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TITLE OF THE RESEARCH PAPER

SIMPLE MORTGAGE

By
Name of the Student Sk. Roshan
Roll No. 2018 LLb083
Semester: 7th
Name of the Program: 5 year (B.A., LL.B. / LL.M.)

Name of the Faculty Member Prof. Ganta Satyanarayana Sir

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

NYAYAPRASTHA “, SABBAVARAM, VISAKHAPATNAM - 531035
ANDHRA PRADESH, INDIA

Date of Submission: 11-12-2021

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ACKNOWLEDGEMENT
I would sincerely forward my heartfelt appreciation to our respected Drafting, Pleading &
Conveyance professor, Prof. Ganta Satyanarayana Sir for giving me a golden opportunity to
take up this Research Paper regarding “Simple Mortgage”. I have tried my best to collect
information about the project in various possible ways to depict clear picture about the given
project topic.

TABLE OF CONTENTS
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1. SYNOPSIS………………………………………………………………….04
2. INTRODUCTION…………………………………………………………07
3. ESSENTIALS OF MORTGAGE…………………………………………07
4. RIGHTS OF MORTGAGOR……………………………………………..09
5. RIGHTS OF MORTGAGEE……………………………………………..10
6. SUB-MORTGAGE………………………………………………………..11
7. TACKING…………………………………………………………………12
8. SIMPLE MORTGAGE…………………………………………………..12
i) Definition………………………………………………………………12
ii) Section-58(b) of Transfer of Property Act, 1882……………………13
iii) Requirements…………………………………………………………14
9. CASE LAWS……………………………………………………………..15
10. DRAFT OF SIMPLE MORTGAGE……………………………………18
11. CONCLUSION…………………………………………………………..23
12. BIBLIOGRAPHY………………………………………………………..24

SYNOPSIS
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Title: - SIMPLE MORTGAGE

INTRODUCTION:

Section 58 of the Transfer of Property Act defines mortgage. According to this section,

mortgage means a transfer of interest in a specific immovable property. This transfer of
property can be done to secure payment of any existing or future debt, any advance or money
which has been advance which has been forwarded by the way of a loan, or for the
performance of any agreement which may give rise to any pecuniary or monetary liability.
The person who transfers the property is known of the mortgagor. The person to whom the
property is transferred is known as the transferee. A mortgage also includes mortgage money,
which can be defined as the principal sum along with the interest, the payment of which has
been secured for the time being. The instrument which is used by the parties to effect the
transfer is known as the mortgage deed.

A mortgage as per Section- 58 of the Transfer of Property Act, 1882 is the transfer of an
interest in a specific immoveable property for the purpose of securing the payment of money.
This paper examines all essentials of a simple mortgage in detail, as well as its important
features, such as the rights of the mortgagor, mortgagee, with emphasis on the right to
redemption. It also highlights features of sub mortgage and tacking.

AIM/ OBJECTIVE:

1. The main objective of this research is to critically examine the concept of Simple
Mortgage mentioned in the Transfer of Property Act, 1882.
2. To understand as to how the Transfer of Property Act, 1882 plays an important role
with respect to the transfer of an interest over a specific immovable property.
3. To highlight the rights of the mortgagor, mortgagee and the important features like
Sub-Mortgage, Tacking and Right to Redemption.

SCOPE OF THE STUDY:

The Scope of the study is limited to the Section-58 of the Transfer of Property Act, 1882 and
also to the part which is talking about the rights of redemption.

SIGNIFICANCE OF THE STUDY:

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1. To understand the concept of the Simple Mortgage as to how the Section-58 plays an
important role in order to deal with any dispute involving the simple mortgage.
2. To critically analyse the other rights like rights of redemption, Sub-Mortgage and
Tacking.

RESEARCH METHODOLOGY:

a) NATURE OF STUDY: The study is a combination of descriptive, explanatory,

analytical in nature, while primarily being a doctrinal study.
b) SOURCES OF THE STUDY:
i) Primary sources: Judicial judgements,
ii) Secondary sources: articles, books, journals.

