Section 58 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Before anyone lends against a property, or borrows against one, it helps to know what kind of mortgage is being created. Section 58 of the Transfer of Property Act, 1882 defines a mortgage and then describes six kinds. This article reads each as per the text of the Act consulted.
A mortgage is the transfer of an interest in specific immovable property to secure payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement that may give rise to a pecuniary liability. The six kinds are the simple mortgage, mortgage by conditional sale, usufructuary mortgage, English mortgage, mortgage by deposit of title-deeds and anomalous mortgage. Which kind applies depends on what the document and the parties actually provide, not on the name given to it.
Clause (a): what a mortgage is
Section 58(a) says: "a mortgage is the transfer of an 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 the performance of an engagement which may give rise to a pecuniary liability."
Four things stand out.
- It is a transfer of an interest, not of full ownership. The lender gets an interest as security.
- The property is specific immovable property.
- The purpose is security.
- What is secured can be a loan (advanced or to be advanced), an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
The clause also gives the names: the transferor is the mortgagor, the transferee the mortgagee; the principal money and interest of which payment is secured for the time being are the mortgage-money; and the instrument, if any, by which the transfer is effected is the mortgage-deed.
Mortgage is one form of security. Our guide on charge, mortgage, hypothecation and pledge shows how it differs from the others. If you are borrowing against a property and want to match the structure to your needs, our loan against property service can help you understand the options.
The six kinds at a glance
| Kind | Clause | Key feature in the text |
|---|---|---|
| Simple mortgage | (b) | No possession delivered; the mortgagor binds himself personally to pay; the mortgagee may cause the property to be sold on default |
| Mortgage by conditional sale | (c) | The mortgagor ostensibly sells on one of three conditions; the condition must be in the sale document |
| Usufructuary mortgage | (d) | Possession is delivered (or promised); the mortgagee keeps possession and takes rents and profits in place of interest or payment |
| English mortgage | (e) | The mortgagor binds himself to repay on a certain date and transfers the property absolutely, subject to a proviso to re-transfer on payment |
| Mortgage by deposit of title-deeds | (f) | In specified towns, documents of title are delivered to a creditor or his agent with intent to create a security |
| Anomalous mortgage | (g) | Any mortgage that is none of the above |
(b) Simple mortgage
Where, without delivering possession, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that on his failing to pay the mortgagee shall have a right to cause the property to be sold and the proceeds applied, as far as necessary, to the mortgage-money, the transaction is a simple mortgage.
Example. Arjun Mehta borrows Rs. 40,00,000 from a lender and signs a document promising to repay, and agreeing that if he does not, the lender may have his flat sold. Arjun stays in the flat. This fits the description of a simple mortgage.
(c) Mortgage by conditional sale
Where the mortgagor ostensibly sells the property on one of three conditions, the transaction is a mortgage by conditional sale:
- on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute; or
- on condition that on such payment being made the sale shall become void; or
- on condition that on such payment being made the buyer shall transfer the property to the seller.
There is a proviso, printed in square brackets in the copy consulted: no such transaction is deemed to be a mortgage unless the condition is embodied in the document which effects or purports to effect the sale.
The copy prints clause (c) with several lines broken and unindented, so the three conditions run together on the page. The three conditions above follow the printed words.
Example. Kavita Rao signs a sale deed of her plot to Naveen with a term in the same deed that if she repays Rs. 15,00,000 by a given date, the sale becomes void. The condition is in the sale document, so the proviso is met. If the same arrangement was made only by a separate oral promise, the proviso says the transaction is not deemed to be a mortgage.
(d) Usufructuary mortgage
Where the mortgagor delivers possession (or expressly or by implication binds himself to deliver possession) of the property to the mortgagee, and authorises him to retain possession until payment of the mortgage-money and to receive the rents and profits (or any part of them, and to appropriate them) in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest and partly in payment of the mortgage-money, the transaction is a usufructuary mortgage.
Several phrases in clause (d) are in square brackets in the copy consulted, marking amended wording.
(e) English mortgage
Where the mortgagor binds himself to repay on a certain date and transfers the property absolutely to the mortgagee, subject to a proviso that he will re-transfer it on payment of the mortgage-money as agreed, the transaction is an English mortgage.
(f) Mortgage by deposit of title-deeds
The clause applies where a person in any of the listed towns delivers to a creditor or his agent documents of title to immovable property, with intent to create a security on it. The copy consulted names the towns of Calcutta, Madras and Bombay, with "" in brackets and "[ *]" marking omitted words, and adds any other town the State Government concerned may specify by notification in the Official Gazette. The copy does not say which words were omitted, and the list of towns and any State notifications should be checked.
The point of this kind is that delivery of title documents, with the intent to create security, is itself the transaction the clause calls a mortgage by deposit of title-deeds, in the towns the clause covers. Section 59 deals with the form for other mortgages and excepts this kind; see our article on sections 59 and 59A.
(g) Anomalous mortgage
A mortgage that is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds is an anomalous mortgage. It is the catch-all for combinations, and the terms of the document govern.
How to use the classification
- Look at the substance. What matters is whether possession is delivered, whether there is a personal promise to pay and whether the sale is conditional, not the name used in the document.
- Check formalities. Section 59 sets the form for creating a mortgage.
- Check other laws. Banks and financial institutions may have a separate statutory route for recovery.
- Stamp duty is outside this Act. Check the State rules.
For a broader introduction, see our guides on mortgage types in simple English and the complete guide to mortgage types under the Transfer of Property Act.
Need help choosing or documenting a mortgage?
The kind of mortgage decides what the lender can do and what the borrower keeps. If you are raising a loan against a property, we can help you understand the structure and the paperwork through loan against property support.
Key takeaways
- A mortgage is the transfer of an interest in specific immovable property to secure a loan, an existing or future debt, or the performance of an engagement that may give rise to a pecuniary liability.
- Section 58 describes six kinds: simple, conditional sale, usufructuary, English, deposit of title-deeds and anomalous.
- A mortgage by conditional sale is a mortgage only if the condition is embodied in the sale document.
- A mortgage by deposit of title-deeds applies in the towns the clause names or the State Government specifies.
- An anomalous mortgage is any mortgage that is none of the other five.
- Later amendments and State changes should be checked.
Read next
- Sections 59 and 59A: how a mortgage is made, registration and attestation
- Section 60: right of mortgagor to redeem
- Mortgage Types -- Simple, English, Usufructuary, Equitable
- Types of Mortgage Under Transfer of Property Act -- Complete Guide
Disclaimer: Based on a publisher's print of the Transfer of Property Act, 1882 showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003), as consulted on 2 October 2026. State amendments, later amendments, stamp duty and registration charges are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.