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American Journal of  
Society and Law ( AJSL)

A Comparative Research Study of  Official Mortgage and Possessory Mortgage
Muhammad Ibrahim Sekandary1*, Toryalai Hemat2

Volume 2 Issue 1, Year 2023
ISSN: 2835-3277 (Online)

DOI: https://doi.org/10.54536/ajsl.v2i1.1094
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Article Information ABSTRACT

Received: December 19, 2022
Accepted: January 19, 2023
Published: January 29, 2023

A mortgage is a contract by which money is pledged as a debt, for this reason, it is said 
that a mortgage is a guarantee for the mortgagee’s claim. In other words, mortgage is the 
seizure or retention of  a thing or property in exchange for a right so that the right can be 
obtained through it. The importance of  this research study is that as the issue of  mort-
gage exists in practice, many people face many challenges while practicing it in their daily 
lives. So, this research study will assist them fulfilling their needs in practicing mortgage. 
The main purpose of  the research article is to explain and analyze the similarities and 
differences between the official mortgage and the possessory mortgage. The doctrinal 
research methodology and descriptive, explanatory, and analytical research approaches 
are used in this work. It is worth mentioning that this research study is entirely based on 
library sources. At the end of  this research, the researcher has concluded that the official 
mortgage has a number of  similarities and differences with the possessory mortgage. The 
possessory mortgage is the deposit of  collateral to the mortgaged in exchange for the loan 
by the mutual consent of  both mortgagor and mortgaged in which it is necessary that the 
mortgaged property will be transferred to the creditor and he will take care of  it until the 
acquisition of  loan. Furthermore, the possessory mortgage can be in both movable and 
immovable property and the official mortgage can only be in immovable property. The 
mortgaged property remains with the mortgagor. But if  the debtor does not return the 
loan to the mortgaged, the mortgaged has the right to sell the mortgaged property. When 
the mortgaged property is sold, the mortgaged has the priority to get the loan back. 

Keywords
Mortgage, Official Mortgage, 
Possessory Mortgage, Afghan 
Civil Law

1 Lecturer of  Law &Political science faculty at Rokhan Institute of  higher Education, Jalalabad, Afghanistan
2 Vice-Chancellor of  Academic Affairs & Lecturer of  Law & Political sciences faculty at Rokhan Institute of  higher education,  
  Jalalabad, Afghanistan
* Corresponding author’s e-mail: msekandary58@gmail.com

INTRODUCTION
A person receives a loan from another person. Later 
on, he refuses to pay the debt, or he is unwilling to pay 
the debt, so the debtor must pay the creditor’s right 
because the creditor has cooperated with the debtor in 
good faith. Therefore, in order to solve these problems, 
Islamic Sharia and the Civil Code of  Afghanistan have 
combined other rights related to the right of  Ain, which 
is called the right of  the mortgage. In other words, a 
mortgage is a loan use to buy or keep up a house, land, or 
other real estate. A mortgage is a written agreement that 
gives a lender the right to take your home if  you do not 
return the money, they lend you according to the terms 
that you agreed to when you took out the mortgage. 
The Afghan civil code divided mortgage into two types: 
The possessory mortgage and the official mortgage. 
According to article 1770 of  the Afghan civil code, the 
possessory mortgage is a contract in which a person gives 
a guarantee against a loan to another person(mortgagor) 
who will foreclose this right in order to obtain his right 
from him(mortgaged). This kind of  mortgage is formed 
through a mutual consent of  both parties (creditor and 
debtor) and does not need to be registered in an official 
document. Additionally, it encompasses both movable 
and immovable properties. As well, in this mortgage, it 
is necessary that the mortgaged property ought to be 
transferred to the creditor. So, in the possessory mortgage 
include both movable and immovable properties. 
According to the article 1832 of  the Afghan civil code, 
the official mortgage is a contract based of  which creditor 

gains real right over estate that is allocated to discharge of  
debt and, due to this, creditor shall have priority right over 
other ordinary creditors and lower degree creditors and 
he may recover his credit from the estate in whomever 
possession it is. So, the official mortgage includes only an 
immovable mortgage. 

