Anda di halaman 1dari 34

TOPIC - RIGHT OF FORECLOSURE VS.

RIGHT OF SALE
– A COMPARATIVE STUDY

SUBMITTED TO SUBMITTED BY

Dr. B.R.N Sarma Anish kumar

Roll no. – 1816

BBA LLB

SEMESTER – 3rd

CHANAKYA NATIONAL LAW UNIVERSITY,PATNA


ACKNOWLEDGEMENT
I
I would like to thank my faculty Dr. B.R.N Sarma . whose guidance helped me a lot
with structuring my project.
I owe the present accomplishment of my project to my friends, who helped me
immensely with materials throughout the project and without whom I couldn’t
have completed it in the present way.

I would also like to extend my gratitude to my parents and all those unseen hands
that helped me out at every stage of my project.
DECLARATION

I hereby declare that the project entitled RIGHT OF FORECLOSURE VS.


RIGHT OF SALE – A COMPARATIVE STUDY submitted by me at
CHANAKYA NATIONAL LAW UNIVERSITY is a record of bona fide project
work carried out by me under the guidance of our mentor Dr. B.R.N Sarma
. I further declare that the work reported in this project has not been
submitted and will not be submitted, either in part or in full, for the
award of any other degree or diploma in this university or in any other
university.
AIMS & OBJECTIVE
 To study right of foreclosure
 To study right of sale

HYPOTHESIS
 Right of foreclosure is the exclusive right of the lender to have the possession over the
property.
 Right to sale is the exclusive right of the seller to transfer the whole rights of the
ownership to the buyer

RESEARCH METHODOLOGY
 The research Methodology is used in the research is based upon the doctrinal research
methodology and the entire content collected through books, websites and articles.

RESEARCH LIMITATION
 The researcher has time limitation in completing the project.
Content
1. CONCEPT OF MORTGAGE
2. RIGHT OF SALE
3. RIGHT OF FORECLOSURE
4. A COMPARATIVE STUDY
5. CASE STUDY
6. CONCLUSION
7. BIBLIOGRAPHY
Chapter 1 – CONCEPT OF MORTGAGE
A mortgage is a method of creating charge on immovable properties like land and building.
Section 58 of the Transfer of Property Act 1882, define a mortgage as follows:

"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." 1

In terms of the definition, the following are the characteristics of a mortgage:

(1) A mortgage can be affected only on immovable property. Immovable property includes land,
benefits that arise out of land and things attached to earth like trees, buildings and machinery.
But a machine which is not permanently fixed to the earth and is shift able from one place to
another is not considered to be immovable property.

(2) A mortgage is the transfer of an interest in the specific immovable property. This means the
owner transfers some of his rights only to the mortgagee. For example, the right to redeem
the property mortgaged.

(3) The object of transfer of interest in the property must be to secure a loan or performance of a
contract which results in monetary obligation. Transfer of property for purposes other than
the above will not amount to mortgage. For example, a property transferred to Liquidate prior
debt will not constitute a mortgage.

(4) The property to be mortgaged must be a specific one, i.e., it can be identified by its size,
location, boundaries etc.

(5) The actual possession of the mortgaged property is generally with the mortgager.

(6) The interest in the mortgaged property is re-conveyed to the mortgager on repayment of the
loan with interest due on.

(7) In case, the mortgager fails to repay the loan, the mortgagee gets the right to recover the debt
out of the sale proceeds of the mortgaged property.

1
https://investinganswers.com/financial-dictionary/real-estate/mortgage-1608
Essentials of a Mortgage2

1) Transfer of Interest: The first thing to note is that a mortgage is a transfer of interest in
the specific immovable property. The mortgagor as an owner of the property possesses all
the interests in it, and when he mortgages the property to secure a loan, he only parts with
a part of the interest in that property in favour of the mortgagee. After mortgage, the
interest of the mortgagor is reduced by the interest which has been transferred to the
mortgagee. His ownership has become less for the time being by the interest which he has
parted with in favour of the mortgagee. If the mortgagor transfers this property, the
transferee gets it subject to the right of the mortgagee to recover from it what is due to
him i.e., the principal plus interest.

2) Specific Immovable Property: The second point is that the property must be specifically
mentioned in the mortgage deed. Where, for instance, the mortgagor stated “all of my
property” in the mortgage deed, it was held by the Court that this was not a mortgage.
The reason why the immovable property must be distinctly and specifically mentioned in
the mortgage deed is that, in case the mortgagor fails to repay the loan the Court is in a
position to grant a decree for the sale of any particular property on a suit by the
mortgagee.

3) To Secure the Payment of a Loan: Another characteristic of a mortgage is that the


transaction is for the purpose of securing the payment of a loan or the performance of an
obligation which may give rise to pecuniary liability. It may be for the purpose of
obtaining a loan, or if a loan has already been granted to secure the repayment of such
loan. There is thus a debt and the relationship between the mortgagor and the mortgagee
is that of debtor and creditor. When A borrows 100 bags of paddy from B on a mortgage
and agrees to return an equal quantity of paddy and a further quantity by way of interest,
it is a mortgage transaction for the performance of an obligation.

2
https://www.srdlawnotes.com/2016/05/what-is-mortgage-and-its-essentials.html
4) Where, however, a person borrows money and agrees with the creditor that till the debt is
repaid he will not alienate his property, the transaction does not amount to a mortgage.
Here the person merely says that he will not transfer his property till he has repaid the
debt; he does not transfer any interest in the property to the creditor. In a sale, as
distinguished from a mortgage, all the interests or rights or ownership are transferred to
the purchaser. In a mortgage, as stated earlier, only part of the interest is transferred to the
mortgagee, some of them remains vested in the mortgagor.

To sum up, it may be stated that there are three outstanding characteristics of a mortgage:

a) The mortgagee’s interest in the property mortgaged terminates upon the performance of
the obligation secured by the mortgage.

b) The mortgagee has a right of foreclosure upon the mortgagor’s failure to perform.

c) The mortgagor has a right to redeem or regain the property on repayment of the debt or
performance of the obligation.

FORMS OF MORTGAGES3
Section 58 of the transfer of Property Act enumerates six kinds of mortgages:

(1) Simple mortgage.

(2) Mortgage by conditional sale.

(3) Usufructuary mortgage.

(4) English mortgage.

(5) Mortgage Ly deposit of title deeds.

(6) Anomalous mortgage.

