Principles of Equity

If an individual takes a loan from another and puts his property on the line, and after the
specified period fails to pay the loan back, as per common law, the lender will become the
owner of the property which was put on the line. If after a couple of months, the mortgager is
willing to pay back the money with interest, common law dictates that the mortgagee is not
bound by law to sell the property back.

In such cases, the aggrieved party can approach an equity court which will dictate that on the
basis of the principles of equity, the mortgagee should give the mortgager the property back
if the property hasn’t been sold off.

These equity principles have already been made a part of the statutes but rarely are they
recognized by common law.

Ownership of property implies a bundle of rights. These rights are in exclusion to a person.
Rights of property only have meaning if the property holder can enjoy those rights by
excluding others.

Property Rights are both in rem and in personam.

The natural school terms right to proper y as a natural right. For self-conservation, while
others say that the right to property is something that is provided by the state or the
government.

When the right to property was a fundamental right, it came conflict with the socialist agenda
of the Indian government.

The socialist agenda was to break the triangle of imperialism, capitalism and colonialism.
Due to socialist concerns, the right to proper is not an absolute right.

Property rights signify that they are a bundle of rights which are exclusive.
These rights are exclusive but not absolute rights. So the state can interfere into this right
under certain circumstances, most commonly for the purpose of public good.

The congress thought that capitalism was only sustained by colonialism.

Socialism succeeded capitalism once it collapsed.
Ultimately, private ownership would shift to collective ownership i.e. socialism.
Socialism talks about collective property + economic equality.
The Indian National Congress leaned towards socialism. After demonetization, there
wouldn’t be enough capital to invest in infrastructure.
The death of the Indian zamindari system also lead to the rise of the new bourgeoisie.
Neither is the right to property of the individual absolute, nor is the state’s right to interfere in
one’s property.

After 1978, right to property was well promoted as it was before because an amendment
removed it from being a fundamental right.
The amount of compensation received in a case involving property cannot be challenged in a
court of law on the grounds of adequacy. But, that doesn’t mean that the amount of
compensation is so law that it constitutes fraud on fraud.
One can get into the principles only if the amount of compensation is so low that it is almost
illusory.

ADM Jabalpur - Expanded the definition of property rights and included proprietary rights.
Art. 19(1)(f) prevented the government to acquire your property.
But if the government doesn’t give compensation then no right is infringed under art 19(1)(f).
Art. 19(1)(f) did not talk about compensation.

Art. 31 was framed for compensatory purposes.

The state may acquire property compulsorily but only foe a public purpose, compensation to
the owner and in such manner may as be prescribed by law.

Deprivation means substantial rights of proprietary rights are taken away. But this does not
mean acquisition.

Doctrine of eminent domain

Art 31(2) - It had recognition under the constitution of india.

This was repealed by the 44th amendment. Article 31(1) gives protection against deprivation.

State of Bengal v Bella Banerjee

The compensation itself includes just and equitable fulfilment of loss. After this judgement,
an amendment was passed which stated that the adequacy of compensation cannot be a
ground to challenge.
The right to property also gives you the power to exclude others. This the reason the right to
property was linked to fundamental rights.

So, if the government acquires the property, art. 19(1)(f) and 31(1) will be applied.
Compensation under article 31(2) will be applied.

In the bella Bannerjee judgement the court firstly have power to the legislature to decide the
adequacy of compensation but also said that the principles through which we arrive at the
compensation are judicially reviewable. Therefore, the compensation is itself judicially
reviewable. Also, compensation can only be given at the time of acquisition.

This judgement defined the term compensation and also concluded that the methods of
arriving at that compensation are judicially reviewable.

i. Compensation
ii. Public purpose – Interchangeably used with public use.
The court will not look into what constitutes public purpose. The court shall not substitute the
government view of what is public interest, with its own view of what is public interest.
Vajravedu Mudaliar v Special Deputy Collector
Madras legislature enacted an act leading to town planning. Principles of arriving to
compensation were laid down. But, the executive changed the principles under the Act. By
this change in principles, the compensation now given was lesser than before.

The court said that after the 4th amendment we cannot review the adequacy but the
compensation cannot be so less that it constitutes a fraud on the constitution.

So the court stands by the definition of ‘compensation’ given by the Bella Bannerjee case.
Therefore, the compensation I judicially reviewable if the amount of compensation is illusory
in nature.

UOI v Metal Corporation

Fraud on the constitution with respect to this case is when the compensation amount is
illusory or too less or principles of valuation are irrelevant.

Absolute acquisition of certain properties by the state government which were engaged in
metal manufacturing. The value of unused machines was to be purchase value or price value.
The government had appreciated the value of the property.

The factory owners argued that the purchase price of the property was extremely low.
The court then looked at the principles of evaluation and then decided that the value arrived
at was lower than the market value and that the government had given less compensation.
Executive wisdom is replaceable by judicial wisdom when the principles are amendable and
the power is given to the court.

State of Gujarat v Shantilal

Metal corporation was wrongly decided and it ought to be overruled.
Scope of judicial review is limited till the compensation is illusory. Court said that the
principles of compensation can only be looked at if the court prima facie decides that the
compensation is illusory. Therefore, the court cannot see whether the principles are relevant
or not. Not justiciable.

R.C Cooper v UOI

The court looked at the dictionary meaning of compensation and said that if compensation is
illusory and the principles are irrelevant, then the courts need to interfere.

It upheld the interpretation of varjavedu that was given in metal corporation case.
After this, the 24th and 25th amendment was given and the word compensation under art
31(2) was replaced by the word amount.
After Keshavananda bharti, it was decided that the court can only look at the compensation
when it is illusory enough to shake the conscience of the court.

Kelo v. City of New London

It talked about the scope of public purpose.
The city council of new London wanted to acquire land for research and development. But
land was taken away for private purpose.
Public purpose can be served indirectly through a direct private interest.
Then the 44th amendment came into play which introduced Art. 300A and did away with
article 31.
Can private interest amount to public interest?
A land acquisition out of private interest can be justified by using the excuse of employment
or economic growth.
Private interest can also serve as public interest.

Tata Motors Case

In the tata motors case, they claimed that they were setting up a factory for public purpose.
The court said that if this were to be allowed, it would be really simple to acquire land with
the excuse of public purpose and nobody would claim land on the purpose of a company.
Easy amendment of 300A – no requirement of reasonable restriction u/a 300A of the
constitution.
No writ petition to supreme court u/a 32.
No requirement of public purpose.
No requirement of compensation

When we talk about authority of law, we assume that it includes the doctrine imminent
domain.
Law u/a 300A should be a just and fair law.
If imminent domain still operates with 300A, then it means that the court cannot take away
my property w/o it being for a public purpose and it must read ‘compensation’ and not
‘amount’. The word amount has been removed. Now, for any kind of ‘deprivation’ the
aggrieved individual can claim compensation from the government.

