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What is Equitable Mortgage? A Complete Guide
In property financing, an equitable mortgage offers a simple yet powerful way to secure loans without lengthy paperwork. But what exactly is it, and how does it work under Indian law? This blog breaks down the concept, drawing from key judicial precedents to help you understand its formation, validity, and potential pitfalls.
Whether you're a borrower depositing title deeds or a lender enforcing rights, grasping equitable mortgages can prevent costly disputes. We'll explore definitions, requirements, and real-world applications based on Supreme Court and High Court rulings.
Defining Equitable Mortgage
An equitable mortgage, also known as a mortgage by deposit of title deeds, arises when a debtor hands over property title documents to a creditor as security for a debt, with the clear intent to create a security interest. Unlike traditional mortgages requiring registered deeds, this form relies on the parties' intention and specific conditions.
Under Section 58(f) of the Transfer of Property Act, 1882 (TPA), it is defined as: a mortgage where a person in any of the towns specified in the proviso to this section, or at any other place by custom or agreement, delivers to a creditor or his agent documents of title to immovable property, with intent to create a security thereon.
Key distinction from English law: In India, this is a legal mortgage, not merely equitable, granting strong enforcement rights [
Search Results for "What is Equitable Mortgage? Key Legal Insights"
1973 0 Supreme(SC) 163 • India - Supreme Court
S. M. SIKRI, J. M. SHELAT, K. S. HEGDE, A. N. GROVER, A. N. RAY, P. JAGANMOHAN REDDY, D. G. PALEKAR, H. R. KHANNA, K. K. MATHEW, M. H. BEG, S. N. DWIVEDI, A. K. MUKHERJEA, Y. V. CHANDRACHUD
When the Courts declare a law, they do not mortgage the future with intent to bind the interest of the unborn generations to come ... Payment of compensation would be determined by equitable considerations and not by market value. ... It is open to the charge made that any form of property which gives man power over man is not an instrument of freedom but of servitude
2001 8 Supreme 660 • India - Supreme Court
P.VENKATARAMA REDDI, SHIVARAJ V.PATIL, B.N.KIRPAL
Thus, apart from the fact that the policy of disinvestment cannot be questioned as such, the facts herein show that fair, just and equitable ... terms that are not in any manner less favourable than the Voluntary Retirement Scheme offered by the company on the date of the arrangement ... Public Interest Litigation should, therefore, be disposed of at the earliest as any delay will be contrary to public interest and ... accordance with its terms;(d) it is not a party to, bound or affected by or subject to any indenture, #....
2012 2 Supreme 602 • India - Supreme Court
DEEPAK VERMA, DALVEER BHANDARI, H.L.DATTU
respondent had not been able to establish the family arrangement by which this house was given to the respondent for his residence ... which was clearly proved from the pleadings and documents on record.The respondent had not been able to establish the family arrangement ... The caretaker holds the property of the principal only on behalf of the principal. ... Possession is an incidence of ownership and can be transferred by the owner of an immovable property to another such as in a mortgage ... A serva....
1999 3 Supreme 102 • India - Supreme Court
D.P.WADHWA, S.SAGHIR AHMAD
If the intention of the parties was that the transfer was by way of security, it would be a mortgage. ... The transferor cannot retain any part of his interest or right in that property or else it would not be a sale. ... The property sold would stand transferred to the buyer subject to the statutory charge for the unpaid part of the sale price. ... This Clause confers statutory recognition on the English Doctrine of Equitable Lien. ... What is conta....
2008 0 Supreme(SC) 526 • India - Supreme Court
R.V.RAVEENDRAN, P.SATHASIVAM
construction of a building thereon and that he had also obtained a loan for such construction from Central Government by mortgaging ... to a daughter or sister by way of could be done orally and did not require a registered instrument - Even though there was no independence ... said property - According to him, when he commenced construction in suit property, plaintiffs tried to interfere with his possession ... He exhibited the certified copy of the sale deed dated 7.11.1977 in his favour as Ex.B1, a certified cop....
2011 Supreme(Online)(KER) 39487 • India - High Court of Kerala
THOMAS P.JOSEPH, J
subject to an equitable mortgage. ... The properties involved were part of previous transactions with claims of conflicting interests regarding the mortgage created by ... Issues: Whether the properties referred to in the petition are part of the equitable mortgage subject and require precise ... mortgage, such transfer being after creation of the equitable mortgage#HL_....