(1) Simple Mortgage

3
R K SINHA Transfer of property act
In a simple mortgage, the mortgager does not deliver the possession of the mortgaged
property. He binds himself personally to pay the mortgage money and agrees either expressly
or impliedly, that in case of his failure to repay, the mortgagee shall have the right to cause
the mortgaged property to be sold and apply the sale proceeds in payment of mortgage
money.

The essential feature of the simple mortgage is that the mortgagee has no power to sell the
property without the intervention of the court. The mortgagee can:

(i) apply to the court for permission to sell the mortgaged property, or

(ii) file a suit for recovery of the whole amount without selling the property.

(2) Mortgage by Conditional Sale

In this form of mortgage, the mortgager ostensibly sells the property to the mortgagee on the
following conditions:

(i) The sale shall become void on payment of the mortgage money.

(ii) The mortgagee will retransfer the property on payment of the mortgage money.

(iii)The sale shall become absolute if the mortgager fails to repay the amount on a certain
date.

(iv) The mortgagee has no right of sale but he can sue for foreclosure.

Foreclosure means the loss of right possessed by the mortgager to redeem the mortgaged
property. The mortgagee has the right to institute a suit for a decree so that the mortgager will
be absolutely debarred from his right to redeem the property. The right to foreclosure arises
when the time fixed for repayment expires and the mortgager fails to repay the mortgage
money. Without the fore closure order the mortgagee will not become the owner of the
property.

(3) Usufructuary Mortgage

Under this form of mortgage, the mortgager delivers possession of the property or binds
himself to deliver possession of the property to the mortgagee. The mortgagee is authorized
to retain the possession until the debt is repaid. The mortgager reserves the right to recover
the property when the money is repaid.
The essential feature of this form of mortgage is that the mortgagee is entitled to receive rents
and profits relating to the mortgaged property till the loan is repaid and appropriate the same
in lieu of interest or in repayment of the loan or both.

The mortgager is not personally liable to repay the mortgage money. So the mortgagee
cannot sue the mortgager for repayment. He can neither sue foreclosure nor sue for sale of
the mortgaged property; the only remedy for the mortgagee is to remain in possession of the
property and pay himself out of the rents or profits of the mortgaged property. Since there is
no time limit he has to wait for a very long time to recover his dues.

(4) English Mortgage

The English mortgage has the following characteristics:

(1) The mortgager transfers the property absolutely to the mortgagee. The mortgagee,
therefore, is entitled to take immediate possession of the property. The transfer is subject
to the condition that the property shall be transferred on repayment of the loan.

(2) The mortgager also binds himself to pay the mortgage money on a certain date.

(3) In case of non-repayment, the mortgagee has the right to sell the mortgaged property
without seeking permission of the court in circumstances mentioned in section 69 of the
Transfer of Property Act.

Mortgage by Deposit of Title Deeds

When a debtor delivers to a creditor or his agent document of title to immovable property,
with an intention to create a security there on, the transaction is called mortgage by deposit of
title deeds. Such a mortgage is restricted to the towns of Kolkata, Mumbai and Chennai and
other towns notified by the State government for this purpose in the Official Gazette. This
type of mortgage requires no registration. This form of mortgage is also known as equitable
mortgage.

Legal Mortgage vs. Equitable Mortgage

On the basis of transfer of title to the mortgaged property, mortgages are divided into two types,
namely:
(i) Legal Mortgage.

(ii) Equitable Mortgage.

Legal Mortgage

In a legal mortgage, the legal title to the property is transferred in favour of mortgagee by a deed.
The deed is to be registered when the principal money is Rs. 100/- or more. On repayment of the
loan, the legal title is retransferred to the mortgagor. This method of creating charge is expensive
as it involves registration charges and stamp duty.

Equitable Mortgage

An equitable mortgage is effected by mere delivery of documents of title to property to the


mortgagee. The mortgagor through Memorandum of deposit undertakes to grant a legal
mortgage if he fails to pay the mortgage money.

Essential Requirements of Equitable Mortgage

(1) An equitable mortgage requires three essential features

i. there must be a debt existing or future,

ii. there must be deposit of title deeds, are the title deeds should be deposited as security for
the debt.

(2) Registration of documents is not necessary.

Royal Printing Works and Others Vs. Oriental Bank of Commerce (7990). It was established
in the above case, that where a security is furnished by deposit of title deeds, no registration
is necessary.

(3) An equitable mortgage can be effected only in the towns of Kolkata, Mumbai and Chennai
and in certain places notified by the State Government.
Sulochana and Others Vs. The Pandyan Bank Ltd. It was held in the above case that the
debtor need not produce the documents and deposit the same in person in any of the towns
mentioned in that Section. If the intention was to deposit the documents in the towns
mentioned and the documents were duly forwarded, such deposit shall be deemed to have
been made in the towns specified in the Section.

Sabasiva Rao Vs. Bank of Baroda (1989). It was held that even if certified copies of
documents of title to goods are deposited, if the intention of the deposit is for. security to
cover a loan, it would amount to equitable mortgage.

(4) The documents are to be retransferred to the mortgagee on repayment of the debt.

(5) The mortgagee is empowered to apply to the court to convert the equitable mortgage into a
legal mortgage, if the mortgager fails to repay the loan on a specified date.

(5) Anomalous Mortgage

In terms of this definition an anomalous mortgage is one which does not fall under anyone of
the above five terms of mortgages. Such a mortgage can be effected according to the terms
and conditions of the mortgager and the mortgagee. Usually it arises by a combination of two
or more of the above said mortgages. It may' take various forms depending upon custom,
usage or contract.

RIGHTS OF MORTGAGER 4

Right of Mortgager-

(1) Rights of Redemption: The mortgager has a right to redeem the mortgaged property
provided:

a. he-pays the mortgage money on due date at the proper place and time,

4
http://kalyan-city.blogspot.com/2010/10/essentials-of-mortgage-rights-of.html
b. the right of redemption has not been terminated by an act of the parties or by decree of a
court.

The mortgager who has redeemed the mortgage is entitled to the following rights:

(a) to get back the mortgage deed and all other documents relating to the mortgaged
property,

(b) to obtain possession of the mortgaged property from the mortgagee, as in the case of
English mortgage,

(c) to have the mortgaged property retransferred at his cost to him or to such third person as
he may direct.

