1

RIGHTS AND LIABILITIES OF MORTGAGER

INTRODUCTION
Mortgage is a conveyance of property, upon condition, as security for the payment of a
debt or the performance of a duty, and to become void upon payment or performance
according to the stipulated terms also, the written instrument by which the conveyance is
made or a State of being pledged as, lands given in mortgage or to grant or convey, as
property, for the security of a debt, or other engagement, upon a condition that if the debt or
engagement shall be discharged according to the contract, the conveyance shall be void,
otherwise to become absolute, subject, however, to the right of redemption or to pledge, either
literally or figuratively to make subject to a claim or obligation or a conditional conveyance
of property as security for the repayment of a loan or put up as security or collateral or an
agreement to give up an interest in something if you fail to perform some duty.
In many cases, it means that you'll give up your home if you fail to repay your
home loan as agreed. You can use mortgage as a verb, meaning "to pledge". So to say a
mortgage is the pledging of a property to a lender as a security for a mortgage loan. While a
mortgage in itself is not a debt, it is evidence of a debt. It is a transfer of an interest in land,
from the owner to the mortgage lender, on the condition that this interest will be returned to
the owner of the real estate when the terms of the mortgage have been satisfied or performed.
In other words, the mortgage is a security for the loan that the lender makes to the borrower.
The term comes from the Old French "dead pledge," apparently meaning that the
pledge ends (dies) either when the obligation is fulfilled or the property is taken through
foreclosure. In many countries it is normal for home purchases to be funded by a mortgage. In
countries where the demand for home ownership is highest, strong domestic
markets have developed, notably in Spain, the United Kingdom, the Commonwealth of
Australia and the United States. Mortgagee legally termed for the mortgage lender.
The main function of the mortgage is to provide security to the lender. The lender
loans the money and registers the mortgage against the title to the property. The borrower

gives the lender the mortgage as security for the loan, receives the funds, makes the required
payments and maintains possession of the property.
The borrower has the right to have the mortgage discharged from the title once the debt is
paid. If the mortgagor fails to repay the loan according to the conditions set forth by the
lender, then the mortgagee reserves the right to foreclose on the property. Borrower is termed
as Mortgagor, who owes the obligation secured by the mortgage, and may be multiple parties.
Generally, the debtor must meet the conditions of the underlying loan or other obligation and
the conditions of the mortgage.
I.

Definition S. 58
A mortgage is the transfer of an interest in specific immovable property for the purpose

of securing the payment of money advanced or to be advanced by way of loan, an existing or

future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee, the principal money and
interest of which payment is secured for the time being are called the mortgage-money , and
the instrument by which the transfer is effected is called a mortgage-deed.
II.

Elements
The

following

(1)

There

of
are
must

the

a
essential

be

characteristics
transfer

Mortgage
of
of

mortgage
an

interest.

(2) There must be specific immovable property intended to be mortgaged.

(3) The transfer must be made to secure the payment of a loan or to secure the
III.

performance of a contract
In terms of the definition, the following are the characteristics of a mortgage:

(1) A mortgage can be effected only on immovable property. Immovable property includes
land, benefits that arise out of land and things attached to earth like trees, buildings and
machinery. But a machine which is not permanently fixed to the earth and is shift able
from one place to another is not considered to be immovable property.
(2) A mortgage is the transfer of an interest in the specific immovable property. This means
the owner transfers some of his rights only to the mortgagee. For example, the right to
redeem the property mortgaged.
(3) The object of transfer of interest in the property must be to secure a loan or performance
of a contract which results in monetary obligation. Transfer of property for purposes other

than the above will not amount to mortgage. For example, a property transferred to
Liquidate prior debt will not constitute a mortgage.
(4) The property to be mortgaged must be a specific one, i.e., it can be identified by its size,
location, boundaries etc.
(5) The actual possession of the mortgaged property is generally with the mortgager.
(6) The interest in the mortgaged property is re-conveyed to the mortgager on repayment of
the loan with interest due on.
In case, the mortgager fails to repay the loan, the mortgagee gets the right to recover the debt
out

of

IV.

the

sale

proceeds

of

Transfer

the

mortgaged

of

property.
Interest

The right of the mortgagee is only an accessory right which is intended merely to secure the
due

payment

of

the

debt.