Due to 300A, the right to property is no longer a fundamental right. Now, actions taken
under 31A, 31B and 31C can be challenged on the grounds of right to property and will not
be able to take shelter behind the excuse of fundamental rights. This is just a school of
thought, which hasn’t necessarily been accepted by law.
We can’t confirm if 300A has made 31A, 31 and 31C redundant.

K.T Plantation v. State of Karnataka

Devika rani – the first lady of Indian cinema
The estates of mr. and mrs. Rani were going to be acquired by the government to build a
museum. Some portion of that estate had been sold to KT. Plantation
The government found that the ground sold to kt plantation was agricultural land and the
ground was allowed to be held over the agricultural ceiling limit since they were growing a
rare plant.
The government passed over an acquisition act which received presidential assent, due to
which the government withdrew the exemption on the rare plant, effectively banning the two
from selling the land to kt plantation.
The couple said that if the government plans to acquire the land u/a 300A, then they must
award the both of them compensation for doing so.
Article 21 says that through due process, rights can be taken away but not the right to
property.
The land was acquired for a public purpose and the court held that the compensation need not
be just but only has to be justifiable in court.

Transfer of Property Act

The act makes a distinction between moveable and immoveable property. Rules in relation to
transfer of moveable property are different from the rules of transfer of immoveable property.
TOPA mainly deals with moveable property but doesn’t exclude moveable property.
TOPA is applicable to moveable property but where it isn’t specified, it is only applicable to
moveable property.
SOGA also deals with the transfer of moveable property.
Section 3 of the TOPA defines immoveable property as – something that doesn’t include
standing timber, growing crops or grass.

Section 3(36) of the General Clauses act defines immoveable property as:
Land + benefits to arise out of that land + things attached to the earth + things
permanently fastened to anything attached to the earth.
Neither the TOPA, SOGA or GCA define moveable property properly.
Immoveable property and moveable property change meanings with the change in transfer of
rights.
Benefits which arise out of land are called ‘profit a prendre’. Transfer of these benefits is
transfer of immoveable property.
Nature of property (immoveable/moveable) depends on the object and intent behind the
attachment.
Exceptions to benefits arising out of land: standing timber, growing crops and grass +trees,
fruits etc.

How do we tell if something is embedded in the earth?

i. Degree and/or mode of attachment – when a thing is attached to the earth in such
a way that it can stand its own weight. And it cannot be removed from the earth
w/o causing damage to the property.
ii. Object of attachment – If an attachment has been made to the land for permanent
enjoyment, it is classified as to be embedded in the earth.
Whenever a license is given to reap the benefits of a land that the owner of the land would
have received, it becomes benefit arising out of land. The transfer of this profit is ‘profit a
prendre’
Right to moveable property doesn’t require registration of license but right to immoveable
property does.

Anand Behra v State of Orissa Case

Goods such as standing timber, bamboo and grass can be taxed if they can be classified as
moveable property.
In the case above, the bamboo wasn’t sold itself, it was the right to grow bamboo and other
crops on a particular piece of land and the right to reap the benefits that was given. This was
a right to immoveable property and immoveable property cannot be taxed.

Shantabai v State of Bombay

If standing timber is there in asset and gives the right to take it away but it is with respect to
the future goods that the it is a right in land so immovable property.

State of Orissa v Titagurh Paper Mill

Benefit arising out of land so it is an immoveable property.

Duncan Industries Case

Plant and machinery treated as moveable property
p/m is immoveable property as it was installed on the land with the purpose of permanent
use. There is no definition of permanence therefore you must arrive at a conclusion on the
basis of the facts given.
Things attached to things which are already attached to earth are for permanent enjoyment
and so when valuing the property for transfer, the things attached to attached things should be
taken in as immoveable property.

Exceptions to the attachment rule – Whenever a property is attached to earth is severed or

liable to be severed, it is a moveable property and not an immoveable property.

TOPA – S5 talks about what transfer means, who may transfer property and what can be
trasnfered.
Transfer of property applies when the transfer:
i. Has to be made by a living person to one or more living persons.
ii. Must convey property
iii. Is in the present or in the future.

Conveyance: Title must pass to a person who is otherwise not entitled. The passage of title
means that right to possess and enjoy the property. (not necessarily the right to dispose of the
property)

A license to earn profit from the premises will not mean transfer under TOPA. Even if the
right to possess and enjoy the property is there, unless it entitles you to the property.
Succession not covered under TOPA.

Types of conveyance:
i. Sale
ii. Mortgage
iii. Lease
iv. Exchange
v. Gift

Transferor doesn’t need to necessarily own the property, but must be legally entitled to
transfer such entitlement. Not necessary for all rights to be conveyed.
Entitlement means a right to possess and enjoy the property. But this right is not absolute.

Partition is not the same as transfer since no new entitlement is being created. A will is not a
transfer, since the entitlement can be changed by changing the will. A will is concerned with
property of a dead person but under the TOPA, the property is concerned between two living
persons.

Surrender – Falling of a lesser interest in favour of a higher interest. Not a transfer.

Relinquishment is not a transfer since it does not create new entitlement

S7. – Who can transfer? If one is competent enough to enter a contract as per section 11 of
the contracts act, you are entitled to transferable property.
I. Competent to contract
II. Entitled to the property or has authority to dispose of

S6. What may be transferred. Property of any kind may be transferred except as otherwise
provided or by any other law for the time being in force. (Not specified, so both immoveable
property and moveable property can be included)

(a) Spec successionis – expectation of succession cannot be transferred. One can’t transfer
property just because he expects to inherit it in the future.
(b) Right to re-enter - It means right to take the possession back. For ex: If A has leased out
land to B and a condition is set up that no house can be built on it and B goes ahead and
builds a house on the property and in the process breaches the condition upon which the
contract was entered into. Subsequent to this, A has the right to re-enter the property. This
right cannot be transferred to another person. But, if upon the breach of such condition,
the lease on the property is terminated, the right to re-entry can be transferred to another
individual.
(c) Easement - It is the right on the immoveable property of somebody else, for the beneficial
enjoyment of my immoveable property. This right of easement cannot be transferred. The
property whose beneficial enjoyment is enjoyed through exercising the rights over other’s
property, is known as dominant heritage.
(d) Arrears for maintenance can be transferred but right to future maintenance cannot be
transferred.
(e) Actionable claim - Section 3 of the TOPA. My claim to a definite sum of money or my
interest in the moveable property not in possession.
(f) Right to sue for compensation - It is a secondary right. Primary right such as right of
getting payment can be transferred but if the contact is breached and the primary right has
been exhausted, one can only have the secondary right. This secondary right is not subject
to transfer.

