10"' ..., rnongage' .

o- - · .. ....Y.., a.

As stated above, the right of redemption is a st tut .

a ory nght
convcerred on the mortgagor. under Section 60 of the T •p .Ac.t Th'1s
statutory an~ p~rmanent~rtg~t of mortgagor gives rise to a well-
){J1o
wn maxim, Once. a mortgage always a mortgage ' • It means
once mortgage deed 1s entered into, it can never be changed because
change, if any affects the right of redemption.• Lord Devay
supplemented (added) the words 'and nothing but a mortgage' in
the leading case. The above view was laid down by House of
Lords through Lord Devay in- .

vfoakes vs. Rice (1902) AC 24: In the instant case, Rice

mortgaged his premises ~ne gim~wiH. to Noakes & Company~ ubjeC!
~ of the p~em1ses _gamst~ e _repayment of all the money
with interest. There was a co nt in the ,mortgage dee&' that
durin the term Rice shall not use or sell upbn the premises, any
alt li uors not exclusive! obta· ed by Noakes & Company. Held
that Rice -was entlt ed to redemption. Since, the cov~nant was a

the House ofLords'7confirm~~ t~i~

three principles: · · · - ·· ··
a
clog·on tne equity of redemption, it was declared-void-.- On appeal;.
and laid down the·follow~ g
, ··
( 1) Once mortgage is alw~ys ~~rtg;ge. Mortgag~ -
b(fmade irredeemable and provision if any to that effect
is void. - ··- ··
(2) The Mortgage shall not reserve to himself any collateral
advantagesEo;u~ts~1~~ui]@ri~g-eJ~ iffi~..and~-
1

nght of redemption ts vv
(3) ~y stipulation ~es~aini~~ preventing the mortgagor's

In other words there should be no clog or fetter on eq~ity

of redemption. Any' st1pulat1on
. . wh.tc h makes mortgage
. tt~nsaction
:
.
inconsistent .
with the nght o f re demption 1s called Clog on
Redemption'.

n
 -· - • upc:rry A. Ct
The right of redemption is not only a statuto .
under Section 60 of the T.P.Act 1882 hut 1J"Ynghtrecoo..·
• . . . ' , a1so e . ott!Sed
smce 1t 1s available to the mortgagor even aft quitabJe ri h
stipulat~d p~riod ~or pay~ent ~f the mortgag:r;~~=Xpiry_of ~h:
redemption 1s an mdefeas1ble nght given t6 the rnort Right of
cannot be separated from Mortgage. agteern gag~r and it
. . h . . b '\I'uy ent, Which
away th1s ng t, ts an oppressive argain and is void. @ a takes
conferring collateral benefit on the mortgagee also greement
. . amounts tO I
on redempt10n:"'f It has been decided in Noakes & C c og
Rice, 1914 Ae:75. ompany vs.

However, in Kre /in er vs. New Pata onia Meat Cold c,

. 'd d h II otorage
Co"!-pany, it was ec1 e t. at co ater~I adv~ntages can 1be enforced
against the mortgagor proVIded there 1s nothm_g unreasonable ab
them. ' ·- · ·- - ~
In this case a mortgage f/as executed ~n 1910 •b;:-;;t
purchasing compan -~ 6 ~ 0iia fin§hf wool b10ke1s where~ .
the mortgagee stipulat~ ato r t ve years the mottga~or-compan:Y,.,
should not sell sheep skins to any one other than.th~m0rtgagu..s0,
long as they were willing to
pay at the mar-ket -price.µ he lo?jl)
j ould be paid offJat anytime. It was paid off tµ. 1911. The Court
held that collateral advanlflges {gluld--be_enf orcect even ajJg7
(:redemj}t§provided these_conditions were satisfied:
(1) that it is not unfair and unconscionable;
. (:,J,I\

(2) that it is not the nature of penalty to clog tlw equity of

redemption;
(3) that it is not inconsistent or repugqant to the equity of
redemptio~ · · -
[ Application of Kregli,iger's Rule in India: Secti~n 60 of
the Act has invalidated the Kreglinger's rule and hence it ha~ no
application in India. If any stip~lation operated beyond redemptt0n,
it is vo§J
. In st ances of Clog on Redemption: The following are the
mstances of clog on redemption:
"Marshalling' means arranging or setthng the claims of two persons m respect of certain common property
For example, suppose 'A' mortgages properttes 'X' and 'Y' to Band then property Y alone to C lfB seeks to
reahze Ills mortgage out ofY, C c.n compel B to proceed first agamst X and realize the crebt from 1L And m
case BIS unable to reahze the-whole amount.duato hlmf'rn!!l )Ll,e i,;enn_tJed ~~vet-the~ fr<llll _
Under Sec 81, the subsequent mortgagee 1s empowered to regulate or Marshall the order 1n which and
from which property the pnor mortgagee wtll realize hIS clarm