LITERATURE REVIEW:

1) K.V Venkatasubramama Iyer, Mortgagee’s Right of Sale, 1 Madras Law

Journal 38, 39 (1919).
As a simple mortgage under the Act is a transaction in which it is necessary to have a
stipulation for the right to sell, the only case in which a right to sell can be sustained
under the Transfer of Property Act, without an express or implied stipulation for it in
the mortgage agreement is where the transaction is an English mortgage. But judicial
decisions have conceded to a usufructuary mortgagee a right to a decree for sale in
two cases: Firstly, where the mortgage-deed contains a covenant to pay and secondly,
where possession of the mortgaged property is not delivered to the mortgagee under
the mortgage agreement.
2) Mayank Barman, Mortgage & its types, Law Times Journal
https://lawtimesjournal.in/mortgage-its-types/ (last accessed 18th Nov, 2021).
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.
In this case, the possession of the property is with the mortgagor himself but he binds
himself personally to pay the mortgage-money and agrees to a condition that if he
fails to pay the mortgage money to the mortgagee then in that event, the mortgagee
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can sell that property by way of sale. The mortgagee in this case is known as a simple-
mortgagee.

CHAPTERIZATION:

SYNOPSIS

INTRODUCTION

ESSENTIALS OF MORTGAGE

RIGHTS OF MORTGAGOR AND MORTGAGEE

SUB-MORTGAGE

TACKING

SIMPLE MORTGAGE

CASE LAWS

PROFARMA DRAFT

CONCLUSION

BIBLIOGRAPHY

INTRODUCTION:
According to Section 58 of the Transfer of Property Act, 1882, a mortgage is the transfer of
an interest in specific immoveable property for the purpose of securing the payment of money
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advanced or to be advanced by way of loan, an existing or future debt or the performance of

an agreement which may give rise to pecuniary liability.1

Section 58 of the Transfer of Property Act defines mortgage. According to this section,

mortgage means a transfer of interest in a specific immovable property. This transfer of
property can be done to secure payment of any existing or future debt, any advance or money
which has been advance which has been forwarded by the way of a loan, or for the
performance of any agreement which may give rise to any pecuniary or monetary liability.
The person who transfers the property is known of the mortgagor. The person to whom the
property is transferred is known as the transferee. A mortgage also includes mortgage money,
which can be defined as the principal sum along with the interest, the payment of which has
been secured for the time being. The instrument which is used by the parties to effect the
transfer is known as the mortgage deed. The transferor is called a mortgagor, the transferee a
mortgagee; the principal money and interest the payment of which is secured for the time
being are called the mortgage money and the instrument by which the transfer is affected is
called the mortgage deed.2

ESSENTIALS OF MORTGAGE:3

 Transfer of Interest-
The transfer of interest in a specific immovable property is called mortgage. The
mortgagor who has the possession of the overall interest of the property only cedes a
part of the interest in favour of the mortgagee while mortgaging his property in order
to secure a loan. After the completion of the mortgage, the interest of the mortgagor
reduces to that proportion that has been mortgaged to the mortgagee. His ownership
also reduces temporarily until he makes good of the loan that he has taken from the
mortgagee. When the mortgagor transfers his property, then under the rights provided
to the mortgagee, the transferee can recover what he has loaned to the mortgagor.

 Specific Immovable Property-

1
Section 58(b), Transfer of Property Act, 1882
2
Section 58(b), Transfer of Property Act, 1882
3
Essentials of Mortgage available at http://www.lawyersclubindia.com/forum/Types-of-Mortgage-
8944.asp#.Uyc18c6adFx (last visited on 18-11-2021.
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There must be specific mention of the property to be mortgaged in the mortgage deed.
The reason behind stating specific property is in case, the mortgagor cannot repay his
loan, then the court can decree a sale of the specific property mortgaged by him when
the mortgagee files a suit for non-payment of loan.

 Securing the Payment of a Loan-

In the case where the debtor secures a loan from the creditor by mortgaging a specific
immovable property but specifies a condition in the mortgage deed that the creditor
cannot sell the specific property before the loan is repaid, then it will not be
considered as a mortgage at all. This is because there is no transfer of interest in this
case. There is a basic difference between sale and mortgage. In the case of a sale, the
entire interest in the property is transferred i.e. “transfer of rights.” But in the case of a
mortgage, only the interest in the property is transferred for a specific period.

The transaction involved in a mortgage is for performance of obligations or payment

of a loan. The mortgagor and the mortgagee share the relation of a debtor and a
creditor. If however the debtor borrows money from the creditor and puts this clause
that the creditor cannot sell the mortgaged property before the repayment of loan then
it is not a mortgage as there is no transfer of interest from the property mortgaged.
The basic difference between sale and mortgage is that in mortgage there is a part of
interest that is transferred while in a sale there is complete transfer of rights.

