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CS Professional · Drafting, Pleadings and Appearances · Drafting of Agreements, Deeds and Documents

Ravi Traders in Chennai executes a mortgage deed to secure a loan of Rs 8,00,000 by transferring an interest in its shop. Ravi Traders delivers no title-deeds. Which formality is required for a valid mortgage under section 59 of the Transfer of Property Act, 1882?

A registered instrument signed by the mortgagor and attested by at least two witnesses is required. For principal money of one hundred rupees or more, section 59 permits no other mode except a mortgage by deposit of title-deeds.

  1. AA registered instrument signed by the mortgagor and attested by at least two witnessesCorrect
  2. BAn unregistered instrument signed by the mortgagor and one witness
  3. CDelivery of the property alone, without any instrument
  4. DOral agreement followed by payment of the loan amount

Explanation

Where the principal money secured is Rs 100 or more, a mortgage other than one by deposit of title-deeds can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses. Delivery alone is available only for sums under Rs 100 and not for a simple mortgage.

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