L1m1tat.10n of the Rule

The claim to marshalling must not be allowed to preiudice the rtghts ofthe first mortgagee or of other who
have acquued an mterest for collSlderanon
Illustration
If two esrates X and belonging to 'A·. are first mortgaged to B, then Xis ,mortgaged to C and Y is ,mortgaged
to D,C would not be penmtted to compel B to marshal in hIS favour, which of would pre,ud1ce the mterest
of D Similarly, D could not compel B to resort m the first msrance o the estate X The nght ofMarshallmg
may be excluded by a contract between the parties

Doctnne of Conmbunan /Sec 82}

Pnnc1ple
"As between persons liable m respect of the same debt. their habihty is to be m proportion to the quantum
of theu mtere st m the property"
While the mortgagor's nght of redempnon is a nght exercisable agamst the mortgagee, the nght of
contnbunon 1s one that anses between mortgagors
Inter Se:
The doctnne of contnbunon rests upon the pnnc1ple that "a fund which is equally hable with another to
pay a debt shall not escape because the creditor has been paid out of that other fund alone

Illustration:
A,B and C three brothers mortgaged theiqomc property to D for Rsl0,000/- Thereafter they pamnoned
the property mto three shares For reabzmg his mortgaged money if D msntuted a stnt for sale of the
property and realized his money by the sale of A's share then ·A' is enntled for contnbut1on against the
shares ofB and C each 3,333 Rs

Marshallin& Supersedes Contnbut1on

Where marshalling and contnbunon might confuct with each other. marshalling 1s to prevatl

Subro&ation · Sec 92
The term 'Subrogation· simply means "Subst1tuuon", this term ongmates from Roman law "Wben one
person rakes the place of another person he 1S said to have subst1tuted or taken the place of the fonner one"
In Roman Law, a creditor who lent money to the debtor for the purpose of payment of a mortgage on
condinon that he was to besubstttuted m. the place of the mortgagee, was entitled to claim the benefit of
the secunty discharged w11h Ills money This rule of Roman Law has not been recognized by many legal
systems of the world
46
 ') -_ V\ ' L. .
182
Lectures on Transfer of Property Act '
....-- consideration has been omitted, for the law in Ind ' - - - -
recognize any d.1stinctton
. . . b etween good and valuable . ta .does .not
consideration.
When the right of Marshalling arises: Where th
creditors of the same debtor, and one creditor has the ri ere
ht are two
. g to resort
only to one fund, the court wtll order the first creditor to b .
out of the fund against which the second creditor has n paid
o c1aim so
far as that fund will extend, so as to leave as much as p 'bl '
the second fund for payment of the second creditor If th fi
oss1 e of
· e 1rst
creditor has already paid him out of the second fund, the court will
allow the second creditor to stand in his shoes and resort to the
first fund to the extent to which the second fund has been exhausted
by the first creditor.
Where a Mortgagor (owner) mortgages two or more properties
to one person, and then (later/subsequently) mortgages one or more
of the properties to another person, the subsequent mortgagee may
request the prior (previous) mortgagee to realise the debt only from
the property or the security which is not mortgaged to the puisne
(subsequent) mortgagee.
E.g.: 'A ' mortgages property 'X ' and 'Y' to 'B'. Subsequently
' A' also mortgages property 'X' to 'C'.
In this example 'B ' has 1st charge on ' X' and 'Y'. 'C' has
second charge on property 'X ' but has no charge directly on property
'Y' . However ' C ' can request 'B' to transfer the charge for
remaining value against property ' Y ', in his ('C ' s) favour to realise
his debt.
Underlying Principle:~e doctrine of Marshalling is _based
on the principle of equity an laid down in the case of Aldrich vs.
·copper (1803) 8 Ves. 382, which reads as follows:
.
When a Creditor has two funds, the mterest O f the debtor
. h
shall not be regarded. Such Creditor shall take that fiun d wh1c
\)~
r(
N {ortgages of Immovable Property and C
~:::!:!.-- -----.:...:.!~~~~h~arges 183
. and shall leave the remaining for h
s htrl1, . anot er Credito
paY h 11 not affect the mterest of a third party/ r, and
h tit s a person.
1
a £ssentials of the Doctrine of Marshalling:
( l) There must be a common debtor of two 0 rmoremortg
against the same mortgaged property. ages
(2) The prior mortgagee shotdd -n ot> be prejudiced.
(3) It should not cause prejudice to third person ,s interest
.
also.
(4) There should be no agreement c~ntrary to that effect.
Limitations or Exceptions: The doctrine does not apply in
the following cases:
(1) The doctrine does not apply if it causes prejudice to the
prior mortgagee.
(2) The doctrine does not apply if it is prejudiced to third
party who acquired interest in property for consideration.
In the above ex.ample, 'A' has also mortgaged property 'Y' to
'D' who acquired interest in property for consideration; 'C' cannot
compel 'B ' to adjust his debt against the property 'Y' (of 'A').
(3) The doctrine does not apply unless the mortgagor is the
common debtor for both the creditors (mortgagees).
(4) The doctrine does not apply where a portion of the property
is mortgaged and the same is mortgaged subsequently to another.
(S) The benefit under this doctrine does not apply (extend) to
lessee.
Venkayya vs. Venkataramayya, AIR 1930 Mad. 17l -ln tbis
case ' A and B own properties . X apd Y respecu·v ely · A and B
lllortga
. ged th e1r
. properties X and Y to C• A and B had separated
~~te~ests in the properties X and Y. Subsequently, B alone mortgag:e
~: interest in his property, y to D. Later, D made a requ~st f~o~
h lrshalling of the properties X and Y . The Madras High nd
e d th t D .
a
h 11 · on the grou
is not entitled to the right of mars a mg
 .,
wu u mongagee payin off
41
~t:cun ty. The net result
- - t:) ... "'"' _ is that
_ a
-vith respect to th g th e firS t mortgagee acqmres pnority
e mortgage wh. h h
-is own mort gage. tc e redeems and not with respect
fhe doctrine of tacki h .
n
__,o 94 of the L aw of Propert
ng as been
A abolished in England by
January 1926 .
_,,,,,. y ct, 1925 with effect from 1st

