English mortgage
Section 58(e) of the Transfer of Property Act, 1882 defines an English mortgage: the mortgagor binds himself to repay the money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, subject to a proviso that it will be retransferred on payment as agreed. Its features are a personal covenant to repay, an absolute transfer of ownership and the right to reconveyance.
It differs from a mortgage by conditional sale (s.58(c)), where the transfer is ostensibly a sale becoming absolute on default, and from a usufructuary mortgage (s.58(d)), where the mortgagee takes possession and usufruct. Despite the absolute transfer, the mortgagor keeps the right to redeem under s.60. The remedy of the mortgagee is a suit for sale; foreclosure is not available for this form.
Example
The deed transferred the house absolutely, with a covenant to repay by March and a promise to reconvey, so it was an English mortgage under s.58(e).
In Indian law
- Sections 58(e) and 60, Transfer of Property Act, 1882
See also
equity of redemption · encumbrance
Read more in the study notes
- Lending by banks: principles, priority sector, securities, interest and penalty (Banking Law)
- Mortgage deed and lease deed (Drafting, Pleading and Conveyance)
- Mortgage: definition and kinds (Property Law)