mortgage by deposit of title deeds

A mortgage by deposit of title deeds is created when a person delivers documents of title to immovable property to a creditor or his agent, with intent to create a security on the property. It is known in English law as an equitable mortgage. It needs no written mortgage deed and no registration, which makes it popular with banks.

It can be created only in Kolkata, Chennai, Mumbai and other towns notified by the State Government, though the property itself may be situated elsewhere. The crucial fact is the intention to create security, which is inferred from the circumstances. If the terms are reduced to a document that is itself the bargain, that document must be registered.

Example

The borrower deposited the sale deed of his Bengaluru site with the bank to secure the loan, creating a mortgage by deposit of title deeds.

In Indian law

• Section 58(f), Transfer of Property Act, 1882

See also

mortgage · registration · simple mortgage

Read more in the study notes

• Lending by banks: principles, priority sector, securities, interest and penalty (Banking Law)
• Plain language drafting (Drafting, Pleading and Conveyance)
• Mortgage deed and lease deed (Drafting, Pleading and Conveyance)
• Transfer of property: meaning and what may be transferred (Property Law)
• Mortgage: definition and kinds (Property Law)