The doctrine of marshalling entitles the subsequent purchaser and puisne mortgagee to claim the right of marshalling.
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Section 56 and 81 of the TPA, 1882 are applicable in a situation where the mortgagees have the same debtor or mortgagor. The debtor or mortgagor should be the owner of two or more properties. This is essentially what is
marshalling by subsequent purchaser.
Looking to buy or sell your property? Make it happen here. Post free property ad on NoBroker If you need any legal assistance to scrutinise property documents, just fill your details here and NoBroker expert lawyers will connect with you Essential Ingredients of Section 56 of TPA, 1882:The owner must have two or more properties;
There must a common mortgagor or debtor between two or more mortgagees;
Marshalling in transfer of property act dictates that
the owner must sell one or more properties out of those properties to a purchaser after mortgaging them to the mortgagee;
The doctrine of marshalling will not be applied to prejudice the rights of third parties.
The subsequent purchasers have been conferred with a power to make the mortgagee satisfy his debts out of the properties which are not sold to the purchaser.
If a mortgagee obtains a foreclosure decree, then he is entitled for the protection of the said law.
Section 56 does not apply in the following cases –
Auction Sale
Leases
Purchases subject to prior encumbrance
The owner must have two or more properties;
The owner must mortgage those properties to one mortgagee and afterwards mortgages one or more of the properties to a puisne mortgagee;
There must be a common mortgagor between two or more mortgagees;
The doctrine of marshalling will not be applied to prejudice the rights of third parties.
Under this section the subsequent or puisne mortgagee has been privileged to make the prior mortgagee satisfy his debts out of the properties which are not mortgaged to the puisne mortgagee.
This right is given against the mortgagor.
This right cannot be used:
To prejudice the right of prior mortgagee;
To defeat or unduly delay the mortgagees;
To cause injury to the rights of third parties.
I believe this should clarify what is
marshalling by subsequent purchaser to you. Let me know in comments if you have any questions.
Read more:
What are the rights and liabilities of buyer and seller
What is exchange under Transfer of Property Act
What is spes successionis
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What is marshalling by subsequent purchaser?
Udvesh
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2 Year
2022-08-26T10:48:59+00:00 2025-02-21T00:06:37+00:00Comment
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