SUBROGATION

Subrogation means substitution. Any person, other than mortgagor or co-

mortgagor, who having interest in the mortgaged property and who redeems
the mortgage, is entitled to be substituted in place of mortgagee. As discussed
in the preceding section, where a person (e.g., surety of the mortgagor) makes
payment of debt in default of mortgagor, he is entitled to redeem the mortgage.
But, at the same time such person has right to recover his money from out of
the mortgaged property just as mortgagee would have done had the debt not
been paid by that person. In other words, the person who pays off the mortgage
becomes clothed with all the rights of mortgagee. This is called subrogation or
substitution of that person in place of mortgagee for purpose of redemption,
 SUBROGATION

Kinds of Subrogation.-Section 92 provides for two kinds of

subrogation:

(i) Legal Subrogation; and

(ii) Conventional Subrogation.

Legal subrogation is a subrogation by operation of law.

The facts and surrounding circumstances operate to justify in
law the substitution of a person in the place of mortgagee. It is
 S. 100 CHARGE
Where immovable property of a person is made security for the
payment of money to another, and the transaction is not a mortgage
there is creation of charge. The charge is created in favour of the person
who is entitled to such payment. Section 100 of the Act defines charge in
the following words: "Where immovable property of one person is, by act
of parties or by operation of law, made security for the payment of
money to another and the transaction does not amount to mortgage, the
latter person is said to have a charge on the property.........” .

Charge on an immovable property is created to secure payment of

 Distinction Between Charge and Mortgage:
1. In a charge there is no creation of any interest in favour of the
charge-holder; therefore, charge is not a transfer of property.
Mortgage is a transfer of interest i.e. transfer of property. In other
words, in a mortgage there is transfer of interest in the property
mortgaged while in a charge no interest is created in the property
charged do as to reduce the full ownership to limited ownership.
2. In a charge there is jus ad rem ie. creation of 'right of payment out of
specified property. Charge is therefore, creation of something more
than a personal obligation but not a right in rem. In mortgage there is
a right in rem.
3. Charge may be created either by act of parties or, by operation of law
Mortgage is created only by act of parties.
4. Charge cannot be enforced against a bona fide transferee for value
without notice of the charge. Mortgage can be enforced against any
 LEASE.
Section 105 defines lease. Lease is a transfer of 'right of enjoyment of an
immovable property made for a certain period, in consideration of a
price paid or promised to be paid or, money, share of crops, service or
any other thing of value to be given periodically or on specified
occasions to the transferor by transferee. As is evident from the
definition, lease is not a transfer of ownership in property, it is transfer of
an interest in an immovable property. The interest is the right to use or
enjoy the immovable property. Since 'interest' in an immovable property
is considered as property, lease is a transfer of property. However, lease
is a transfer of only a partial interest. It is not a transfer of absolute
 LEASE.

Price is called premium and the money, share, service or other

things so given is called the rent. The essential elements of
lease are as under:

1. The parties i.e. transferor and the transferee.

2. The demise i.e. right to enjoy immovable property.

3. The term i.e. the duration.

4. The consideration i.e. premium or rent.

 LEASE AND LEAVE AND LICENSE.
1. Lease is a transfer of interest therefore it is a transfer of property. In
licence there is no transfer of any interest; it is not a transfer of
property.
2. In lease the transferee (lessee) gets a proprietary right in respect of
the land. This proprietory right is called demise or the leasehold
estate. Licence, on the other hand is a personal right of the person
(licensee) using the land of another person. The right of the licensee
is in the nature of a permission to do or continue to do certain things
on another's land. It is, therefore, personal right.
3. Being a proprietary right (i.e. property) lease is a transferable
interest. Licence being personal right is not transferable and cannot
be assigned to a third party.
4. Lessee is entitled to maintain action against any trespasser whereas
the licensee cannot take action against the trespasser.
 DURATION OF LEASE
Duration is an essential element of every lease. The period or
duration for which the right to enjoy the property is being transferred is
generally provided in the lease itself by mutual agreement of the parties.
Where the lease is otherwise valid except that its term is not given, the
term is fixed on the basis of local law and customs, if any, In the absence
of any mutually agreed term in the lease, local law or, custom in-respect
of its duration, the term of a lease is ascertained under the provisions of
Section 106.

For ascertaining the term of a lease, this section has classified leases
 S.107~MODES OF MAKING LEASE.
A. Leases which can be made only by registration:
(a) Leases from year to year.
(b)Leases for a term exceeding one year;
(c) Leases reserving a yearly rent.
(d)Permanent leases.
B. Leases in which registration is optional:
(e) Leases from month to month.
(f) Leases for a term of one year.
(g)Leases for a term of less than one year.
The Indian Registration Act, 1908 also makes similar
provisions regarding the registration of leases. Under Section 17, the
leases mentioned in group (A) are compulsorily registerable. The leases
 RIGHTS & LIABILITIES OF LEASE.
Rights of Lessor:
Lessors' right to cancel lease.
Liabilities of Lessor.
1. Duty to disclose latent material defect.
2. Duty to give possession.
3. Covenant for quiet possession.
 RIGHTS & LIABILITIES OF LEASE.
Rights of Lessee:
In the absence of any contract or local usage to the contrary, the rights
of a lessee as given under Section 108 clauses (d) to (j) are given below:
(1)Right to enjoy the accretions to the leased property.
(2)Right to avoid the lease in case of any destruction of property by fire,
tempest, flood, violence of an army or of mob or other irresistible
force.
(3)Right to repair the property when lessor fails to do so and to deduct
the cost of repairs from rent.
(4)Right to make such payments which are obligatory on the lessor and
to deduct that amount from the rent.
(5) Right to remove the fixtures made by him during tenancy.
 RIGHTS & LIABILITIES OF LEASE.
Liabilities of Lessee:
Section 108 clauses (k) to (q) lays down the liabilities of lessee.
The duties or liabilities of a lessee are given below:
(1)Duty to disclose facts, materially increasing the value of property.
(2)Duty to pay rent or consideration of lease.
(3)Duty to maintain the property.
(4)Duty to give notice to lessor of any encroachment on property.
(5)Duty to use or enjoy the property in a reasonable way.
(6)Duty not to erect permanent structure without lessor's consent.
(7)Duty to re-transfer the possession on determination of lease.
 DETERMINATION OF LEASE
1. By lapse of time. Lease is transfer of demise for a certain period. After
expiry of the period specified in the lease, the lease is automatically
determined. However, if there is a stipulation for its renewal, the lease
continues even after expiry of the fixed period.
2. By happening of specified event. The term of a lease may be made
subject to certain condition such as happening of some specified
event. If the term is limited conditionally on the happening of a future
event, the lease determines upon the happening of that event. For
instance, where a lease is made for a term of thirty years or upon the
death of lessee whichever is earlier, the lease shall come to an end if
lessee dies before expiry of thirty years. A lease for the life of tenant
determines upon the death of the tenant.
3.Termination of lessor's interest. Where the lessor's own interest in
immovable property is limited, the lease comes to an end upon the
 DETERMINATION OF LEASE

(6) By implied surrender. Surrender is implied if it takes place by

operation of law. By operation of law, there is surrender (i) by creation
of a new lease or, (ii) by relinquishment of possession. When a lessee
accepts from the lessor a new lease of the same property which is
already leased to him there is implied surrender of the earlier lease.
(7) Forfeiture is another mode of determination of Sea Forfeiture of a
lease means loss of lessee's right to use the property by some fault on
his part. A lease is determined by forfeiture on following grounds:
a. Breach of express condition by lessee.
b. Denial of landlord's title.
c. Insolvency of the lessee.