The three most important features of a mortgage are:

 The mortgagor can claim his right to the property he mortgaged after he repays his
loan.
 The mortgagee has a right to sell the mortgaged property on non payment of debt.
 On complete payment of the debt, the mortgagee gives up whatever interest he had on
the mortgaged property.
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RIGHTS OF MORTGAGOR:4

1. Rights of Redemption:
The mortgagor has the right to get back the mortgaged property if-
o He repays the loan on the correct date and time.
o His right to get back his mortgaged property has not been quashed by the court
or by one of the contracting parties.

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

 He can get back all the valid legal documents accrued in the process of executing the
mortgage deed.
 He also gets the right to receive possession of the mortgaged land from the mortgagee
as done in English mortgage.
 He also has the right to get back the property he mortgaged as his own expense or to a
third person as directed by him.

When the property has been redeemed by the mortgager, he also gets the right to get back all
the legal documents which are related to the property. He also gets the right to get back the
possession of the immovable property.

2. Accession to Mortgaged Property:

During the period of mortgage when the mortgaged property was under the control of
the mortgagee, if he made any alterations to the property, then on total repayment of
mortgage money, the mortgagor when he gets back his property, gets it back with all
the alteration if there is nothing explicitly mentioned in the contract.
3. Right to Transfer to Third Party:
The mortgagor on repayment of the mortgage money may want the mortgaged
property to be transferred to a third person and the mortgagee is bound to oblige. If at
the repayment of the loan, the mortgager instead of taking back the possession of the

4
Rights of Mortgagor available at  http://sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last
Visited on 18-11-2021)
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property, instructs the mortgagee to transfer the property to some third person, the
mortgagee is bound to transfer the property to such third person.
4. Right to Inspection and Production of Documents:
The mortgagor possesses the right to check and keep record of all the title documents
which are in possession of the mortgagee. Even though the documents relating to the
mortgaged property is in the possession of the mortgagee, the mortgagor is entitled to
inspect and keep the records of all the documents which are with the mortgagee.

RIGHTS OF MORTGAGEE:5

1. Right to Sue for Mortgage Money:

The mortgagee can claim his mortgage money by filing a suit in the following
situations.

i) Where the mortgagor through personal covenant takes up the liability to pay the
mortgagee as in English and simple mortgage.
ii) Where the mortgaged property is insufficient or damaged or partly destroyed and
the mortgagor has not furnished any further security.
iii) Where the mortgagee is denied of the total or proportion of the mortgaged
property by the mistake of the mortgagor.
iv) Where the mortgagor is unable to provide security to the mortgagee where he has
the right to have security.
2. Right of Sale:
The mortgagee is well within his right to sell off the mortgaged property on non-payment
of loan by filing a suit and getting a decree from the court. However Sec. 69 of the
Transfer of Property Act gives the right to the mortgagee to sell off the mortgaged
property without filing a suit in the court of law and getting a decree to sell the mortgaged
property.
3. Right of Foreclosure:

5
Rights of Mortgagor available at  http://sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last
Visited on 18-11-2021)
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The mortgagee has a right to move court and file a suit against the mortgagor barring him
from claiming the mortgaged property back. The right of foreclosure can be claimed in
mortgage by conditional sale and anomalous mortgage.
4. Right of Accession to Property:
If any alteration is made to the mortgaged property, then the mortgagee is entitled to both
the property that has been mortgaged and the alteration as security for the money loaned.
5. Right to Possession:
The mortgagee is legally empowered to take control of the mortgaged property as per the
terms of the contract of mortgage. This right is available in usufructuary mortgage.

SUB-MORTGAGE:6

A mortgage becomes a sub mortgage when the mortgagee, who is the current possessor of the
mortgaged property, uses the mortgaged property as an advance. The mortgaged property as
is property of the mortgagee as long as the mortgagor has not repaid his loans, he can use the
mortgaged property to get loans by re-mortgaging the already mortgaged property. A
mortgage takes the form of a sub-mortgage when the mortgagee uses the property which is in
his possession to take a loan himself. The mortgaged property is considered as the property of
the mortgagee till the amount of loan is not paid back. He can, therefore, get an advance by
further mortgaging the already mortgaged property. The mortgagee gets all the legal rights
which a mortgagee gets in the case of a mortgage. He also has the right to get his loan repaid
and can sue for payment. He can also take the mortgaged property as security.