(2) Accession to Mortgaged Property: During the possession of the property, if the mortgagee
has voluntarily made any improvement in the property, the mortgager, on redeeming the
property, is entitled to all such additions or improvements, unless there is a contract to the
contrary.

(3) Right to Transfer to Third Party: The mortgager may require the mortgagee to transfer the
mortgaged property to a third person instead of retransfer to him.

(4) Right to Inspection and Production of Documents: The mortgager has the right to inspect
and make copies of all documents of title in the custody of mortgagee.

RIGHTS OF MORTGAGEE5

Rights of Mortgagee

(1) Right to sue for mortgage money: The mortgagee has the right to file a suit in a court of
law for the mortgage money in the following cases:

a. Where the mortgager binds himself to repay the mortgage money, as in the case of simple
and English mortgage.

5
https://economictimes.indiatimes.com/rights-of-a-mortgagee/articleshow/3803377.cms
b. Where the mortgaged property is wholly or partly destroyed or the security is rendered
insufficient and to mortgager has not provided further security.

c. Where the mortgagee is deprived of the whole or a part of his security by the wrongful
act of the mortgager.

d. Where the mortgager fails to deliver the mortgaged property in case the mortgagee is
entitled to it.

(2) Right of sale: The mortgagee in case of a simple, English and equitable mortgage has the
right to sell the property after filing a suit and getting a decree from a court.

A mortgagee has a right of sale without the intervention of the court under certain
circumstances mentioned in Section 69 of Transfer of Property Act.

(3) Right of foreclosure: The mortgagee has a right to obtain from the Court a decree for
foreclosure against the mortgager, that is, the mortgager is absolutely debarred of his right to
redeem the property. The right of fore closure is allowed in (i) a mortgage by a conditional
sale, and the anomalous mortgage.

(4) Right of accession to property: If any addition is made to the mortgaged property, the
mortgagee is entitled to such addition for the purpose of security provided there is no
contract to the contrary. For example, A mortgages a certain plot of land to B and afterwards
constructs a building on it. B is entitled to the building and land as security for the loan.

(5) Right of possession: The mortgagee is entitled to the possession of the mortgaged property
as per the terms of mortgage deed. Such a right is available in usufructuary mortgage.

CHAPTER 2- RIGHT OF SELL

Mortgagees Right To Sell: Past Situation


The power of the mortgagee to sell without intervention of the court, before the incorporation of
such right under Section 69 of the Transfer of Property Act, 1882, was a subject-matter of
controversy and divergent views.

This power of sale, a feature of the English mortgage was originally confined to Englishmen or
to Indian residents in the Presidency Towns who were conversant with the forms of English
mortgage and English law and procedure as administered in the Presidency Towns. In the
mofussil, prior to the Transfer of Property Act, there were certain regulations governing the law
of mortgages between the parties who were not Europeans. Those regulations did not empower
the mortgagee to effect sale of the mortgaged property without the intervention of the court. 6

Section 69 of the Transfer of Property Act, 1882, was modelled on the English Conveyancing
Act, 1881 and the English Law of Property Act, 1925. Section 69 was later remodelled by
amending Act 20 of 1929 drawing the principles from the English law.

Section 69 of the Transfer of Property Act, 1882 contains five sub-sections. Sub-sections (1) and
(2) as detailed hereunder, deal with the circumstances under which the mortgagee's right to
exercise the power of sale without the intervention of the court arises. Sub-sections (3) and (4)
respectively dwell on the title of the purchaser from the mortgagee and the manner of
deployment of sale proceeds of the mortgaged property by the mortgagee, his duties and
responsibilities. Sub-section (5) states that nothing in this section applies to powers conferred
before the first day of July, 1882.

The right under Section 69 is as much and as full a right as the right of redemption of the
mortgagor. The mortgagee is, in no sense, a trustee for the mortgagor in the matter of the power
of sale; as he holds it for protection of his interest and for his benefit. The mortgagee is not
debarred from exercising the power of sale, even though the mortgagor files a suit for
redemption. So long as the mortgage money is not paid or validly tendered, the mortgagee with
full knowledge of a pending suit for redemption and even to defeat the suit can enforce his power
of sale under this section.

6
https://www.legalbites.in/sale-immovable-property/
While clauses (b) and (c) of sub-section (1) require that power of sale without intervention of the
court must be expressly conferred on the mortgagee by the mortgage deed, no such conditions
need be fulfilled, where the mortgage is an English mortgage and neither of the parties is Hindu,
Mohammedan or Buddhist or any sect, race etc., as stipulated under clause (a) of sub-section
(1).

Power of sale without intervention of court

The words "power of sale" refer to a clause expressly included in the mortgage deed. They mean
conveyancing. The expression has not been defined in the Act. It includes all steps which are
necessary to be taken in connection with a sale. The law permits the greatest freedom of contract,
unless it is expressly taken away. If any party contends that a particular clause restricts, in any
way, the power of parties to enter into a contract, the burden rests on him to show that the words
prevent an agreement between the parties.

The power of sale, under Section 69, can be exercised only in the three cases mentioned in
clauses (a), (b) and (c) of sub-section (1). The situation of the property is immaterial in cases
falling within clauses (a) and (b).7

A mortgagee has no right of sale if there is no default in payment of the mortgage money. There
can be default in payment of mortgage money only after it has become due, and not before. In
cases, where no time is fixed for payment of the mortgage money, there must be a demand for
payment before it can be said that the mortgagor has made a default in payment of the mortgage
money. It has been held in Purasawalkam Hindu Janopakara Saswatha Nidhi Ltd. v. Kuddus
Sahib that where the amount due for principal is not repayable at any particular date, nor is
anything stated as to when it is to be repaid, there can be no default in the payment of the
principal sum due until there is a demand made for the money.

7
http://shodhganga.inflibnet.ac.in/bitstream/10603/131970/16/16_chapter%208.pdf
Section 69(1) (a)

The first case in which the mortgagee can have the power to sell is mentioned in clause (a) of
sub-section (1) of Section 69 of the Transfer of Property Act, 1882. It lays down the following
conditions for the acquisition of the power, namely: (1) that the mortgage must be an English
mortgage, as defined in Section 58(e) of the Transfer of Property Act, 1882, and (2) neither the
mortgagor nor the mortgagee must be-

(i) a Hindu, Mohammedan or Buddhist, or


(ii) (ii) a member of any other race, sect, tribe, or class from time to time specified in this
behalf by the State Government in the Official Gazette.
(iii) The power of sale is inherent in the mortgagee, if Conditions (i) and (ii) mentioned
above are satisfied. Thus it can be exercised where an English mortgage is executed
by a company, which can be said to have no religion3 In L.V. Apte v. R.G.N. Price,
the A.P. High Court applied Section 69 to an English mortgage between a company
and trustees for debenture-holders, some of the trustees being Hindus.

