Vol. 12 · pages 511–515

490 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES (ii) Transfer of an Interest: 1. It means the tranfer of some right belonging to the mortgagor in respect of the property. 2. Ownership consists of a bundle of rights, such as, right to possess, right to enjoy, sell, etc. 3. It is enough if one of these rights is transferred. The right transferred may vary :— (i) It may be the right to sell. (ii) It may be the right to enjoy. (iii) It may be the right to own. 4. The nature of the right transferred is matter of no consequence so long as some right is transferred. III. THE PURPOSE MUST BE SECURING THE PAYMENT OF MONEY ADVANCED. 1. The transfer of interest is by way of Security. The idea of a Security involves two things. There must be a debt or pecuniary liability and secondly there must be some property pledged for the meeting of that liability. 2. The purpose of the transfer must be securing of the debt. A transfer made for the purpose of securing a debt must be distinguished from a transfer, the purpose of which is to discharge a debt. 25 All. 115=30 I. A. 54. 11 Bom. 462. 3. The right trasferred must be to enable the man to recover the debt. The transfer must not extinguish the debt. If the effect of the transfer is to extinguish the debt then there is no mortgage. Illustration.— 11 Bom. 462 Abdulbhai vs. Kashi In 1862, A in consideration of Rs. 150 passed to B a writing called Karz Rokha (or debt-note). It proved (inter alia) that B should hold and enjoy a certain piece of land belonging to A for twenty years, that at the end the land should be restored to A free from all claims in respect of principal or interest. Held, not a mortgage. 25 All. 115.

491THE TRANSFER OF PROPERTY ACT MORTGAGE COMPARED WITH OTHER FORMS OF ALIENATIONS MORTGAGE AND SALE 1. 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. 2. In a mortgage, the money paid is a loan and the transfer is a transfer of an interest only. 3. 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. 4. 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 1. 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. MORTGAGE AND PLEDGE 1. The bailment of good as security for payment of debt or performance of a promise is called a ‘pledge’ — Section 172 Indian Contract Act. 2. 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. 3. Delivery of possession of the property pledged to the pledgee is essential. But delivery of possession is not essential to a mortgage. 4. 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.

492 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 5. Pledge can only be of personal property. Mortgage can be of both personal as well as real property. Mortgage and Liens 1. A lien is a kind of security which is created by the operatin of the law. Lien is a right created by law and not by contract to retain possession of the property blonging to another until certain demands are satisfied. 2. The law on the subject of lien is scattered in many statutes of the Indian Legislature. E.g. Contract Act Sections 170-General-171-Bankers Solicitors, etc., 221-Agent’s lien. Sale of goods 47, unpaid Vendor’s lien. T. P. 554 : 55 (6) seller’s and buyer’s lien. 3. Lien does not create general ownership as a mortgage does, not even qualified property as in a pledge—only right to retain possesion. 4. Both mortgagee and pledgee can sell: but lien holder cannot. Mortgage and a charge 1. A charge is defined in Section 100. There are two elements in a charge : (1) There is a pecuniary liability. (2) Immoveable property is made security for the discharge of that pecuniary liability. 2. In a mortgage there are three elements :— (i) There is pecuniary liability. (ii) Immoveable property is made security for the discharge of that pecuniary liability. (iii) There is a transfer of an interest in that property in favour of the creditor. 3. In a charge there is no transfer of interest. There is only burden. 35 Cal. 837 (844) ; 13 Lah. 660 T. B. 35 Cal. 985. 4. The difference between mortgage and charge is material.

493THE TRANSFER OF PROPERTY ACT 1. A mortgagee can follow the mortgaged property in the hands of any transferee from the mortgagor. While a charge can be enforced only against transferee with notice— 33 Cal. 985. § DIFFERENT CLASSES OF MORTGAGE 1. The section enumerates six classes of mortgage :— (i) Simple mortgage. (ii) Mortgage by conditional sale. (iii) Usufructuary mortgage. (iv) English mortgage. (v) Equitable mortgage. (vi) Anomalous mortgage. 2. Characteristics of the different classes of mortgage. (i) Simple Mortgage 1. A Simple mortgage involves two things : (i) A personal obligation, express or implied, to pay. (ii) The transfer of a right to cause the property to be sold. Personal obligation 1. When a person accepts a loan, there is involved a personal liability to pay, unless there is a covenant to pay out of a particular fund. 10 Cal. 740 ; 22 Cal. 434 ; 16 Cal. 540 ; 13 Mad. 192 ; 15 Mad. 304 ; 27 Mad. 526 : 86. 1. A loan may be a secured loan or unsecured loan. 2. Every unsecured loan involves a personal obligation to pay. 44 I. A. 87. 3. The only case of a loan in which a personal obligation to pay is negatived, is where there is a covenant to pay out of a particular fund. Cases. 10 Cal. 740 ; 22 Cal. 434 ; 16 Cal. 540 ; 13 Mad. 192 15 Mad. 304 ; 27 Mad. 526 : 86.

494 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES 4. 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. 5. 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. 6. 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. 1. 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. 2. 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.