The sub mortgagee has all the rights of the mortgagee and has all the legal rights of the
mortgagee. He has the right to get repaid the money loaned, file a suit against the mortgagee
turned mortgagor and take mortgaged property as security. The sub mortgage is also called
“mortgage of mortgagee.”

6
Sub Mortgage available at  http://www.sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last
Visited on 18-11-2021)
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TACKING7

A debtor can lawfully execute more than one mortgage at the same time on his own property.
But the priority of the mortgages will be according to the dates on which they were executed.

SIMPLE MORTGAGE8

Definition

Simple mortgage is executed where without any property being delivered to the mortgagee;
the mortgagor makes himself liable to repay the debt9. It is implied by him in an express or
implied manner that in the event of non-repayment of loan, the mortgaged property can be
used to make good of the loan by the mortgagee.10

The fundamental characteristic of simple mortgage is that the mortgagee has no right to
liquidate the property without the permission of the court. The mortgagee can:11

 Apply to the court for consent to offer the sold property, or

 File a suit for recuperation of the entire sum without offering the property.

Section-58(b) of Transfer of Property Act, 1882:

7
Tacking available at  http://www.sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last Visited
on 18-11-2021)

8
Dr. Poonam Saxena, Property Law, Pg.410 – 412

9
Simple Mortgage is used to notify all mortgage deeds where the debtors binds himself through a personal
covenant and gives his property as security to the creditor. See Jangi Singh v chander (1908) ILR 30 All 390

10
In a deed of simple mortgage, the transfer of right signifies the right to liquidate the property. There is no rule
stating that such right be expressly mentioned in the mortgage deed. See dalip Singh v Bahadur ram (1912) 34
All 446.

11
Fundamental Characteristics of Simple Mortgage available at
sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last Visited on 16/3/2014)
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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.

Personal Liability

A simple mortgage entails two types of liabilities, personal liability and the mortgaged
property.12 In a standard mortgage deal, the mortgagor does not have any personal liability
and on non-repayment of loans, the mortgagee can move on to liquidate the mortgaged
property in order to make good of the loan. But in a simple mortgage, there is a personal
liability on part of the mortgagor to repay the loan along with the mortgaged property, hence
the mortgagee has to option to move against either the mortgagor personally thus obtaining a
decree against him or he can move against the mortgaged property to liquidate it for the
payment of loan. The presence of a personal covenant is very important in a simple mortgage
and that is what distinguishes it from other forms of mortgage.

No Delivery of Possession

There is no delivery of mortgaged property in simple mortgage. The money can be recovered
by a money decree. A clause to transfer the complete interest of a mortgaged property to the
mortgagee on non-payment of loans changes the simple mortgage into mortgage with
possession.

Sale of Property

In mortgage, the mortgagor may give the power to sale the property either expressly or
impliedly. This basically means that on the event of non-payment of debt, the mortgagee can
sell the mortgaged property. But even if the contract of mortgage specifically talks about
selling the property on non-payment the mortgagee cannot go ahead with the sale of the
mortgaged property and has to wait for the intervention of the court to sell the mortgaged
property.

12
Wahidunnia v Gobardhan (1900) ILR 22 All 453
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Adverse Possession

A trespasser who removes the mortgagor and takes possession of the land that land can still
be legally mortgaged. The trespasser can become the owner of the limited right the mortgagor
has over the land mortgaged by him but it does not in any way take away the legal rights of
the mortgagee over the mortgaged land in a simple mortgage .Adverse possession is valid
only when the mortgagee who has a right over the mortgaged land does not take possession
over the land in time and he runs against time which is from the day he gets his right to
interest over the mortgaged land. If there is no accrual of rights to possess the land by the
mortgagee, his right cannot be taken away by the mere possession of that particular
mortgaged land by the adverse claimant.

If the mortgage has been declared illegal for being unregistered and the mortgagee has been
in possession of that land for more than 12 years then after 12 years, the mortgage becomes
valid.

