What is meant by the term mortgage

It is a combination of two French words ”mort” i.e. dead and ”gage” i.e. pledge; meaning thereby “dead pledge”. Dead Pledge would mean, an interest created in favour of the creditor/property transferred to the creditor not absolutely, but in a manner which is defeasible/ cancelable upon repayment of the borrowings.

Mortgage is a transfer of an interest in specific immovable property as a security for the repayment of a monetary liability. This liability could be arising out of money already advanced or to be advanced; it could be future debt or it could be pecuniary liability arising out of the non-performance of any engagement.

The mortgage as referred to in the section 58(a) of the Transfer of Property Act, 1882 is a mortgage of immovable property as this section has no application to movable property. Security by way of movable property is called hypothecation or pledge or pawn.

Can a covenant not to alienate or not to transfer or deal with/dispose of property amount to a mortgage?

If a debtor promises to repay the debt and covenants that until payment he will not alienate a particular property, the transaction does not amount to a mortgage, for there is no transfer of an interest in the property.

Does a sale with a condition of re-transfer amount to a mortgage?

It does not, because the relationship of debtor and creditor does not subsist in such a transaction and there is no debt for which the transfer is a security. Such a transfer is not a partial transfer, but a transfer of all rights in the property reserving only a personal right of repurchase or pre-emption which is lost if not exercised within the stipulated time, or may amount to a retransfer or cancellation for non-fulfillment of conditions. However this is not a mortgage.

In mortgage what is the real right transferred to the mortgage?

A mortgage has two aspects. Firstly, it embodies a promise by the debtor to repay the loan and as such it creates a personal obligation. In the second place, it also brings about the conveyance i.e. the transfer of property, since it passes to the creditor a real right in the property mortgaged to him. Such a right created in the property is merely an accessory right, intended to secure the due repayment of the debt.

About the author

Leave a Reply

Your email address will not be published. Required fields are marked *