Mortgage is simply a transfer of interest in the immovable property while the ownership still
retains with the mortgagors. Thus, where a joint family property is subject to mortgage, there
is no transfer of ownership and the coparceners being its lawful owners are competent to allot
the mortgaged property in oral partition to any of the coparceners. The coparcener to whom
the mortgaged property is allotted becomes its absolute owner and is entitled to redeem the
mortgage.
The words 'transfer of an interest' also bring out the distinction between : (i) a mortgage and
an agreement to mortgage, and (ii) a mortgage and a charge. A mortgage is a transfer of an
interest and creates a right in rem, but mere agreement that one person shall lend the money
and the other would borrow it by way of mortgage, does not create any interest in the property
intended to be mortgaged. Such an agreement is not even capable of specific performance,
that is, the court cannot compel the parties to borrow or lend money. Such an agreement only
gives rise to an obligation to pay damages. Since a mortgage creates a right in rem, such right
is available against all subsequent transferees of the mortgaged property irrespective of
notice.
The

broad

distinction

between

mortgage

and

charge

is

--

(1) Whereas a charge only gives a right to the payment out of a particular immovable property
without transferring any interest in the property a mortgage is in essence a transfer of an

interest

in

specific

immovable

property.

(2) a mortgage is good against a subsequent transferee and may be enforced against a bona
fide purchaser for value with or without notice, while a charge is good only against a
subsequent

transferee

V.

with

Specific

notice.

immovable

property.

The description of the property in the mortgage deed, if any, must at least be sufficient to
identify

the

VI.

property.

Consideration

of

mortgage.

The consideration of a mortgage may be either : (1) money advanced or to be advanced by

way of loan (2) an existing or future debt or (3) the performance of an engagement giving
rise
VII.

to
Effect

of

failure

pecuniary
of

mortgagee

to

advance

liability.
amount

undertaken.--

A mortgage under the Transfer of Property Act is a transfer of an interest of an interest in the
land mortgaged, and not a mere contract. Once a document transferring immovable property
has been registered, the transaction passes out of the domain of a mere contract and falls into
one

of

conveyance.

Therefore, a transaction of mortgage formally, executed does not become void or ineffective
merely because the mortgage fails to advance the amount of money undertaken to be
advanced by him. If, without advancing the amount agreed to be advanced, he sues on the title
created under the deed of mortgages the court will not award him a decree for anything more
than what he has advanced. But this does not mean that the mortgage is invalid
RIGHTS AND LIABILITIES OF MORTGAGOR
A. Right of mortgagor to redeem [Section:60 of TP Act 1882];
B. Redemption of portion of mortgaged property [Section:60 of TP Act 1882];
C. Obligation to transfer to third party instead of retransference to mortgagor
[Section:60-A of TP Act 1882];
D. Right to inspection and production of document.- [Section:60-B of TP Act 1882];
E. Right to redeem separately or simultaneously [Section:61 of TP Act 1882];
F. Right of usufructuary mortgagor to recover possession [Section: 62 of TP Act
1882];

G. Power to deposit in court money due on mortgage [Section:83 of TP Act 1882];

H. Accession to mortgaged property[ Section: 63 of TP Act 1882];
I. Improvements to mortgaged property[ Section: 63A of TP Act 1882];
J. Renewal of mortgaged lease.- [Section: 64 of TP Act 1882];
K. Implied Contracts by Mortgagor [ Section: 65 of TP Act 1882 ];
L. Mortgagors power to lease. [Section: 65-A of TP Act 1882];
M. Waste by Mortgagor in possession [Section: 66 of TP Act 1882];
A.Right of mortgagor to redeem:According to s 60 of TP Act, at any time after the principal money has become due, the
mortgagor has a right, on payment or tender, at a proper time and place, of the mortgagemoney, to require the mortgageea) to deliver to the mortgagor the mortgage-deed and all documents relating to the
mortgaged property which are in the possession or power of the mortgagee .
b) where the mortgagee is in possession of the mortgaged property, to deliver possession
thereof to the mortgagor,
c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to
such third person as he may direct, or to execute and (where the mortgage has been
effected by a registered instrument) to have registered an acknowledgement in writing
that any right in derogation of his interest transferred to the mortgagee has been
extinguished.
d) Acknowledgement that right has been extinguished.
e) Extinguishment of right by (1) the act of the parties, or (2) the decree of the court.
It is the most important right of the mortgagor, through which, the
mortgagor after paying-off the money becomes entitle to get back the property. At any
time after the mortgage- money has become due, the mortgagor has a right on the payment
of the mortgage-money to require the mortgagee to reconvey the mortgaged property to
him. This right of the mortgagor, through which he is entitled to get the property returned
to him, contemporaneously with the discharge of his obligation, is called the right of
redemption.
POSITION IN THE TRANSFER OF PROPERTY ACT.