Requirements of Mortgage Deed:

 A thorough investigations of title up to 60 years and preparation of an abstract on title and

a thorough search in all the places as required in the case of sale.
 Recitals:- A short history of the property right up to its vesting in the mortgagor and the
object of the loan, amount and rate of interest.
 Parties to the deed: Mortgagor first and thereafter the mortgagee
 Operative Words: in the case of a simple mortgage, the property is charged and assured as
security for repayment of the mortgage debt. In case of a English Mortgage, it is out and
out sold to the mortgage subject to the covenant as to re-convey upon repayment of the
debt with interest (Section-58 (e) of the Transfer of Property Act).
 Possession: an English mortgagee has the right to take possession of the property. Such a
mortgage should contain a clause as to the appointment of a Receiver who may be a
nominee of the mortgagee. Section-69A of Transfer of Property Act.
 Execution and Attestation: Attestation is compulsory to every mortgage. In case where
the mortgagor does not know the language, the deed must be explained to him by some
competent person.
 Registration: Compulsory in case of mortgage of value above 100/-
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 Delivery of the Title deed: a mortgagee is entitled to all the title deeds of the mortgaged
property. If for any reason they are left with the mortgagor through inadvertence or
negligence, he can manipulate a prior equitable mortgage by depositing the same
elsewhere.
 Redemption: Period is fixed by agreement between the parties. Under Article 61 of the
Limitation Act, 1963, a suit for redemption may be brought within 30 years from when
the right to redeem accrues according to the agreement. In case where the property has
been transferred by the mortgagee for valuable consideration the period of limitation is 12
years for the date of knowledge.

CASE LAWS:

1) M.N. NAGENDRAN CHETTIAR v. LAKSHMI AMMAL13

A simple mortgagee, whether he be the first mortgagee or the puisne mortgagee, could
not take advantage of his own omission in making persons in possession of the property,
parties to his suit; nor could he contend that the right of such a person in possession is
only to redeem the prior mortgage. A simple mortgagee's right is prima facie one to
have the mortgaged property sold. Such a mortgagee does not acquire higher or further
rights by filing (what may be called for the present purpose) an ineffective suit by
omitting to make persons entitled to possession and puisne mortgagees, parties to the
same. Such a result could not be avoided by the plea of want of notice, on the part of the
prior mortgagee, of the subsequent transactions relating to the property. Equity of
redemption and right to possession are valuable 'rights in rem', and persons who have
properly acquired such rights could not be prejudiced in their legal rights simply because
the prior simple mortgagee had not personal knowledge or notice of the same. Cases of
choses in action might be different.
2) Anandi Lal and Ors v. Ram Sarup and Ors14
The appointment of a receiver of the mortgaged property and his taking over possession
does not amount to the dispossession of the mortgagor at all inasmuch as the income or
the rents and profits are mere accession to the mortgaged property. A typical case
advocating such a view is Paramasivan Pillai v. Ramasami Chettiar15.With the utmost

13
(1933) 65 MLJ 108
14
AIR 1936 All 495
15
1933 56 Mad 915
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respect, I would say that such a conception is untenable. The corpus of the mortgaged
property is one thing, while its usufruct is quite another. The very essence of
a simple mortgage is to keep a clear distinction between the corpus which is the security
for the debt, and the income which belongs to the mortgagor. If the income were an
accession to the mortgaged property, then the entire income from the commencement of
the simple mortgage must be such an accession and must belong to the mortgagee and not
to the mortgagor. If the income also is to belong to the mortgagee, then all distinction
between a simple mortgage and a possessory mortgage may just as well be abolished, and
the written contract between the parties torn to pieces.
3) Vyapuri and Anr v. Sonamma Boi Ammani16
A simple mortgagee under the Transfer of Property Act can neither bring ejectment to
recover the land mortgaged, nor can it be said that his right is an A equitable interest. It is
admitted that Article 132 of the Act of 1871 was applicable to suits by
a simple mortgagee instituted against the mortgagors or persons claiming under them to
enforce the charge by sale of the mortgaged property, and the Privy Council
in Vasudeva Mudaliar v. Srinivasa Pillai 17 say that it was perfectly settled that such
suits were governed by that article. The Privy Council in the above case make no
distinction whatever between suits against mortgagors and against strangers in possession
of the mortgaged property and the language of the article does not warrant any such
distinction. But we are asked to infer that their Lordships in Karan Singh v. Bakar Ali
Khan18 : S.C assumed without question or discussion that such a suit was not governed
by Article 132, but was a suit for possession against a stranger in possession of
immoveable property governed solely by the residuary Article 145, that they assumed
unnecessarily a metaphysical possession in the simple mortgagee and that he was affected
by a vicarious bar. I decline to draw any such inference. The Privy Council characterised
Act XIV of 1859 as an inartificially drawn statute and the later Act of 1871 as a "more
carefully drawn statute. It seems to me that the Legislature in 1871, specially
enacted Article 132, for all suits by simple mortgagee to enforce the payment of money
charged by sale of the property mortgaged instead of leaving some suits to be governed
by that article and others by Article 145.