S43. – When a property is transferred and the transferor doesn’t have the right to do so, the
transfer stands voidable at the option of the transferee. If after such transaction has taken
place, the transferor gets the right to perform the transfer, the transfer is valid.

Separately an easement can’t be transferred but it can be transferred with dominant heritage.
Right to future maintenance.
All interest in property restricted in it enjoyment to the owner personally.

A contingent transfer is different from spec successionis because such transfer takes place
after the entitlement to the property being transferred has been received.

S43 talks about transfers done by mistake or fraud when the transferor has induced
wrongfully that he is entitled to the property. In this case, the contract is voidable at the
behest of the transferee.

S6 (b) – right to re-entry : two situations –

i. When the right to re-entry can be transferred – The lease is over and the
possession is back with the owner. The right to re-entry and trsansfer are both
present.
ii. When the right to re-entry cannot be transferred – Lease isn’t over but the
possession has been received back. The right to re-entry is present but the right to
transfer isn’t present since the lease is ongoing.
(c) easement cannot be transferred w/o transferring the property that it is attached to.
(d) right to use or dispose of property that has been specifically vested in you cannot be
transferred to anybody else.
(e) right to sue cannot be transferred.

An actionable claim – Claim to a debt or a beneficial interest in moveable property.

(h) no transfer can be made for an unlawful object.

S8. Operation of a transfer

It deals with the effect of a transfer when -
I. When there is a transfer of the property, you are automatically transferring all your
interests in the property.
II. Chattels are the moveable properties which are not fixed to land or are not fixed to
what is already embedded in the land. They are not automatically transferred.
III. When a debt is transferred then the securities attached to it are also transferred.

With the transfer of land, the easementary right, things which are attached to the earth,
the future rents and profits are all transferred along with the land – unless otherwise stated
or expressly mentioned in the agreement.

A chattel is an object attached to the property but not for permanent enjoyment therefore
different from a fixture.

Easement – is the right enjoyed over someone else’s property, which enables you to enjoy
the right over your own property.

S10.
When transferring a property, there cannot be a condition on alienation of the property.
This section only deals with those transfers where absolute restraint is there. Absolute
ownership includes absolute interest in disposing and so no condition can be put on it.
So the condition put on the transfer shall be void but not the transfer itself.
There has to be absolute restrain for this section to come into play. So a partial restraint
can be put on the transfer.
Absolute restraint on alienation means a substantial barring of the right to dispose the
property.
Exception - In case of a lease where condition is in benefit of the lessor or those claiming
under him.
Provided for the benefit of women (non-hindu, non-muslim, non-buddhist) during her
marriage, she cannot transfer.

S.11
When absolute interest is transferred of any property, then there cannot be any condition
on enjoying the property on his own will.
S.12
Conditions on a transfer where the interests are limited then the rights cannot be waived
off on the condition of insolvency.
Insolvency cannot be a condition on transfer of property. But if the property is for life
interest, and then insolvency happens, then the creditor can use the property only till the
transferee is alive. Upon the death of the transferee, transferor gets the property back.

S25.
Condition can be precedent, subsequent and collateral. If condition is impossible to
perform; against public policy etc. (as mention in the section) then transfer will be held to
be void.

S.26.
Condition Precedent - The fulfilment of the condition is important to effectuate the
transfer. Condition precedent is important to fulfil the transfer but condition subsequent is
important to retain the transfer (substantial compliance is enough).

Mohd. Raza
Family property was given to widow on a condition that no alienation to stronger. She
can sell the property only to family members.
This is a family settlement and no transfer and so S.10 will not apply.

Zoroas train company.

There was a cooperative society which was meant to provide housing for Parsis. This
member can only transfer it to only a Parsi.
S.10 will not apply. The parent act cannot trump laws.

K. Munuswamy
There was a family settlement that property is given to parents and after their deaths, the
property will go to their sons. The property is sold to one of their sons. The other son
argues that they cannot do that. This condition will not attract S.10.
However, public policy on free circulation of property and so even if it is not a transfer,
the condition on them in invalid.

S.28
It allows ulterior disposition. Two different interests created under same property.
Prior disposition is a transfer to a person on a condition. If that uncertain event either
happens or does not happen, then it will transfer to another person which is known as
ulterior disposition.
The 2nd person has a vested interest in that property.

Prior Disposition v Ulterior disposition

The ulterior disposition is dependent upon the happening or not happening of an uncertain
event.
Prior disposition is an ordinary transfer and it can be retained by fulfilling the condition
subsequent. If this condition is not fulfilled, the ulterior disposition comes into play and
the transfer occurs between another individual and the original transferrer.
If it is mentioned in the sale deed that for an ulterior transfer to take place, the prior
disposition must fail, and if it is specified what the manner of failure has to be for the
ulterior disposition to take place, the ulterior transfer can only take place if the prior
disposition has failed in that specific way.

S27.
The Ulterior Disposition is dependent upon the failure of the transferee to fulfil the
condition upon which the transfer is to be made. This failure to fulfil the condition may
be because such event happened which made it impossible for him to join the army. (see
example in bare act)

There are a number of ways by which this condition can fail. This section says that no
matter how the condition fails, the ulterior disposition will take place. Manner of failure
doesn’t matter unless expressly mentioned. That specific way of failure, if mentioned,
should be the only way through which the ulterior disposition should take place.

S.29
For an prior disposition to take place, the condition subsequent should be strictly
complied with. If in case the condition subsequent cannot be strictly complied with, then
the ulterior disposition will prevail.

S.30
If the ulterior disposition is invalid, the prior disposition is not affected by it.

S.31
Reversion of Property - I am transferring my land to you with the condition that you will
not dig a well in that lend. If you do dig such a well, the property will revert back to the
transferrer or the remainder man (a guy who has been designated to receive the property
by the transferrer).
When an absolute interest is being transferred, no such condition can be applied to the
transfer that restrains the interest of the transferee in the land. It is hit by section 11. Only
in the case of partial transfer can such condition be applied where the interest is altered or
restrained.
Insolvency cannot be a condition to nullify the transfer or be a condition for ulterior
disposition.
Section 31 only applies in the case of partial transfer and not absolute transfer.

S.32
If the condition prior is illegal or immoral, the transfer fails.

S.33
X makes a gift to A on the condition that he joins the army. A suffers from an injury
which makes him incapable of joining the army. The condition is deemed to be broken.

S.34
If the fulfilment of the subsequent condition of transfer is fraudulently averted from being
completed, then the ulterior transfer will not take place due to the non completion of the
prior disposition.

Vested Interest and Contingent Interest

S.19
When the interest in the property is immediately transferred from the transferor to the
transferee for present enjoyment or future enjoyment, it is called a vested interest.

