Home  /  Transfer of Property Act  /  Section 96

Section 96: Mortgage by deposit of title-deeds

Transfer of Property Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1882
Section 95 All 137 Sections of Transfer of Property Act Section 97

Legal Commentary & Landmark Judgments: Section 96

Section 96 equates a mortgage by deposit of title-deeds (equitable mortgage) to a simple mortgage, declaring that all statutory provisions applicable to simple mortgages apply equally to equitable mortgages.

  • Parity with Simple Mortgage: The provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to a mortgage by deposit of title-deeds.
  • Enforcement by Sale: Equitable mortgagee has the same statutory right to cause the mortgaged property to be sold under a civil court decree for sale as a simple mortgagee under Section 67.
  • No Right of Foreclosure: An equitable mortgagee cannot sue for strict foreclosure or debarment of the equity of redemption; the remedy is strictly sale.
  • Order 34 CPC Integration: Suit on equitable mortgage follows Order 34 Rule 4 CPC.
Key Landmark Precedents:
  • State of Haryana v. Narvir Singh, (2014) 1 SCC 105: The Supreme Court confirmed that Section 96 equates mortgages by deposit of title deeds with simple mortgages in all enforcement respects, enabling banks to sue for court sale.
  • K.J. Nathan v. S.V. Maruthi Rao, AIR 1965 SC 430: The Constitution Bench established the three ingredients of an equitable mortgage under Section 58(f) read with Section 96: debt, deposit of title deeds, and intention that deeds be security for debt.
Courtroom Practice & Strategic Litigation Guidance:

Banks holding an equitable mortgage must file a suit for sale under Order 34 Rule 4 CPC read with Section 96; do not pray for foreclosure, which is barred for simple and equitable mortgages.

Section 95 All 137 Sections of Transfer of Property Act Section 97