16
(1916) ILR 39 Mad 811
17
(1907) I.L.R. 30 Mad. 426
18
(1883) I.L.R. 5 All. 1 (P.C.)
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4) Lallu Singh v Ram Nandan and Ors19

Khiali Ram v. Nathu Ram20, and the cases that follow it and should be accepted; but it
must be said that the learned Judges who made it did not thereby uphold the validity of
usufructuary mortgage as such of occupancy right. I have no doubt that a mortgage of
occupancy holding usufructuary or otherwise, is void as a mortgage. A deed creating a
charge on occupancy rights is equally invalid. It does not matter if such a deed is
registered. It may, however, be upheld otherwise than as a mortgage and to a lesser
extent. In case of usufructuary mortgage of an occupancy holding the mortgagor cannot
recover possession without payment of sums due under the mortgage, not because it is a
valid mortgage and the rules applicable to valid mortgages relating to redemption compel
him to do so, but because he is bound by a covenant to pay, before resuming possession,
which covenant is binding, apart from any supposed relationship of mortgagor
and mortgagee, and under the general law applicable to agreements of a personal
character. In this view of the matter, no distinction can be made between a covenant
contained in the so-called deed of usufructuary mortgage and a covenant contained in the
so-called deed of simple mortgage, a deed of further charge or simple money bond. In
each case, it can be enforced against the person bound by it. Reliance is placed on Khiali
Ram v. Nathu Ram for the proposition that a usufructuary mortgage of an occupancy
holding is valid and, for that reason, money due thereunder must be paid if the mortgagor
seeks to redeem. The same reason, it is said, does not exist in case of simple mortgage,
which implies a right of sale and is, therefore, invalid. I shall presently deal with the
contention, but would remark in passing that a right of sale is equally implied in case of a
usufructuary mortgage.

DRAFT OF SIMPLE MORTGAGE

19
AIR 1930 All 136
20
[1893] 15 All. 219
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This deed of Simple Mortgage is executed on ___20th_____ day of

_______November_______ month of _______2021______ year by
Sri.______KartmullaKarimulla ____________________, S/o./_________Sk John
Ahmad___________________, occupation_______Business_____________, and aged
___50_______ years, residing at___
NearVidyakendramHigh_School,_Park_Road,_Sattenapalli,_Guntur_(dt),_AndhraPra
desh_______________________________________________________________________
________________________________________________. herein after called the
MORTGAGOR.1

In favour of

Sri.__Dharanikota_Srinivasa_Rao__S/
o.__Dharanikota_Kotilingam__occupation__________Bus_Driver__, aged
45________years,
residing_Ravi_Nagar_Colony,_Addanki,_Prakasam(dt),_Andhra_Pradesh____

Herein referred to as the MORTGAGEE.2

Whereas, the term Mortgagor and Mortgagee, unless repugnant to the context shall mean and
include their representatives heirs, successors, executors, administrators, trustees, legal
representatives and assigns.

Whereas, the Mortgagor herein, is the sole and absolute owner of immovable property 3
bearing No.___790________ known as ____Amaram__ situated at morefully described in
the schedule hereunder written and herein after called the scheduled property. Whereas, the
Mortgagor is the absolute owner, having acquired the property, by
_____Kartmulla_Karimulla______________ 4 and since then Mortgagor has been in
possession and enjoyment of the schedule property and paying taxes and levies thereon, as
sole and absolute owner thereof.

Whereas Mortgagor being in need of money for the purpose of ______clearing

educational_loan___________. Mortgagor requested the Mortgagee to lend him a sum of
Rs._____1,00,000______ (Rs.________One_Lakh_____________only) which the
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Mortgagee has agreed to do on the Mortgagor executing these presents with a view to secure
the repayment thereof with interest as herein after provided.