When A transfers property to B, without the transfer being dependent on a condition

precedent, it creates a vested interest in the property.

If the property has been transferred to the transferee, but the enjoyment of the property is
dependent on the death of the transferor, there is a vested interest that has been created in
the property.

Any transfer which is not dependent on an uncertain event, the transferee has a vested
interest in the property. The transfer has in fact taken place but the enjoyment of the
property by the transferee has been postponed.

When the deed of transfer mentions that the transferee can enjoy the property from
immediate effect, there is still a vested interest.
When the enjoyment of the property is based on the occurrence of a future certain event, a
vested interest is created.

Vested interest can be inherited. A vested interest can also be transferred. Vested interest
is not dependent upon any condition precedent.

S.13
Transfer for the benefit of an unborn person.
When a property is to be passed down to an individual after the death of a person to
whom the property was previously transferred to, the transfer of property on the death of
such individual should be an absolute transfer.

Before such property can be transfered to the unborn person, there much be an
intermediate interest created.
(Transfer to an unborn person, the transfer must be of an absolute interest).

When a property is transferred from A to B, it is a life interest and therefore a partial

interest. C, an unborn individual, is next in line to receive the property. When such
property is finally given to C, it must consist of an absolute transfer of property and
cannot be a partial transfer (such as a life transfer).

The second transfer, with the first transfer being from A to B and it being a partial
transfer, cannot again restrain the property from being alienated. C should be able to
dispose of the property if the transfer to B was a partial interest. See rule 14.

S.20
When unborn person acquires interest on transfer for his benefit.
An interest in property created for an unborn individual gets converted into a vested
interest once he is born.
An intermediate transferee has to be created in order for me to be able transfer the interest
to an unborn person.
If the unborn person dies before the death of the individual who is transferring the interest
to the unborn person, the vested interest can be transferred to the relatives of the unborn
person.

If the transferrer dies before the transferee has attained majority, the transferee still has a
vested interest in the property but he will not be able to enjoy the property, so in the
meantime, the property will revert back to the person from whom the transferor had
received the property.

A -> B -> C

If C has not maintained majority at the time of the death of B, the property reverts back to
A even though C has a vested interest in the property. C will not be able to enjoy the
property till he attains majority. Once C attains majority, he can claim the property from
A.

S.14
Rule against perpetuity - A property cannot be prevented from alienation for an indefinite
period of time.
The property can only be locked for the lifetime of the immediate transferees.
Otherwise, the property cannot be locked for a long period of time
The ulterior disposition can only fall if the prior disposition is invalid to begin with.

S.15
Transfer to a class, some of whom come under sections 13 and 14.
A says that after the death of B, the property that is being transferred by A to B, will go to
the children of B and in order for the children of B to claim that property, they must be
majors at the time of the death of B.

B gives birth to X, Y and Z. At the time of death of B, X and Y are majors while Z is a
minor.

Now the property will be split between X and Y as per section 15 since they are not
disqualified from the process of transfer merely because in their class of persons, one of
the person has not attained majority and is therefore not eligible for transfer as per section
15.

S.16
If a transfer of some property is dependent on the failure of transfer to another individual,
but, if the transfer on which the second is dependent is itself invalid to begin with, the
second transfer fails.
If the prior disposition is invalid as per section 14 and 15, the ulterior disposition which is
dependent on the prior disposition also fails.

S.17
Direction for accumulation
Where a life interest is being transferred with a property with the condition that 50% of
the profits earned from such property will come to the transferor till he is alive or till a
time period of 18 years after the date of the transfer.
It can be said that either it is a an exception to section 11 or it's only applicable to partial
transfer. In case of an absolute transfer under section 11, no condition regarding the
income received through property can be implemented.
But, as per section 17, a percentage of the income from property can be claimed but only
till the point when the individual is alive or till 8 years after the date of transfer of the
property.

S.17
If the property has been transferred for a public purpose, it can be locked for an indefinite
period of time from being alienated.
The restrictions of 14, 16 and 17 don't apply.

S.22
In comparison with section 15, this section talks about there being a contingent interest
when one person has not attained a particular age as specified in the terms of transfer.

Section 15 talks about unborn children and there is no contingent transfer. If in a class of
persons, two out of three are legible to receive the property, both of them will hold the
property.

S.23, 24. - Read from the bare act.

Equitable Principle v. Common Law

It emerged as common law has a right but not a remedy. It wasn’t able to provide. Equity
courts emerged in order to provide rights and remedies i=given under the common law.
Common law treats similar situations equally. But that might not be true.

Under Indian Lw, the equitable remedy is already mentioned under the statutes.

S. 40
Restrictive Covenants
It talks about restrictive covenants with regards to land.
Where for the enjoyment and benefit of their own property, an individual can put a
restriction on the enjoyment on the other person's property. This is called a negative
covenant or a restrictive covenant and the opposite is a positive covenant. ex. to not build
more than 3 stories.
This individual X, has the right to enforce this covenant against Z, the individual who
bought the same property from Y if:
i. It is a gratuitous transfer
ii. If z has notice of the same.

If such property was transfered to Z:

i. With consideration
ii. and no such notice was given
Z is not obligated to follow such negative covenant. But if both of these conditions are
not satisfied together, then Z has no defense against X.
A positive covenant is when to ensure such enjoyment, the individual asks another to
perform a task to facilitate such enjoyment. ex. to put up a fence in order to separate the
property.

S.41
The real owner is the person in whose name the property has been purchased.
An ostensible owner is someone who holds out that he is the real owner of the property
and is capable of sale or transfer of the property with the consent of the actual/real owner
of the property.

If the bona-fide purchaser cannot with reasonable effort, figure out who the is actually in
charge of the property, the real owner can transfer such property to the purchaser. Later,
the ostensible owner cannot claim this transaction to be void.
This section protects the rights of the bona-fide purchaser against the real owner and the
ostensible owner.

The benami transaction is one instance of a sale by an ostensible owner.

S.42
Talks about transfers where the transferor has the right to revoke the transfer.
If the transferor is satisfied that the transferee has not complied with the conditions of the
lease, he may terminate the lease with the transferee.
What right does the transferee have against the transferor?
- The transferee can ask for compensation from the transferor.
- In the case where the contract has been revoked and the property has been transferred to
a third party, that third party has a better claim over the land than the original transferee.

S.39
If a property that has conditions relating to the income earned from the property, and has
been sold to X, the individual who is a beneficiary with regards to the conditions of
transfer, can claim such interest from X if:
i. It is a gratuitous transfer
ii. C has the notice of the same

The beneficiary cannot claim such interest as opposed to X if:

i. Consideration
ii. C does not have notice.

