Charges is defined under section 100 of transfer of property act 1882.In order to create a charge there must be an immovable property. The immovable property of one person is made as a security for the payment of money to another person, that particular immovable property remains as a security for the payment of money. It does not amounts to mortgage whereas to constitute charge there must contain all the provisions which applies too simple mortgage. Mortgage is wider than a charge every mortgage there is a charge but every charge is no a mortgage.
Charge can be either by act of party or by operation of law . When an agreement through which immovable property as a security for transferring any interest in the property constitutes charge by act of parties. However that agreement should disclose an intention to create charge on the particular property for money. Which means there should be an evidence showing intention to be made and that intention can be made liable to satisfy the debt by him. Charge created by operation of law means, when a charge created by the provisions of an Act.
As said above the charge is not a mortgage but in order to initiate a charge ,all provisions of simple mortgage stated under section 58(b) of Transfer of Property Act should be applied. With the help of difference between a charge and mortgage the concept of charge can be understood and the important difference between mortgage and charge has be explained under section 58 of TP Act . A mortgage is security for repayment of debt , where as a charge stands as a security for repayment of anything it is not always a debt. Mortgage is a security give for money related liability but not in the case of charge .
The most important difference between mortgage and charge is an interest in immovable property, only in mortgage has internet on the property and charge doesn’t create any interest on the immovable property . The person whose property have been made security for the payment of money the interest of that property remains with the owner of that property itself.
A charge which is created by operation of law does not require registration as prescribed under section 59of the TP Act but when a charge created by act of parties requires registration that showing the intention to make the land security for the payment of money. In case of charge award of the arbitrator is outside the scope of section 100 of TP Act . Charge is excepted under section 100 of TP Act are the charge of trustee, and charge expressly provided by any other law and bona fide purchasers for value without notice .
A charge declared in a decree must be enforced by a suit and the doctrine of subrogation applies to charge. In charge prior mortgage notice of charge is immaterial, where a portion of the property charged has been relieved thereof without the consent of the holder or the charge. The charge holder can proceed against the whole property for the enforcement of the charge and the principle of ratable distribution is inapplicable.
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