494 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES
- Whether a loan, for which there is security, involves a personal obligation to pay is a question of construction. Two propositions may be stated as those of law :—
(i) Personal liability is not displaced by the mere fact that security is given for the repayment of the loan with interest.
(ii) The nature and terms of security may negative any personal liability on the part of the borrower.
- In a simple mortgage, there is always security given for the loan. The loan is a secured loan. But nature and terms of the security must not negative the personal liability of the mortgagor. A personal covenant to pay is implied in and is an essential part of every simple mortgage.
Cases. 22 All. 453 (461); 29 Mad. 491 ; 30 All. 388.
- In the absence of such a covenant, the security would be a mere charge.
Cases. 42 All. 158 (164)=46 I. A. 228 ; 52 All. 901.
II. Right to cause the property to be sold.
This is a right in rein although it can only be enforced by the intervention of the Court, as the words, ‘cause to be sold’ indicate.
The transfer of this right may be express or it may be implied.
(ii) Mortgage by Conditional Sale
1. Characteristics.
(1) The transfer is by way of sale. It is a transfer of ownership.
(2) The difference between sale and mortgage by conditional sale is that, in sale the transfer is absolute while in mortgage by conditional sale, it is not absolute but is subject to a condition.
(3) The condition may take three forms :—
(i) That on default of payment of mortgage money on a certain day, the sale shall become absolute.
(ii) Then on such payment being made, the sale shall become void.
(iii) That on such payment being made, the buyer shall transfer such property to the seller.