S.43
This section protects the transferee in the case of a fraudulent transfer. it gives the
transferee the option to either do away with the transfer or let it be as it is. It is voidable
on the part of the transferee.
But, as long as the transferor has no right over the property, the transferee has no such
remedy as mentioned above. But, if the transferor gets such authority over the property in
the future, and the transferee has not rescinded the contract right away and the contract
subsists, he can have the option of making the transferor deliver the property to him.

Once such notice is given to the transferee, he must within a reasonable amount of time
choose to rescind the transfer or make the transferor go ahead with the transfer. If within
a reasonable amount of time, the transferee hasn't communicated his want to the
transferor, the transferor has the right to transfer the said property to a third individual.

S.48
Priority Rights - X promises to transfer property to Y if he gets married within two years.
Meanwhile, X transfers the property to Z. Y then gets married before two years have
passed. Y has a contingent interest in the property and his right over the property will be
greater than the right of Z since the transfer between X and Y had been effectuated way
before the transfer between X and Z.

In a case where the later transfer has been registered and the first transfer hasn't been
registered, the second transferee has a greater right over the property.

S.49
If a property has been transferred, and with it comes an insurance policy, but the
insurance hasn't been transferred itself and is still with the transferor, such amount that
would be equivalent to the amount of insurance that one would claim from the property
shall be given to the transferee.

S.50
Bonafide Rent - Protects the bonfire person that pays rent. If the owner changes without
notice, then he is discharged from paying to the transferee on the month of transfer. Rent
in advance?

S.51 Improvements made by bonafide holders under defective titles.

Any person who believes in good faith to be the holder of the property is then the
bonafide holder.
If whatever improvements have been made to the property has increased the value of the
property, the bona fide holder shall be paid the amount by which the value of the property
has increased. Such payment shall be made by the person who has evicted the bona fide
holder.

S.52
Doctrine of lis pendens - When a suit is pending in a court of law in relation to
immovable property and the suit involves the determination of rights with regards to such
property, the immovable property cannot be transferred to any third person. The
transferor is barred from dealing with the property or selling off the property.
This is to protect the rights of the party to the suit who is not the transferor.
This suit can be of any type and doesn't need to be a specific type of suit for the transferee
to have this sort of protection under this section.

S.53
Fraudulent Transfer
If the creditors think that the debtor is going to transfer the property where a suit has been
instituted, then they can get an injunction if transfer has still not taken place.
If I have my creditors to pay and I understand that I cannot pay them back and I gift the
property to somebody else, and my creditors can prove in a court of law that I have sold
the property through fraud, the court shall make the transfer voidable at the option of the
creditor.

S.56
Marshalling by a subsequent purchaser.
Even though you have a right to equity, you cannot exercise that right to the prejudice of
your neighbour.

If A has two properties, which have been both mortgaged to B, but the second property
has been sold to C. Now, B can only redeem the loan from the first property. If there is
some amount of loan left after exhausting the first property, only then can B move to
redeem the loan from the second property.

This is done to protect the interest of the subsequent transferee.

This section only works when B has an option as to claim compensation from a property
that nobody has an interest in.

The law doesn't make a distinction between move-able and immovable property in the
case of an exchange.
Specific Transfer
Sale -
1.Transfer of absolute ownership. It occurs between a seller and buyer.
2. Consideration (Price) - Must be a money consideration or money and something else.
Some money is a must. Prince need not be paid on transfer. It can be price promised too.

Sale for a property the value of which is more than a 100 rs is completed once such sale
has been registered. After such registration, the ownership has passed on to the buyer.
When ownership of the property has been transferred but the possession is still with the
transferor, the transferor is holding the property in the capacity of a trustee.
The registration of this sale creates a vested interest in the transferee.

Any deed of sale that gives the buyer an immediate interest in the property, be it vested or
contingent, will be called a contract of the property.

A contract for sale is by which one promises to sell a property upon the fulfilment of a
condition.
Through a contract for sale, you do not have an interest in the property but you do have a
right to enforce the contract for sale. All the rights he has is the right to a sale deed if he
has performed the conditions mentioned in the contract.

The difference between a contract of sale and a contract for sale is that;
In the case of transfer of property, the title already belongs to the transferee and all he
needs is the possession to be transferred.
In a contract for sale, no such title has been transferred.
A contract for sale doesn't create such interest in the property. It gives you the right to
make the transferor register the sale deed.

Contact for sale - Under contract of sale, there should be an immediate transfer of title of
the property. Interest has been created. But under contract for sale, it is just a promise to
sell you my house.
Exchanges
S.118
The law doesn't make a distinction between move-able and immovable property in the
case of an exchange.
The rights and liabilities of both the parties of an exchange are similar to the rights of a
buyer and seller.
Exchange can also take place in turn of money.
Whenever there is a money element in a transaction, it becomes a sale.

Gift - transfer of any property (both movable and immovable) without any consideration.
The person who makes the gift is known as a donor
The person who accepts a gift is known as donee.
Cannot transfer things that do not exist yet.
There has to be acceptance on the part of the donee. It can be done by making a
communication or taking possession etc. Specific form of acceptance is not given under
the TOPA.
Unless there is a specific time mentioned in the gift deed for acceptance, the donee must
accept the gift during the life time of the donor.
If the donee fails to accept the gift during the donee’s lifetime, it becomes void. So heirs
cannot accept.
Very specific transfer between two persons.
If the gift is immovable property and is being made then registration is necessary.
For movable goods, delivery is important or by registration. So, registration not
compulsory.

S.125
When the gift has to be made to several persons and if one doesn’t accept then it doesn’t
mean the gift will be invalid, the fight will remain valid in respect of the remaining
persons.

S.126
If there is a condition attached to the gift that it may be revoked on the happening of a
specified certain event, the gift is not a gift at all, it is a partial transfer.
But, if there is a condition in the transfer deed that the gift may be revoked on the
happening of a specific uncertain event, then the gift is valid.

A clause which says that the gift may be revocable upon the happening of a specified
certain event, the clause will be void. The gift may still be void if accepted.
Any transfer of the gift which dependent upon the will of the donor will be invalid. The
revocation of the gift cannot depend on the donor's will. The second the donor changes
the will in his favour, it will not be considered as a valid transfer.
The gift may be revoked by the donor or the gift may be revoked by the donee even after
accepting it if such gift is hit by any of the principles of the Indian contract act.
S.127
Onerous Gift - It is a gift with an obligation attached to it. If you accept the gift, you also
accept the obligation the gift entails. Such obligation is called a charge on the property. A
charge is a monetary interest in the property.
A charge on the property is different from a condition subsequent since a charge can only
be of a monetary nature.

S.55
Right sand duties of the buyer and seller
Duty of execution of the proper document of the sale deed rests with the seller. It is the
duty of the seller to execute the registered document that validates the sale.