Unlike England, the Act does not distinguish between the right to redeem and equity of
redemption. In England, this right was evolved by the Chancery Courts and was known as
equity of redemption. On the following counts, the mortgagors right to redeem can be
justified:
1. Transfer of an interest. In a mortgage, the mortgagor transfers one of all his interests in
the immovable property. The mortgagor transfers only an interest in favour of mortgagee and
not the whole interest in the property.
2. Residuary ownership. After creating an interest in favour of mortgagee, the mortgagor
still has the remaining interest. The remaining interest is called the residuary ownership of the
mortgagor in the mortgage-property. It is the residuary ownership, by virtue of which, the
mortgagor has the right to redemption vested in him.
3. Purpose is only securing the payment of debt. As per the provisions of the Transfer of
Property Act, in the transaction of mortgage, since there is a transfer of an interest of the
immovable property by the mortgagor for securing the loan, he is entitled to
get back that interest on the repayment of the loan. By making the payment of the loan with
its interest, the mortgagor becomes entitled to redeem, that is call back the interest given to
the mortgagee as security for repayment.
4. Principles of equity, justice and good conscience. Mortgagor neither intends nor desires
that the property should go absolutely to mortgagee. Therefore if the mortgagee is unable to
repay the debt on a fixed date and there is some delay, the law must extend his right to
redemption upto a reasonable time. Principles of equity, justice and good conscience do not
allow that a transaction which is of borrowing nature should become an absolute conveyance,
only on the ground that the debt was not paid on the fixed date. It is therefore, an inherent
right of every mortgagor, laid down in sec. 60, irrespective of the kind of mortgage.
EQUITY OF REDEMPTION.
The right of redemption of the mortgagor under sec. 60 of the Transfer of Property Act is
based on the equity of redemption under English law. In England, the mortgagors right of
redemption was introduced by the Chancery Courts, also known as the Courts of Equity. The

mortgagors right to redeem the mortgage by making payment, even after the due date is
known as equity of redemption. The Chancery Court introduced this right in order to do
justice with cases on mortgage decided under the common law.
Prior position at Common Law.
At common law, the mortgage was the transfer of legal estate (absolute interest), subject to a
condition. The condition was nonpayment of loan upto fixed date, which if fulfilled, the
mortgaged property belonged absolutely to the mortgagee. Common law treated the nonpayment of debt upto a specified period as penalty for the mortgagor. The common law gave
no relief to the mortgagor, who failed to repay the debt upto the specified period, even though
he was ready to repay within few days after the specified period. Thus, in default of the
repayment the mortgagor lost all his rights in his immovable property.
This situation was exploited by the money-lenders, by not accepting the money on the
due date. They knew that if somehow the loan with interest remained unpaid upto the fixed
date, they will become owner of the property in lieu of the small sum of
money, which the debtor took in his urgent need.
Role of Chancery Courts.
Soon the Chancery Courts realized that the main purpose of the mortgage is to keep the
property as a security to the moneylender for the repayment of money. Therefore, the moneylender should not be given any legal right to hold on the property absolutely if the mortgagor
was ready to repay the debt within reasonable time after the expiry of the due date. Thus, the
right which was denied by the Common Law was given to the mortgagor by the Courts of
Equity. This right of the mortgagor to redeem even if he was in default was known as equity
of redemption.
Thus, this very principle evolved by the Chancery Courts went against the common law.
Equity started with the notion that stipulation as to time (fixed date for repayment) should not
be treated as penalty. The Courts even held it to be the essential character of every mortgage.
They provided further that it was an important right of the mortgagor and it could not be
denied in anymanner, not even express agreement of the parties themselves. Equity declared
that once a mortgage, always a mortgage.

ONCE A MORTGAGE ALWAYS A MORTGAGE.