Section 69(1) (a) is confined only to a select sect of mortgagors and mortgagees who
do not belong to the majority communities in India. This section is taken advantage of
by corporate bodies who are not natural persons since such bodies are not deemed to
belong to any religion. As far as individuals are concerned, this section can be
adopted if both the mortgagor and mortgagee do not belong to the religion, race, sect,
tribe or class which are excluded from the purview of Section 69(1) (a).

If the conditions in Section 69(1) (a) and Section 69(2) are complied with,
mortgagee's power of sale arises suo motu.
It is opined that Section 69(1) (a) is outdated in the present circumstances since the
stipulations cannot be applied to the commercial transactions like mortgages, in letter
and spirit. No community can be compelled to exclude themselves from a particular
commercial venture as it would affect their constitutional rights.
Sections 69(1) (b) and 69(1) (c)

The words "expressly conferred" in clauses (b) and (c) indicate that the inherent power available
under clause (a) is not available under clauses (b) and (c).

To bring a case under Section 69(1) (b), it is necessary to establish that


(i) a power of sale without the intervention of the court is expressly conferred on the mortgagee
bythe mortgage deed, and (ii) the mortgagee is Government. This clause is applicable only
where the mortgagee is the Government and does not extend to any other person. It applies both
to the State Governments and the Central Government. 8

Section 69(1) (c) requires that

(i) a power of sale without the intervention of the court must have expressly been
conferred on the mortgagee by the mortgage deed, and
(ii) (ii) the mortgaged property, or any part thereof, must, on the date of the execution of
the mortgage deed, have been situate within the towns of Calcutta, Madras, Bombay
or in any other town, or area, which the State Government may, by notification in the
Official Gazette, specify in this behalf.

It is observed that the three cases mentioned in clauses (a), (b) and (c) of sub-section
(1) of Section 69 of the Transfer of Property Act are independent and mutually
exclusive. Clause (a) applies only where the mortgage is an English mortgage and the
parties do not belong to certain religions, or sects, etc. Clause (b) applies to cases
where the mortgagee is the Government. Under clauses (a) and (b), it is not necessary
that the property mortgaged should be situated in any particular place. It may be
situated in any part of India. But an essential condition of clause (c) is that the
mortgaged property must be situated within any of the towns or area, specified in the
clause.

8
R.K. SINHA Transfer of property law
Conditions for exercise of power

Section 69(2) (a) and Section 69(2) (b) specify the conditions for exercise of the power. These
conditions are imperative and cannot be varied by an agreement between the parties. The power
to exercise the right of sale arises when

(i) (a) notice in writing requiring payment of the principal money has been served on the
mortgagor, or on one of several mortgagors, and

(b) default has been made in payment of the principal money, or of part thereof, and
(c) such default has continued for three months after such service; or
(ii) some interest under the mortgage amounting at least to five hundred rupees is (a) in arrear,
and (b) remains unpaid for three months after becoming due.

Conditions (i) and (ii) are in the alternative. It is sufficient if any one of them is fulfilled.
The power of sale under Section 69(1) can be exercised by the mortgagee only when the
conditions under Section 69(2) are fulfilled.

No notice is necessary when default is made for the payment of interest. It is sufficient that
interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for
three months after becoming due.

Notice cannot be waived

The notice required by Section 69(2) (a) is not only necessary but is imperative and even the
period of three months cannot be curtailed by agreement of the parties.

The Supreme Court in Narandas Karsondas v. S.A. Kamtam held that the conferment of power
on mortgagee to sell without intervention of the court in a mortgage deed by itself will not
deprive the mortgagor of his right of redemption. The equity of redemption is not extinguished
by mere contract for sale. Therefore, until sale is complete by registration the mortgagor does not
lose his right of redemption. In view of the fact that only on execution of conveyance ownership
passes from one party to another, it cannot be said that the mortgagor lost the right of redemption
just because the property was put to auction. The mortgagor has a right to redeem unless the sale
of property was complete by registration in accordance with the provisions of the Registration
Act.

Section 69(1)(a) of the Transfer of Property Act, 1882 unduly excludes the majority communities
in India from exercising the power of sale available for an English mortgagee. This section
appears to have been enacted only for the transactions between mortgagors and mortgagees who
are English people or people of English origin.

Section 69(1) (a)a blot on statute

When the debate on uniform civil code in India is hotting up amongst the law-makers and the
general public, retention of Section 69(1) (a) of the Transfer of Property Act, 1882 is a blot on
the statute-book. This section is a clear discrimination between religious communities in
commercial transactions in India.

Section 69(1) (a) of the Transfer of Property Act, 1882 has lost its relevance in the present-day
secular circumstances. English mortgage is rarely resorted to by the lenders like banks in view of
the religious discrimination in the section itself and stamp duty and registration expenses being
heavy to be borne by the mortgagors.

It is suggested that an amendment to Section 69 of the Transfer of Property Act is the need of the
hour deleting the portion regarding restriction of the power of sale without intervention of the
court only to certain religious communities.

The power of sale under Section 69(1) (c) of the Transfer of Property Act can be exercised only
when the mortgaged properties are situated within certain towns. The restriction in respect of
location of the properties within certain towns for the purpose of Section 69(1) (c) might have
been a carefully considered decision at the time when the section was inserted into the Act. It
protects the gullible rural masses from the usurious moneylenders. Since then, the situation has
undergone changes and the people in the rural sector are prudent enough to know the
implications of mortgage transactions.

Mortgagees Right To Sell: Present Situation

At present, an attempt has been made to change the situation by passing the “Securitisation and
Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (Act 54 of
2002)”, which protects the interests of the banks and other financial institutions by providing
ways to recover their amounts by selling the assets of the mortgagor.
The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
Act, 2002, fondly called by bankers as Securitisation Act, has recently been enacted conferring
powers on banks and financial institutions, if they are secured creditors, to realize the securities
by sale etc., without intervention of court. The Act contains a provision overriding the provision
of Section 69 of the Transfer of Property Act, 1882. Sub-section (1) of Section 13 of the said Act
reads as under: 9

"13. (1) Notwithstanding anything contained in Section 69 or Section 69-A of the Transfer of
Property Act, 1882, any security interest created in favour of any secured creditor may be
enforced, without the intervention of court or tribunal, by such creditor in accordance with the
provisions of this Act."

