Equitable Mortgage

Also known as: mortgage by deposit of title deeds, MODT

An equitable mortgage is created by depositing original title deeds with a lender as security, without executing a registered mortgage deed.

Recognised under Section 58(f) of the Transfer of Property Act, it is the most common form of home-loan security in India because it avoids mortgage stamp duty. Its due-diligence significance is that it leaves no trace on the Encumbrance Certificate. Some states require a Memorandum of Deposit of Title Deeds (MODT) to be registered, which does surface on the EC - but where no MODT is registered, only a CERSAI search will reveal the charge.

What it proves

A subsisting security interest in favour of the depositee lender.

What it does not prove

Nothing about it appears on the Encumbrance Certificate unless an MODT was separately registered.