NOW THIS DEED WITNESSETH that pursuant to the said agreement and in consideration
of the sum of Rs.________1,00,000_____ (Rupees.________One_Lakh_______only) lent
and advanced by the Mortgagee to the Mortgagor on the execution of these presents (receipt
whereof the Mortgagor hereby admit). He the Mortgagor hereby covenants with the
Mortgagee that he the Mortgagor will pay to the Mortgagee the sum of
Rs.____20,000_______ (Rupees._________________only) on the day of _____20th ______
(herein after referred to as the ‘due date’) with interest thereon in the meanwhile and until
repayment of the said sum in full, at the rate of __2%_______ on the __20th_______day of
____December__________ and each subsequent installment on the ___________ day of each
succeeding month until the said principle sum of Rs.___1 LAKH_______
(Rupees_________One Lakh_____________only) repaid in full, and the Mortgagor further
covenants with the Mortgagee that in the event of the Mortgagor failing to pay any
installment of interest, he will be liable to interest on the said installment in default at the
same rate as aforesaid from the date of default until payment such installment as and by way
of compound interest. Without prejudice to the right of the Mortgagee to take any action on
default as herein under provided, and it is agreed and declared that in the event of Mortgagor
committing default in payment of any installment of interest or committing breach of any
other term of this deed, the whole amount of principal then due with interest thereon will at
the option of the Mortgagee become payable forthwith as if the said date had expired.

And this deed further witnesseth that in consideration aforesaid, the Mortgagor hereby
mortgage his said scheduled property situated at _____Guntur______ and described in the
schedule hereunder written as a security for repayment of the said sum with interest and all
other moneys due and payable hereunder with a condition that on the Mortgagor repaying the
said principal sum of Rs.__1 Lakh_______ with all interest and other moneys due to the
Mortgagee (hereinafter referred to as the Mortgage amount) the Mortgagee will redeem the
said scheduled property from the mortgage security and shall if so required by the Mortgagor
execute a deed of Release but at the costs of the Mortgagor.

And it is further agreed and declared by the Mortgagor that in the event of the Mortgagor
failing to pay the said principal sum with all interest and other moneys when the same shall
become due and payable under these presents, the Mortgagee will become entitled to have the
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said scheduled property sold through any competent court and to realise and receive the said
mortgage amount out of the net sale proceeds of the said scheduled property.

And it is further agreed and declared by the Mortgagor that he shall also be liable to pay and
shall pay all the costs, charges and expenses that the Mortgagee will incur for the protection
of the mortgage security and or for the realisation of the mortgage amount and the same shall
be deemed to form part of the mortgage amount and the security therefor as aforesaid.

And it is further agreed that during the pendency of the security hereby created and until
repayment of the mortgage amount the Mortgagor will get insured and keep insured the
buildings and structures standing on the said land against loss and damages due to fire or any
other accident in the sum of at least Rs.__75,000______ with some Insurance Company of
repute and pay all premium in the insurance policy as and when it becomes due and payable
in respect thereof to such company and shall hand over the policy to the Mortgagee duly
endorsed in his name as assignee and in the event of the Mortgagor failing to do so or to pay
the premium, the Mortgagee will be entitled to insure the said buildings and structures and/or
to pay the premium thereon and the amount paid by the Mortgagee in respect thereof will be
deemed to form part of the mortgage amount.

And it is further agreed that in the event of the said scheduled property being destroyed or
damaged by fire or any accident as aforesaid. The Mortgagee will be entitled to receive the
insurance claim under such policy to the exclusion of the Mortgagor and to appropriate the
same first towards all arrears of interest and then the principal amount or as any part thereof
as may be sufficient to pay the mortgage amount due and if any surplus remains the same
only will become payable to Mortgagor.

SCHEDULE

(Mortgaged under this deed)

All the piece and parcel of immovable property 5 bearing No.___790___ Measuring
_______400ft________

Bounded by:-

On the East: Blue Colour Building

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On the West: Vidyakendram High School

On the South: Vegetables Market

On the North: Sri Chaithanya High Scool

Market value of the property mortgaged under this deed is Rs._________2Lakhs____

(Rupees_________________Two Lakh Rupees___________________only).

The Stamp duty is paid as per Article 34(b) of the Schedule to the Andhra Pradesh Stamp
Act, 1957.

