Here's a quick, structured revision for your final exam day, covering "Sale,"

"Exchange," and "Mortgages & Charges":

Sale, Exchange, Mortgages & Charges: Exam Day Revision

Summary
This summary provides a concise overview of definitions, essentials, modes of
transfer, and key distinctions.

I. SALE
A. Definition (Section 54 TPA)
●​ A transfer of ownership in exchange for a price paid or promised, or part paid
and part-promised.

B. Essentials
1.​ Competent Seller: Must be able to transfer.
2.​ Competent Buyer: Must not be disqualified (Section 6(h)(3)).
3.​ Transferable Property: Subject matter.
4.​ Transfer of Ownership: Key distinguishing feature from other transfers
(mortgage, lease).
5.​ Money Consideration: The consideration must be money. If not money, it's an
exchange/barter.

C. Mode of Transfer by Sale

●​ Tangible Immovable Property:
○​ Value of Rs. 100 and upwards: Only by registered instrument.
○​ Value less than Rs. 100: By registered instrument OR delivery of property.
●​ Intangible Immovable Property (e.g., reversion): Only by registered
instrument.

D. Contract for Sale

●​ Differs from sale of goods: Courts typically grant specific performance for
immovable property contracts.
●​ Rights & Liabilities: Dealt with in Section 55 TPA.

II. EXCHANGE (Sections 118-121 TPA)

A. Definition
●​ Two persons mutually transfer ownership of one thing for ownership of
another.
●​ Crucial: Neither thing or both things being money only. (If only money is involved,
it's a sale).

B. Essentials
1.​ Competent to Contract.
2.​ Mutual Consent.
3.​ Mutual Transfer of Ownership (things/interests need not be identical).
4.​ Neither party paid money only.

C. Mode of Exchange
●​ Transfer in completion of an exchange is made in the same manner as for a sale
of such property.

III. MORTGAGES (Sections 58-104 TPA)

A. Definition & Nature (Section 58 TPA)
●​ Transfer of an interest in specific immovable property.
●​ Purpose: Securing payment of money (loan - advanced/to be advanced,
existing/future debt) or performance of engagement giving pecuniary liability.
●​ Parties: Mortgagor (transferor), Mortgagee (transferee).
●​ Money Secured: Mortgage money.
●​ Instrument: Mortgage deed.

B. Essentials of a Mortgage
1.​ Transfer of Interest: Mortgagor parts with an interest, not full ownership.
2.​ Specific Immovable Property: Must be clearly identified in the deed.
3.​ To Secure Payment of a Loan/Obligation: Primary purpose is security for a
debt or pecuniary liability.
4.​ No Alienation Clause: Mere agreement not to alienate property is NOT a
mortgage.

C. Outstanding Characteristics of a Mortgage

1.​ Mortgagee's interest terminates upon performance of the secured obligation.
2.​ Mortgagee has right of foreclosure upon mortgagor's default.
3.​ Mortgagor has right to redeem (regain property) on repayment/performance.

D. Form of a Mortgage Contract (Section 59 TPA)

●​ Principal money Rs. 100 or upwards: Must be by registered instrument (except
mortgage by deposit of title deeds).
●​ Nature: Not just a contract, but conveyance of interest.

