Hypothecation Mortgage Lawyer

Rights of Mortgagor and Mortgagee in India

Definition of the term Mortgage:

According to the Section 58(a) of the Transfer of Property Act 1882, “A mortgage is the transfer of interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt or performance of an engagement which may give rise to a pecuniary liability.”

The transferor is called the mortgagor, the transferee is called the mortgagee, the principal money and interest of which payment is secured for the time being are called the mortgage -money, and the instrument (if any) by which the transfer is effected is called a mortgage deed.”

Essential elements of mortgage:

1)It must have a transfer of interest.

2) The above said interest must be some specific immovable property.

3) The target of the transfer should be to protect any debt of the payment or performance of an engagement which may bind to a pecuniary liability.

In simple words, a mortgage is the transfer of an interest in specific immovable property for some purpose. The mortgagor is the property owner in a property-mortgage situation who receives or asks for a loan. And the mortgagee is any person or bank or lending institution providing or giving a loan.

Duties and Responsibilities

Mortgagor: The mortgagor has many duties and responsibilities such as the right to be informed about the total cost of loan, settlement, etc., of the mortgage loan agreement. The mortgagor has the power to redeem the property after he clears the loan amount. The mortgagor has the power to lease out the property according to the terms of the contract.

Mortgagee: The mortgagee has power or right to receive payment from the mortgagor and if the mortgagor fails to make the payment then mortgagee can sell the property of the mortgagor to get the loan amount and before doing so he has to serve a notice to the mortgagor. The mortgagee should maintain the records of gains from the property.



1. Selling Right:- The mortgagor fails to pay the loan to the mortgagee then mortgagee has the right to sell the property by auction.

2. Shortage Of Money Case:- If the amount is less then the loan after selling the property then the mortgagee can recover the left amount by getting decree from the court.

3. Usufructuary Case:- If the mortgagee has no right to sell the property and get a decree from the court then he can retain possession till the recovery of the loan.

4. Refusal Of Debt:- The mortgagor refuses to return the loan or unable to pay the loan then mortgagee can get a foreclosure decree from the court.

5. Adjustment Of Payment:-After sale of the property banker has the right to distribute the payment.


1.    Redeem Of Property:-When the loan is returned the mortgagor has the power to get back his property.

2.    Right To Claim Damages:- When the mortgagee has possession of the property and the property is damaged somehow then mortgagor has the power or right to recover the damages.

3.    Right Of Lease:- The mortgagor has the possession of the property then he can lease the property.

4.    Recovery Of Possession:- The mortgagor has the right to get back his property after clearing the loan to the mortgagee.

5.    Appointment Of Auditor:- There should be an auditor appointed by the modarba company who is a qualified charted accountant approved by the registrar.


In simple words, the mortgagor is the person who receives the loan and the mortgagee is the person who gives the loan. The powers or rights and duties or responsibilities of the mortgagor or mortgagee may vary in respect of mortgage and state laws. Hence, it is better to consult with an expert before taking a loan.

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