Mortgage and its Types

Synopsis

Introduction

Mortgage.....Define

RELEVANT PROVISIONS

Types of Mortgage.........SECTION 58 TPA

Simple Mortgae

Mortgae by Cnditional Sale

Usufructuary Mortgage

English Mortgage

Mortgage by Deposit of Title Deed

Anamolous Mortgage

CASE LAWS

Introduction: 

Section 58 provides definition,formation aand different kinds of mortgage.

Mortgage.....Define

Simply morgage is an interest in land created by a written instrument providing security for payment of debt.

CASE LAW.

Mortgage debt is transfer of interst in immoveable property (1912  34 ALL 273)

PLD 1996 Lah.99)

pld 1995 Pesh.96

Definetions

58. 'Mortgage' 'mortgagor' 'mortgagee,' 'mortgage-money' and 'mortgage' defined, (a) 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.

Essentials of mortgage.

1.There must be transfer of interest in immoveable property.

2.property should be existing and specefic.

3.The transfer is by way of security for the repayment of loan.

4.Object to secure debt, pecuniary liability.

(b) Simple mortgage. Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to gay 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 mortgagemoney, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.

Essentials of simple mortgage.

1.No delivery of posession of mortgage property. 

2.Mortgagor undertakes personal liability.

3.Must be effected by registered instrument. 

5.No foreclosure. 

6.No private sale.

Remedies in Simple Mortgage. 

1.Suit for money decree.

Suit for sale of property mortgaged. 

(c) Mortgage by conditional sale. Where the mortgagor ostensibly sells the mortgaged property: on condition that on default of payment of the mortgage money on a certain date the sale shall become absolute; or on condition not on such payment being made the sale shall become void, or on condition that on such payment being made the buyer shall transfer the property to the seller, the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale: [Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale]. (d) Usufructurary mortgage. Where the mortgagor delivers possession [or expressly or by implication binds himself to deliver possession] of the mortgaged property to mortgagee, and authorizes him to retain such possession until payment of the mortgagee-money, and to receive the rents and profits accruing from the property '[or any part of such rents and profits and to appropriate the same] -in lieu of interest, or in payment of the mortgage-money, '[or] part in lieu of interest or partly in payment of the mortgage-money, the transaction is called a usufructuary mortgage and the mortgagee a usufructuary mortgagee.

(e) English mortgage. Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.

(f) Mortgage by deposit of tine-deeds. Where a person in [the town of] Karachi, and in any other town which the ''[Provincial Government] concerned may, by notification in the [official Gazette], specify in this behalf, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

(g) Anomalous mortgage. A mortgage which is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.]

59. Mortgage when to be by assurance. 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 the 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.

59-A. References to mortgagors and mortgagees to include persons deriving title from them. Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees shall be deem