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 (if any) by which the transfer is effected is called a mortgage-deed.

Where the principle money secured is one hundred rupees or upwards, a mortgage otherwise than a mortgage by deposit by title deeds can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. When the principle money secured is less than one hundred rupees, mortgage may be effected either by a registered instrument signed by the mortgagor and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property.

• Right of mortgagor to redeem:

Section 60, Transfer of Property Act provides that at any time after the principal money has become due, the mortgagor has right on payment or tender, at a proper time and place, of the mortgage money, to require the mortgagee

• (i). 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;
• (ii). where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor; and
• (iii). 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 mortgage has been extinguished:

Provided that the right conferred by this section has not been extinguished by the act of the parties or by decree of court.

• Obligation to transfer to third party instead of re-transference to mortgagor

Section 60 A, Transfer of Property Act provides that 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 retransfer, he may require the mortgagee, instead of retransferring the property, to assign the mortgage debt and transfer the mortgaged property to such third person as the mortgagor may direct the mortgagee and the mortgagee shall be bound to assign and transfer accordingly.

The provisions of this section do not apply in the case of mortgagee, who is or has been in possession.

• Rights to inspection and production of documents

A 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 cost and expenses in this behalf, to inspect and make copies or abstracts of or extracts from documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.

• Rights to redeem separately or simultaneously

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.

• Right of usufructuary mortgagor to recover possession

In the case of 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.

• Accession to mortgaged property

Where mortgage 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.

• Improvements to mortgaged property

Section 63A (1), Transfer of Property Act provides that 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 save only in cases provided for in sub-section (2) be liable to pay the cost thereof.

• Renewal of mortgaged lease

Where the mortgaged property is a lease, and the mortgagee obtains a renewal of the lease, the mortgagor, upon redemption, shall in absence of a contract by him have the benefit of the new lease.

• Mortgagor’s power to lease

Section 65A(1), Transfer of Property Act provides that a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee.

• Waste by mortgagor in possession

A mortgagor in possession of the mortgaged property is not liable to the mortgagee for 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.

A security is insufficient, unless the value of the mortgaged property exceeds by one-third or, if consisting of buildings, exceeds by one-half the amount for the time being due on the mortgage.

“Mortgage-deed” includes every instrument whereby, for the purpose of securing money advanced, or to be advanced, by way of loan, or an existing or future debt, or the performance of an engagement, one person transfers, or creates, to, or in favour of, another, a right over or in respect of specified property;

The transfer of property Act, 1882 codified the law relating to mortgages. The mortgagers right to redeem the mortgage is jealously guarded by the courts. The doctrine of equity of redemption is expressed in the maxim “once a mortgage, always a mortgage”.   The equitable right to redeem subsists until the mortgagers interest is effectually extinguished by the process of law.

It is well settled that when a person enters into possession of immovable property not in the accretion of any absolute title but on the basis of unregistered mortgage deal in his favour and remains in possession for more than 12 years, he acquires the status of way mortgagee by the doctrine of prescription and even the unregistered mortgage deed is not valid transaction for want of registration, the mortgager is entitled to redeem the property. Such an unregistered mortgage deed cannot be treated as an agreement to enter into a mortgage deed in future.

Any person, company, association or body of individuals not otherwise disqualified can be the mortgager. In the case of a company or association, such a mortgage must be authorized by the memorandum and approved by a resolution of the Board of Directors or the governing body as the case may be. Under S. 292 of the companies Act, 1956 it is the Board of Directors who can borrow money on mortgage and the same shall be done by resolutions passed at the board and general Meetings.