What
is a Mortgage?
Transfer of property act 1882, deals with mortgage. The relevant section is 58(a). The
necessary ingredients are: -
1.
Transfer of interest in specific immovable property.
2.
Transfer is for the purpose of securing the payment of money advanced or to be
advanced by way of loan.
3.
It may be existing and future debt.
4.
It may be also for performance of an engagement, which may lead to financial
liability.
Can
a mortgage be done in favour of company?
Yes.
The transfer of specific interest in an immovable property should be in favour
of living person. Living person includes company, association, and body of
individuals.
What
is the difference between mortgage and pledge?
Mortgages
are dealt as per transfer of property act while Indian Contract Act of 1872
deals with pledge.
Pledge
is the bailment of goods, as security for payment of debt, performance or
promise.
The
pledgee holds the possession of goods as security, but has no right of
foreclosure, as there is no transfer of ownership.
Right
of enjoyment of property not given to the pledgee.
Transfer
of possession is very important in case of pledge; not necessarily so in case
of mortgage, depending upon type of mortgage. In mortgage there is transfer of
interest, whereas in case of pledge, the pledgee has only special right of
detaining the goods till repayment of loan.
Mortgagor
has right of redemption and mortgagee has right of foreclosure, where as the
pledgee does not have right of foreclosure.
What
are the different kinds of mortgages?
Broadly
there are six types of mortgages: -
1.
Simple Mortgage
2.
Mortgage by conditional sale
3.
Usufructuary Mortgages
4.
English Mortgages
5.Mortgage
by deposit of title deeds
6.
Anomalous Mortgage.
What
is meant by mortgage by possession and mortgage without possession?
In
case of mortgage by possession, the physical possession of the immovable
property is delivered, possession is important in case of Usufructuary
mortgage. In case of mortgage without possession, the physical possession of
the property is not delivered like in simple mortgage.
What
is meant by Redemption?
Redemption
is right available to mortgagor that is one who has transferred the interest in
immovable property. He may at any time after the principal money has become due
may repay the amounts due, get the interest in specific immovable property
transferred in his favour, and also get back the possession, if delivered to
the mortgagee.
What
is foreclosure?
This
is right available to mortgagee, who may exercise this after the mortgage money
has become due and before decree has been made for redemption or mortgage money
has been paid or deposited in the court.
The mortgagee has a right to obtain from competent court a decree that the
mortgagor, shall be absolutely debarred of his right of redemption or that the
property be sold.
What
are the remedies available to the mortgagee?
The
mortgagee has three remedies. A suit may be filed on personal covenant, where
the mortgagor has undertaken to repay the debt, binding him personally. A suit
can also be filed for sale and thirdly may exercise his right of foreclosure.
More,
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