Question

Where the mortgagor delivers possession of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property in lieu of interest, or in payment of the mortgage-money, the transaction is called an ....... mortgage.

• A. Conditional
• B. English
• C. Simple
• D. Usufructuary

Hint:

In a usufructuary mortgage, the mortgagee has the right to enjoy the property's profits instead of receiving interest until the mortgage is repaid.

Answer 1

The Correct Option is D

Step 1: Understanding the Question.
A usufructuary mortgage occurs when the mortgagor transfers possession of the property to the mortgagee but allows the mortgagee to retain possession until the mortgage is paid off. The mortgagee may use the property and receive profits in lieu of interest.
Step 2: Analysis of Options.
- (A) Conditional: A conditional mortgage involves specific terms regarding the repayment or redemption conditions, but it is not the same as a usufructuary mortgage.
- (B) English: This refers to a type of mortgage where the mortgagor remains in possession of the property but transfers ownership in case of default.
- (C) Simple: A simple mortgage is one where the mortgagor retains possession but agrees to sell the property if the debt is not repaid.
- (D) Usufructuary: This is the correct term, as the mortgagee retains possession of the property and enjoys the profits until the mortgage is paid.
Step 3: Conclusion.
Thus, the correct answer is (D) Usufructuary.