Mortgage

Transfer of Property Act, 1882 — Section 58

A transfer of interest in immovable property as security for the repayment of money. The Transfer of Property Act recognises six types: simple, mortgage by conditional sale, usufructuary, English, mortgage by deposit of title deeds (equitable mortgage), and anomalous mortgage. Banks most commonly use equitable mortgage (deposit of title deeds) and English mortgage for home loans.

The form of mortgage chosen at sanction dictates the lender's recovery path years later. In practice Indian banks rely most on the equitable mortgage by deposit of title deeds (quick, no registration) and the English mortgage, though the Transfer of Property Act recognises six types. The mortgage type matters because it governs whether SARFAESI can be invoked, whether a separate mortgage suit is needed, and the priority of the bank's charge against later claimants. A defective creation, deposit in a non-notified town, missing intention to secure, an unstamped or unregistered instrument where registration was required, can render the security unenforceable and collapse the entire recovery. Borrowers and contesting creditors attack precisely these defects in a Section 17 challenge or a title objection. The mortgagor's statutory right of redemption survives until the property is sold. Well-advised lenders confirm the mortgage was validly created and properly recorded before commencing enforcement.