Define the expression 'Sale', 'Mortgage' and 'Mortgager'.

Question: Define the expression 'Sale', Mortgage and Mortgagor. [JJS 2001]

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Answer

The Transfer of Property Act, 1882 governs the transfer of property in India between living persons. Among its key concepts are the terms ‘Sale’, ‘Mortgage’, and ‘Mortgagor’, which relate to different modes of transferring rights or interests in immovable property. These expressions are legally defined under various sections of the Act to provide clarity on their scope and operation.

Sale [Section 54]

Sale is defined as the transfer of ownership in exchange for a price paid, promised, or partly paid and partly promised. It involves a complete transfer of rights from the seller to the buyer. For immovable property of ₹100 or more, registration of the sale deed is mandatory.

In Narandas Karsondas v. S.A. Kamtam (1977 AIR 774), it was held:

An agreement to sell does not create any interest in or charge on the property. Ownership is transferred only upon execution and registration of a sale deed.

Mortgage [Section 58(a)]

A mortgage is the transfer of an interest in specific immovable property to secure:

• A loan already advanced or to be advanced,
• An existing or future debt,
• Or the performance of a pecuniary obligation.

Ownership remains with the mortgagor, while only a limited interest is transferred to the mortgagee.

Mortgagor [Section 58(a)]

The mortgagor is the person who creates the mortgage by transferring an interest in his property as security for a debt. While he parts with a limited interest in the property, he remains its legal owner unless foreclosure or sale occurs.

In Ram Kishan & Ors. v. Sheo Ram & Ors, (2008) 1 ICC 365, the Punjab & Haryana High Court ruled that in a usufructuary mortgage without a fixed redemption period, the mortgagor's right to redeem arises only when the mortgage money is paid or tendered. The Court upheld that such a mortgage remains always redeemable and dismissed the mortgagee's claim of ownership by lapse of time.

The terms ‘Sale’, ‘Mortgage’, and ‘Mortgagor’ under the Transfer of Property Act are foundational to property law in India. While a sale results in complete ownership transfer, a mortgage creates only a security interest in favour of the lender, with the mortgagor retaining ownership. Understanding these distinctions is essential for determining the nature of rights and liabilities involved in property transactions.