The provisions of the Act have been made applicable exclusively to banks and financial
institutions as secured creditors to enforce their security interest with a view to recovering their
debts. That is, if the banks and financial institutions are secured creditors having lent against
securities like mortgage of immovable property, charge, hypothecation they can take over and
sell such securities after giving 60 days' notice to the borrowers so as to adjust the loan, without
resort to litigation in a competent court of law. The provisions of the Act cannot be considered to
have been extended to the secured creditors in general. In a nutshell, the provisions of Section 69
of the Transfer of Property Act, 1882 can be ignored by the banks and financial institutions in the
matter of recovery of their debts ex curia whereas other creditors have to file a suit in a
competent court for recovery of the loan. Otherwise, Section 69 of the Transfer of Property Act,
1882 still remains on the statute and is applicable to other creditors who are not banks and
financial institutions. The banks and financial institutions are empowered to short-circuit the
legal process to enforce the securities for recovery of their loans while the other creditors such as
individuals, association of persons have to undergo the rigmorale of court proceedings. This is a
clear discrimination endowing one section with legal favouritism and depriving similarly placed
others of such right. Hence the suggestion for the amendment to make the law uniform to all
creditors who have lent against mortgage securities.

9
http://www.legalserviceindia.com/articles/mort_rg.htm
It is suggested that the stipulation of certain notified towns in Section 69(1) (c) of the Transfer of
Property Act, 1882 should be deleted by an amendment since such a stipulation does not have

any sanctity or reasonable purpose in the present circumstances.

Recourse to legal proceedings through a court of law for recovery of debts, though secured by
mortgage, is not only time-consuming but expensive too. The suggested amendment to Section
69 of the Transfer of Property Act, 1882 will result in enforcement of mortgage security by the
mortgagee without resort to court proceedings and will, to some extent, disburden the courts
from the current scenario of docket explosion so that the other cases can be adjudicated as
expeditiously as possible.

CHAPTER 3 - RIGHT OF FORECLOSURE


A mortgage is a transfer of an interest in some immovable property, as a security for
advancement of some loan. A person who gives security and takes the loan is called as
mortgagor and person who advances the money is known as mortgagee. The relationship
between the mortgagor and mortgagee is that of a creditor and debtor. The law on mortgage in
India is governed by Transfer of Property Act, 1882.10

The right of foreclosure is a right available to a mortgagee to recover his outstanding money.
This right is available under Section 67 of the Transfer of Property Act, 1882. After the principal
amount has become due, and before payment of mortgage money by mortgagor or before decree
of redemption has been passed by Court, mortgagee has a right to obtain a decree of foreclosure
from the Court. A suit to obtain a decree that a mortgagor will be absolutely debarred from
exercising his right to redeem the mortgaged property is called a suit for foreclosure.

Conditions:

Dr. Avtar Singh, Textbook on the Transfer of Property Act, 3rd Edition (New
10

Delhi: Universal Law Publishing Co. Pvt. Ltd., 2012).


The right to foreclosure can be exercised by mortgagee only when:

 The debt amount has become due for payment.


 There are no contrary conditions in the mortgage deed as to the time fixed for
repayment etc.
 Mortgage money has become due but mortgagor has not got a decree of redemption of
the mortgaged property.
 Mortgage money has become due but mortgagor has not paid or deposited the amount.
After the mortgage money has become due, the mortgagor can pay off his debt in
three ways:
 By tendering or making payment of the mortgage money directly to mortgagee
 By filing a suit for redemption.11
 By depositing the amount in court.
 Mortgagee should not be mortgagee of public works like canal, railway etc.
 A trustee or legal representative of mortgagee cannot file a suit for foreclosure but for
sale only.

However, when mortgagor fails to redeem the property, the mortgagee does not become the
owner of the property, he has to file a suit for recovery of the amount due. The limitation period
for instituting a suit is 12 years. The final decree in a suit for foreclosure on the failure of
defendant to pay all amounts due extinguishes the right of redemption which has to be
specifically declared. A mortgagee may hold two or more mortgages executed by the same
mortgagor. In respect of each of such mortgages, he may have a right to obtain a decree of
foreclosure. In case he sues to obtain such a decree on any one of the mortgages, he will be
bound to sue on all the mortgages in respect of which the mortgage money has become due.

Right to foreclosure and right of redemption:

The right of foreclosure is counter-part of right of redemption. Mortgagor gets a right of


redeeming his security after payment of debt amount; similarly mortgagee has a right of
foreclosure or sale in default of redemption by the mortgagor. Section 67 protects interest of a
mortgagee who has advanced a loan in pursuance of some interest in a security and mortgagor

11
Section 67, Transfer of Property Act, 1882.
has defaulted in payment. The right of foreclosure of mortgagee is co-extensive to right of
redemption of mortgagor. Subject to the intention expressed in the contract, the mortgagee gets
the right to enforce his security when the mortgagor’s right to redeem accrues. But the rule may
be limited by the terms of the mortgage and if the limitation is not oppressive or unreasonable, it
will be given effect to.Right to foreclosure can be limited in nature subject to the contract
between parties, but right to redemption is an absolute right, which cannot be limited in any way.

It follows that when a mortgagee makes a statement about his right to recover the mortgage
amount, such statement impliedly acknowledges the corresponding right of redemption of the
mortgagor. Further, a statement admitting jural relationship, need not refer to or reiterate the
rights and obligations flowing there from. Where a party to the mortgage, by his statement,
admits the existence of the mortgage or his rights under the mortgage, he admits all legal
incidents of the mortgage including rights and obligations of both parties that is mortgagee and
mortgagor.

Foreclosure and different kinds of mortgages:

The act contemplates six kinds of mortgage, namely simple mortgage, mortgage by conditional
sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds and
anomalous mortgage.12

Simple mortgage: The mortgagee in such scenario does not get possession of the mortgaged
property and therefore cannot exercise right of foreclosure. The remedy is either to proceed
against the mortgagor personally or for sale of the mortgaged property.

Mortgage by conditional sale: Mortgage by conditional sale provides in case of default of


payment, mortgage will become a sale. The remedy in such a situation is not foreclosure but
debarring mortgagor’s right of redemption.

