CHARGE

CHARGE

• The term charge has been defined by section 100 of the transfer of property act in the following words:

"Where immovable property of one person is by act of parties or operation of law made security for the payment of debt of money to another and the transaction dose not amount to a mortgage,the latter person is said to have a charge on the property; and all the provisions herein before contained which apply to a simple mortgage shall ,so far as may be ,apply to such charge".

• Nothing in this section applies to the charge or a trustee on the trust property for expense property incurred in the execution of his trust and save as otherwise expressly provided by any law for the time being in force,no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.

•Thus the charge is a security for the payment of a debt of money to another.

ESSENTIAL ELEMENTS-

1) It is created on immovable property.

2) This property is made a security for the payment of money and not by way of mortgage.

3) It is created in favour of the creditor.

4) It may be of any one of two kinds ;

     a) By act of parties.

     b) By operation of law.

IMPORTANT POINTS RELATED TO CHARGE

• A charge is created only on immovable property.

• It cannot give rise to pecuniary liability.

• It may be created upon the wealth or property of a person.

• In a charge there is no covenant to pay.

• In a charge there lies no personal liability.

• A charge is not subject to the redemption or foreclosure.

• A charge created by operation of law dose not require registration.

• A charge created by act of parties requires registration irrespective of the amount involved.