Professional Documents
Culture Documents
5 Charge Lien Easement
5 Charge Lien Easement
Charge
• Definition
• Powers and restrictions on
powers of chargor
• Effect
Section 257: The order by the court has to be in Form 16H, which
shall contain:
•the sale to be by public auction;
•require the sale to be held on such date but not less than a month
•specify the total amount due to the chargee
•require the Registrar of the Court to fix a reserve price for the
purpose of the sale, being a price equal to the estimated market
value of the land or lease
Procedure before sale.
• Section 258. (1) Where such order has been made, the Registrar of
the Court -
• (a) to serve a copy on the chargor, and on every chargee of the land
or lease; and
• (b) to see that the sale is publicly advertised in accordance with
rules of court, or the practice customarily adopted in the State.
• (2) The chargee shall -
• (a) prepare the conditions of sale, in accordance with the terms of
the order and any determination by the Registrar of the Court;
• (b) if in his custody, deposit the issue document of title, or duplicate
lease, with the Court not less than one week before the date fixed
for the sale; and
• (c) in the case of a charge of an undivided share deposit with the
Court not less than one week before the date fixed for the sale, the
copy of the issue document of title issued to the co-proprietor.
Procedure at sale.
• Section 259. (1) Every sale shall take place under the direction of an officer of the
Court, with the assistance of any licensed auctioneer if needed. The officer has to
• (a) receive bids (including by the chargee);
• (b) settle summarily any question arising in the course of the proceedings;
• (c) in the absence of any bid at or above the reserve price, withdraw the land or
lease in question from the sale,
• direct that it be put up for auction on a subsequent date, either at the same or at a
new reserve price, and
• see that the subsequent sale is publicly advertised; and
• (d) declare the sale concluded in favour of the highest bidder.
(3) The purchaser upon payment of the full amount of the purchase price, be entitled
to receive -
• (a) a certificate in Form 16F that the land or lease in question has been sold to him
(which shall, as provided by section 267, be registrable by the purchaser as if it
were an instrument of dealing);
(4) Where the order for sale requires the payment of any deposit by the successful
bidder and the balance to be settled on a date not later than one hundred and
twenty days from the date of the sale, the provisions of section 267A shall apply.
B- Application to Land Administrator
for order for sale
• Section 260. where the land is held under Land Office title,
the whole or undivided share, or lease application for an order
for sale by a chargee shall be made to the Land Administrator in
Form 16G.
• Section 261. Land Administrator to hold enquiry.
Upon receiving any application, the Collector shall -(a) appoint a
time and place for the holding of an enquiry;
(b) notify the chargee of the time and place; and
(c) cause a summons to be served on the chargor, requiring him
to appear at the enquiry and show cause why the order should
not be made.
• The LA has to find whether the charge is on the register, and
whether there is a default in the repayment of loan according to
the terms of the charge.
• If there is a dispute relating to the charge, it can be referred to
Court. LA can stop proceeding pending the decision of the court.
• LA can only make order for the sale of land
• Section 264A. Postponement or cancellation of an order for
sale by Land Administrator.
• (1) An order for sale may be postponed only once for a period not
exceeding three months or cancelled by the Land Administrator
upon an application of the chargee with the concurrence of the
chargor in Form 16O :
• such application shall be submitted to the Land Administrator not
less than seven days before the date of the sale. Section 266.
Right of chargor to tender payment at any time before sale
to the court or LA. (3) Where any order for sale ceases to have
effect by virtue of this section, the Registrar of the Court or, as the
case may be, Land Administrator shall give notice thereof to every
chargee of the land or lease in question.
Effects of sale
• Section 267..
• (1) Any certificate of sale shall be treated as an
instrument of dealing, and shall be registrable
accordingly; and, upon the registration
• (a) the title or interest of the chargor shall pass
to and vest in the purchaser, freed and
discharged from all liability under the charge in
question and any charge subsequent thereto;
and
• Only endorsed tenancies will will be protected
upon transfer.
Application of purchase
money.
• Section 268.
• (1) The purchase money arising on any sale shall be applied -
• (a) firstly, in the payment of rent to the State Authority or the lessor,
any other outgoings payable to the State Authority or any local
authority;
• (b) secondly, in the payment of the expenses of the sale;
• (c) thirdly, in the payment to the chargee of the total amount due;
• (d) fourthly, in the case of an annuity or other periodic sum, in
accordance with any provision for the satisfaction of payments
subsequently falling due; and
• (e) fifthly, in the payment off of subsequent charges, if any, in the
order of their priority.
• (3) The residue, if any, of the purchase money shall be paid to the
chargor.
REMEDIES OF CHARGEES:
POSSESSION
• Section 270. Limitation of powers to certain lands, and to first chargees only.
• (1) the chargee can possess land if -
• (a) the land is held under Registry title and final title;
• (aa) the charge is not on an undivided share; and
• (b) in the case of any town or village land it is not occupied by the chargor.
• (2) the said powers shall be exercisable by first chargees only.
• Section 271. Power of chargee to take possession on any default by chargor.
• (1) any chargee may, at any time when the chargor is in breach of any agreement on
his part, enter into possession of the whole or any part of the land so -
• (a) if any lease or tenancy binding on him, receive the rent payable to the chargor
thereunder; and
• (b) so far as it is not so subject, by going into occupation thereof.
• Section 272. Procedure for taking possession
Notice be given
Upon such notice the rights of chargor are passed to chargee
The chargee may apply to court for possession of the property
Duration of right to
possession
• Section 273..