THE TRANSFER OF PROPERTY ACT 491
MORTGAGE COMPARED WITH OTHER FORMS OF ALIENATIONS
MORTGAGE AND SALE
Sale is defined in Section 54—It is a transfer of ownership for a price. The price is not a loan and the transfer is not a transfer of an interest but is an absolute transfer of ownership.
In a mortgage, the money paid is a loan and the transfer is a transfer of an interest only.
In a breach of a contract of sale, the rights are the rights of a vendor and purchaser while the contract is a contract of mortgage the rights are those of a mortgagor and mortgagee.
In sale, the property is transferred absolutely. In mortgage, the property serves only as a security for the repayment of a debt.
MORTGAGE AND OTHER KINDS OF SECURITIES
- There are four kinds of securities (1) mortgage,
(2) pledge, (3) lien and (4) hypothecation or charge.
It is important to note the distinction between mortgage and other kinds of securities.
I. M ORTGAGE AND P LEDGE
The bailment of good as security for payment of debt or performance of a promise is called a ‘pledge’ — Section 172 Indian Contract Act.
In a mortgage, general ownership in the property passes to the mortgagee and the mortgagor has only a right to redeem. In a pledge, only ‘a qualified or special property’ passes to the pledgee, the general ownership remains in the pledgor.
Delivery of possession of the property pledged to the pledgee is essential. But delivery of possession is not essential to a mortgage.
The property which is once pledged cannot be pledged a second time, because, no possession can be granted to the second pledgee, while property which is mortgaged once to one person can be mortgaged again to others subsequently.