Sree Gokulam Chit And Finance Co.(Pvt.) vs Sahir T on 6 February, 2026
15. As noticed above, a mortgage can also be created to
secure a future debt. This Court, in Madhusoodanan Nair v.
Kochunni (2001 (1) KLT 548), held that where an equitable
mortgage is created by a subscriber of a chit/kuri to secure
an existing or future debt, the same is enforceable under
Section 58 of the Transfer of Property Act, 1882, as a
mortgage includes future debt. Therefore, it can be concluded
that an obligation arising out of a prized chit transaction,
or a future liability that may arise followed by availing a
loan from a chit fund even prior to the prizing of the chit,
can be secured by a mortgage.