Drafting, Pleading and

Conveyancing
MORTGAGE DEED

SUBMITTED TO:
Dr. Sunaina
SUBMITTED BY:
Poonam Sharma
ROLL NO.: 35/17
LL.B. 3rd Year (6th Sem.)
 UNDERTAKING
I hereby declare that the project entitled MORTGAGE DEED of subject DRAFTING,
PLEADING AND CONVEYANCING submitted by me to Dr. Sunaina is a bonafide project,
carried out by me and is the record of an original work done by me.

I further certify that this project is my own work based on my personal study and research
and that I have acknowledged all material and sources used in its preparation, whether they
be books, lecture notes, and other kind of document, electronic communication. I also declare
that I have not copied in whole or otherwise plagiarised the work of other persons.

Poonam Sharma Date- 31st march 2020

(name)

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 ACKNOWLEDGMENT
Primarily I would thank god for being able to complete this project with success. Then I
would like to thank my Drafting, pleading and conveyancing teacher Dr. Sunaina, whose
valuable guidance has been the ones that helped me patch this project and make it full proof
success, as her suggestions and her instructions has serves as the major contributor towards
the completion of the project.

Then I would like to thank my friends and my family who have helped me with their valuable
guidance and suggestions has been helped in various phases of the completion of the project.

Last but not the least but I would like to thank my classmates who have helped me a lot.

Poonam Sharma

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 Table of Contents

S.NO.: TOPIC PAGE NO.:

1. Abbreviation 4

2. Introduction 5

3. Mortgage Deed

 Definition and meaning 6-7

 characteristics

4. Kinds of Mortgage Deed 8-10

5. Drafting of Mortgage Deed 11-16

6. Bibliography 17

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 ABBREVIATIONS

ABBREVIATION DESCRIPTION

W/O Without

e.g. For example,

i.e. That is

Sec. Section

@ At the rate

p.a. Per annum

& And

INTRODUCTION

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Before we start with what mortgage deed is let’s just understand first what conveyancing is.
The word ‘to convey’ in simple words means to transfer, to make over and thus
‘Conveyancing’ means and denotes an instrument or deed through which one or more living
persons transfer his or their interest in present or in future in or upon an immovable property
to one or more living persons. Conveyancing hence, in layman language is an art of drafting
deeds and documents whereby any right, title, or interest in an immovable property is
transferred from one person to another. Now when we know the meaning of conveyancing
lets understand what deed is? A Deed in its legal sense means a solemn act denoting douc^,
and it may be defined as an instrument written on parchment or on a paper executed, signed,
sealed and delivered by an executant. Now when we know what conveyancing and deed
means it will be easy for us to understand what mortgage deed is.

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 MORTGAGE DEED
 MEANING OF MORTGAGE DEED:
 Mortgage deed is defined under the Sec.58 of the THE TRANSFER OF PROPERTY
ACT,1882. It declares that a mortgage is the transfer of an interest in a specific
immovable property for the purpose of securing the payment of money advanced or to
be advanced by the way of loan, or on existing or future debt, or the performance of
an engagement which may give rise to a pecuniary liability.
 The definition of the mortgage provided by the INDIAN STAMP ACT,1899, is wider
then given under The Transfer of Property Act, because it includes movable property
as well.
 MORTGAGOR- The transferor is called the mortgagor.
 MORTGAGEE- The transferee is called the mortgagee.
 The principal money and the interest of which the payment is secured is called the
Mortgage-money; and the instrument of transfer is called the Mortgage-deed.

 Characteristics of a mortgage deed:

In terms of the definition the following are the characteristics of a mortgage-deed:
 Specific Immovable Property: A mortgage can be effected only on immovable
property. It includes in it lands, benefits that arise out of land and things attached to
earth like trees, buildings and machinery. But a machine which is not permanently
attached to the earth and is shift-able from one place to another is not considered
under this.
 Transfer of An Interest: A mortgage is the transfer of an intertest in the specific
immovable property, i.e., the owner transfers some of his rights only to the mortgage.
For example, the right to redeem the property mortgaged.
 For the Purpose of Securing: The object of transfer of interest in the property must be
to secure a loan or performance of a contract which results in monetary obligation.

 Execution, Attestation, Registration and Stamp Duty: A mortgage-deed should be

executed by the parties themselves and be attested by at least two witnesses and it

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 should be registered. The same stamp-duty as is for the conveyance for a
consideration equal to the amount secured by the mortgage.
 The property to be mortgaged must be specific one i.e., it can be identified by its size,
location, boundaries etc.

