(a) 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.
(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 immovable 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.
Legal Commentary & Landmark Judgments: Section 58
Section 58 of the Transfer of Property Act, 1882 defines a 'mortgage' and establishes the six distinct statutory forms of mortgages recognized under Indian property law.
Sub-sections (b) through (g) define six distinct mortgage types: (b) Simple mortgage (no possession, personal covenant, judicial sale); (c) Mortgage by conditional sale (ostensible sale becoming absolute on default); (d) Usufructuary mortgage (possession delivered, rents/profits appropriated towards interest/principal); (e) English mortgage (absolute transfer with proviso for re-transfer upon payment); (f) Mortgage by deposit of title-deeds / Equitable mortgage (created in notified towns by delivering documents of title with intent to create security); and (g) Anomalous mortgage (a composite or customary mortgage not fitting standard classes).
Mortgage by deposit of title deeds (Section 58(f)) is the standard commercial lending mechanism used by Indian banks. It requires three essentials: debt, deposit of original title deeds, and intent that deeds act as security. If the memorandum of deposit merely records a past completed transaction, it requires no registration; but if the memorandum itself creates the mortgage, it attracts mandatory registration under Section 17 of the Registration Act.