IN WITNESS WHEREOF the Mortgagor has put his hand the day and year first hereunder
written. WITNESSES:

1) Sk. Kartmulla Karimulla

MORTGAGOR
20-11-2021.
2) Dharanikota Srinivasa Rao MORTGAGEE
20-11-2021

[ 1
if the Mortgagor is represented by his agent such as guardian or general power of
attorney holder or special power of attorney holder, then his full name, occupation, age,
address and capacity under which he represents the Mortgagor shall be entered]

[ 2
if the Mortgagee is represented by his agent such as guardian or general power of
attorney holder or special power of attorney holder, then his full name, occupation, age,
address and capacity under which he represents the Mortgagee shall be entered]

[ 3 Full details of the property number such as Khata number, street/road with reference to
the local authority records and boundaries shall be furnished.. If the property Mortgaged is a
Flat / Apartment details of the property on which the Flat / Apartment is constructed, flat
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number, floor number, name of the apartment etc., full details of the property so as to identify
shall be furnished.]

[ 4 Described whether the ownership is acquired by inheritance or by partition of joint family

property or by release or by gift or by settlement or by will (bequeath) or by sale deed
executed by _______Kartmulla Karimulla________ registered as document
No.______1500_______ of Book No.____50_, Volume No._03____, Page No.___5170___ in
the office of the Registrar or Sub-Registrar]

[ 5 Full details of the property number such as Khata number, street/road with reference to
the local authority records and boundaries shall be furnished.. If the property Mortgaged is a
Flat / Apartment details of the property on which the Flat / Apartment is constructed, flat
number, floor number, name of the apartment etc., full details of the property so as to identify
shall be furnished.]
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CONCLUSION

Simple mortgage is distinguished from other forms of mortgage by the presence of a personal
covenant. In simple mortgage, the mortgagor binds himself personally to the mortgagee to
repay the loan and also pledges his property as a security, which can be liquidated on default
of payment. But a decree has to be passed by the court to liquidate the security and without
the intervention of the court, the security cannot be liquidated. One more characteristic that
must be kept in mind that there is only a partial transfer of interest from the mortgagor to the
mortgagee on transfer of property. In the case of a simple mortgage, the presence of a
personal covenant is necessary. The mortgagor takes personal liability for the repayment of
the loan, and the mortgaged property acts as security for the mortgage. If the mortgagor is
unable to pay the loan, then the mortgaged property may be attached. In such situation,
consent of the court is required to liquidate the property.

Section 58 of transfer of property acts deals with mortgage and kinds of mortgage. Mortgage
is a legal agreement for securing a loan where a person uses a immovable property as
collateral for the loan. The transferor is called a mortgagor and transferee is called a
mortgagee. There is not any absolute interest is transferred. There are specifically immovable
property intend to transfer. In a mortgage not ownership only interest is transferred over the
property for the purpose of securing loan.
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BIBLIOGRAPHY:

  Section 58(b), Transfer of Property Act, 1882

 Section 58(b), Transfer of Property Act, 1882
 Essentials of mortgage available at http://www.lawyersclubindia.com/forum/Types-
of-Mortgage-8944.asp#.Uyc18c6adFx  (last visited on 15/3/2014
 Rights of Mortgagor available at 
http://www.sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc  (Last
Visited on 16/3/2014)
 Rights of Mortgagor available at 
http://www.sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last
Visited on 16/3/2014)
 Sub Mortgage available at 
http://www.sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc(Last
Visited on 16/3/2014)
 Tacking available at
sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last Visited on
16/3/2014)
 Dr. Poonam Saxena, Property Law, Pg.410 – 412,
 Simple Mortgage is used to notify all mortgage deeds where the debtors binds himself
through a personal covenant and gives his property as security to the creditor. See
Jangi Singh v chander (1908) ILR 30 All 390
  In a deed of simple mortgage, the transfer of right signifies the right to liquidate the
property. There is no rule stating that such right be expressly mentioned in the
mortgage deed. See dalip Singh v Bahadur ram (1912) 34 All 446.
  Fundamental Characteristics of Simple Mortgage available at
sjecnotes.weebly.com/uploads/5/2/5/1/5251788/mortgage.doc (Last Visited on
16/3/2014)
  Wahidunnia v Gobardhan (1900) ILR 22 All 453
 https://www.heinonline.com
 https://www.manupatra.com
 https://www.westlaw.in
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 https://lexisnexis.ac.in