Introduction to Mortgage, Types, and Comparison
Linguistically, mortgage means proof, continuity, 
imprisonment, and necessity. In other words, mortgage 
is a pledge of  something. In terms of  legal terminology, 
a mortgage is a contract by which money is pledged as a 
debt, and for this reason, a mortgage is a guarantee for 
the mortgagee’s claim. In other words, mortgage is the 
seizure or retention of  a thing or property in exchange 
for a right so that the right can be obtained through it. 
Therefore, whenever the debtor places his property with 
the creditor in exchange for the goods that he has bought 
from the creditor, until he pays the creditor’s right, in 
case of  non-payment, the creditor can Sell the debtor’s 
property and get his/her right. This is called mortgage.
From the researcher’s perspective, the above definitions 
have some similarities and differences. The first similarity 
is, the mortgage is against another person’s right. The 
second similarity is that the mortgage is a means of  
obtaining the right. The first difference is that in the first 
definition, the mortgaged property is not known, while in 
the second definition, only those properties that can be 
used are specified. Therefore, the second definition is a 
better than the first one. 

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Am. J. Soc. L. 2(1) 21-24, 2023

The Nature of  the Mortgage Contract
There are two opinions regarding the nature and essence 
of  mortgage, each of  which will be explained as follows.

1. All jurists and scholars agree that the mortgage 
contract is considered an endorsement contract, which 
is established by the agreement of  the two parties for the 
protection and guarantee of  the loan.

2. The point of  controversary among the scholars 
regarding the nature of  mortgage is, whether it is a 
commutative contract, a voluntary contract or both?
According to the Hanafi school of  jurisprudence, this 
contract is voluntary, because the mortgagor does not 
take anything from the mortgaged in exchange for 
confiscating his property. Also, the mortgagor is not 
forced to pay or hand over the mortgage. From the point 
of  view of  Ibn Masoud, mortgage is from the kind of  
commutative contracts which is formed against a loan. 
Zaheli then confirms the point of  view of  the Hanafi 
school jurisprudence and considers the mortgage as a 
voluntary contract. According to the Shafi’i and Hanbali 
school of  jurisprudence, mortgage is not one of  the sorts 
of  commutative contracts. Because the debtor is not 
obliged to hand over the object for guarantee, while in 
commutative contracts, the contracting party is obliged 
to pay or hand over an object in exchange.
In conclusion, it can be said that a mortgage contract is 
one of  the certified contracts that is formed in exchange 
of  an object.
Now there is a question arises that whether the mortgage 
is a binding contract or a permissible? It can be said as 
an answer that a mortgage is a binding contract for the 
mortgagor and a permissible contract for the mortgaged. 
Because the mortgagor cannot cancel the contract 
whenever he wants, until a certain date is reached, the 
mortgaged can cancel the mortgage contract whenever 
he finds money.

The Terms and Conditions of  Mortgage
In order for a mortgage contract to be considered 
concluded, the presence of  the following conditions is 
considered necessary.
First condition: Consent: The mortgage contract will be 
formed with the consent and pleasure of  both parties 
(mortgagor and mortgaged). 
Second condition: Possession: Anything that is mortgaged 
must be given to the mortgaged in possession. For 
example, if  the land is mortgaged but someone else is in 
possession of  it, then this mortgage is not valid.
Third condition: Intellect: Both the mortgagor and 
the mortgaged should be intelligent, that is they will 
understand the transaction. 
4-Exchangeable: The mortgaged item will be able to be 
sold, the price will be collected, it will be available and it 
can be taken into possession at the time of  purchase.

Elements of  Mortgage
The following four elements must be existed in a contract 
to consider it as a mortgage.

1. Mortgagor: The Mujalat alahkam aleadlayh defines 
the mortgagor as a person who has given the mortgage.

2. Mortgaged: The Mujalat alahkam aleadlayh defines 
the mortgaged as a person who receives or takes the 
mortgage.

3. Mortgage property: A property that is given as a 
mortgage. Everything which is given in a guarantee is 
considered as mortgage property. 

4. Concubine: There should be an offer and acceptance 
in the contract of  mortgage. 

Kinds of  Mortgage
Based on Afghan civil code, mortgage is categorized 
into official and possessory mortgage. However, Islamic 
Shari’ah only recognize the possessory mortgage. Both 
types are going to be explained as follows. 