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 KIND OF MORTGAGE DEED
Sec.58 of the Transfer of Property Act enumerates six kinds of mortgages which creates and
transfer interests in the mortgaged-property in a different matter:

i. Simple mortgage
ii. Mortgage by conditional sale
iii. Usufructuary mortgage
iv. English mortgage
v. Anomalous mortgage
vi. Equitable mortgage

I. Simple Mortgage
In a simple mortgage, the mortgager does not deliver the possession of the mortgaged
property. He binds himself personally to pay the mortgage money and agrees either
expressly or impliedly, that in case of his failure to repay, the mortgagee shall have
the right to cause the mortgaged property to be sold and apply the sale proceeds in
payment of mortgage money.
One of the essential features of the simple mortgage is that the mortgagee has no
power to sell the property w/o the intervention of the court. The mortgagee can
i. Apply to the court for permission to sell the mortgaged property, or
ii. File a suit for recovery of the whole amount w/o selling the property.

II. Mortgage by Conditional Sale

Under the mortgage by the conditional sale, the mortgager ostensibly sells the
property to the mortgagee on the following conditions:
i. The sale shall become void on payment of the mortgage money.
ii. The mortgagee will retransfer the property on payment of the mortgage
money.
iii. The sale shall become absolute if the mortgager fails to repay the amount on a
certain date.
iv. The mortgagee has no right of sale but he can sue for foreclosure.

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 *Foreclosure means the loss of right possessed by the mortgager to redeem
the mortgaged property. Th e mortgagee has the right to institute a suit for a
decree so that the mortgager will be absolutely debarred from his right to
redeem the property. The right to fore closure arises when the time fixed for
the repayment express and the mortgager fails to repay the mortgage money.
Without the foreclosure order the mortgagee will not become the owner of the
property.

III. Usufructuary Mortgage

Under the Usufructuary mortgage, the mortgager delivers possession of the property
or binds himself to deliver possession of the property to the mortgagee. The
mortgagee is authorized to retain the possession until the debt is repaid. The
mortgager reserves the right to recover the property when the money is repaid.

The essential feature of this form of mortgage is that the mortgagee is entitled to
receive rents and profits relating to the mortgaged property till the loan is repaid and
appropriate the same in the lieu of interest or in repayment of the loan or both.

The mortgager is not personally liable to repay the mortgage money. So, the
mortgagee cannot sue the mortgager for repayment. He can neither sue foreclosure
nor sue for sale of the mortgaged property; the only remedy for the mortgagee is to
remain in the possession of the property and pay himself out of the rents or profits of
the mortgaged property. Since there is no time limit, he has to wait for a very long
time to recover his dues.

IV. English Mortgage

The English mortgage has the following characteristics:
i. The mortgage transfers the property absolutely to the mortgagee. The
mortgagee, therefore, is entitled to take immediate possession of the property.
The transfer is subject to the condition that the property shall be transferred on
repayment of the loan.
ii. The mortgager also binds himself to pay the mortgage money on a certain
date.

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 iii. In case of non-payment, the mortgagee has the right to sell the mortgaged
property w/o seeking permission of the court in circumstances mentioned in
Sec. 69 of the Transfer of Property Act.

V. Anomalous Mortgage
In terms of the definition an Anomalous mortgage is one which does not fall under
anyone of the above forms of mortgages. Such a mortgage can be effected according
to the terms and conditions of the mortgager and the mortgagee.

Usually it arises by a combination of two or more of the above said mortgages. It may
take various forms depending upon the custom, usage or contract.

The possession may or may not be delivered under this type of mortgage. The remedy
is by sale or by foreclosure depending upon the terms of the deed.

VI. Equitable Mortgage

An Equitable mortgage is effected by mere delivery of the documents of title to
property to the mortgagee. There is no delivery of the possession and no registration
is required.

The mortgagor through Memorandum of deposit undertakes to grant a legal mortgage

if he fails to pay the mortgage money. Also, the remedy is only by sale and not by
foreclosure.

