MORTGAGE UNDER TPA

 MORTGAGE UNDER TRANSFER OF PROPERTY ACT, 1882

Section 58 to 104 of the Transfer of Property Act, 1882 discusses mortgages and charges.

A mortgage is a transfer of an interest in immovable property and it is given as a security for

a loan. The ownership of an immovable property remains with the mortgagor itself but some

interest in the property is transferred to the mortgagee who has given a loan.

Essential conditions of a mortgage:

1. There must be a transfer of interest to mortgagee.

2. Interest created in the specific immovable property.

3. Mortgage should be supported by the consideration.

Kinds of Mortgage

As per Section 58 of Transfer of Property, there are six kinds of mortgages

Simple Mortgage

A simple mortgage is defined in Section 58(b) of the Transfer of Property Act of 1882. In a

simple mortgage, the borrower does not transfer the property to the mortgagee, but agrees to

pay the mortgage amount. The mortgagee agrees on the condition that if the mortgage is not

paid, the mortgagee has the right to sell the property and use the proceeds.

Conditional Mortgage

The conditional sale mortgage is defined in Section 58(c) of the Transfer of Property Act of

1882. In it, the mortgagee imposes three conditions on the mortgagee and the mortgagee has

the right to sell the property if:

1. the mortgagee defaults in the payment of the mortgage at any time.

2. Once the mortgagee has made payment, the sale becomes void.

3. Upon payment of the money by the mortgagee, the property is transferred and this

transaction is called a conditional sale mortgage.

Usufructuary Mortgage

The Usufructuary mortgage is defined in Section 58(d) of the Transfer of Property Act of

1882. In this mortgage, the mortgagor gives possession of the property to the mortgagee and

authorizes the mortgagee to hold the property until it is paid by the mortgagee. The

mortgagor also authorizes the mortgagee to collect the rent or profit from the mortgaged

property and to use it in lieu of interest payments. Such a transaction is called an

Usufructuary transaction.

Rights and Liabilities of Mortgagor and Mortgagee

1. Rights of Mortgagor

2. Right of Redemption

3. Right to transfer to a third party

4. Covenant for payment of rent

5. Covenant for the discharge of prior mortgage

Rights and Liabilities of Mortgagee

The rights and liabilities of a mortgagee are given from Section 67 to 77 of Transfer of

Property Act, 1882.

1. Right to sale

2. Right to sue

3. Right to sell

4. Right to appoint a receiver

Liabilities of Mortgagee in Possession

As per Section 76 of the Transfer of Property Act, 1882 list down the duties of the mortgagee

who is in possession of the property which belongs to the mortgagor.

1. Duty to manage the property

2. Duty to collect rents and profits

3. Duty to pay rent, revenue and public charges

4. Duty to make the necessary repairs

5. Duty to keep the accounts