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Section 3 of TPA, 1882 reads immovable property does not include standing timber, growing crops and grass. This interpretative clause does not help us much in understanding as to what is immovable property The General Clause Act, 1827 defines the expression as follows: Immovable Property shall include land, benefits to arise out of land, and things attached to earth The expression attached to earth given in the above definition, is explained in TPA (section 3) as follows: attached to earth means: (1) Rooted in the earth as in the case of trees and shrubs; (2) Embedded in the earth, as in the case of walls or buildings; or (3) Attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached. Doors, windows and shutters of a house are attached to the house for the permanent beneficial enjoyment of the house and are, therefore, immovable property. The TPA does not define the term immovable property or movable property exhaustively. However, the Act deals with the transfer of both movable property and immovable property. Some examples of immovable property are: (1) Land and buildings (2) Right to collect the rent of immovable property (3) A right of way (Easement) (4) Hereditary offices (5) A right to collect dues from a fair on a piece of land (6) The interest of a mortgage in immovable property (7) The equity of redemption (8) The right to collect lac from trees (9) The grant of a right to collect tobacco leaves for making bidis The following have been held not to be immovable properties (1) Right of worship (2) Government Promissory Notes (3) Royalty (4) A right to recover maintenance allowance (5) Copy right (6) A decree for sale on a mortgage deed (7) Standing timber, growing crops and grass Properties which cannot be transferred under the TPA, 1882 Section 6 of the TPA provides that property of any kind may be transferred except as other wise provided by this Act, or nay other law for the time being in force. However section 6 provides certain exemption to this general rule. These are: Spes Successionis: the chance of an heir-apparent (undoubted legal heir) succeeding to an estate, the change of a relation obtaining a legacy on the death of the kinsmen (a man or a boy who is somebodys relative), or any other mere possibility of a like nature, cannot be transferred (i.e, some body cannot sell or transfer some thing of which he is not having legal right as on the date of transfer)
1. There must be a transfer of an interest in an immovable property. Unless some interest in property is transferred, there can be no mortgage, for a mortgage creates a right in rem. 2. The interest transferred should be an interest in specific immovable property, It is necessary to specify the property in order to create a mortgage thereof. The property must be specified with distinctness so as to identify the property described. But the description will be sufficiently specific, if it renders the property identifiable or capable of being ascertained. It may be noted that the actual possession of the property need not always be transferred to the mortgagee
3. The purpose of the transfer should be to secure a debt and not to discharge it 4. The mortgage may be to secure the performance of an engagement that may give rise to a pecuniary liability
5. A minor cannot be a mortgagor, though he can be a mortgagee: As all the essentials of a valid contract are applicable to mortgage, a minor cannot be a mortgagor-be cannot incur a liability. However, he is capable of holding property and therefore can accept a transfer of property by a mortgage. A minor, therefore, can be a mortgagee. 6. A mortgagor can transfer either a legal interest or an equitable interest in the property mortgaged. Accordingly, mortgage that is created is either a legal mortgage or an equitable mortgage
Legal Mortgage: A legal mortgage may be defined as the creation by demand of a legal estate or interest in land, as security for the payment of money due or to become due, in favour of the person who takes the security subject to the mortgagor's right to have the estate so created extinguished on repayment of the loan, with interest. The person (borrower) who gives the security is called the mortgagor and the lender is called the mortgagee. It should be noted that a mortgage given as security for a debt is not a sale of the property
The mortgagor has the right to have the mortgage redeemed upon repayment of the money advanced, together with interest and any cost and charges properly incurred by the mortgagee in order to protect, preserve or enforce his security. A legal mortgage must be by deed. In this case a mortgage deed is executed Equitable Mortgage: An equitable mortgage is created by an agreement, express or implied, that an equitable interest in the property shall pass to the mortgagee as security for a debt due or to become due. An equitable mortgage is affected by deposit of deeds or documents of title. The legal tide to the property is not passed to the mortgagee, but the mortgagor undertakes, through a memorandum of deposit, to execute a legal mortgage in case he fails to pay the debt in time Equitable mortgages accompanied by the deposit of title deeds do not require registration. But if a mortgage deed has been prepared, it must be registered. An equitable mortgagee cannot sue for foreclosure (a legal process by which a mortgagees right to redeem a mortgage is taken away, usually because of failing to make payments), though he can sue for a decree for sale. A suit for mortgage money can only be brought if there is a personal covenant (agreement) to pay Simple mortgage: Section 58(b) provides as follows: Where, without delivering the possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage money and agrees, expressly or impliedly, that in the event of his failing to pay according to his contract, the mortgagee shall have a right, to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage money, the transaction is called a simple mortgage, and the mortgagee a simple mortgagee From the definition, we can spell out the following essentials of a simple mortgage: 1. The mortgagor must personally undertake to pay the mortgage money. This personal obligation may be express or implied. 2. The mortgagor retains the possession of the property with himself. 3. The mortgagor agrees, expressly or impliedly, that in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, as far as may be necessary, in payment of the mortgage money. 4. From the above, it may be inferred that in a simple mortgage, the security of the debt is twofold i.e., (i) The personal obligation of the mortgagor and (ii) the property 5. In case the mortgagor sells the property, the buyer takes the property subject to the mortgage but not subject to the personal obligation of the mortgagor' because such personal obligation, being the burden of a contract, cannot be assigned without the consent of the mortgagee. 6. Also, the decree obtained by the mortgagee can be executed against the other properties of the mortgagor like any other money decree Describe a mortgage by deposit of title deeds: Section 58 (f) provides that where a person in any of the following towns, namely, the towns of Calcutta,
1. The mortgagor transfers the mortgaged property absolutely to the mortgagee. But it does not mean that all the right, title and interest of the mortgagor is transferred to the mortgagee. What is meant is that such a mortgagee would be absolute owner, were it not for the proviso for retransfer of property. 'However, the transfer above is made subject to a condition that the mortgagee will re-transfer the property to the mortgagor upon payment of the" mortgage money as agreed. 2. The mortgagor continues to remain liable for the amount, in spite of the absolute transfer of the property to the mortgagee 3. In case of default by the mortgagor in repayment of the mortgage money, the mortgagee has a right to sell the property without seeking the
Usufractuary Mortgage: in this mortgage, the mortgager transfers the possession of the mortgaged property to the mortgagee until the payment of the mortgage money an to receive the rents and profits accruing from the property in lieu of the interest or partly in payment of the mortgage money Anomalous Mortgage: a mortgage which is not a simple mortgage, a mortgage by conditional sale, a Usufractuary mortgage, an English mortgage, or mortgage by deposit of title deeds within the meaning of this section is called an anomalous mortgage Section 35: Election when necessary (accept either fully or reject fully) Where a person professes (confess, acknowledge) to transfer property which he has no right to transfer, and as part of the same transaction confers any benefit on the owner of the property, such owner must elect either to confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so conferred, and the benefit so relinquished shall revert to the transferor or his representative as if it had not been disposed of, subject nevertheless, where the transfer is gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh transfer, and in all cases where the transfer is for consideration, to the charge of making good to the disappointed transferee the amount or value of the property attempted to be transferred to him. Illustrations The farm of Sultanpur is the property of C and worth Rs.800. A by an instrument of gift professes to transfer it to B, giving by the same instrument Rs.1,000 to C. C elects to retain the farm. He forfeits the gift of Rs.1,000. In the same case, A dies before the election. His representative must out of the Rs.1,000 pay Rs.800 to B. The rule in the first paragraph of this section applies whether the transferor does or does not believe that which he professes to transfer to be his own.
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