2009 Supreme(Online)(KER) 13224 • India - High Court of Kerala
K.M.JOSEPH, J
under an equitable mortgage. ... be entitled to the release of mortgaged documents. ... Fact of the Case: The petitioner failed to repay a loan, leading to recovery steps by the Board. ... the documents under the equitable mortgage will be returned to the petitioner. ... of interest and upon payment of the amount, the documents may be released to the petitioner. ... will be taken thereon #HL_START....
2009 Supreme(Online)(KER) 36938 • India - High Court of Kerala
P.R.RAMACHANDRA MENON, J
actions by the petitioner, referencing past judgments and obligations under equitable mortgage principles. ... SARFAESI - Bank Loan Dispute - SARFAESI Act - Sections relevant to loan recovery and equitable mortgageFact of the Case ... officers and irregularities in loan transactions including diversion of funds and creating equitable mortgages without proper authority ... concerned to the persons who have created equitable....
2012 Supreme(Online)(KER) 7153 • India - High Court of Kerala
P.BHAVADASAN, J
Mortgage - Equitable Mortgage - Transfer of Property Act - Section 58(f) - Court discussed the essentials of equitable mortgage ... Issues: Whether a valid equitable mortgage was created by the second defendant using only an encumbrance certificate and tax ... The first defendant Bank claimed an equitable mortgage despite plaintiffs' evidence of document forgery. ... Mo....
2018 Supreme(Online)(KER) 11456 • India - High Court of Kerala
B.KEMAL PASHA, J
The equitable mortgage did not cause any loss to the mortgagee, and the petitioner's purchase of property did not incur criminal ... Equitable Mortgage - Criminal Liability - IPC Sections 420, 406, 468, 471 - The court quashed proceedings against the petitioner ... Issues: Whether the petitioner can be held criminally liable for the actions associated with the equitable mortgage, given ... It was only an equitable mortgage....
2025 0 Supreme(SC) 367 • India - Supreme Court
J. B. PARDIWALA, R. MAHADEVAN
to create a security evident from such ‘equitable mortgage’. ... Thus, while mortgage by deposit of title deeds under the English Law is an equitable mortgage and subservient to a legal mortgage, in India mortgage created by such deposit is not subservient to an equitable mortgage as such mortgage is in itself a legal mortgage. ... Having understood the concept of ‘equitable #HL_....
2021 0 Supreme(Ker) 1042 • India - Kerala
DEVAN RAMACHANDRAN
word and concept of 'equitable mortgage' was expressly brought in, making it unambiguous that the delivery by a debtor of his title document, in certain specified towns, with the intent to create mortgage over the property covered by it in favour of the creditor, would partake the character of an “equitable ... mortgage. ... mortgage”. ... mortgage by deposit of Title Deeds. ... There is no doubt – as is admitted that the original provision relating to equit....
1982 Supreme(Online)(Kar) 8 • India - Karnataka High Court
M. P. Chandrakantaraj Urs, J.
In other words, the court below has come to the conclusion that the said two documents are themselves documents which create the equitable mortgage. 2. Shri R.C. ... I have already stated that the agreement for repayment of the loan and utilisation of the loan do not even mention the equitable mortgage. The second document merely recites the fact of having deposited the title deeds at an earlier date. ... Castelino, learned counsel appearing for the plaintiff - revision - petitioner has contended that the court was clear....
2022 0 Supreme(Mad) 1045 • India - Madras
D. BHARATHA CHAKRAVARTHY
Though such a mortgage is often described as an equitable mortgage, there is an essential distinction between an equitable mortgage as understood in English law and the mortgage by deposit of title deeds recognised under the Transfer of Property Act in India.” ... , is however, essential in India to create what is frequently referred to as an equitable mortgage. ... Waghorn, (1835) 41 R.R. 208, that the deposit of a copy of a court roll (official rec....
2025 0 Supreme(Bom) 517 • India - IN THE HIGH COURT OF JUDICATURE AT BOMBAY
A.S. Chandurkar, Rajesh S. Patil, JJ.
In an equitable mortgage, the borrower can sell the mortgage property to the third party without knowledge of the lender as in an equitable mortgage, the mortgage is created by depositing the title deed with the lender as a security for the loan amount. ... Registration is not compulsory for an equitable mortgage.15. In the present proceedings, in the first transaction the SBI had collateral security by way of equitable mo....
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