Question

"Mortgage by deposit of title deeds" is legally referred to as what type of mortgage?

• A. Simple Mortgage
• B. Usufructuary Mortgage
• C. Equitable Mortgage
• D. English Mortgage

Hint:

Deposit of title deeds = Equitable Mortgage (Section 58(f), TPA).

Answer 1

The Correct Option is C

Concept: Under the Transfer of Property Act, 1882, different types of mortgages are recognized. One such type is created without a formal written instrument, merely by depositing title deeds with the lender.
Step 1: Understanding mortgage by deposit of title deeds.
When a borrower delivers the title deeds of immovable property to the lender with an intent to create security, it is known as a mortgage by deposit of title deeds.
Step 2: Legal terminology.
This type of mortgage is commonly referred to as an Equitable Mortgage.
Step 3: Legal provision.
It is recognized under Section 58(f) of the Transfer of Property Act, 1882.
Step 4: Key characteristics.

• No formal registration required (in notified towns)
• Created by mere delivery of documents
• Based on trust and intention of parties

Step 5: Eliminating other options.

• Simple Mortgage: No transfer of possession, but requires a formal agreement
• Usufructuary Mortgage: Possession is given to the lender
• English Mortgage: Absolute transfer with a condition of retransfer

Step 6: Conclusion.
Thus, a mortgage by deposit of title deeds is known as an Equitable Mortgage.