Possessory Mortgage
The possessory mortgage is a contract in which a 
person gives a guarantee against a loan to another 
person(mortgagor) who will foreclose this right in 
order to obtain his right from him(mortgaged). This 
kind of  mortgage is formed through a mutual consent 
of  both parties (creditor and debtor) and does not need 
to be registered in an official document. Additionally, it 
encompasses both movable and immovable properties. As 
well, in this mortgage, it is necessary that the mortgaged 
property ought to be transferred to the creditor.
It is worth mentioning that the possessory mortgage was 
also recognized the Romans. In the past, the possessory 
mortgage was criticized when the debtor (mortgagor) 
handed over the possession of  the mortgage to the 
creditor or handed it over to a third party that both of  
them had agreed upon. However, in contemporary laws, 
the delivery of  mortgaged materials is not considered an 
important pillar, but only as an obligation arising from 
the contract. It means that a mortgage is currently a 
consensual agreement and can only be done with mutual 
consent.
The provisions of  possessory mortgage are regulated 
from article 1770 to 1801 in the Afghan civil code. 
Regarding the definition of  the possessory mortgage, 
The Afghan civil code state that “Possessory mortgage is 
a contract on the basis of  which mortgager undertakes to 
give his property to possession of  mortgagee or another 
trustee person in exchange for a financial right whose full 
or partial payment shall have priority over rights of  the 
first-degree creditors and creditors of  lower degrees.” It 
is clearly inferred from the mentioned article that based 
on the possessory mortgage, the mortgagor give his real 
estate or movable property to the mortgaged or his legal 
representative against the debt he/she is responsible for, 
so the debt is delayed. In this case, the mortgaged acquires 
the first right to other creditors by selling the property.

Official Mortgage
The Afghan civil code defines official mortgage as 
“Official mortgage is a contract on the basis of  which 

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creditor gains real right over estate that is allocated to 
discharge of  debt and, due to this, creditor shall have 
priority right over other ordinary creditors and lower 
degree creditors and he may recover his credit from 
the estate in whomever possession it is.” It is inferred 
from the mentioned article that the official mortgage 
only encompasses immovable property, not movable 
property. Accordingly, in the official mortgage, the real 
estate remains under the possession of  the mortgagor. 
In case, if  the debtor or mortgagor fails to pay the loan, 
then the mortgaged has the right to sell the mortgaged 
property. And whenever the mortgaged property is sold, 
the mortgaged gets the right of  priority over all the 
other debtors in getting his loan. Official mortgage has a 
number of  features that which are going to be discussed 
as follows. 

First Feature
The official mortgage should be registered. A formal 
mortgage must be established by the mortgagor and 
mortgaged through formal proceedings. Clause 1 of  the 
article 1833 of  the civil code of  Afghanistan states that 
“Official mortgage shall not be concluded, unless on the 
official paper that is completed by relevant officials.”

Second Feature
 A formal mortgage is not formed on any other properties 
other than the real estate. But unless the law dictates 
differently. Unlike the possessory mortgage, which can 
be formed in movable and immovable property.

Third Feature
The mortgager should own the mortgaged property 
in the formal mortgage. The civil code of  Afghanistan 
declares that” Mortgager must be the owner of  the 
mortgaged estate and have the capacity to take action 
on it.” In an official or formal mortgage, the mortgager 
keeps the property in his possession and only specifies 
the guaranteed property to the mortgaged from which 
the mortgaged can get his loan.

Fourth Feature
As mentioned above, in the official mortgage, it is not 
necessary that the mortgaged takes care of  the mortgaged 
goods, but the mortgager can protect the mortgaged property 
himself. Therefore, in a formal mortgage, the owner of  
the mortgaged property enjoys the privilege of  ownership. 
Based on this, he/she can sell or lease the property.

Fifth Feature
A formal or official mortgage is not divisible. This 
means that the official mortgage cannot be such that if  
the mortgager pays a part of  the loan, then the right of  
the mortgage is considered paid from the portion of  the 
mortgaged goods. Rather, the official mortgage continues 
until the full payment of  the loan and remains on the 
entire property and is not considered to be paid from any 
parts of  the mortgaged goods.

Sixth Feature
In a formal or official mortgage, the possession of  the 
mortgager does not change on the mortgaged property, 
but remains with the mortgagor as before, but like before, 
the mortgaged property remains in the property of  the 
mortgager.

Comparison of  the Possessory Mortgage and the 
Official Mortgage
To make a comparison between the possessory mortgage 
and the official, first I have to point out the similarities 
and then the differences as follows. 

