58(b) Simple mortgage.—Where, without delivering possession of the mortgaged property, the mortgagor binds himself personally to pay 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 mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.
Mathai Mathai v. Joseph Mary, (2015) 5 SCC 622. Paragraph 20.2 Simple mortgage is a mortgage where property is mortgaged without delivering possession of the mortgaged property to the mortgagee.
58. (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 that 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.
Ganpati Babji Alamwar v. Digambarrao Venkatrao Bhadke, (2019) 8 SCC 651. Paragraph 10. Whether an agreement is a mortgage by conditional sale or sale with an option for repurchase is a vexed question to be considered in the facts of each case. The essentials of an agreement, to qualify as a mortgage by conditional sale, can succinctly be summarised. An ostensible sale with transfer of possession and ownership, but containing a clause for reconveyance in accordance with Section 58(c) of the Act, will clothe the agreement as a mortgage by conditional sale. The execution of a separate agreement for reconveyance, either contemporaneously or subsequently, shall militate against the agreement being mortgage by conditional sale. There must exist a debtor and creditor relationship. The valuation of the property, and the transaction value, along with the duration of time for reconveyance, are important considerations to decide the nature of the agreement. There will have to be a cumulative consideration of these factors, along with the recitals in the agreement, intention of the parties, coupled with other attendant circumstances, considered in a holistic manner. The language used in the agreement may not always be conclusive.
58 (d) Usufructuary mortgage.—Where the mortgagor delivers possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-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 partly in lieu of interest or partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.
Mathai Mathai v. Joseph Mary, (2015) 5 SCC 622. Paragraph 20.2 The mortgagor delivers possession or expressly or by implication binds himself to deliver possession of the mortgaged property to the mortgagee and further authorises him to retain such possession until payment of the mortgage 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 partly in lieu of interest or partly in payment of the mortgage money.
Narpatchand A. Bhandari v. Shantilal Moolshankar Jani, (1993) 3 SCC 351. Paragraph 7. A usufructuary mortgagee is a transfer of a right to possession of the mortgaged property and the right to receive the rents and profits accruing from such property. Tenanted premises, if is mortgaged by the landlord by way of usufructuary mortgage, the usufructuary mortgagee thereunder would become entitled to receive the rents and profits accruing from such property in his own right and on his own account
58(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.
Raj Kishore v. Prem Singh, (2011) 1 SCC 657 . Paragraph 21. A transaction to constitute an English mortgage the following essential conditions must be satisfied: (1) The mortgagor must bind himself to repay the mortgage money on a certain date. (2) The property mortgaged should be transferred absolutely to the mortgagee. (3) Such absolute transfer should be made subject to the proviso that the mortgagee shall reconvey the property to the mortgagor upon payment by him of the mortgage money on the date the mortgagor binds himself to pay the same. 22. It is only in cases where all the three requirements indicated above are satisfied that the transaction constitutes an English mortgage and not otherwise.
58(f) Mortgage by deposit of title-deeds.—Where a person in any of the following towns, namely, the towns of Calcutta, Madras and Bombay, and in any other town which the State Government concerned may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.
State of Haryana v. Narvir Singh, (2014) 1 SCC 105. Paragraph 13. Mortgage by deposit of title deeds is the actual handing over by a borrower to the lender of documents of title to immovable property with the intention that those documents shall constitute a security which will enable the creditor ultimately to recover the money which he has lent. 14.2. No instrument is required to be drawn for this purpose. However, the parties may choose to have a memorandum prepared only showing deposit of the title deeds. In such a case also registration is not required. But in a case in which the memorandum recorded in writing creates rights, liabilities or extinguishes those, the same requires registration.
58(g) Anomalous mortgage.—A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.
Sardar Govindrao Mahadik v. Devi Sahai, (1982) 1 SCC 237. (as an example) Paragraph 2. Even though the mortgage was mortgage with possession, it was not a usufructuory mortgage but an anomalous mortgage in that the mortgagor had agreed to pay interest at the rate of 12 per cent and the mortgagee was liable to account for the income of the property earned as rent and if the mortgagee himself occupied the same he was bound to account for the rent at the rate of Rs 515 per annum.
Compiled by S. Basavaraj, Advocate, Daksha Legal.
Daksha Legal 