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

Seller’s 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

 

Seller’s Rights

Before sale Entitled to all rents, profits or other benefits

After sale Charge on property

Buyer’s 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

 

Buyer’s Rights

Before Sale Chare on property for price paid

After sale Entitled to all benefits

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 Mortgagor’s 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 FOR SALEBasis Contract –OF SALE Contract FOR SALERule Contract + Transfer

+ considerationContract for future sale

Time Immediate / Presentcontract shall take palace if terms settled between the parties, it may be noted that in every sale there is a preceding contract for sale, upon the execution of this , preceding contract the sale happened

FutureSome time parties are not in a position to execute the Sale Deed at present but they intend that sale would take place between them in future. In order to have the evidence of their intention that the property would

between the parties. Thus sale complete in furtherance of his very contract.

sold the contracting party only and not anybody else.

Part performance Immediate/ simultaneous activity

Postponed / future/ delay

Type Sale deed Agreement for Agreement

Position in India Establish law Not establish law, it is the concept of English law

Remedy Protected by Law ( In India)

Not protect by Law ( only Doctrine of Equity u/s 54 applicable to transferee)

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

Not establish rightIt 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 purchaser- following 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 NothingIt is merely a document creating a right to obtain another documents namely , dully a executed sale deed.

Effect It provides the established interest / ownership on the property, he there is dully 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 Law-Creates an equitable ownership in favour of the purchaser and the vendor holds property for him as a trustee. Under India LawDoctrine 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 Buyers Rights Buyers Duty

1. To get the rent and profits of the property till he possess the ownership.

1. Disclosure of material defect in the property if any.

2. Produce of title deed of the property.

3. Answer relevant questions, asked by buyer.

4. Care of property and title deed as

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

its own, like a normal prudence person care.

5. Payments of outgoing till date of sale.

the contract of sale.

After SaleSeller Rights Sellers Duty Buyers Rights Buyers Duty

1.Saller’s Lien or charge-

1. Giving possession of the property

2. Convent for title.

3. Delivery of the title deed.

1. Enjoy all the rights arising out of the property

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.