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DRAFTING OF MORTGAGE DEED

Based on the hypothetical facts a precedent form of a deed of mortgage is as follows:

A. Deed of Mortgage
The MORTGAGE DEED is made on this ……….day of January,15
BETWEEN Shri N.K. Sinha, a Hindu adult and Indian inhabitant of Delhi,
carrying on business of electrical goods in the name and style of “General
Electric Stores” And/or “Sinha Vastu Bhandar” situate at Shop No. 23-P, BH
Block, Club Road, West Shalimar Bagh, Delhi,110088, hereinafter called
“THE MORTGAGOR” of the One Part,
And Shri Akshay Pratap Singh Ranawat, a Hindu adult and Indian inhabitant
of Delhi, carrying on business of Sugar Mills at C-87, Block C, Mansa Ram
Park, Uttam Nagar, Delhi,110059, hereinafter called “MORTGAGEE” of the
Other Part:
WHEREAS the Mortgagor is the absolute Owner and the Sole Proprietor of a
shop situate Shop No. 23-P, BH Block, Club Road, West Shalimar Bagh,
Delhi,110088, and all furniture, fixtures, fittings, utensils, instruments of trade,
articles and other things lying and being in the said shop absolutely belong to
the MORTGAGOR
AND WHEREAS THE MORTGAGOR, being urgently in the need of the
money to run the said business of “General Electric Stores” And/or Electric
Light House efficiently and smoothly, need a sum of Rs. 1,30,000/- (Rupees
one lakh thirty thousand only) AND WHEREAS the Mortgagee agreed to lend
and advance the said sum of Rs. 1,30,000/- (Rupees one lakh thirty thousand
only) to the Mortgagor upon having the repayment thereof with interest
secured in the manner hereinafter expressed
NOW THIS DEED WITNESSETH that:
i. In pursuance of the said agreement and ibn consideration of the sum of
Rs. 1,30,000 (rupees one lakh thirty thousand only) paid to the
Mortgagor by the Mortgagee (the receipt whereof the Mortgagor
hereby acknowledges), the Mortgagor does hereby agree with

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 Mortgagee that the Mortgagor will repay the said loan as follows:
namely, on or before the 11th day of each and every month regularly a
sum of Rs. 10,000 (Rupees ten thousand only) per month regularly for
a period of 13 consecutive months. The first of such instalment of Rs.
10,000/-(Rupees ten thousand rupees only) shall be paid on or before
the 11th day of February,20…. and thereafter on or before the receipt
thereof until the entire loan is repaid in the manner as aforesaid;
ii. The Mortgagor further agrees that on this failure and default to pay for
ant Two Consecutive monthly instalments as aforesaid the Mortgagee
shall be at liberty to call upon Mortgagor to pay the balance of the said
principal amount then due together with interest thereof @ of interest
12% p.a. within 15 days;
iii. And further should the claim be then not satisfied the Mortgagor
agrees that the Mortgagor shall be entitled to cause the said Mortgaged
property to be sold and with the proceeds thereof to satisfy his claim
and if the claim is still not satisfied, the Mortgagee shall be at liberty to
recover the balance from the person and other property of the
Mortgagor:
iv. For the aforesaid reason and is security for the said consideration of
Rs. 1,30,000/- (Rupees one lakh thirty thousand only) the said
Mortgagor (N.K. Sinha) does hereby mortgage by way of simple
mortgage to the said Mortgagee, Akshay Pratap Singh Ranawat. All
that the said business of General Electric Store and/or Electric Light
House, situate at Shop No. 23-P, BH Block, Club Road, West Shalimar
Bagh, Delhi,110088 together with goodwill and all the furniture,
fixtures, and fittings, instalments of the trade, stock-in-trade, all other
articles and things lying and being in the said shop more particulars
described in the SCHEDULE hereunder;
v. FURTHER, the Mortgagor agrees and undertakes not to alienate,
transfer, assign, sell and mortgage his right in the said mortgaged
property to any other person or to cause its deterioration during the
period of the Mortgage and further AGREES that if the Mortgagor
makes a breach of any of the terms and conditions of this deed within

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 the stipulated period, the Mortgage-money w/o waiting for the expiry
of the stipulated period;
vi. the Mortgagor agrees and undertakes that the Mortgagor shall always
keep the stock-in-trade for the value not less than the said sum of Rs.
1,30,000/-;
vii. this Deed shall not only bind the Mortgagor but also his heirs,
executors, administrators and assigns ; Provided always that the
Mortgagor shall be entitled to redeem the said Mortgage at his option
by paying the all amount of consideration at any time or by way of
instalments at any time @ of more than Rs. 10,000/- (Rupees ten
thousand only) per month.
IN WITNESS WHEREOF the said Mortgagor, Shri N.K. Sinha, has
hereto signed and set his hands on the day and the year first herein
above written.

