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Mortgage In Immovable Property And Charge

Sections 58 to 104 of the Transfer of Property Act, 1882 are devoted to the specifics of mortgages and charges. The key elements defined in Section 58 of the Transfer of Property Act, 1882 include: Mortgage: A mortgage constitutes the transfer of an interest in immovable property with the aim of securing repayment of money advanced, settling an existing or future debt, or ensuring the performance of an engagement that may lead to a financial obligation.

Mortgagor and Mortgagee:

The individual transferring the interest in the immovable property is termed the mortgagor. The recipient of this transfer is known as the mortgagee. Mortgage Money: This refers to the principal sum and its interest, for which the repayment is presently secured.

Mortgage Deed:

This is the document through which the transfer is formalized. A mortgage involves transferring an interest in immovable property as security for a loan. While the ownership of the property stays with the mortgagor, they transfer some rights in the property to the mortgagee, who provides the loan.

Key conditions of a mortgage include:

  1. A transfer of interest to the mortgagee.
  2. The interest must pertain to a specific piece of immovable property.
  3. The mortgage must be backed by consideration.
Sections 100 to 101 of the Transfer of Property Act, 1882 cover the legal framework for charges on immovable property. Charge Section 100 defines a charge as the designation of immovable property by one party to another as security for a payment obligation, without constituting a mortgage. Although the transaction establishes no transfer of interest to the charge holder, it grants them the right to recover the owed funds from the property. The legal provisions applicable to simple mortgages are similarly applicable to charges.

Key Considerations under Section 100 of the Transfer of Property Act, 1882:

  1. A charge can be established either through an agreement between parties or automatically by law.
  2. It is specifically created to secure the payment of money.
  3. Unlike a mortgage, a charge does not constitute a property transfer.
  4. Enforcement of a charge can be sought through legal action.
  5. A charge can be dissolved by mutual agreement to release the debt, through novation, or by a merger of interests.

Mortgages and charges are both forms of security for the payment of money, but they have distinct legal characteristics and implications:


  • A mortgage is specifically created as security for the repayment of a debt.
  • It involves a formal agreement between the parties where the borrower commits to repaying the money.
  • In a mortgage, there is an explicit transfer of an interest in immovable property from the mortgagor to the mortgagee.
  • Legally, every mortgage qualifies as a charge.
  • The enforcement period for a simple mortgage is 12 years, while for mortgages other than simple mortgages, it is 30 years.


  • A charge may be created as security for the payment of money but not necessarily for a debt; it can arise from other obligations.
  • Unlike a mortgage, a charge does not usually involve a formal agreement specifying that the party will repay; it can arise by operation of law.
  • In the case of a charge, there is no transfer of property interest; instead, the charge simply grants a right to payment out of the specified property.
  • Not every charge constitutes a mortgage.
  • A charge must be enforced within 12 years, regardless of its nature.

These distinctions highlight the nuanced differences in how property law treats these two types of securities, both of which are designed to protect the financial interests of the lender or beneficiary. Conclusion:
The concept of mortgage is one of the important concepts under the Transfer of Property Act, 1882 as it helps in securing the debt to the mortgagor and also helps in redeeming the property as soon as the mortgagor pays back the amount due to the mortgagee.

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