Usufructuary mortgage: Under this mortgage, mortgagee retains possession until repayment of
money and receives rents and profits or part thereof in lieu of interest, or in payment of mortgage

12
Section 58, Transfer of Property Act, 1882.
money or partly in lieu of interest and partly in payment of mortgage money. There is
redemption when the amount due is personally paid or is discharged by rents or profits received.
He does not have a right to foreclose or sale.

English mortgage: A mortgagor binds himself personally to pay the debt, and there is an absolute
transfer of mortgaged property in favour of mortgagee. Therefore he does not have a right of
foreclosure but a right to file a suit for sale of the mortgaged property.

Mortgage by deposit of title deeds: As per Section 96, the mortgagee of title deeds is on the same
footing as a simple mortgagee, therefore remedy available is sale of the mortgaged property.

Anomalous mortgage: The remedy depends on the terms contained in the mortgage deed as
anomalous mortgage is combination of two or more types of mortgages.

Partial foreclosure:

Partial foreclosure is not a remedy under Section 67. The rule is that one of the several
mortgagees cannot foreclose or sell in respect of his share unless several mortgagees have, with
consent of the mortgagor, severed their interests under the mortgage.The reason of this rule is to
protect the mortgagor from being harassed by a multiplicity of suits where the severance of
interest of the mortgagees has taken place without the consent of the mortgagor. Accordingly all
the co-mortgagees must join together and file one suit in respect of the whole mortgage money.

Subrogation:

Where redemption of mortgaged property is carried out by any person who has interest in the
mortgaged property other than the mortgagee, like subsequent mortgagees, co- mortgagors,
buyer of mortgaged property, surety of mortgaged debt or creditor of mortgagor, such person
enters into the shoes of mortgagee. He gets all the rights that the creditor (mortgagee) had against
the principal debtor (mortgagor) including right to foreclosure, redemption or sale. This is known
as subrogation.However, the entire mortgage should be paid off by the person.
The person can enforce the security over the original debtor for reimbursement. A person pays a
mortgage to protect his/her own interest in the property or because s/he is secondarily liable for
the debt or for the discharge of the lien. However, if the borrower used the proceeds of the loan
to discharge a prior encumbrance, it is not a sufficient reason to entitle the lender to subrogation.
There should be ample proof that the loan was made for that purpose.

A co- mortgagor in possession, of excess share redeemed by him can enforce his claim against
non redeeming mortgagor by exercising rights if foreclosure or sale as exercised by mortgagee
under Section 67 of the Transfer of property Act but that does not make him a mortgagee.The
remedy of redemption, foreclosure and sale available to such co-mortgagor are the rights as a
subrogee not as a mortgagee reincarnate but by way of rights akin to those vesting in the
mortgage.13

Estoppel of right of foreclosure:

Where mortgagee has accepted the redemption amount and revalued amount and right to redeem
has been enforced, it cannot be interfered with. Mortgagee could not approbate and reprobate,
since mortgagee didn’t challenge execution proceedings during pendency of appeal in Supreme
Court, the right of foreclosure is lost by estoppels.

CHAPTER 4 - Foreclosure vs Power Of Sale

Foreclosure is a legal proceeding in which the lender obtains a court order to terminate the right

of the borrower to the property or the asset mortgaged usually due to default and recover the debt

by the sale of the property. Power of Sale is a clause that is usually inserted in the agreement

made at the time of execution of the loan, giving the right to the lender to reposes the property in
case of a default by the borrower without getting a specific court order for this.

13
Krishna Pillai Rajasekharan Nair v. Padmanabha Pillai (2004)12 SCC 754.
Foreclosure can only be carried out after a specific court order is obtained by the lender to

terminate the right of redemption of the borrower. The right of redemption is the borrower’s

right, meaning that the borrower can repay the complete full amount due to the lender and retain

his property. The lender would generally reposes the property and conduct a public auction of it

to recover his debt. This auction would be conducted in supervision of the court or its designated

person. Power of Sale clause, which is included in the loan agreement would also specify the

type and number of defaults that could trigger the clause. This clause would neither require a

specific court order nor court supervision to execute the repossession and subsequent auction.
The proceeds of the auction would first be used to clear the debt of the lender then that of any
lien holders and if there is a surplus, the same would go to the borrower.

The term foreclosure, however, is interpreted in different ways in different countries or parts of

the world. In places like India the term refers to the intention of the borrower to close the loan

before the expiry of the term by way of prepayment of the balance amount due. The term power
of sale is generally interpreted the same way everywhere.

Summary

1. Foreclosure is the procedure by which the lender obtains a court order by which he can

reposes the mortgaged asset of the borrower in case of default. The Power Of Sale is a clause

inserted in the loan agreement by virtue of which the lender can reposes the mortgaged property

of the borrower in case of default.

2. After repossession in a foreclosure any auction or sale may only be carried out in supervision

of the courts whereas in Power of Sale this may be done without court intervention.

3. The term foreclosure is interpreted differently in different parts of the world whereas the term

Power of Sale generally maintains the same meaning.


CHAPTER 5 - CASE STUDY

Williams v Morgan [1906] 1 Ch 80414

No right to foreclosure for breach of condition to pay interest on mortgage

Facts

The defendant was a borrower under a mortgage and the lender was the plaintiff’s predecessor.
The mortgage deed provided that the principal mortgage sum would be repaid on 1st January
1914. The mortgage deed also provided that interest was payable biannually. In 1906, the
plaintiff issued a summons for foreclosure.

Issue

The plaintiff argued that the condition for biannual repayment of interest had been broken and it
could therefore foreclose even though the principal was not yet payable. The defendant argued
that there was no room for foreclosure until the legal right to redeem had come to an end.

Held

The Court noted that the proviso that the defendant shall not pay off the principal until
1st January 1914, was unconditional. Furthermore, the proviso that the principal will not be
called up if the interest is regularly paid on a biannual basis was absolutely clear in its terms. The
Court could not import a covenant to pay the principal at an earlier date if interest was in default.
If a condition in the mortgage deed is broken in whole or in part then the defendant mortgagee’s
estate is absolute in law and foreclosure lies regardless of whether the time for paying the
principal has arisen. However, in this case, having considered the tenor of the document, the
Court did not consider that any condition in the deed was broken. It was not possible to import
the covenant to pay biannually into the proviso for redemption so that the defendant’s estate was
absolute in law. There could therefore be no foreclosure before the agreed date of 1st January
1914.

