One of the attributes of transfer of immoveable property is MORTGAGE which is defined by the central enactment relating to the Transfer of Property as “A mortgage is a transfer of an interest in specific immoveable property for the purpose of securing payment of money advanced or to be advanced by way of loan, an existing or future debts or the performance of an engagement which may give rise to pecuniary liability”.
Thus, in commercial and corporate practice this specie of property transfer assumes immense significance as it constitutes the safeguard and protection to the money circulated in the market by way of lending, loan, debt, etc. The right of the person advancing money by way of loan, legal debt, credit is secured by a mortgage deed with that of corresponding liability placed in the person borrowing such money.
Mostly lawyers associated with the Banking Sector, Financial Institutions, Licensed Money lenders, Investment Companies are entrusted with the drafting and preparation of mortgage deed executed by the transferor i.e. Mortgagor who borrows money from, and places with, the transferee i.e. Mortgagee the property owned by the Mortgagor as a lawful security in various forms for the money so advanced. Such lawyers have to adhere to their moral duty to exercise professional acumen as in the case of Sale/ Purchase Deed or Development Agreement & Development Power Of Attorney or Transfer of Development Rights or Agreement for Sale, Public Notice and thus pursuant thereto had to investigate the title of the Mortgagor to the property to be mortgaged and draw appropriate Search Report and issue Certificate of Title stating whether the property is eligible for mortgage and free from any legal impediment.
The various forms of mortgage whereby the property is conveyed or agreed to be conveyed as a security for the money advanced are:
Simple Mortgage: this is a contractual mortgage which takes place without delivery of possession of the mortgaged property. Under this type of contract a mortgagor is personally bound to pay the debt to the mortgagee and in the event of mortgagor’s failure to repay such debt, the mortgagee shall have the 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.
English Mortgage: Under English mortgage a mortgagor transfers the mortgaged property absolutely to the mortgagee under a legal obligation to repay the debt money on a certain date and but subject to a proviso that the mortgagee will transfer such property back to the mortgagor upon payment of the secured money.
Mortgage by deposit of title deeds: this kind of mortgage is created by a delivery to a creditor or his agent documents of title to immoveable property with a intent to create a security thereon. Such security is enforceable by sale of the property through court.