A document has been registered today which says that the possession of the property shall
be transferred two months later. As of now, the buyer is the owner, but the seller till the
two months are over, is the constructive owner of the property. The seller till then holds
the title deeds.

Before the completion of the sale and before the ownership has been passed off to the
buyer, it is the duty of the seller to pay any debts or charges in relation to the property.
They must be paid in full by the seller before the ownership is transferred to the buyer.

The seller has the duty on the buyer to deliver the possession of the property as it has
been agreed upon buy the two. If no specific method of delivery has been mentioned, he
must do so in a reasonable manner. He must also deliver the title deeds.

When the seller is making a sale, the seller gives a warranty i.e. he is entitled to the
interest of the property that he is selling off. This is an implied covenant.

What is the duty of the buyer the sale?

If the buyer buys a property for a price much lower than the actual value of the property,
he must disclose such fact that may make the seller aware of the true value of the
property, if the seller has no ordinary way of discovering this fact that changes the value
of the property.

After the sale has been completed, it is the buyer who must bear all loss on the property
and must pay any and all other property related expenses.

After the sale has been completed, if any improvement has been made upon the land, the
buyer is entitled to such improvements.

The seller has the right to rent and profits till execution.
After the execution, the seller will have the right on unpaid consideration. So it will be
treated as a charge on the property.

S.17 of the registration Act

Registration of all the non-testamentary property of more than Rs.100 needs to be
registered.
How to escape registration duty?
1. General P.O.A - Irrevocable
Technically become and owner and transfer will take place on the death by will.
In this process, you may evade the registration money as it is in effect not a sale.

Satywan v Raghubir
S had a land A. R had a and B. R approaches S to exchange their lands. So there was an
oral agreement which was entered into but neither written statement or registration. But
after this, there was a dispute where S refused to deliver the land. R sued S. R influenced
S with liquor in court and land was given to R. After this, S went for mutation of B.
But the person said that the court’s decree showed wrong address and there was already a
mortgage on B.
So, S filed a suit for influence of intoxication etc. But whether it is a valid exchange
initially?
R says registration not mandatory under s.118 of TOPA, so valid.
S argues that it is registrable under S.17 of registration Act.
The court held that change conveys interest in the property and so S.17 of registration act
and so registration is mandatory for exchange.

S.105
Lease - It is only relation to immovable property. UnLease can only be given for an
immovable property and not a move able property.
If such a thing is given for a movable property, it is called bailment.
Immovable property can be both tangible and intangible. The land can be leased to a
person as well as the right of way.
Undef lease, right to possess is granted.
Immovable property can be both intangible and tangible.
Creates new interest in the property
for a duration - can be mentioned in the lease agreement or a per petal lease i.e forever.
There has to be a consideration. Lessee can only be evicted by a court decree. Even if
violation of any obligation, courts decree necessary. But the lease is terminated.
Premium is a one time amount to secure the lease. It can Also be a rent terms of money or
in terms of service.
The consideration can also be premium + rent. The manner of payment as per the
agreement.
Only proprietary right of possession.
The property being leased out is called lease-hold property.
It is a transfer of partial interest and so not the owner.
The possessor rights are absolute as well as to the exclusion of the owner.
Right to enjoyment is not an absolute right and is dependent on the agreement.
Unless anything is mentioned in the agreement, the lease can be transferred. It can be
automatically inherited.

If no duration is mentioned in the lease agreement, it doesn’t automatically get renewed

every year. Unless the lessor gives a notice that no more lease from next year etc. there is
a notice period that has to be provided by the lessor.
Notice Period - 6 months for agricultural purpose 15 days for any other purpose of lease.

S.106
A lease must have a duration, it must contain when the lease is terminating.

It could be specifically time bound or for perpetuity.

There is no minimum duration of lease.

If the lessee dies during the duration of the lease, the lesser has to right to enjoy the
property for the rest of the time period the lease has been given for. Both the parties can
bring it to a termination but time is not a factor when it comes to the termination of lease
unless specifically mentioned. A perpetual lease can be for an indefinite amount of time.

Lease has to be registered under S.17 of the registration act.

But in lease, both lessor and less have to register, i.e. sign, the deed because it is very
contractual.

Lease gives the right to pass, but

I. Under license, right to use is only there and can kick him out anytime.
II. So, no new interest in the property under license.
III. A lease is transferable unless contrary to contract but a license cannot be transferred.
IV.A lease is transferrable unless contrary to contract but a license cannot be transferred.
V. A lease is for specific time or per petal but under license can be terminated for
anytime or when the purpose for license gets over.
VI. Under lease, the lessor can sell the property and the new owner becomes the lessor
but under a license if property is transferred then license is terminated, privy to
contract.
VII. Lease rights can be inherited but not under license.
S.52 of the easement act derives license.
Associated hotels of India v R.N Kapoor
Saloon shop. Plaintiff runs this shop. He wants fixation of rent. This is only applicable to
plaintiff only if it is a lease and not license. According to the law, that allows the govern
to fix the rent.
Hotel argues that it is not a lease and so he has to pay the rent decided by the hotel. Only
a license has been given.
The deed is titled as license deed.
Plaintiff has exclusive right to use the premises.
Plaintiff has the exclusive right to us it for 1 year. Cannot alienate or dispose of the
property.
Can be terminated without prior notice if there is a violation of contract.
The court held that it is a lease and said that the intention of the party must be looked at.
Possession is whose hands it is in and who controls it.
Whether the agreement reflects the rights of the lessee or license.

If there is a conflict of this type, the substance of the agreement should be looked at and
the above points should be taken into consideration.
The right of transfer is provided to the plaintiff, exclusive control of the area assigned to
them prima facie denote lease.
And the deed cannot be terminated without violation of contract. So this exclusive test but
can be a prime facie test and collaborate other acts like intervention etc. with it.

Subhash Chandra

Tenancy at Sufferance.
If the tenant, even after termination of leave, stays on the property, the lease is known as
tenancy at sufferance. He is not committing any trespass because still no decree of court
is there to evict lessee.
Wrongful Possession - and so, mesne profits can also be asked but if in this case, after
termination, the lessor is still accepting the rent then it has been automatically renewed.
Now he cannot go in court for eviction.
After this the tenant is known as tenant by holding over. (S.116)

S.108
Rights and duties of lessor and lessee.
I. Disclose all material defects that are there in the property.
II. Give possession to the lessee without unreasonable delay. If this is not done then the
lessee can go to court for specific performance and also claim compensation for delay
in possession.
III. Lessor gives implied covenant to the lessee that lessee has the right to enjoy and
possess the property without undue influence or part of lessor.
IV.Right of the lessee to enjoy and ascertain of the property. (Any extra benefit/value
addition). Only till the time is not contrary to contract. Ex. If lease given for
agricultural purposes and if tomorrow a mine is found then you cannot claim it
because the lease was for agricultural purposes only and not mining.
V. When any act of nature affects the purpose of the land which was given for lease, the
lessee has the right to terminate the contract at his option.
VI.The lessee has the right to repair and maintain the property. But it can be claimed from
the lessor, if it is mentioned under the contract that the lessor will pay for
maintenance.
VII. If any expense that lessor was obligated to pay to government can be paid by
lessee and get reimbursed from lessor.
VIII. The things attached to the immovable property for personal enjoyment are
fixtures. Chattels are things not attached to immovable property for permanent
enjoyment. The lessee has the right to remove the fixtures but when giving the
property back to lessor after termination, he will have to give it back with fixtures or
with compensation.
IX.For an agricultural lease, the lessee reserves the rich ton the crops for whose seeds
have been sown by lessee except when the eviction is due to the fault of lessee.