The Schedule of The Property Mortgaged

All that business of electrical goods including furniture, fixtures,
fittings and the goodwill together with the tenancy right thereof carried
on by the Mortgagor in the name and style of ‘General Electric Store’
and/or ‘Sinha Vastu Bhandar’ and or ‘Electric Light House ‘situate at
Shop No. 23-P, BH Block, Club Road, West Shalimar Bagh,
Delhi,110088 list of furniture, fixtures and fittings:
1) A Glass Counter with surmica on the top and lighting
arrangements inside it;
2) Big Cup Board 13” x 8” in size;
3) Big decorative blocks and show-cases with the glass covering
all the walls from bottom to top;
4) Ceiling fans;
5) Awning and all other goods, etc.
SIGNED, SEALED, AND DELIVERED
At Delhi by within the named (N.K.
Sinha) The Mortgagor in the presence of……… Sd/-
RECEIVED of and from Shri……………………

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 Akshay Pratap Singh Ranawat the Mortgagee……...above
named a sum of Rs. 1,30,000/- (Rupees one lakh thirty
thousand only) as above mentioned.
WITNESSES
I SAY RECEIVED Rs. 1,30,000
Sd/-
Mortgagor (N.K. Sinha)

B. Deed of Simple Mortgage

This DEED OF MORTGAGE made on the………day of……. BETWEEN
PS, of etc. hereinafter called “THE Mortgagor” of the one part,
AND XY of etc. hereinafter called “The Mortgagee” of the other part,
WHEREAS the Mortgagor is the absolute owner of the property intended to
be hereby mortgaged which is free from all encumbrances and attachments.
AND WHEREAS the Mortgagee has agreed to lend and advance a sum of
Rs……….to the Mortgagor at his request and repayment with interest thereof
secured in the manner hereinafter expressed.
NOW this deed WITNESSES that:
i. in pursuance of the consideration of the sum of Rupees……paid to the
mortgagor by the mortgagee the receipt whereof the mortgagor does
hereby acknowledge and confirm;
ii. the mortgagor does hereby further agree with the mortgagee that the
mortgagor will on or before the……. day of……. pay or cause to be
paid to the mortgagee the sum of Rs…….
iii. the deed further WITNESSES that in lieu of the interests on the
mortgaged amount and as as security for the repayment of the the said
loan the Mortgagor does, hereby, charge, assure and mortgage by way
of simple mortgage to the mortgagee the House with 1 rooms and
common washrooms bearing No…………situate art fetching monthly
rent of Rs…….. to the mortgagor;

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iv. the mortgagor does, hereby grant and authorise the mortgagee to
recover and realise the rent from the various tenants and appropriate
the same for the satisfaction of the interest on the loan;
v. this indenture furthers WITNESSES that the mortgagor has good title,
full power and absolute authority to charge and mortgage the said
property and the same is free from all encumbrances.

In Witnesses whereof, etc. as usual.

Signed, Sealed and Delivered as usual.

Signed, Sealed and Delivered as usual. Schedule of the property.

Money-Bonded with Surety

THIS BOND is made on the………day of……….2019, by Shri……., son

of aged about………., resident of…… hereinafter called the Debtor

And Shri………, son of………. aged about…………, resident of………

hereinafter called the Surety.

WHEREAS Shri………, son of……. aged about………. Resident

of…………. has lent and advanced to me, viz., the said Shri a sum of
Rupees……. (Rs……) only at the request and assurance and guarantee of
the said Shri………. the surety as to its repayment personally with interest
at 12% p.a. in case of default on my part;

NOW by this bond we, the said debtor and the surety hereunder jointly
and severally are held liable, and do bind ourselves, our respective heirs,
executors, administrators and representatives unto the said
Shri……………….his heirs, executors, administrators, representatives and
assigns for payment to him or them, as the case may be, of the sum of
Rupees……….. (Rs……. only) on demand on or before the ………. day
of……. On instalments, etc. with interest thereon @ of Rs……. percent
p.a. from the date hereof until such payment.

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 In WITNESS WHEREOF, we, the said, Shri………. and Shri…….
have set add subscribed our respective hands and seals the day and the
year first herein above written.

Signed, Sealed and Delivered by

Shri…………… the debtor in the Sd/-

presence of……………. at Hoshiarpur

Sd/-

Signed, Sealed and Delivered by

Shri………. the surety in the Sd/-

presence of…………… at Hoshiarpur

Sd/-

__________________

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 BIBLIOGRAPHY
 Books
 Allahabad Law Agency, Principles & Forms of Pleading, Drafting &
Conveyancing with Advocacy & Professional Ethics, 2019, 11th ed., Dr. A.N.
Chaturvedi

 Bare-Acts
 Transfer of Property Act,1882
 The Indian Stamp Act,1899

 Websites
 legalservicesindia.com
 lexisnexis.in
 indiankanoon.org/search

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