X files a suit in the court against her husband Y for maintenance. The court grants the decree and orders the husband to pay a monthly maintenance of rupees to the wife. In case of default of the husband to pay the maintenance, his property would be liable to amount for the same. New Kaiser-i-hind Spg. However, there should be a clear intention to give a property as security for the payment of money due. Under section 58 of the Act, when a borrower transfers interest in an immovable property to the lender for securing the payment of money advanced or to be advanced, an existing or future debt from the lender who might be a bank or financial institution that creates a pecuniary liability is said to have created a mortgage of the immovable property.
The borrower is called the mortgagor and the lender is the mortgagee. If the mortgagor fails to repay the debt, the mortgagee can sell the security after giving a notice to the mortgagee. The transfer of such interest takes place by executing a mortgage deed. The money advanced is known as mortgage money. X takes a loan of rupees 1,00, from the bank, keeping his house as a security.
He deposits the title deeds of the house with the bank. In such a case, X is said to have mortgaged his house. Paresh Nath Singha vs Nabogopal Chattopadhya [iv] the court held that when a mortgage is executed it is said to be a transfer of an interest in an immovable property. Immovable property under General Clauses Act is defined as one which includes land, benefits arising out of the land, things attached to the land or things that are permanently fastened to anything that is attached to the earth.
The key differences between mortgage and charge are as under-. Mortgage means when there is a transfer of an interest in ownership of an immovable property by the mortgagor as a security for the repayment of debt to the mortgagee. Whereas a charge on an asset implies a security of an asset created to secure a debt or a loan advanced by the lender, there is no transfer of ownership interest but a mere security for the repayment of debt. Hence charge is a right of releasing the debt out of the asset held as security but there is no transfer of interest executed.
A mortgage should be registered compulsorily under the Transfer of Property Act whereas a charge need or need not be registered under the Act. When a charge is created by the act of parties, it must be registered. However, if a charge is created on a property through the operation of law, registration is not required. Charges can be applied on both movable and immovable properties, Mortgagees, Pledge and Hypothecation. It depends on whether the company takes out the mortgage on a circulating asset or a tangible asset.
Circulating assets generally include receivable accounts, inventory , etc. A mortgage that is taken out on a building is a fixed charge.
However, a floating charge can also be converted into a fixed charge on crystallization. But this only happens when a company undergoes liquidation. The deeds or legal documents state that who owns a particular property or land.
It enables a solicitor to check if a property can be sold or not, by the seller. These deeds are owned by the owner of that property. However, if there is any mortgage on to the land, then these deeds or documents will be found at its mortgage lender, the photocopies of which can be asked at any time.
It also helps to know if there are any mortgages on a piece of property. The three types of mortgages are — fixed-rate mortgages, adjustable-rate mortgages, and alternative mortgages. In fixed-rate mortgages, a person knows how much he has to pay every month. If legal title is transferred then this will be a legal mortgage, whereas if beneficial title is transferred, it is an equitable mortgage see Mortgages—Mortgages can be legal or equitable.
The secured party the 'mortgagee' does not have to actually be in possession of the mortgaged property for a mortgage to exist. Legal mortgages can be taken over both tangible assets eg land, ships and aircraft and intangible assets such as intellectual property rights.
It is possible to create an equitable mortgage over any asset which can be the subject of a legal mortgage. See Practice Note: How is a mortgage created?. To discuss trialling these LexisPSL services please email customer service via our online form.
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Those shares are held in treasury and referred to as the company's treasury shares. The treasury shares regime is set out in CA , ss. They are intended to be used when completing the prescribed form under the Landlord and Tenant Act , Part 2 Notices. Skip to main content. Sign in Contact us. Legal Guidance. Acquisition finance. In-house banking and finance. Key developments and horizon scanning. Regulation for banking lawyers. Regulation for derivatives lawyers. Structured products and securitisation.
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