E. Kinds of Mortgages
1.​ Simple Mortgage:
○​ Mortgagor personally binds to pay.
○​ Mortgagee gets right to cause property to be sold (via decree) on default.
○​ No right of possession or foreclosure for mortgagee.
○​ If property insufficient, mortgagee can sue personally.
2.​ Mortgage by Conditional Sale:
○​ Ostensible sale with a condition for re-purchase (or invalid sale) on
repayment.
○​ No personal covenant to pay.
○​ Mortgagee typically not given possession.
○​ Mortgagee's remedy: Foreclosure (becomes owner on default via court suit).
3.​ Usufructuary Mortgage:
○​ Mortgagor delivers possession (or binds to) to mortgagee.
○​ Mortgagee retains possession until debt paid, receives rents/profits in lieu of
interest/principal/both.
○​ No personal liability on mortgagor.
○​ Mortgagee has no right to foreclose or sue for sale.
○​ Mortgagee must manage property with ordinary prudence.
4.​ English Mortgage:
○​ Mortgagor binds self to repay on a certain date (personal covenant).
○​ Transfers property absolutely to mortgagee.
○​ Proviso: Mortgagee re-transfers property upon payment on agreed date.
○​ Mortgagee's remedy: Sale of property.
○​ Distinction from Conditional Sale:
■​ English: Personal liability, absolute transfer (with re-transfer proviso).
■​ Conditional Sale: No personal covenant, qualified ownership (ripening to
absolute on default).
5.​ Mortgage by Deposit of Title Deeds (Equitable Mortgage):
○​ Person delivers title deeds to creditor (or agent) with intention to create
security for a loan.
○​ Requisites: Debt, deposit of title deeds, intention to secure.
○​ No registration required. Oral agreement + delivery of deeds is sufficient.
○​ Purpose: Expediency for urgent funds.
○​ Geographical Restriction: Only in specific towns (e.g., Calcutta, Madras,
 Bombay, Delhi, Bangalore, etc.).
○​ Intention is crucial: Mere possession of deeds without intention is not a
mortgage.
○​ Documents of Title: Must show prima facie title (e.g., tax receipt not
sufficient).
6.​ Anomalous Mortgage:
○​ Any mortgage that is not one of the above five types.
○​ A combination of characteristics of other mortgages (e.g., usufructuary
with right of sale, or personal liability added).

F. Other Terms
●​ Sub-mortgage: Mortgagee mortgages their interest in the mortgaged property.
●​ Puisne Mortgage: Mortgagor creates a second or subsequent mortgage on
already mortgaged property.

G. Rights of Mortgagor
1.​ Right of Redemption (Section 60): Most important right. Take back property by
paying mortgage money after due date.
○​ Can redeem anytime after principal due, before right extinguished by act of
parties, court decree, or limitation (60 years).
○​ Cannot redeem before money becomes due.
2.​ Right Against Clog on Equity of Redemption: Any provision preventing,
evading, or hampering redemption is void. "Once a mortgage, always a
mortgage."
3.​ Right of Partial Redemption (Section 61): Generally, cannot redeem piecemeal.
But if multiple mortgages to same mortgagee, can redeem any one or more
separately (unless contract to contrary).

H. Implied Contract by Mortgagor (Section 65)

●​ In absence of contract to contrary, mortgagor implies covenants:
○​ Right to transfer interest (covenant for title).
○​ Assist mortgagee in quiet possession.
○​ Pay public charges.
○​ Pay rent on leased mortgaged property.
○​ Pay interest/principal on prior encumbrances (if subsequent mortgage).

I. Rights of Mortgagee & Remedies

●​ If mortgagor defaults, mortgagee can recover:
 ○​ From the mortgaged property.
○​ Sue for recovery from mortgagor personally.

IV. CHARGE (Section 100 TPA)

A. Definition
●​ Immovable property of one person is made security for payment of money to
another.
●​ Crucial: The transaction does NOT amount to a mortgage.

B. Creation
●​ Act of Parties: Intent between debtor/creditor to make property security, and
creditor has present right to it.
●​ Operation of Law: Arises from statutory provisions/legal obligations.

C. Types of Charges
●​ Fixed Charge: On specific property.
●​ Floating Charge:
○​ Equitable charge on assets for time being of a going concern (peculiar to
companies).
○​ On a class of assets, present and future.
○​ Assets can change in ordinary course of business without interference.
○​ Is ambulatory and shifting, remains dormant until it crystallizes.
○​ Crystallization: Becomes fixed when:
1.​ Money becomes payable and debenture holder enforces security.
2.​ Company ceases business.
3.​ Company is wound up.

D. Distinction between Mortgage and Charge

Feature Mortgage Charge

Interest Transfer Transfers an interest in No transfer of interest; only

property. security.

Creation Only by act of parties. By act of parties OR

operation of law.

Formality Must be registered & Need not be in writing; if

attested (2 witnesses) for Rs. written, need not be attested
 100+ (except deposit of title or registered.
deeds).

Foreclosure Possible in certain types Cannot foreclose (but can

(conditional sale, anomalous). get property sold).

Enforceability Transferee of mortgaged Generally, not enforceable

property takes it subject to against transferee for
mortgage (bound by it). consideration without
notice.

Personal Liability Can have both security & By act of parties, often
personal liability. negatives personal liability
(remedy against property
only). (Absence of personal
liability is key test from simple
mortgage).