SALES OF IMMOVABLE PROPERTY

SS.54-57

Definition of Sale S. 54
Transfer of ownership
For price money consideration
Essentials of valid sale
Competent parties
Subject matter existence
Consideration price
Mode of transfer conveyance
When ownership is deemed to be transferred?
At the time of execution or registration
Contract of sale
Rights of prospective purchaser specific performance, to recover price

Sellers Duties

Before sale
To disclose material defects in the property or title
To produce the title-deeds for inspection
To answer relevant questions as to title
To execute conveyance
To take care of the property and title deeds
To pay the outgoings
After sale
To give possession to the buyer
To covenant for title
To deliver title deeds on receipt of the price

Sellers Rights

Before sale
Entitled to all rents, profits or other benefits
After sale
Charge on property

Buyers Duties

Before Sale
To disclose facts which materially increases the value of property
To pay the price
After sale
To bear the loss to the property
To pay the outgoings

Buyers Rights

Before Sale

Chare on property for price paid

Entitled to all benefits

After sale

MORTGAGES OF IMMOVABLE PROPERTY

SS. 58-104

Meaning S.58

Transfer of an interest
In a specific immovable property
For the purpose of security of
Payment of loan
Payment of debt
Performance of an engagement giving rise to pecuniary liability

Transferor = Mortgagor, Transferee= Mortgagee,

Principal money + Interest = Mortgage money,
Instrument if any = Mortgage Deed

Kinds of Mortgages - Ss.58 (b) to (g)

Simple Mortgage
Personal Undertaking to pay
Possession not given
If default right to sell
Mortgage by conditional sale
Ostensible sale,
Condition- three types
Usufructuary Mortgage
Delivery of possession
Right to enjoy
No personal liability
English Mortgage
Personal obligation
Absolute transfer
With proviso to retransfer
Mortgage by deposit of title-deeds
Equitable mortgage

Deposit of title deeds

Existence of debt
Intention to create security
Territorial restrictions
Anomalous Mortgage
Residuary clause

RIGHT OF REDEMPTION - S.60

To redeem- reclaim, buyback, reversion

Once a mortgage always a mortgage no intention to transfer absolutely, object to
protect mortgagor
Scope of right
When can be exercised- after principal money becomes due
Clog on redemption
Absolute statutory right Not subject to contract
Clog is a stipulation which prevents mortgagor
Instances of clog- condition of sale, long period etc.
How to exercise this right of redemption- tender of payment, deposit in court of law
Effect of redemption- mortgage deed, title deeds, possession, retransfer
Partial redemption
Extinguishment of right of redemption

OTHER RIGHTS OF MORTGAGOR

S. 61 - 65

Transfer of mortgage
Right to inspect documents- own cost, reasonable time
Right to redeem separately or simultaneously one mortgagee, two mortgages, subject to
contract
To recover possession in case of usufructuary mortgage- additional to s.60, provides time
Accession to mortgage property part of property, natural or acquired, inseparable
necessary to preserve property
Right to improvements Right to get benefits of renewed lease
Mortgagors right to lease

LIABILITIES OF MORTGAGOR S. 65 & 66

Implied covenants of mortgagor for

Title
Defence of title
Payment of public charges

Payments of rent
Discharge of prior mortgage
Liability for waste
Not to do anything injurious to property

RIGHT TO FORECLOSURE - S.67

Counter part of S.60- closing or withdrawing

Subject to contract and not absolute
Nature of right To file suit
To debar mortgagor absolutely from redemption
When it arises after mortgage money becomes due
Depends upon type of mortgage
Mortgage by conditional sale
Anomalous mortgage- entitled to foreclose
Partial foreclosure

OTHER RIGHTS OF MORTGAGEE

SS.68 - 73

Right to sell simple, English, m. by title deeds, anomalous-depends

Right to sue for mortgage money personal obligation, property destroyed, etc.
Right to sell w/o intervention of court- only in english, certain areas, parties not hindu
muslim
Right to accession
Right to renewed lease
Right to spend money to keep safe, when necessary, after informing
Right to get proceeds of revenue sale

LIABILITIES OF MORTGAGEE S.76

Only when is in possession Duties

To manage property
To collect rents & profits
To pay rents, revenues & public charges
To make necessary repairs
Not to commit any destructive act
With respect to insurance money
To keep accounts
To apply rents & profits
To account for gross receipts after tender or deposit of money

MISC. PROVISIONS

Marshalling Securities S. 81
Contribution S. 82
Subrogation S. 92
Prohibition of tacking S. 93

CHARGES : S 100

Similar to mortgage but not mortgage

Meaning
Where immovable property made security
For payment of money to another
No transfer of interest
Transaction not mortgage
Types
By act of parties
By operation of law
Extinction
Release
Novation
Merger

DIFFERENCE BETWEEN MORTGAGE &

CHARGE:

Meaning
Transfer of interest
Mode of creation
Right in rem
Enforcement against bonafide transferee
Registration
Future property

Difference between contract OF SALE, & contract

Basis
Contract OF SALE
Rule
Contract + Transfer +
consideration
Time
Immediate / Present
contract shall take
palace if terms settled
between the parties, it
may be noted that in
every sale there is a
preceding contract for

FOR SALE
Contract FOR SALE
Contract for future sale
Future
Some time parties are
not in a position to
execute the Sale Deed
at present but they
intend that sale would
take place between

sale, upon the

execution of this ,
preceding contract the
sale happened
between the parties.
Thus sale complete in
furtherance of his very
contract.
Immediate/
simultaneous activity

them in future. In order

to have the evidence of
their intention that the
property would sold the
contracting party only
and not anybody else.

Type

Sale deed

Position in India

Establish law

Remedy

Protected by Law ( In
India)

Agreement for
Agreement
Not establish law, it is
the concept of English
law
Not protect by Law
( only Doctrine of
Equity u/s 54 applicable
to transferee)

Right of Purchaser

Establish Right
It can restrain or set
aside the execution of
a sale deed of the
same land to another
person.

Part performance

Postponed / future/
delay

Not establish right

It cannot be apply to
restrain or set aside the
execution of a sale
deed of the same land
to another person.
Equity protect the
interest of purchaserfollowing is the right of
purchaser:
He may file a suit
u/ Specific
Performance Act
1963 against
vendor.
He may compel
the vendor to
execute the sale
deed in his favour
If the purchaser
paid some money
to the vendor he
may acquire the
charge upon the

property for the

money which he
had paid, and he
is entitle to get it
pay back
Nature

Expressed and implied

Effect

It provides the
established interest /
ownership on the
property, he there is
dully executed sale
deed.

Nothing
It is merely a document
creating a right to
obtain another
documents namely ,
dully a executed sale
deed.
S54 clearly says that a
contract for sale does
not itself , create any
interest or charge on
the property. No title
or interest in respect of
the property is
therefore created in
favour of purchaser on
the basis of such
contract.
Under English LawCreates an equitable
ownership in favour of
the purchaser and the
vendor holds property
for him as a trustee.
Under India Law
Doctrine of equitable
interest is not
recognized in India, so
neither Legal Estate nor
the Equitable Este in
favour of the
transferee.
In Laclman Nepak v/s
Nadam Kayalu Syama
held
It is well settled law in
India that existence of
any agreement for sale
does not of itself create
any interest in or

charge upon such

property.
Even if the purchaser
paid the consideration
and had taken the
possession of the
property on the basis of
such contract, he
cannot get ownership
unless a sale deed is
dully executed in his
favour.

S55- Rights and Obligation of

Buyers and Seller
Before the Sale
Seller Rights

Sellers Duty

1. To get the
1. Disclosure of
rent and
material
profits of
defect in the
the
property if
property till
any.
he possess
2. Produce of
the
title deed of
ownership.
the property.
3. Answer
relevant
questions,
asked by
buyer.
4. Care of
property and
title deed as
its own, like a
normal
prudence
person care.
5. Payments of
outgoing till
date of sale.

Buyers Rights

Buyers Duty

1.Buyers charges- In
case the sale does not
take place due to any
reason, buyers has a
right to take back his
payment made in
advance with interest.

1.Duty of
disclosure, if the
seller is ignorant
about his own
right in property.
It is the duty of
the buyer to
disclose the seller
that some material
fact can increase
the cost of the
property in future.
2.Payment of price. To pay
the agreed payment/ price
for the property in the
contract of sale.

After Sale
Seller Rights
1.Sallers Lien or
charge-

Sellers Duty
1. Giving possession
of the property
2. Convent for title.
3. Delivery of the
title deed.

Buyers Rights
1. Enjoy all the
rights arising out
of the property

Buyers Duty
1.Bear the loss to
property.
2.To pay the out goings
on property.

Difference between Mortgage and Charge

1.
A mortgage is created by the act of the parties whereas a charge may
be created either through the act of parties or by operation of law.
2.
A charge created by operation of law does not require the registration
as prescribed for mortgage under the Transfer of Property Act. But a charge
created by act of parties requires registration.
3.
A mortgage is for a fixed term whereas the charge may be in
perpetuity.
4.
A simple mortgage carries personal liability unless excluded by express
contract. But in case of charge, no personal liability is created. But where a
charge is the result of a contract, there may be a personal remedy.
5.
A charge only gives a right to receive payment out of a particular
property, a mortgage is a transfer of an interest in specific immovable
property.
6.
A mortgage is a transfer of an interest in a specific immovable
property, but there is no such transfer of interest in the case of a charge.
Charge does not operate as transfer of an interest in the property and a
transferee of the property gets the property free from the charge provided he
purchases it for value without notice of the charge.
7.
A mortgage is good against subsequent transferees, but a charge is
good against subsequent transferees with notice.