Similarities between the Possessory and Formal 
Mortgages
First
Both the possessory and the formal mortgages are 
formed as a result of  the contract.

Second
Both the possessory and formal mortgages are kinds of  
Subsidiary property right.

Third
Both the possessory and the official mortgages are not 
divisible. 

Fourth
The mortgaged has the right on the entire mortgagor 
until he has received the loan.

Differences between the Possessory and Formal 
Mortgage
First
Since the mortgage is formed with the mutual consent 
of  the parties, it does not to be registered. On the other 
hand, the official mortgage needs to be registered. 

Second
The possessory mortgage can be in both movable and 
immovable property and the official mortgage can only 
be in immovable property.

Third
In possessory mortgage the mortgaged property is 
transferred to the mortgaged, but in official mortgage, 
the mortgaged property remains under the control of  the 
mortgagor.

Fourth
The mortgaged property remains with the mortgagor. 
But if  the loan is not returned back from the debtor to 
the mortgaged, the mortgaged has the right to sell the 
mortgaged property. When the mortgaged property is 
sold, the mortgaged has the priority to get the loan back.

CONCLUSION
At the end of  this research, the researcher has reached 

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to the conclusion that according to the Afghan civil law 
mortgage is divided into two types: Official mortgage and 
possessory mortgage. Both the official and possessory 
mortgage has a number of  similarities and differences 
with each other. Both mortgages are formed as a result 
of  a contract. Moreover, both the possessory and formal 
mortgages are kinds of  Subsidiary property right and 
both the possessory and the official mortgages are not 
divisible. Additionally, the mortgaged has the right on the 
entire mortgagor until he has received the loan. 
Apparently, the official and possessory mortgages 
have some differences. The official mortgage has to be 
registered in an official document but the registration 
of  the possessory mortgage is not required and just the 
mutual consent of  the parties is sufficient. Furthermore, 
the possessory mortgage can be in both movable and 
immovable property and the official mortgage can only 
be in immovable property. Moreover, in the possessory 
mortgage the mortgaged property is transferred to the 
mortgaged, but in official mortgage, the mortgaged 
property remains under the control of  the mortgagor. 
As well as, the mortgaged property remains with the 
mortgagor. But if  the loan is not returned back from the 
debtor to the mortgaged, the mortgaged has the right 
to sell the mortgaged property. When the mortgaged 
property is sold, the mortgaged has the priority to get the 
loan back.

Recommendations
After conducting this research, I make the following 
recommendations and suggestions to the readers and 
future researchers. 

1. The researcher suggests to the people to be very 
cautious in the mortgage contract and refrain from 

doing todays customary forms of  mortgage, because this 
customary mortgage is forbidden in Islam. 

2. Since in this research article, the researcher has 
compared only the possessory and official mortgage, the 
researcher suggests to the future researchers to compare 
and implement the official and possessory mortgage 
with the forms of  customary mortgage, and mention the 
practical examples.

REFERENCES
Ashrafi, M. (1388). Sha’air al-Islam fi Masal al-Halal wa 

Haram (The Rites of  Islam in Issues of  Halal and 
Haram). Tehran, Iran. 2. 

Abdullah, N. (1397). Property law. Saeed Publications, 
Kabul, Afghanistan. 

Ameed, H. (1389). Ameed Persian dictionary. Publications 
of  Rah Rushd, Iran.

Zaheili, W. (1414). Al-Fiqh al-Islami wadalta (Islamic 
jurisprudence and its evidence). Dar Al-Fikr Library, 
Beirut. 9. 

Jubal, M. U. (1381). Mujallah Al-Ahkam Al-Adliyya 
Journal of  Judicial rulings, a collection of  jurisprudential rules. 
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Sanhouri, A. R (2002). Al-Wasit fi Sharh al-Qunun al-
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Ali Haider, (1428). Darr al-Ahkam by Ali Haider (2nd ed). 
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Kasani, M. (587 AH). Badaa’ al-Sana’I fi Tartyb Alshariee. 
Dar al-Kutab. Beirut. 

Nazeer, D.M. (1396). Property law in Islamic jurisprudence 
and civil law of  Afghanistan (2nd ed). Hamid Risalat 
Publications, Kabul. 

Civil Law of  the Islamic Republic of  Afghanistan (1355). 
Official Gazette. 353. 2.

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