Mortgage
The transfer of an interest in specific immovable property to secure the payment of money advanced or to be advanced as a loan, an existing or future debt, or an engagement giving rise to a pecuniary liability.
Explained
Section 58(a) of the Transfer of Property Act, 1882 defines a mortgage as the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability. The transferor is the mortgagor, the transferee the mortgagee, the principal and interest secured the mortgage-money, and the instrument the mortgage-deed. Only an interest, not ownership, passes, and the object is security for a debt.
Section 58 recognises six kinds. In a simple mortgage possession is not delivered and the mortgagor is personally liable, the mortgagee having a right to have the property sold. In a mortgage by conditional sale the mortgagor ostensibly sells on condition that the sale becomes absolute on default or void on payment, and the condition must be in the same document. In a usufructuary mortgage possession is delivered and the mortgagee takes rents and profits in lieu of interest or principal. In an English mortgage the property is transferred absolutely subject to re-transfer on repayment. A mortgage by deposit of title-deeds is made by delivering title documents in notified towns with intent to create security. Any other form is an anomalous mortgage.
Under Section 59 a mortgage securing one hundred rupees or more, other than by deposit of title-deeds, must be by a registered instrument signed by the mortgagor and attested by at least two witnesses. Section 60 gives the mortgagor a right to redeem once the money becomes due, and any term that clogs this equity of redemption is void. In Seth Ganga Dhar v. Shankar Lal (1958) a long redemption period was upheld as a fair bargain, but a term converting the mortgage into a sale on non-redemption was held to be a clog. Section 67 gives the mortgagee the right to foreclosure or sale.
A mortgage differs from a charge under Section 100, which creates security without transferring an interest, and from a pledge, which secures movables. Because a suit to enforce a mortgage by sale is an action in rem, it cannot be referred to arbitration: Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. (2011).
What the law says
(a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being arc called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.
(b) Simple mortgage.—Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.
Defines mortgage and its six kinds
Where the principal money secured is one hundred rupees or upwards, a mortgage [other than a mortgage by deposit of title-deeds] can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.
Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by [a registered instrument] signed and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property.
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Mortgage when to be made by registered instrument
At any time after the principal money has become [due], the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, to require the mortgagee (a) to deliver [to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee], (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:
Provided that the right conferred by this section has not been extinguished by act of the parties or by [decree] of a Court.
The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption.
Mortgagor's right to redeem
In the absence of a contract to the contrary, the mortgagee has, at any time after the mortgage-money has become [due] to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgage-money has been paid or deposited as hereinafter provided, a right to obtain from the Court [a decree] that the mortgagor shall be absolutely debarred of his right to redeem the property, or [a decree] that the property be sold.
A suit to obtain [a decree] that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.
Nothing in this section shall be deemed—
Mortgagee's right to foreclosure or sale
Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained [which apply to a simple mortgage shall, so far as may be, apply to such charge].
Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust, [and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge].
Charge distinguished from mortgage
For the exam
- Section 58(a) TPA: transfer of an interest in specific immovable property as security.
- Six kinds: simple, conditional sale, usufructuary, English, deposit of title-deeds, anomalous.
- Section 59: registered and attested instrument if Rs 100 or more, except deposit of title-deeds.
- Right of redemption (Section 60) cannot be clogged.
- Mortgage transfers an interest; a charge (Section 100) does not.
893 questions in the Law Maker question bank use this term. Practise Transfer of Property Act questions
Judgments
- Seth Ganga Dhar v. Shankar Lal (1958)A term postponing redemption of a mortgage for eighty-five years was held not to be a clog on the equity of redemption, as the bargain was fair; the redemption suit filed before that period ended was premature.
- Booz Allen and Hamilton Inc. v. SBI Home Finance Ltd. (2011)A suit to enforce a mortgage by sale is an action in rem that only a court may decide, so it cannot be referred to arbitration under Section 8 even though the parties agreed to arbitrate such disputes.
Related terms
- Transfer of propertyUnder Section 5 of the TPA, an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself and one or more other living persons.
- Immovable propertyLand, benefits to arise out of land, and things attached to the earth or permanently fastened to anything attached to the earth. Defined inclusively in Section 3(26) of the General Clauses Act, 1897.
- LeaseA transfer of a right to enjoy immovable property for a certain time, or in perpetuity, in consideration of a premium or rent (Section 105 of the Transfer of Property Act).
- SaleA transfer of ownership in exchange for a price paid or promised or part-paid and part-promised (Section 54 of the TPA). Sale of goods is governed separately by Section 4 of the Sale of Goods Act, 1930.
- PledgeThe bailment of goods as security for payment of a debt or performance of a promise (Section 172 of the Contract Act). The bailor is called the pawnor and the bailee the pawnee.
Further reading
Checked 6 November 2026. Statutory text is quoted from the Bare Acts library, taken from India Code. See the full glossary.