concept of charge under tpa ,1882

1. CONCEPT OF CHARGE
UNDER TPA,1882
ANUBROLU SAI PAVANA
6TH SEM BBA LLB

2. INTRODUCTION
• A charge is a form of security for a loan under which certain property is agreed to
“charged”. The types of property that are capable of being charged include all real
and personal property. When property is charged the chargor retain ownership of
the property but the chargor has the right to utilise the collateral property if the
debt is not discharged.

3. RESEARCH QUESTION
• What is charge under Transfer of property Act and what are the essentials and
termination of charge?
• What is the Judicial interpretation on charge under Transfer of property Act ?

4. ESSENTIALS OF VALID CHARGE UNDER TRANSFER OF PROPERTY
There are some essentials which need to be fulfilled to create a valid Charge under
Transfer of Property Act:
• Immovable property
• Does not amount to a mortgage
• The Charge created by an act of parties
• Charges arising by operation of law

5. TYPES OF CHARGE
• Fixed charge
• Floating charge

6. TERMINATION OF CHARGE
A charge can be discharged in the same way that a mortgage can. As a result, a
charge may be discharged: –
• By Act of parties by the release of Debt or Security.
• By the process of Novation, or
• By means of Merger.

7. CASE LAWS
Debi Singh and Ors. vs. Jagdish Saran Singh AIR 1952 All 716
• A mortgage is a legal process under which a person borrows money from another
person and secures the repayment of the borrowed money and also pays the interest
at the agreed rate, by creating any right or charge in favor of the lender on his
movable and/or immovable property
Raychand Jivaji vs. Basappa Virappa Bellary (1940) 42 BOMLR 1113
• In this case court held that it would be sufficient to create a charge if it can be seen
from the document that there is a clear intention to use that property as security for
the payment of money, without transferring any right or interest in the property.

8. CONCLUSION
‘Charge’ is said to take place when one person’s immovable property is pledged as
security for the payment of money to another by an agreement or by the operation
of law as per Section 100 of TPA and its registration is done under the Section 77 of
the Companies Act, 2013. Hence, every mortgage is a charge but not every charge
is a mortgage. A charge is an interest created over an immovable property for
securing payment of the amount which is due to the party. The property is not
transferred to the lender and only interest is created. It is neither a lien nor a
mortgage but some properties of both are present in a charge.

9. THANK YOU