8.CIIARGES
[Section 100]

Sections IO~ ~nd IOI of the Transfer of Property Act, 188

lay down the proVJs1ons relating to 'Charges' and run as follows: 2
Charges (Section 100): <ivhere immovable property of one
person is ~y act of parties or operation of law made!securi~ for the
payment of money to another, and the transaction does not amount
to a mortgage, the latter person is said to have a charge on the
property; and all the provisions hereinbefore contained which apply
to a simple mortgage shall, so far as may be, apply to such charge)
Nothing in this section applies to the charge of a trustee on
the trust property for expenses properly incurred in the exeC~tion
of his trust, and, save as otherwise expressly provided by any law
for the time being in force, no charge shall be enforced against any
property in the hands of a person to whom such property has been
transferred for consideration and without notice of the charge.
 ( Kinds of Charge: As stated abov~, charge takes p13ce i
two_ways namely-
{l), Charge by act of parties; and
Charge by operation of La':J
 I·

Mortgages of Immovable Property·and Ch

· arges 193
---G. Char,ge by act of. parties: An agteetnent, which giV'es
iJlllilOvable pro~ s~cWlty for the satisfaction of a debt without
transferrin~ any mterest 1~ the property constitijtes a charge by the
act of partI~ The following are the illustrations of charges by the
acts of parties. ~ :
[Jo A inherited an· estate from his maternal grandmother and
executed an agreement to pay his sister B a fixed annual
sum out of the rents of the estate, B has charge on the
.J
estate . .
(ii) A sued B on a promissory note. The compromise decree
directed the payment of the money and further directed
that B shalI not dispose of his share in a factory until
satisfaction of the entire decretal amount. It was held
that A had a charge on the property specified.
No particular form of word is needed for the creation of a
charge. It is sufficient if having regard to all the circumstances of
the trans~on, the document shows an intention to make the land
security for the payment of money mentioned therein. Further, the
Act nowhere prescribes any particular mode of creating orally.
Where, however, it is created by an instrarnent, such instrument
must be registered unless the amount involved is less than Rs. I 00.
[Section 17(1)0,) of the Registration Act].
· (b Charge operatio1:1 of law: A .c.h~rge _by operation of law is
one, which arises irrespective of the agreement of the parties. Such
charges are known as equitable liens in English Law.
F.:Qllowiug are the iastaaees of charge by law 01 charge-by
operation oflaw. (>.A!). ~Ol,V') ·

(a) Unpaid Vendor's Lien (Section 55 Clause (4).

(b) Vendee's charge for pre paid purcha~ed money under
Section 55(6).
(c) M an,b aUing gf securitiei -m:tder s _c cti~n 82 - charge in .
favour of a person entitled to contribution. ~ . ·i ,z.
TPA-13
'\'94
Lectures on Transfer of Property•A'ct
-
( d) A trustee under the Trust Act, 1882 is entitled 't o 1have
charge on the property Section 32 of the Trust Act explains
.
the powers of the trustee to hold and charge on the
property. ) ·
Floating Charge: A charge ,may be floatirig as well as fixed.
--~~;+-;" nronertv but a floating