Duties of lessee
I. Pay premium or rent or both as per the contract.
II. Communicate the privileged information in the knowledge of lessee at the time of
lease to the lessor.
III. Duty to maintain the property to lessee.
IV.Unless contrary intention in contract, the lessee cannot build any permanent structure
on the land.
V. If any encroachment over the property then duty of the lessee to communicate the
same to the lessor.

S.111
Termination of Lease
I. If for a particular duration, then when the duration is complete.
II. If the lessee violates any condition put under the contract
III. When lease terminated, on fulfilment of any condition. In these cases, no need for the
lessor to serve the notice.

When service of notice is necessary

I. If there is an obligation under contract on lessor to serve notice.
II. No duration mentioned then year to year basis and then notice necessary. This
specified uncertain event shouldn’t be on the will of the lessor.
III. In the case of sub-lease, with the failure or fulfilment or termination of parent lease,
the sub-lease fails. i.e. when there is expiration of the interest of the lessor itself.
IV.When there is implied or express surrender of lease by the lessee.
V. When there is a merger of interests. Ex. A as father gave land to B on lease. But now
when A died B inherited it and became the owner. So there is merger of partial interest
and absolute interest.
VI.On notice - It is deemed that the lease is terminated on the date of notice.

The rent control act - Fixes some rent in some cases or in some cases lessor even cannot
evict. Specific legislation curtails the lessor’s bargaining rights which were given under
TOPA.
So where renT control act applies, it trumps TOPA. (central legislation)

V. Dhanpal Chettiar v. Yasoda annual AIR 1979 SC 1745.

When the lease is automatically terminated under TOPA or rent control act then there is
no further notice that has to be served under S.106

Mortgage
For movable property, it is called a hypothecation or pledge.
A security against the debt.

S. 58
When you keep a specific immovable property and there is a transfer of interest in return
for securing the debt known as mortgage. Mortgager and mortgagee
A mortgage is not only for a loan, it can be for existing debt or future debt. It may also be
for an arrangement which may give rise to a pecuniary liability.

The loan which the mortgager advances to the mortgagee is known as ‘mortgage money’

Kinds of mortgage
The money decree and sale decree do not have an order. Can exist simultaneously. If
mortgager communicates of not paying money, then can go for a decree of sale.

i. Simple Mortgage - When the mortgager is personally liable to pay of the debt.
No delivery of possession of the property. So incase of default, the mortgagee
will have the right to sell the property and fulfil the debt. Primary remedy to
sue and in case of non-payment, the bank can sell the property by virtue of
decree of court. The mortgagee has a right in the property only upto the debt
amount and will therefore have to return the excess after the sale. For money
decree, you would be personally liable.
ii. Mortgage by conditional sale - Mortgagee sells the property to P as the
ostensible owner and with consent of the real owner. But there was a condition
on the transfer that the transfer will only take place if the mortgager fails to
 pay the money to the mortgagee. All this is mentioned in the mortgage deed of
this type of mortgage. No delivery o possession to mortgagee required at the
time of the mortgage. In case of default, the contingent interest interest gets
converted into a vested interest in P. There is no personal liability of
mortgager and so the money decree is not a remedy and the mortgagee can use
the property as sale for money.
iii. Usufructuary Mortgage - There is a delivery of possession of the property. The
mortgagee can appropriate mortgage money as rents and profits from the
property. In the case of default, the mortgagor has the right to earn rent and
profits from the property to fulfil the mortgage money. There is no personal
liability of the mortgager. Once the mortgage money is fulfilled, the property
has to be reverted back to the mortgager. Right to decree of sale if not
available.
iv. English Mortgage - Actual delivery of possession of the property with the
condition that he is personally liable to pay off the debts. In case of default,
the mortgagee becomes the absolute owner of the property. But this is not true.
This goes against equitable principles of remedy. So, there was a clause added
as proviso that the mortgagee will re-transfer the property upon payment. The
court held that the equity principle will always come above the rights of the
mortgagee as an absolute owner. Remedy - He can ask for money decree or
can get a decree for sale from the court. So, only remedy same as simple
mortgage.
v. Mortgage by deposit of title deeds - The title deeds are submitted. No
possession. Remedy same as simple mortgage. But, it gives a better security.
Here, the mortgager cannot sell the property or further alienate it. Personally
liable.
vi. Anomalous Mortgage - A mortgage which doesn’t fit into the above
mortgages then it is known as an anomalous mortgage. It is very contractual in
nature.

In the 2nd and 3rd too eon mortgage, there is no right to sell. But, in the other primary
remedy is money decree and secondary remedy is right to sale through decree. But after
the default, till the time the decree of sale is passed, the mortgager can pay the amount
and get the property redeemed. This is called the equity of redemption.

S.60
After the principal money is due. In payment of such money at proper time and place.
basically after the due date even if the mortgager defaults but the mortgagee has received
the decree of dale until this time, the mortgage money can be paid and the property can be
taken back. Right to redeem - this is a statutory right and cannot be taken away by
contract.
Such a clause which curtails this right is called a clog on redemption.
For example - If the fixed time of paying back the money is unreasonable then it curtails
this right to redeem.
If the purpose of the property is changed
Mortgage agreement cannot be converted into a sale agreement. But this is only
applicable when the mortgager is personally liable.
Or a clause which prevents the mortgager from alienating the property during the
mortgage. The clause would be void but not the mortgage deed.
The mortgager is better entitled to the property than the mortgagee.
This clog is void in mortgage deed.
However, my right to redeem extinguishes if there is decree of sale. Secondly by act of
the mortgager for subsequent deed of sale in favour of the bank if unable to pay.
The mortgager can extinguish his right to redeem as given above.
The Tim period being too long does not automatically make it a clog.