Pushpangadan v/s The Federal Bank Ltd15


The first respondent is the plaintiff in the suit filed for recovery of the money advanced by the
Bank to the appellant on account of a loan he took for agricultural purposes. According to the
plaintiff, as per the terms of the loan, the amount was repayable on demand within twelve
months in a lump sum with interest at 16.5% at quarterly rests. As a security for the advance, the

14
https://www.lawteacher.net/cases/williams-v-morgan.php
15
https://indiankanoon.org/doc/411634/
appellant executed a demand promissory note in favour of the Bank. He also executed a
hypothecation agreement in favour of the Bank. A collateral security was also offered as
equitable mortgage in respect of the scheduled property by depositing the title deed.

2. The appellant contended in his written statement inter alia, that (he action of the Bank in
charging interest at the rate of 16.5% per annum was unauthorised and illegal. The directions
issued by the Reserve Bank of India to the Scheduled Banks in the matter of charging interest for
loans are binding on the Bank. According to the above circumstances, the Bank is precluded
from charging interest on agricultural loans in excess of 13.5%. Therefore, it was contended that
the agreement to pay interest at the rate of 16.5% per annum is opposed to public policy. The suit
was decreed allowing the plaintiff to realise from the defendants and their assets and also
charged over the scheduled property.

Allahabad Bank Vs Ms. Shivganga Tube Well and others16

This first appeal is admitted on 12th March, 1998. Heard learned counsel appearing for the
respective parties.

(3) fa631-97

2. Appellant - Bank's suit for recovery of an amount of Rs. 27,76,137/- and for preliminary
decree for sale of the mortgaged property for recovery of the said amount was decreed
against the borrower -

original defendant No.1, but was dismissed against the guarantors i.e. defendants No. 2 to 6.
Hence, this first appeal against the guarantors.

3. The case of the appellant/plaintiff, in short, is as under :-

. That, the original defendant No. 1 has availed a loan of Rs. 10 (ten) lacs on 12.02.1988 and
10.03.1988 for the purposes of purchase of a truck with bore-well Rig, Machine, Screw
Compressor, Drilling Rig, etc. The original defendant No. 1 -

the borrower hypothecated the said machinery and its accessories with the plaintiff Bank. At
the same time, the defendants No. 2 to 6 i.e. present respondents No. 2 to 6 agreed to stand as
continuing guarantors for the original defendant No. 1 in repayment of the loan amount as
agreed between the appellant Bank and the defendant No.1. They agreed (4) fa631-97 to

16
https://indiankanoon.org/doc/64158507/
mortgage their respective immovable property, situated in Nizamabad in Andhra Pradesh
State. They agreed to accept all the terms and conditions of the sanction of the loan amount.
Thereafter, the amount was sanctioned and disbursed to the defendant No. 1.

They accordingly delivered their title-deeds at Himayatnagar Branch of the


plaintiff/appellant Bank on 29.04.1988. Thus, equitable mortgage by depositing the title-deed
is created by these respondents. The defendant No. 3 i.e. the respondent No. 3 has further
executed agreement to mortgage his plots, situated at Shivajinagar, Nizamabad, as detailed in
the plaint and accordingly, those title-deeds were deposited on 29.04.1988 at Himayatnagar
branch of appellant Bank.

All the defendants on 28.04.1988 attended the Himayatnagar branch of appellant Bank and
on 29.04.1988, deposited the title-deeds of their respective immovable properties, as detailed
in the plaint. They had agreed by executing affidavits regarding the confirmation of the
mortgage by deposit of title-deeds and had further agreed that the revival of the loan, if any
by the borrower i.e. defendant No. 1 shall bind the mortgagor. However, (5) fa631-97 as the
defendant No. 1 failed to repay the loan amount as agreed from time to time, he has executed
balance confirmation letters between 1989 and 1992, as detailed in the plaint and thus
extended the time for payment of the borrowed amount together with interest accrued.
However, due to the persistent default, the amount staggered to Rs. 27,76,137/-. In the
circumstances, the suit, as detailed supra, came to be filed on 22.07.1994.

4. The defendant No. 1 i.e. the borrower, though served with the summons, failed to appear
before the trial Court and thereafter to file written statement. The case, therefore, proceeded
without his written statement. Defendants No. 2 to 4 i.e. present respondents No. 2 to 4 filed
their common written statement at Exhibit-33. They denied all the pleadings of the appellant
Bank. Further, the plea of territorial jurisdiction to entertain the suit was taken as the
mortgaged property are situated at Nizamabad in Andhra Pradesh. The original contract
between the appellant Bank and the defendant No.1/ defendant No. 1 was denied. They
denied that these (6) fa631-97 defendants had approached the plaintiff in connection with
any such loan transaction. The execution of any document by them or deposit of title-deeds
towards creation of mortgage was denied. Further, any balance confirmation letter from the
defendant No. 1 was denied. Alternatively, it was submitted that from time to time, these
respondents/defendants had brought to the notice of the Manager of the plaintiff Bank about
the activities of the defendant No. 1.

However, the Branch Manager of the plaintiff Bank failed to take any proper steps or attach
the hypothecated property and therefore, it was claimed that these defendants/respondents
No. 2 to 4 are not required to pay any amount.

5. On the basis of these pleadings, the learned trial Court framed the issues at Exhibit-35. It
held that the appellant failed to prove execution of guarantee-deed by the respondents No. 2
to 6. It further came to the conclusion that the plaintiff was able to prove that the respondents
No. 2 to 4/defendants No. 2 to 4 had executed agreement of mortgage while defendant No. 6
i.e. present (7) fa631-97 respondent No. 6 had executed actual mortgage-deed.
However, it was found that the respondents No. 2 to 6 i.e. original defendants No. 2 to 6 have
never executed the mortgage and therefore, their property is not liable to be sold for recovery
of the money.

As regards the extension of limitation by executing a balance confirmation letter by the


defendant No.1/ respondent No.1, it was held that the said extension would not bind the
present respondents No. 2 to 6.

In the circumstances, the suit as against the respondents No. 2 to 6 came to be dismissed.