This maxim implies that the mortgagors right of redemption would not be defeated by any
agreement to the contrary, even if the mortgagor himself has agreed to it. The maxim simply
denied the validity of any stipulation in the mortgage deed, which defeats the mortgagors
right of redemption. In other word, a transaction, which at one time is mortgage, could not
cease to be so by having any stipulation in the mortgage deed intended to defeat the
mortgagors right of redemption. The underlying principle of this maxim was stated by LORD
HENLEY in following words:
This Court as a Conscience is very jealous of persons taking securities for a loan and
converting such securities into purchases. And therefore I take it to be an established rule, that
a mortgagee can never provide at the time of making the loan for any event or condition on
which the equity of redemption shall be discharged and the conveyance made absolute. And
there is great reason and justice in this rule for necessitous men are not, truly speaking, free
men, but to answer present exigency, will submit to any terms that the crafty may impose
upon them.
In the case of Nabin Chandra Moral V. Lalit Mohan Das
Held: If the mortgage debt is paid, or a tender thereof is made, by any person interested in the
equity of redemption, a mortgage suit can be instituted by any other person who has a right to
equity of redemption.
The right of redemption is the inalienable right of the mortgagor
[Tofzal Ahmed Contractor V. Abdur Rahim & Others, 16 BLD (AD) 160].
Besides the mortgagor any of the following persons may also sue for redemption:- Section 91
of TP
a) Any interested person in the mortgaged property,
b) Any surety for the payment of the mortgaged debt or
c) Any creditor of the mortgagor who has obtained a decree for sale of the mortgaged
property.

CLOG ON REDEMPTION:
The right of redemption continues although the mortgagor fails to pay the debt at the due date.
Any provision inserted in the mortgage-deed which has the effect of preventing or impeding
this right is void as a clog on redemption. This view was substantiated by LINDLEY M. R. in
Stanley v. Wilde
The Supreme Court considered this rule in Murarilal v. Devkaran, where the clause
incorporated in the mortgage deed provided that the amount due under the mortgage should
be paid within 15 years whereupon the property would be redeemed.
Further it provided that in case payment was not made within that period, mortgagee would
become the owner of the property. The Supreme Court affirming the decision of the Rajasthan
High Court, held that any stipulation contained in the mortgage deed, which unreasonably
restrained the mortgagors equity of redemption can be ignored by the court subject to the
general law of limitation prescribed in that behalf.
a) Long Term for Redemption. It is not necessarily true that a long term for redemption is
always a clog on redemption. However, if the length of the term is found to be oppressive,
redemption
would be allowed before the expiry of that period. A period of 90 years for redemption has
been held to be unreasonable and a clog on redemption17. A period of 90 years for
redemption has not been held to be a clog on redemption18.
b) Condition of Sale in Default. A condition in the deed that has the effect of converting a
mortgage into a sale is invalid as a clog on redemption. Such condition converts a mortgage
into a sale. Equity disfavours a mortgage to be converted into a sale. It is therefore void. In
Gulab Chand Sharma v. Saraswati Devi, there was a mortgage by conditional sale. The
mortgagor was given a time of four years for repayment of the debt. The mortgage property
was on lease. The deed contained a stipulation that in case the mortgagee receives any notice
from any public authority for breach of covenants of lease within four years term, the
mortgagee shall become owner of the property. The apex court held this stipulation to be a
clog on mortgagors right of redemption and therefore not to be enforced. But after the

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execution of the deed, the parties agree to the sale of the property that does not amount to be a
clog on the redemption.
c) Condition Postponing Redemption in Default on a Certain Date.
The condition or stipulation that postpones the mortgagors right of redemption in case of
default of payment on a certain date, is regarded a clog on redemption as it bars or restricts
the redemption. In Mohd. Sher Khan v. Seth Swami Dayal, the mortgage was for a term of
five years. A stipulation in deed said that if the mortgagor failed to pay the money, the
mortgagee was entitled to take possession of the property for next 12 years, during which the
mortgage could not be redeemed. The Privy Council held the stipulation to be a clog on
redemption for it hindered the right of redemption.
d) Restraint on Alienation. A condition, which restraints the mortgagor from transferring
mortgage-property is a clog. In a mortgage, the mortgagor only transfers an interest in the
property and still has residuary ownership. He has every right to transfer the property by sale,
gift etc and can even, effect another mortgage.
e) Collateral benefits to Mortgagee. Collateral benefits to mortgagee are not necessarily
clog on the redemption. In order to establish that the collateral benefits are clog on the
redemption it is necessary that: a. The collateral benefits given to the mortgagee are unfair
and unconscionable, and b. The collateral benefits to mortgagee are part of the transaction
of mortgage and not an independent benefit.
In Kreglinger v. New Patagonia Meat & Cold Storage Company Ltd., there was an
agreement dated 24 August 1910, whereby a firm of wool brokers agreed to lend to a
company carrying on the business of meat preservers a sum of 10,000 at 6 per cent. The
deed further provided that if the interest was punctually paid the loan was not to be called in
until 30 September 1915, but the company, might pay off at any time on giving one calendar
months notice. The loan was secured by a floating charge on the undertaking of the company.
The agreement provided that for a period of five years from the date thereof the company
should not sell sheepskins to any person other than the lenders so long as the latter were
willing to buy at the best price offered by any other person and that the company should pay
to the lenders a commission on all sheepskins sold by the company to any other person. The

