meaning of Equitable Mortgage

SARAVANAN.R (Querist) 09 March 2009 This query is : Resolved
Sir,

can any one tell me the meaning of Equitable Mortgage.

My perception is if the Company has secured loan over some assets, raising another loan or borrowings with the same asset as security. Is it correct

please clarify

saravanan

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Sachin Bhatia (Expert) 09 March 2009
An equitable mortgage of property is one where the mortgagor does not convey regularly the property, but does some act by which he manifests his determination to bind the same for the security of a debt he owes. An agreement in writing to transfer an estate as a security for the repayment of a sum of money borrowed, or even a deposit of title deeds, and a verbal agreement, will have the same effect of creating an equitable mortgage.

Jithendra.H.J (Expert) 09 March 2009
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Jithendra.H.J (Expert) 09 March 2009
Eqitable Mortgage:- When a borrower mortgages his existing property to secure a loan , by submitting his ownership title and by giving a right to the lender to sell the property in case of his default. In this the title deeds are kept as a security with the lender.

M. PIRAVI PERUMAL (Expert) 10 March 2009
That does not meet the requirements of a legal mortgage but comes into effect by an agreement to create a legal mortgage or by the creation of an equitable charge such as for the repayment of a loan. It gives the mortgagee the right to foreclose on the property, sell it, or appoint a receiver in case of non payment.

SARAVANAN.R (Querist) 10 March 2009
Dear Sirs,

Thank you for the answer. Can you clarify what is this EXTENSION OF EQUITABLE MORTGAGE. Is it necessary for filing Returns with Registrar of Companies, in case of Extension of Equitable Mortgage.

Saravanan