Simple Mortgage, Usufructuary Mortgage, Mortgage by deposit of title deeds ~ LLBH

Simple Mortgage, Usufructuary Mortgage, Mortgage by deposit of title deeds

Before going to the types of mortgage you have to understand the meaning of 'Transfer'. A mortgage is a kind of transfer of property.

Transfer

Transfer means the act of moving something or someone to another place.

According to Osborn's Concise Law Dictionary, 4th edn., page 336. "Transfer means the passage of a right from one person to another (i) by virtue of an act done by the transferor with that intention as the case of a conveyance or assignment by way of sale or gift etc.; or (ii) by operation of law, as in the case of forfeiture, bankruptcy, descent, or intestancy."

Mortgage has been defined in section 58 of the Transfer of Property Act which is as under :

"A mortgage is 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 called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed."

If a deposit of title deed is made by a letter containing cause of deposit it includes that the parties intended to reduce the bargain into writing and that letter requires registration.--Indian Bank vs. A. S. Rao and Sons AIR 1971 AP 287.

Simple Mortgage

Where the mortgagor promises to pay the mortgage money(loan) without delivering possession of the mortgaged property and agrees expressly or impliedly that in case of non- payment of loan, the mortgagee shall have the right to cause the mortgaged -property to be sold, the mortgage is a simple mortgage.

Usufructuary Mortgage

A mortgage is usufructuary where the mortgagor gives possession of the property to the mortgagee. Since possession is with the mortgagee, he gets the usufruct, i.e., produce, benefits, Rents, or profits of the mortgaged- property. In such a mortgage, the mortgagee is entitled to enjoy the benefits of mortgaged property in lieu of interest on the principal money (debt) advanced by him.

Mortgage by deposit of title deeds

In this mortgage, the execution of mortgage-deed by mortgagor is not necessary. Mere deposit of title deeds of immovable property by the mortgagor to mortgagee is sufficient. Title deeds are those documents that are legal proof that a person owns a particular property.

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