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loan having been paid off by the company in January 1913, in accordance with the agreement,
the lenders claimed to exercise their option of pre-emption notwithstanding the payment off
of the loan. The House of Lords held the stipulation for the option of pre-emption formed no
part of the mortgage transaction, but was a collateral contract entered into as a condition of
the company obtaining the loan. It was not a clog on the equity of redemption or repugnant to
the right to redeem and the lenders were entitled to an injunction restraining the company
from selling sheepskins to any person other than the lenders in breach of the agreement
f) Penalty in Case of Default. An agreement which amounts to penalty in case of nonpayment of debt is a clog on redemption.
CASES ON EQUITY OF REDEMPTION.
In Seth Gangadhar v. Shankar Lal and Ors , it was admitted that the transaction was that of
a mortgage and Section 60 of the Transfer of Property Act was applicable. The Court held that
therein the term of mortgage was 85 years and there existed no stipulation entitling the
mortgagor to redeem during that term which had not expired. The document in question was
held by this Court to be containing a stipulation creating a clog on the equity of redemption
which was found to be illegal.
In Pomal Kanji Govindji and Ors. v. Vrajlal Karsandas Purohit and Ors., the Court held
that whether a clause used in a transaction of mortgage amounted to clog on the equity of
redemption is a mixed question of law and fact. In that case, there existed a provision for
payment of interest at the rate of half per cent per annum payable on the principal amount at
the end of the long period which led the Court to conclude that there was a clog on equity of
redemption. Furthermore, in that case, materials were brought on record to show that the
transaction was entered into by way of security for the loan obtained.
In Shivdev Singh and Anr. v. Sucha Singh and Anr, the Court was dealing with a case of
anomalous mortgage. Therein the mortgage was to remain operative for a period of 99 years.
It was in that situation, this Court opined that the original owner having been in great
financial difficulty, the mortgagees took advantage of the said fact and incorporated a 99
year's term which constituted a clog on the equity of redemption.

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So, any condition imposed in the deed of mortgage itself which places any restrictions on the
right of redeeming the mortgage is a clog in the equity of redemption and, as such, repugnant
to law and void [ Mir Zaman V. Ashraf khan, PLD 1959].
Exercise of the right of redemption:
The mortgagors right of redemption is exercised,i. By paying or tendering mortgage-money to the mortgagee outside the court, i.e. privately
ii. By depositing the amount in the court and
iii. By a suit for redemption, payment or tender.
Tender means an unconditional offer to pay the money under such circumstances that the
mortgagee may receive the money there.
(Section 38 of the Contract Act, 1872).
Extinguishment of right of redemption:The mortgagors right of redemption is extinguished:
a) By foreclosure (section 67)
b) When the mortgagee has exercised power of sale (section 68)
c) When it becomes barred under the Limitation Act, 1908.
The right of mortgage-deed can come to an end only in manner known to law.
- Jaya Singh V. Krishna, AIR 1985 S.C. 1646
Redemption of mortgaged property- period of limitation- where mortgagee had transferred
mortgage right to new mortgagee before expiry of period of limitation, period of limitation
would start from transfer of mortgage and not from original mortgage.
- Faqir Gul V. Abdur Rahman, 1999 CLC 346
So, the mortgagors right on redemption are,1. Delivery of the mortgage-deed and document of title relating to the mortgaged property,
2. Possession, and
3. Reconveyance or acknowledgement.
B. Redemption of portion of mortgaged property:-