Gangadhar v Shankar Lal AIR 1958 SC 773

The mortgager cannot redeem the property before 85 years have passed and after the
passing of 85 years, the mortgager has 6 months to redeem the property. After those 6
months, the property will be considered as a sale deed.
The court held that the equity of redemption is to protect or prevent unfair bargain. There
has to be an oppressive clause put by the mortgagee on the mortgager. Unless it is
oppressive, it shall not be a clog. In this case, it was voluntarily entered into by the
mortgager and mortgagee for period of 85 years. So this is valid. The element of
unfairness makes It a clog but in the case at hand, it was not unfair.
But, the time period of 6 months given after the deed comes to an end is unfair and does
become a clog. This is so because you cannot redeem the right to redemption of mortgage
and this will be valid till a decree of sale is received from the court. So, prima facie a long
duration is a clog but not decisive because it depends on the element of unfairness.

Pomal Kamji Govindji v Kajlal AIR 1989 SCC 436

(usufructuary + simple) anomalous mortgage - principle amount in this case has to be
paid after 99 years along with interest. The mortgagee has the possession of property. The
mortgagee has the right to abolish any structure on the property at the mortgager’s
expense. The court said that the mortgage deed gave too much power to the mortgagee
and such a long period of time and even the full payment after 99 years. So it is an
illusory mortgage.

Foreclosure - you go to the court and claim that the mortgager doesn’t have the right over
the mortgaged property.
Right to foreclosure given to the mortgagee that from now on the mortgager has no claim
on the property.

Simple, English and Mortgage by title - You have a remedy to get a decree of sale. A
decree of sale it is automatic foreclosure.

So no foreclosure decree required in the above and mortgages as you can get a decree of
sale.

Under mortgage by conditional sale -

i. You can get the decree if foreclosure, under usufructuary, the mortgagee
doesn’t have the right to sale or foreclosure. Only to appropriate the rents or
profits.
ii. The mortgager when extinguishes his right to redemption by sale deed then
the mortgagee can get a right to foreclosure as only a sale deed was made and
no decree of sale. So, only in the above two situations can the right of
foreclosure be held as valid.

Who can claim the right to redemption?

I. Mortgager and heirs.
II. Any person having an interest in property or any person having a charge over the
property. A, B and C are jointly the mortgagees of a property.
Subrogation - If mortgager defaults, and if A sells the property then B and C’s interest
will be lost so B pays and redeems the property and gets into the shoes of A.

After this, B can only claim 50k from the property for the time being. He cannot claim
2.5 lakhs as money is only due to A and not B. So, 2 lakhs is still not due to B.
After 5 years, B can claim 2 lakhs. So it is not prudent for him to sell the property now
because he will only get 50k but not Rs. 2 Lakh. Because what is prior in time gets
priority.
The value of property is 50k now but B predicts that after 5 years, it will be Rs. 2 lakh
and so he doesn’t sell the property now.
Getting into the shoes of the other mortgagee is called subrogation.
But when a subsequent mortgagee redeems the property from the prior mortgagee, then it
is known as redeem-up. (S.91)

S.92
Doctrine of Subrogation.
Subrogation can be legal and contractual. The mortgager gets a 3rd party and asks him to
pay his loan and by the doctrine of subrogation, becomes a new mortgagee. This is known
as contractual subrogation.

In the case of A, B and C, even if it is due at the same time and if C redeems A’s loan by
passing B and can only claim what is due from A and not from what is due to C. C can
only bypass B with extent of Rs. 20lakh

Priority Rule - Time when contract was entered into or the time when it becomes due,
first in time in whichever circumstance.

If there is any excess amount when C steps into the shoes of A and sells the property, then
it will be distributed proportionally between B and C.

Tacking is not allowed where you club two loans and claim it together. (S.93)

III. Surety of mortgager

After redeeming the property, the surety becomes a mortgager.

IV. A person who has a charge on the mortgaged property.

Doctrine of Foreclosure Down - If in the example of subsequent mortgages, A gets the

right of the foreclosure after sale of mortgaged property, the rights of D are now not
there. In this case, B and C will also lose their rights in the property as doctrine of
foreclosure down and B and C will now only have money decrees against D.
So, against the right of redemption of subsequent mortgagees, the prior mortgagee will
have right of foreclosure down.

But the general rule of charge still applies. Means that if the buyer is with consideration
and with notice, then B and C can claim from the buyer. But if without notice and with
consideration, then no charge can be claimed.
The right to redemption cannot be extinguished but the right to foreclosure can. So if A
has agreed to not foreclose against B through contract then this is valid.

Marshalling in Mortgage (S.56)

Even though you have a right to equity, you cannot exercise that right to the prejudice of
your neighbour.

If A has two properties, which have been both mortgaged to B, but the second property
has been sold to C. Now, B can only redeem the loan from the first property. If there is
some amount of loan left after exhausting the first property, only then can B move to
redeem the loan from the second property.

This is done to protect the interest of the subsequent transferee.

This section only works when B has an option as to claim compensation from a property
that nobody has an interest in.

The law doesn't make a distinction between move-able and immovable property in the
case of an exchange.

Charge (S.100)
All mortgages create charge on the property but not all charges are mortgages.
A mortgage is the interest in the payment of a debt.
A charge is an interest in a payment which may or may not be a debt, secured by a
movable property. A charge is an interest which has been created by one party in the
favour of another party
When the property for one individual is made security of payment to another person, it is
said that the other person has a charge on that property.
If a debt is secured through some property then it is a mortgage, but if some amount is to
be paid to another person and if then it is secured through a property to get the money
from the property, then it is known as a charge.
Basically, only entitling a payment through that property.

A charge may not be a mortgage but the remedy for the person holding the charge is same
as the remedy which the mortgagee under the simple mortgage has.

Exceptions
If a trustee holding the trust property incurs some expenditure for maintaining the
property, he creates a charge for himself from the property for the expenses. But he is
governed under the trust act and not the TOPA.
No charge if the buyer is with consideration and without notice.

When does a charge get extinguished?

I. When the purpose is fulfilled.
II. When the person relinquishes
III. When it becomes impossible
IV.Motivation of contract
V. Merger of interest (when C becomes the owner of the property)
Difference between mortgage and charge
I. A mortgage is a charge for payment of debt or pecuniary liability but a charge may not
be a debt or pecuniary liability.
II. Mortgage creates a specific interest in the property in favour of mortgagee but a
charge does not. The remedy of sale decree is not available to C. Only for the
payment. So the payment can be from out of the property too. Some interest in the
property.
III. In case of mortgage, there is a personal covenant to pay back the money but under
charge, there may or may not be a personal covenant.
IV. Once the property is mortgaged, the mortgagee has a better title than anyone else in
the property. This is right in rem. But, after the defaults, as long as the money is paid,
under charge, the person having a charge on the property does not have a better title
over the property but only a right against the person who possesses the property for
payment.