VoxJuris
Home › Acts › Transfer of Property Act, 1882 › Chapter IV › Section 58

Transfer of Property Act, 1882 · Chapter IV: Of Mortgages of Immoveable Property and Charges

Section 58: Mortgage , mortgagor , mortgagee , mortgage-money and mortgage- deed defined

In plain words

A mortgage is a transfer of an interest in specific immovable property to secure a loan, a debt, or an obligation that may create a money liability. This section also defines the kinds of mortgage.

  • Simple mortgage: no possession is given, the borrower is personally liable, and the lender can have the property sold if unpaid.
  • Mortgage by conditional sale: an apparent sale that becomes absolute, or void, depending on repayment, with the condition written in the same document.
  • Usufructuary mortgage: the lender takes possession and keeps the rents and profits instead of interest or towards the loan.
  • English mortgage: the property is transferred outright, to be transferred back on repayment.
  • Mortgage by deposit of title deeds: handing over title documents to a creditor in notified towns, intending to create security.
  • Any other kind is an anomalous mortgage.

A simplified explanation, prepared with AI assistance from the official text below and checked automatically against it for numbers and cross-references. The official text is the law and prevails over this summary. Not legal advice.

Read the in-depth explanation, with key Supreme Court rulings ↓

Official text

(a) A mortgage is the transfer of an interest in specific immoveable 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 arc called the mortgage -money, and the instrument (if any) by which the transfer is effected is called a mortgage -deed.

(b) Simple mortgage.— Where, without delivering 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.

(c) Mortgage by conditional sale.— Where the mortgagor ostensibly sells the mortgaged property—

on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or

on condition that on such payment being made the sale shall become void, or

on condition that on such payment being made the buyer shall transfer the property to the seller,

the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:

[Provided that no such transaction shall be deemed to be a mortgage, unless the condition is embodied in the document which effects or purports to effect the sale.]

(d) Usufructuary mortgage.— Where the mortgagor delivers possession [or expressly or by implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage -money, and to receive the rents and profits accruing from the property [or any part of such rents and profits and to appropriate the same] in lieu of interest, or in payment of the mortgage -money, or partly in lieu of interest [or] partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.

(e) English mortgage.— Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.

[(f) Mortgage by deposit of title-deeds.— Where a person in any of the following towns, namely, the towns of Calcutta, Madras [and Bombay], *** and in any other town which the [State Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

(g) Anomalous mortgage.— A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.]

Source: India Code (indiacode.gov.in), the consolidated text published by the Legislative Department, Government of India. Text as updated on India Code on 15 October 2026. Words in square brackets [ ] were inserted or substituted by later amending Acts, and *** marks words omitted by an amendment. The amendment footnotes are not reproduced here. Official text on India Code.

Understanding this section

Section 58 defines a mortgage as the transfer of an interest in specific immovable property to secure the payment of money advanced, an existing or future debt, or the performance of an engagement giving rise to a liability. It then describes six kinds: simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by deposit of title deeds, and anomalous mortgage.

The kinds

KindKey feature
SimpleNo possession; mortgagor personally liable; mortgagee may have the property sold
Conditional saleOstensible sale that becomes absolute on default and void on payment
UsufructuaryPossession and rents go to the mortgagee in lieu of interest or principal
EnglishAbsolute transfer with a promise to re-transfer on payment
Deposit of title deedsDelivery of title documents in notified towns with intent to create security
AnomalousAny other form, or a combination

Conditional sale or sale with repurchase

The most disputed question is whether a document is a mortgage by conditional sale or an outright sale with a right to buy back. Under the proviso to clause (c), a transaction is not a mortgage unless the condition is in the same document. Beyond that, the intention of the parties decides, read from the document and surrounding circumstances, such as whether the price matched the value, whether possession passed, and whether a debtor and creditor relationship continued.

Key Supreme Court rulings

  • Chunchun Jha v. Sheikh Ebadat Ali 1954 INSC 43

    There is no hard and fast rule for deciding whether a document is a mortgage by conditional sale or an outright sale with a condition of repurchase; the intention of the parties, gathered from the document, decides.

  • Vanchalabai Raghunath Ithape v. Shankarrao Baburao Bhilare 2013 INSC 377

    Explained the conditions for a mortgage by conditional sale and held, on the terms of the document, that the transaction was a sale with a condition to repurchase.

Common mistakes

  • Calling a deed a mortgage when the reconveyance condition is in a separate document.
  • Deciding the question on the label of the deed alone.

Read with: Section 60 Transfer of Property Act, 1882, Section 67 Transfer of Property Act, 1882

Prepared with AI assistance as a study aid. Every ruling listed was checked against the Supreme Court's own judgments on this site, and quoted words appear in those judgments; linked names open the full judgment. Read the judgments themselves before relying on them. Not legal advice.

Supreme Court judgments citing the section 58