13

Section 60 of TP Act also provides that a person interested in a share only of the mortgaged
property is not entitled to redeem his own share only, on payment of a proportionate part of
the amount remaining due on the mortgage, except only where a mortgagee, or, if there are
more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the
share of a mortgagor.
C.Obligation to transfer to third party instead of retransference to mortgagor :
Section 60-A states that1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on
the fulfilment of which he would be entitled to require a re-transfer, he may require the
mortgagee, instead of re-transferring the property, to assign the mortgage-debt and transfer
the mortgaged the mortgagee shall be bound to assign and transfer accordingly.
(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by
any encumbrancer notwithstanding an intermediate encumbrance but the requisition of any
encumbrancer shall prevail over a requisition of the mortgagor and, as between
encumbrancers, the requisition of a prior encumbrancer shall prevail over that of a subsequent
encumbrancer.
(3) The provisions of this section do not apply in the case of a mortgagee who is or has been
in possession.
D.Right to inspection and production of documents :
Section 60-B states thatA mortgagor, as long as his right of redemption subsists, shall be
entitled at all reasonable times, at his request and at his own cost, and on payment of the
mortgagee's costs and expenses in this behalf, to inspect and make copies or abstracts or,
extracts from, documents of title relating to the mortgaged property which are in the custody
or power of the mortgagee. This section makes it clear that a mortgagor has a right to inspect
and take copies of documents of title relating to the mortgaged property which are in
possession of the mortgagee. This right subsists so long as his right of redemption subsists.
In the case of Jaya Singh V. Krishna, AIR 1985 S.C. 1646, it was held that:
The right of mortgage-deed can come to an end only in manner known to law.

14

In V.Paily V. K. Augusty, AIR 1967 Ker. 247 a full bench of High Court observed that:
There is no debate on the basis of which right of redemption come to an end.
E. Right to redeem separately or simultaneously:According to s 61 of TP Act, a mortgagor who has executed two or more mortgages in favour
of the same mortgagee shall, in the absence of a contract to the contrary, when the principal
money of any two or more of the mortgages has become due, be entitled to redeem any one
such mortgage separately, or any two or more of such mortgages together.
In the case of Muhammad Hossain V. Inayat Ali, PLD 1952 Lah.372 it was held that If
the plaintiffs wish to redeem the first two mortgages they must redeem them entirely and
cannot ask for their own share only. They must pay the entire mortgage money and if that is
so, they must obtain the entire property under the mortgage.
F.Right of usufructuary mortgagor to recover possession:Section 62 of TP Act provides that in the case of a usufructuary mortgage, the mortgagor has
a right to recover possession of the property together with the mortgage-deed and all
documents relating to the mortgaged property which are in the possession or power of the
mortgagee,a) where the mortgagee is authorised to pay himself the mortgage-money from the rents
and profits of the property,-when such money is paid
b) where the mortgagee is authorised to pay himself from such rents and profits or any
part thereof a part only of the mortgage-money,-when the term (if any) prescribed for
the payment of the mortgage-money has expired and the mortgagor pays or tenders to
the mortgagee the mortgage-money or the balance thereof or deposits it in court.
G.Accession to mortgaged property:
Section 63 says thatWhere mortgaged property in possession of the mortgagee has, during the continuance of the
mortgage, received any accession, the mortgagor, upon redemption, shall, in the absence of a
contract to the contrary, be entitled as against the mortgagee to such accession.

15

Accession acquired in virtue of transferred ownership: Where such accession has been
acquired at the expense of the mortgagee, and is capable of separate possession or enjoyment
without detriment to the principal property, the mortgagor desiring to take the accession must
pay to the mortgagee the expense of acquiring it. If such separate possession or enjoyment is
not possible, the accession must be delivered with the property the mortgagor being liable, in
the case of an acquisition necessary to preserve the property from destruction, forfeiture or
sale, or made with his assent, to pay the proper cost thereof, as an addition to the principal
money, with interest at the same rate as is payable on the principal, or, where no such rate is
fixed, at the rate of nine percent. per annum.
In the case last mentioned the profits, if any, arising from the accession shall be credited to the
mortgagor.
Where the mortgage is usufructuary and the accession has been acquired at the expense of the
mortgagee, the profits, if any, arising from the accession shall, in the absence of a contract to
the contrary, be set off against interest, if any, payable on the money so expended.
The term accession primarily denotes physical accretions or additions whether brought
about by natural or artificial means The general rule is that where mortgaged property in
possession of the mortgagee has received any accession, the mortgagor, upon redemption, is
entitled to such accession. This rule is only an application of the equitable principle enacted in
section 90 of the Trusts Act, 1882.
Section 90 of the Trusts Act,1882 says: Where a tenant for life, co-owner, mortgagee or
other qualified owner of any property, by availing himself of his position as such, gains an
advantage in derogation of the rights of the other persons interested in the property, or where
any such owner, as representing all persons interested in such property, gains any advantage,
he must hold, for the benefit of all persons so interested, the advantage so gained, but subject
to repayment by such persons of their due share of the expenses properly incurred, and to an
indemnity by the same persons against liabilities properly contracted, in gaining such
advantage.
Ways in which accession arise:
Accession or accretion mat arise in any one of the following ways:

16

I. Reasonable way
II. Artificial way
I. Reasonable way: The general rule is that reasonable or natural accession to the mortgaged
property are subject to redemption. For instance, where the area of a village mortgaged
without specification of boundaries was increased as a survey settlement, the mortgagor was
held to be entitled to the increase.
II. Artificial way: Artificial or acquired accessions have been principle property, the
mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring
it. For instance, where the mortgagee, during the continuance of the mortgage sets up a
temporary structure on the mortgaged property, the mortgagor, if he desires to take it, must
pay the cost of the structure to the mortgagee.
(b) Inseparable accessions: If separate possession or enjoyment is not possible, the accession
must be delivered with the property.
The mortgagor is bound to pay compensation only in two cases:
(1) where the acquisition was necessary to preserve the property from destruction, forfeiture
or sale
(2) where it was made with the mortgagors consent.
In these two cases, compensation, i.e. , the proper cost of acquisition should be paid in
addition to the principle money with interest at the same rate is payable on the principle or,
where no such rate is fixed, at the rate of nine percent per annum ( Vide Sec. 63, para, 2).

Contrast with Sec. 86 & 87 of SAT Act:

Section 86 of SAT Act deals with dilluvion and says that the right, title and interest of the
original tenant or his successor-in-interest in the land lost by dilluvion shall subsist if such
land re-appear in situ within thirty years of their loss. However, this provision will not apply
to the cases where re-appearance of land takes place because of any artificial or mechanical
process.

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Section 87 deals with alluvion and says when any land has been gained by accession
(alluvion), whether from the recess of a river sub-divided into:
(a) Separable, and
(b) Inseparable
(a) Separable accessions: Where the accession is capable of separate possession or enjoyment
without detriment to the or of the sea, it shall not be considered as an increment to the
holding or tenancy to which it may be annexed rather it will vest to the government as khas
land.
So, it appears that natural accessions will vest to the government.
F.Improvements to mortgaged property:
Section 63-A says that,
(1) Where mortgaged property in possession of the mortgagee has, during the continuance of
the mortgage, been improved, the mortgagor, upon redemption, shall, in the absence of a
contract to the contrary, be entitled to the improvement and the mortgagor shall not, save
only in cases
provided for in sub-section (2), be liable to pay the cost thereof.
(2) Where any such improvement was effected at the cost of the mortgagee and was necessary
to preserve the property from destruction or deterioration or was necessary to prevent the
security from becoming insufficient, or was made in compliance with the lawful order of any
public servant or public authority, the mortgagor shall, in the absence of a contract to the
contrary, be liable to pay the proper cost thereof as an addition to the principal money with
interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the
rate of nine per cent. Per annum, and the profits if any, accruing by reason of the
improvement shall be credited to the mortgagor.
I.

General rule: Sub-section (1) lays down the general rule that ordinarily a mortgage is
not at liberty to make improvements and charge the mortgagor therewith. With this end
in view, the sub-section laid down that where mortgaged in possession of the
mortgagee has been improved, the mortgagor upon redemption is entitled to the

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improvement. The object is to prevent mortgagee from spending large sums of money
and then charging the mortgagor for
it and in consequence make it impossible for him to redeem.
II.

Exceptions: Sub-section (2) lays down that the mortgagor shall be liable to pay the cost of
improvements in the following cases only, If improvement was necessary to preserve the property from destruction or
deterioration, or
Was necessary to prevent the security from becoming insufficient, or
Was made in compliance with the lawful order of any public servant or public
authority.
In the case of State Bank of Pakistan V. Khaledar Ma, 14 DLR 735, it was held that,
Mortgagor is liable to pay cost for improvement when any when any of the tests under the
section is fulfilled.
J. Renewal of mortgaged lease: Sec 64
Where the mortgaged property is a lease, and the mortgagee obtains a renewal of the lease,
the mortgagor, upon redemption, shall, in the absence of a contract by him to the contrary,
have the benefit of the new lease
K. Implied Contracts by Mortgagor:sec 65-In the absence of a contract to the contrary, the
mortgagor shall be deemed to contract with the mortgagee
(a)

that the interest which the mortgagor has power to transfer the
same

(b)

that the mortgagor will defend or, if the mortgagee be in possession

of the mortgaged property enable him to defend, the mortgagors title
thereto

(c)

that the mortgagor will, so long as the mortgagee is not in

possession of the mortgaged property, pay all public charges accruing
due in respect of the property

