Some rights a mortgagee of property has in the case of a mortgage contract

A mortgage is the transfer of interest in a property to secure payment of money advanced. The transferor is called a mortgagor. The transferee is called a mortgagee. The principal money and interest secured are called as mortgage money. The instrument by which this transfer is effected is called mortgage deed. The provisions related to mortgage of property are contained in the Transfer of Property Act.

A mortgage can be of various types. These include simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds and anomalous mortgage.

A mortgagee can take possession of mortgaged property in case of default. Under the Transfer of Property Act, if there is default in payment of mortgage money, the mortgagee can take possession of mortgaged property and sell it without intervention of a Court only in case of English mortgage. In addition, a mortgagee can take possession of mortgaged property where there is a specific provision in the mortgage deed and the mortgaged property is situated in Kolkata, Chennai or Mumbai. In other cases, possession of property can be taken only with the intervention of a Court.

English mortgage


It is a type of mortgage where the mortgagor binds himself to repay the mortgaged money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a provision that he will re-transfer the property to the mortgagor upon payment of the mortgage money as agreed. This is also called registered mortgage.

This is the safest form of mortgage for a bank. No documents of the property are required to create this kind of a mortgage. The borrower just needs to enter into a mortgage deed with the bank which needs to be stamped and registered in order to make it enforceable. However, this is an expensive way to create a mortgage as charges have to be borne by the borrower for stamping and registration. Further, the mortgagor binds himself to repay the money at a certain date and transfers property absolutely to the mortgagee subject to the condition that he will re-transfer it to the mortgagor on payment of the mortgaged money.

A mortgagee has a right to sue for the mortgage money in these cases:

• Where the mortgagor binds himself to repay.
• Where the mortgaged property is wholly or partially destroyed or the security is rendered insufficient. The mortgagee must have given the mortgagor a reasonable opportunity to provide further security to render the security sufficient and the mortgagor has failed to do so.
• Where the mortgagee is deprived of his security due to a wrongful act or default of the mortgagor.
• Where the mortgagor has failed to deliver possession of the property to the mortgagee.

If a suit is brought, the Court may stay the suit and all proceedings until the mortgagee has exhausted all his available remedies against the mortgaged property, unless the mortgagee abandons his security and re-transfers the mortgaged property.

Section 67 of the Act gives the mortgagee the right to foreclosure or sale. As per this provision, in case the mortgage money has become due to the mortgagee, before a decree has been made for the redemption of the mortgaged property, the mortgagee has a right to obtain a decree from the Court that the mortgagor be absolutely debarred of his right to redeem the property, or a decree that the property be sold. This suit to obtain a decree that the mortgagor be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.