Supreme Court Declares Hypothecation Deed as Guarantee u/s 5(8), Classifies Mortgagor as Guarantor

The Supreme Court ruled that a hypothecation deed should be classified as a guarantee under Section 58 of the Indian Contract Act, changing its legal nature. This means that the mortgagor (borrower) is considered a guarantor for legal purposes. The ruling impacts financial institutions and borrowers by clarifying obligations under hypothecation agreements.