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(d)

and, where the mortgaged property is a lease, that the rent payable
under the lease, the conditions contained therein, and the contracts
binding on the lessee have been paid, performed and observed down to
the commencement of the mortgage and that the mortgagor will, so long
as the security exists and the mortgagee is not in possession of the
mortgaged property, pay the rent reserved by the lease, or, if the lease be
renewed, the renewed lease, perform the conditions contained therein
and observe the contracts binding on the lessee, and indemnify the
mortgagee against the claims sustained by reason of the nonpayment of
the said rent or the non-performance or non observance of the said
conditions and document

(e)

and, where the mortgage is a second or subsequent Encumbrance

on the property, that the mortgagor will pay the interest from time to time
accruing due on each prior Encumbrance as and when it becomes due,
and will, at the proper time, discharge and principal money due on such
prior Encumbrance.

The benefit of the contracts, mentioned in this section shall be annexed to, and shall
go with the interest of the mortgagee as such, and may be enforced by every person in whom
that interest is for the whole or any part thereof from time to time, vested.
L. Mortgagors power to lease :sec 65-A

.-(1) Subject to the provisions of subsection (2),a

mortgagor, while lawfully in possession of the mortgaged property, shall have power to make
leases thereof which shall he binding on the mortgagee.
(2) (a) Every such lease shall be such as would be made in the ordinary course of
management of the property concerned and in accordance with any local law, custom or
usage.
(b)Every such lease shall reserve the best rent that can reasonably be obtained, and no
premium shall be paid or promised and no rent shall be payable in advance.
(c) No such lease shall contain a covenant for renewal.

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(d)

Every such lease shad take effect from the date not later than six months from

the date on which it is made.

(e)

In the case of a lease of buildings, whether leased with or without the land on

which they stand, the s duration of the lease shah in no case, exceed three years, and the lease
shall contain a covenant for payment of the rent and a condition of re-entry on the rent not
being paid within a time therein specified.
(3)

The provisions of sub-section(1) apply only if and as far as a contrary intention

is not expressed in the mortgage deed and the provisions of sub-Section(2) maybe varied or
extended by the mortgage deed and as so varied and extended shall, as far as may be, operate
in like manner and with all like incidents, effects and consequences, as if such variations or
extentions were contained in that sub-section.
M. Waste by Mortgagor in possession: sec 66- A mortgagor in possession of the mortgaged
property is not liable to the mortgagee far allowing the property to deteriorate but he must
not commit any act which is destructive or permanently injurious thereto, if the security is
insufficient or will be rendered insufficient by such act.
Explanation.-A security is insufficient within the meaning of the section unless the value of
the mortgaged property exceeds by one-third, or ,if consisting of buildings exceeds by onehalf, the amount for the time being due on the mortgage.
Liabilities
Following
(i)Liability

of

the

are the

mortgagor.

liabilities of

to

transfer

the
valid

mortgagor.
interest

The mortgagor is liable to transfer valid interest to the mortgagee in respect of

the mortgage property.
(ii)Liability

to

defend

title

The mortgagor is under liability to defend his own title if he is in possession

of mortgage property and if mortgagee is in possession he must enable him to defend his
property.

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(iii)Liability

to

pay

public

charges

It is liability of the mortgagor to pay the public charges so long as the mortgagee is not in
possession.
(iv)Liability

to

pay

rents

Where the mortgage property is a lease it is liability of mortgagor to pay the rent.
(v)Liability

to

pay

interest

and

other

encumbrances:

It is liability to pay interest on the prior mortgage and discharge of such encumbrances at the
proper time where the mortgagee is a subsequent of secondmortgage.
Conclusion:Thus Mortgage is a transfer of an interest in specific immovable property as a security for the
repayment of a monetary liability. This liability could be arising out of money already
advanced or to be advanced it could be future debt or it could be pecuniary liability arising
out of the non-performance of any engagement. A mortgage corresponds to the Hypotheca of
Roman Law. The creditors, on the failure of the debtor to pay the debt, could being
the debtors property to sale and recoup him. To conclude it can be said that the provisions of
the Transfer of Property Act, 1882 relating to mortgage successfully met the expectation and
demand of the mortgagor and mortgagee though it had many limitations.