What is mortgage by deposit of title deeds? (equitable mortgage)

A mortgage by deposit of title deeds is made in one simple act. A borrower hands over the original title papers to a lender, with plain intent to secure a debt. No registered deed is needed for this one step.

Written 20 September 2026. For bankers in India.

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In one line

A person deposits original title deeds with a lender, meaning them as security for a debt. Courts also call this an equitable mortgage.

Why it matters to you

• It needs no deed to start. A deposit made with the right intent is a valid mortgage by itself.
• Intent decides everything. The same act, without intent to secure a debt, creates no mortgage at all.
• Location can matter. The law names three towns by name, and lets a state notify more.
• The paper you sign may still need registration. Some states, and some memorandum wordings, force this step.
• Fraud is a real risk. The same title deeds have been pledged to more than one lender before.

How it works

The Transfer of Property Act, 1882, section 58, clause (f), sets the law. A 1964 Supreme Court case sets the test lenders still use today.

1. Three things must all be true. This comes from the Supreme Court case K.J. Nathan vs S.V. Maruthi Reddy, decided on 11 February 1964.

• A debt. There must be an existing loan, or one about to be given.
• A deposit of title deeds. The borrower gives the papers to the lender.
• Intent to create security. Both sides must mean the deposit as security for the debt.

2. Intent is a question of fact. A court does not assume a mortgage just because a lender is holding papers. It looks at letters, conduct, and the full record of what was agreed.

3. Location can matter. Section 58(f) names three towns without more paperwork: Calcutta, Madras, and Bombay. It also allows any other town a state government notifies. Kerala notified its whole state in 2010. A Kerala High Court order has upheld this power.

4. A memorandum usually follows the deposit. Lenders write down the deposit in a Memorandum of Deposit of Title Deeds. This records the loan, the property, and the fact of deposit.

5. Registration of the memorandum depends on its wording, and on the state. The Supreme Court, in State of Haryana v. Narvir Singh, held that a memorandum stating only the fact of deposit needs no registration. One that adds new terms and conditions must be registered. Tamil Nadu changed this further. Since 1 December 2012, Tamil Nadu law compulsorily registers any instrument recording a deposit of title deeds, whatever it says.

6. Central Registry filing is a separate step. After the mortgage is made, the lender must file it with the Central Registry. The full name is the Central Registry of Securitisation Asset Reconstruction and Security Interest of India, or CERSAI. This filing protects the fast, court-free sale route on default.

Worked examples

Example 1: Stamp duty on a deposit of title deeds in Maharashtra

A borrower takes a loan of Rs 32,00,000 in Maharashtra, secured by a deposit of title deeds.

• Stamp duty on the first Rs 5,00,000, at 0.1 per cent: Rs 500.
• Stamp duty on the remaining Rs 27,00,000, at 0.3 per cent: Rs 8,100.
• Total stamp duty: Rs 500 + Rs 8,100 = Rs 8,600.

Maharashtra taxes this kind of mortgage the same way as a registered mortgage deed. The figure above uses only these two slabs. It does not include any separate lawyer or valuation fee.

Example 2: A Memorandum of Deposit of Title Deeds fee in Karnataka

A borrower takes a loan of Rs 65,00,000 in Karnataka. Karnataka calls the memorandum a Memorandum of Deposit of Title Deeds, or MODT.

• Stamp duty at 0.5 per cent of the loan: Rs 32,500.
• Registration fee at 0.1 per cent of the loan: Rs 6,500.
• Total, before any scanning charge: Rs 32,500 + Rs 6,500 = Rs 39,000.

A separate, small scanning charge also applies in Karnataka, and depends on page count, so it is not added here. Always check the exact figure with your branch.

What the rule says

NO RBI NUMBER: a general law fixes how this mortgage is made, not the Reserve Bank of India. We checked the Reserve Bank of India's 2021 and 2025 housing finance company rules. Both set loan-to-value and other lending limits. Neither says which kind of mortgage a lender must take, or how to create one.

THE LAW, NOT RBI: the Transfer of Property Act, 1882, section 58, clause (f), is the source law. It allows this mortgage, without a registered deed, only in Calcutta, Madras, or Bombay. It also allows any other town a state government has notified. We could not find one single, current, all-India list of every notified town. Kerala notified its entire state in 2010.

THE LAW, NOT RBI: the Supreme Court's 1964 rule in K.J. Nathan vs S.V. Maruthi Reddy still applies. A debt, a deposit of title deeds, and intent to create security must all be present. A court decides intent from the facts, not from a form.

THE LAW, NOT RBI: whether the memorandum itself must be registered depends on what it says, and where you are. The Supreme Court's rule in State of Haryana v. Narvir Singh is that a bare record of deposit does not need registration, but added terms do. Tamil Nadu's 2012 law is stricter still. It compulsorily registers this kind of document, whatever it says, from 1 December 2012.

THE LAW, NOT RBI: Central Registry filing is a separate legal step, under a law Parliament passed. It decides whether a lender may use the fast, court-free sale process on default. This applies the same way to a deposit of title deeds and to a registered mortgage.

BANK PRACTICE: most lenders will not accept a bare deposit alone. They ask for a title search, an encumbrance certificate, and a valuer's report. They also want a signed memorandum, before treating the mortgage as complete for their own file.

Common mistakes

• Assuming no paperwork is needed anywhere. Tamil Nadu compulsorily registers the memorandum since 2012.
• Treating intent as automatic. A court can still find no mortgage, if intent is not proved.
• Ignoring the state notification. A town not covered by section 58(f) needs a registered deed instead.
• Confusing the memorandum with the mortgage itself. The deposit, with intent, creates the mortgage. The memorandum records it.
• Skipping Central Registry filing. This step protects fast recovery rights, separate from the mortgage itself.
• Believing an equitable mortgage is always the cheaper option. In Maharashtra, the stamp duty is the same either way.

How to use it at your desk

1. Confirm the property's state and town.
2. Check if a deposit of title deeds is legal there, without a registered deed.
3. Check your lender's own policy on this kind of mortgage for this loan type.
4. Order a title search report and an encumbrance certificate before accepting the deposit.
5. Take the original title deeds, and record the deposit in a signed memorandum.
6. Check whether your state, such as Tamil Nadu, compulsorily registers the memorandum.
7. Pay the correct stamp duty and registration fee for your state.
8. File the security interest with the Central Registry after the mortgage is made.
9. Keep the original title deeds under dual custody, given the known fraud risk.

Related terms

• Mortgage types — This page is a deeper look at one of the six kinds named there.
• Loan to Value ratio — Sets how much a lender lends against the same property this mortgage secures.
• Own contribution and margin money — The borrower pays this before the property is mortgaged to the lender.
• What is a title search report? — A lender orders this check before accepting a deposit of title deeds.
• Product rule pages: Housing loan rules, Housing Finance Companies Directions 2025.

Quick check

Does a mortgage by deposit of title deeds always need a registered deed?

Answer: No. A plain deposit, with intent to secure a debt, is enough by law.

Must the memorandum recording the deposit always be registered?

Answer: It depends on its wording, and your state. Tamil Nadu compulsorily registers it since 2012.

Does the Reserve Bank of India fix which kind of mortgage a lender must take?

Answer: No. A general property law fixes the kinds. Each lender's own policy picks one.

Sources

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