6. Mr. S.V. Adwant, learned counsel for the appellant/Bank submitted before me that the
learned Civil Judge, Senior Division failed to distinguish between the "transfer of interest by
executing a mortgage-deed" and "a mortgage by deposit of title-

deeds only". Further, the documents executed by the defendants would show that they had
agreed that the balance confirmation by the principal borrower shall bind them. Thus, the
liability of the defendants No. 2 to 6 is co-extensive to that of the borrower and hence, it was
submitted that the suit was within (8) fa631-97 limitation.

7. On the other hand, Mr. P.V. Mandlik, learned Senior Counsel appearing for the
respondents No. 2 to 6, submitted that there is no document on record to show that it was a
continuing guarantee. The documents were only regarding agreement by mortgage by
respondents No. 2 to 4. There is no registration of the mortgage, nor any stamp fees as per
the provisions of Bombay Stamp Act was paid. He further took a plea of territorial
jurisdiction. He further submitted that since there is no mortgage, the guarantors' liability
would not be extended by personal acknowledgement, if any by the borrower during the
subsistence of the contract of repayment of loan. He submits that the period of recovery of
the loan amount was only of three years. The loan transaction was entered into on 12.02.1988
and 10.03.1988 while the suit was filed on 22.07.1994.

In the circumstances, he submitted that the suit was barred by limitation. He further
submitted that the learned trial Court has taken into consideration the contradiction regarding
the fact as to the execution(9) fa631-97 of guarantee-deed at Exh-103. In the circumstances,
Mr. Mandlik wanted that the appeal be dismissed.

Ramayya vs Guruva And Ors. on 5 November, 189017

JUDGMENT

1. The question to be determined in this second appeal is whether the plaintiff is entitled to a
decree for recovery of the amount due to him under his mortgage by sale of the mortgaged

17
https://indiankanoon.org/doc/1926748/
property. The Court of First Instance held he was so entitled and gave him a decree, but the
Lower Appellate Court held he was not, and dismissed his suit. The mortgage was executed after
the Transfer of Property Act came into force, and, therefore, the rights of the mortgagee are those
declared by that Act. Section 67 gives the mortgagee the right to obtain from the Court a decree
for sale "in the absence of a contract to the contrary," but with the proviso that nothing in that
section shall be deemed (a) (inter alia) to authorize a usufructuary mortgagee as such to institute
a suit for foreclosure or sale. The term usufructuary mortgage is defined by Section 58 (d) to be
"when the mortgagor delivers possession of the mortgaged property to the morgagee and
authorizes him to retain such possession until payment of the mortgage money and to receive the
rents and profits accruing from the property and to appropriate them in lieu of interest or in
payment of the mortgage money, or partly in lieu of interest and partly in payment of the
mortgage money." No doubt the incidents here enumerated occur in the present case and the
mortgage would therefore be a usufructuary mortgage within this definition, but for the fact that
the mortgage deed contains a covenant for payment of the principal by a certain date Chathu v.
Kunjam I.L.R. 12 Mad., 109 is an authority for the position that a mortgage is not a usufructuary
mortgage within the meaning of the Transfer of Property Act if there is a covenant to pay the
mortgage debt.

2. The Subordinate Judge holds that the mortgage is of the kind defined as "anomalous" by
the Transfer of Property Act and therefore to be governed by the contract of the parties and that
by the contract in this case the mortgagee is precluded from suing for sale of the mortgaged
property by the provision in the mortgage-dead that, in default of payment within the prescribed
time, the mortgagee shall continue to enjoy the mortgaged property for interest as before. This
provision is one in favour of the mortgagee, extending his security beyond the prescribed period,
and does not, in our opinion, take away his right, arising out of the covenant to pay, to sue for
sale the mortgaged property.

3. We reverse the decree of the lower Appellate Court and restore that of the Munsif. The
plaintiff is entitled to his costs in this and the lower Appellate Court.

CONCLUSION
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.

. Sec 58 of Transfer of Property Act 1882 which deals with topic of mortgage remains silent on
point of possession in mortgage by conditional sale. And in anomalous mortgage it is completely
uncertain that who will have the possession of the mortgaged property because anomalous
mortgage is any mortgage which does not come under the above mentioned first five kinds of
mortgage. So in anomalous mortgage everything complete depends on the terms and condition
set while making the contract of mortgage.

After going through this project, I have come to the conclusion that, section 69(1) (a) of the
Transfer of Property Act, 1882 has lost its relevance in the present-day secular circumstances.
English mortgage is rarely resorted to by the lenders like banks in view of the religious
discrimination in the section itself and stamp duty and registration expenses being heavy to be
borne by the mortgagors.

This is because, section 69(1) (a) of the Transfer of Property Act, 1882 unduly excludes the
majority communities in India from exercising the power of sale available for an English
mortgagee. This section appears to have been enacted only for the transactions between
mortgagors and mortgagees who are English people or people of English origin.

Therefore, in my view there is an urgent need to amend the provisions of sec.69 of the "Transfer
of Property Act, 1882", so that the interest of the secured creditors can be realized more fruitfully
and without much delay and harassment.

The right of foreclosure describes a lender's ability to take possession of a property through a
legal process called foreclosure. Lenders may invoke their right to foreclosure when a
homeowner defaults on their mortgage payments. The mortgage’s terms will outline the
conditions under which the lender has the right to foreclose. State and national laws also
regulate the right of foreclosure.
Foreclosure is the procedure by which the lender obtains a court order by which he can reposes
the mortgaged asset of the borrower in case of default. The Power Of Sale is a clause inserted in
the loan agreement by virtue of which the lender can reposes the mortgaged property of the
borrower in case of default.
After repossession in a foreclosure any auction or sale may only be carried out in supervision of
the courts whereas in Power of Sale this may be done without court intervention.
The term foreclosure is interpreted differently in different parts of the world whereas the term
Power of Sale generally maintains the same meaning.
BIBLIOGRAPHY
1. https://investinganswers.com/financial-dictionary/real-
estate/mortgage-1608
2. https://www.srdlawnotes.com/2016/05/what-is-mortgage-and-its-
essentials.html
3. https://www.legalbites.in/sale-immovable-property/
4. http://shodhganga.inflibnet.ac.in/bitstream/10603/131970/16/16_chap
ter%208.pdf
5. Section 58, Transfer of Property Act, 1882.
6. Dr. Avtar Singh, Textbook on the Transfer of Property
Act, 3rd Edition (New Delhi: Universal Law Publishing
Co. Pvt. Ltd., 2012).
7. R . K. SINHA TRANSFER OF PROPERTY LAW
8. indiankanoon.org