Home  /  Transfer of Property Act  /  Section 98

Section 98: Rights and liabilities of parties to anomalous mortgages

Transfer of Property Act • Official Statutory Text & Practice Guide

Statutory Regulation
Legal Standard
Competent Court / Tribunal
Act 1882
Section 97 All 137 Sections of Transfer of Property Act Section 99

Legal Commentary & Landmark Judgments: Section 98

Section 98 provides that in the case of an anomalous mortgage, the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage-deed, and, so far as such contract does not extend, by local usage.

  • Anomalous Mortgage Freedom: In the case of an anomalous mortgage, the rights and liabilities of the parties shall be determined by their contract as evidenced in the mortgage-deed.
  • Subordination to Local Usage: So far as such contract does not extend, by local usage and custom.
  • Custom Combination Mortgages: Applies to composite mortgages (e.g., simple usufructuary mortgage, mortgage by conditional sale with personal covenant).
  • Clog on Redemption Bar Intact: Even in anomalous mortgages, parties cannot contract to clog or destroy the mortgagor's fundamental equity of redemption under Section 60.
Key Landmark Precedents:
  • Seth Ganga Dhar v. Shankar Lal, AIR 1958 SC 770: The Supreme Court authoritatively held that while Section 98 gives primacy to contractual terms in anomalous mortgages, the court will strike down any clause that operates as a clog on the equity of redemption as void.
  • Prithi Nath Singh v. Suraj Ahir, AIR 1963 SC 1041: Affirmed that Section 98 does not permit lenders to bypass core equitable protections.
Courtroom Practice & Strategic Litigation Guidance:

In hybrid or custom mortgage structures, draft clear remedies for default while avoiding forfeiture clauses that courts will void as an illegal clog under Section 60/98.

Section 97 All 137 Sections of Transfer of Property Act Section 99