Distinguish between Mortgage and Charge.

Basis of Distinction Mortgage Charge Transfer of Interest A mortgage is a transfer of an interest in the property made by the mortgagor as a security for the loan. A charge is not the transfer of any interest in the property, though it is security for the payment of an amount. Creation A mortgage can only be created by act of parties. A charge may be created by act of parties or by operation of law. Registration & Attestation A mortgage deed must be registered and attested by two witnesses. A charge need not be made in writing, and if it is in writing, it need not be attested or registered. Remedy (Foreclosure) In certain types of mortgage (viz., mortgage by conditional sale and anomalous mortgage), the mortgagor can foreclose the mortgaged property. In a charge, the charge-holder cannot foreclose, though he can get the property sold as in a simple mortgage. Enforceability against Transferee In a mortgage, the transferee of mortgaged property can only acquire the remaining interest of the mortgagor, and is therefore, only bound by the mortgage. From the very nature of it, a charge as a general rule, cannot be enforced against a transferee for consideration without notice. Personal Liability In a mortgage, there can be security as well as personal liability. In a charge created by act of parties, the specification of the particular fund or property negates a personal liability and the remedy of the charge-holder is against the property only. The absence of a personal liability is the principal test that distinguishes a charge from a simple mortgage.