CENTRAL UNIVERSITY OF SOUTH BIHAR

GAYA- 823001

SCHOOL OF LAW & GOVERNANCE

Transfer of property of law,1882

PROJECT

Mortage meaning and kinds of mortgage

Under the Supervision of :- Dr.Pallavi Singh (assistant professor )

Submitted By :-
Chandan Kumar
B.A. LL.B. – 5th Semester
Enrolment – CUSB 1713125012

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 ACKNOWLEDGEMENT

I would like to express my special thanks of gratitude to my teacher Dr.Pallavi Singh who
gave me the golden opportunity to do this wonderful project on the topic Mortgage meaning
and types of mortgage, which also helped me in doing a lot of Research and I came to know
about so many new things I am really thankful to her.
I have taken lots of efforts by completing this project. However, it would not have been
possible without the kind support and help of many individuals and organizations like Library
and Computer Lab. I would like to extend my sincere thanks to all of them.
Secondly I would also like to thank my parents and friends who helped me a lot in finalizing
this project within the limited time frame.
I am highly indebted to Central University of South Bihar for their guidance and constant
supervision as well as for providing necessary information regarding the project & also for their
support in completing the project.

Chandan Kumar

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 CONTENTS

I.1. Introduction……………………………………………………..…….….…..4

2. Appellate Jurisdiction and Categories…………………………….….……..5

3. Legal Provisions……………………………………………….……………..10

4. Judicial Pronouncement …………………………………...……………….12

5. Conclusion & Suggestion…………………………………………................13

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Introduction

In Transfer of Property Act, 1882, mortgage is defined under Section 58(a) as: “A mortgage is the
transfer of 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 debt, or the performance of an
engagement which may give rise to pecuniary liability.”1 This was literally a sale with a promise,
so that the mortgagee enjoyed the rents and profits in lieu of interest and became absolute owner
of the property if the debt was not paid.

MEANING OF MORTGAGE

Loan may be secured or unsecured. Where money is given simply on the basis of debtor’s promise
to pay i.e. on promissory note, the creditor can file suit for recovery of his money. But, if such
debtor has no money to repay the loan or becomes insolvent, the creditor’s money is lost because
he cannot recover it from debtor’s property. Such loans are therefore, called, unsecured loans. On
the other hand, before giving the loan, the creditor may take security from the debtor for the
repayment of his money. Where the loan is secured against any movable property, it is called a
pledge. Where the loan is secured against some immovable property of the debtor, it is called
mortgage. In both the cases, whether the property is movable or immovable, the loan is secured
because in default of repayment, the creditor can recover his money from the property which has
been specified as security.2 In the case of B. Jayashankarappa and others V. D. S. Gulwadi3, it
was held that a reading of Section 58 per se shows that a mortgage, no doubt is a transfer, but not
the transfer of absolute ownership rights and in this respect it differs from sale. A mortgage is said
to be a transfer of a limited interest in a specific immovable property. The purpose of mortgage is
said to secure the payment of money, which the transferor possesses in the property, pass on by
transfer to the transferee. In a mortgage, some rights are transferred to the mortgagee, while some
others remain with the mortgagor.

1
Bare act,tpa 1882
2Rk sinha, P 87.
3
B. Jayashankarappa and others V. D. S. Gulwadi, AIR 2000 Karnataka 359.

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In the case of Nidha Shah V. Murli Dhar4, a deed purported to be a deed of mortgage with
possession of certain villages for a period of 14 years, provided that at the expiry of the term the
mortgagers were to come into the possession of the mortgaged villages without settlement of the
accounts and the mortgagee should than have no power whatsoever in respect of the said estate
but should return the mortgage deed to the mortgagors without their repaying the mortgage money.
The mortgagee refused to return such village as he had on the ground that he had not received the
full number of villages and had not been able to compensate himself. The Privy Council held that
the deed was not a security for the payment of any money and the transfer was not a mortgage but
a grant of land for fixed term free of cost. The so called mortgagors were entitled to recover
possession.

4
Nidha Shah V. Murli Dhar, (1903) 25 All. 115.

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