It is the transfer of a legal equitable interest in specific immovable property for securing the payment of debt. The person who pans with the interest in the property is called mortgagor and the bank in whose favour the transfer takes place is the mortgagee. The instrument of transfer is called the mortgage deed. Mortgage is, thus, conveyance of interest in the mortgaged property. The mortgage Interest in the property is terminated as soon as the debt is paid. Mortgages are taken as an additional security for working capital credit by banks.
Where immovable property of one person is, by the act of parties or by the operation of law, made security for the payment of money to another and the transaction does not amount to mortgage, the latter person is said to have a charge on the property and all the provisions of simple mortgage will apply to such a charge. The provision are as follows:
• A charge is not the transfer of interest in the property though it is security for payment. But mortgage is a transfer of interest in the property.
• A charge may be created by the act of parties or by the operation of law. But a mortgage can be created only by the act of parties.
• A charge need not be made in writing but a mortgage deed must be attested,
• Generally, a charge cannot be enforced against the transferred for consideration without notice. In a mortgage, the transferee of the mortgaged property can acquire the remaining interest in the property, if any is left.