Vol. 12 · pages 506–510

485THE TRANSFER OF PROPERTY ACT 3. If property is sold free from incumbrances, the seller must discharge it. If sold, subject to incumbrances, then the interest on incumbrances upto sale must also be paid by the buyer— 26 Bom. S. R. 942. RIGHTS OF BUYER AND SELLER RIGHTS OF THE SELLER I. BEFORE C ONVEYANCE 1. Section 55 (4) (a)— To take rents and profits. 1. Until conveyance, the seller continues to be the owner. Therefore, he has a right to take rents and profits of the property. II. AFTER C ONVEYANCE 1. Section 55 (4) (b)— To claim charge on property for price not paid. 1. If the sale is completed by conveyance and the price or any part of it is unpaid, the seller has under this subsection a charge for the price or for the balance. 2. The charge is a non-possessory charge i. e. it does not give a right to retain possession. As the ownership has passed, the charge gives the seller no right to refuse possession—30 Mad. 524 ; 43 Mad. 712 ; 23 Bom. 525 ; 34 Mad. 543. 3. The charge being on the property, it does not matter if there are several purchasers who had agreed among themselves to pay in a certain proportion. 4. The claim for a charge for unpaid price, not only subsists against the original buyer, but is also available against a transferee without consideration or a transferee with notice of non-payment. 5. The charge is not only for the purchase money but also for interest on the purchase money. 6. The right to a charge for interest commences only from the date on which possession has been delivered. The right to include interest for the purposes of a charge on the property before

486 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES possession has been delivered depends upon the equities and circumstances of the case. Illustration.—If the purchaser retains part of the purchase money as security for the seller discharging an incumbrance, he is not liable to pay interest. 7. English and Indian Law. (i) Under the English Law the seller has a lien from the date of the Contract. (ii) Under the Indian Law the charge begins from the date of the conveyance. (iii) The reasons for this difference :— (a) Under the English Law, the seller parts with the estate as a result of the contract. (b) Under the Indian Law, the seller parts with it as a result of conveyance. (c) The result is the same, for both give the right to proceed against the property. The only difference is that the English lien being equitable, can be moulded by equity to suit circumstances. While the Indian charge being statutory, is rigid and must conform to the terms of the statute. BUYER’S RIGHTS I. BEFORE C ONVEYANCE 1. Section 55 (6) (b)— To claim a charge on the property for purchase money paid before conveyance. 1. The clause as worded makes no sense. It is in two parts. If the clause “unless he has improperly declined to take delivery” which is negatively put was put positively to read “if he has properly declined” then there is no distinction between the two clauses. 2. But there is a distinction between the two parts which is a distinction arising from burden of proof. Under the first part, the purchaser is entitled to certain rights which he can enforce “unless he has improperly declined to take delivery” which means that he is to lose those rights if the seller proves that he, the

487THE TRANSFER OF PROPERTY ACT purchaser, has improperly declined to accept delivery. Under the second part of the clause, the purchaser gets certain additional rights which he can claim, only if, he can show that “he has properly declined to take delivery” and the burden of showing it will be upon him. 3. Under this clause, a buyer has a right to a charge for three things :— (i) for the amount of purchase money properly paid, (ii) for the earnest if any, (iii) for the costs awarded to him. 4. Charge for Purchase money paid. 1. This charge attaches from the moment the buyer pays any part of the purchase money. 2. Charge for purchase money is lost only when the seller proves that the buyer has improperly declined to take delivery. The burden of proof is upon the seller. 5. Charge for earnest and cost. (1) There is a possibility for a charge in respect of these two. But this possibility will be realized only if the buyer proves that he has properly declined to take delivery. The burden of proof is upon the buyer. 6. Earnest and Part Payment of Purchase money. (1) What is stated above about charge in respect of earnest applies only if the money paid is paid as earnest. (2) Money paid by a buyer before conveyance serves two purposes: (1) It goes in part payment of the purchase money for which it is deposited. (2) It is security for the performance of the contract. In the latter case it is earnest. In the former case it is instalment. (3) This difference is important because whether there would be a charge or personal liability or there would not be, would depend upon whether the payment made is Instalment or Earnest. (i) If it is earnest—There is no charge (except in the case of a buyer who proves that he has properly declined to take delivery). Earnest is

488 DR. BABASAHEB AMBEDKAR : WRITINGS AND SPEECHES wholly lost and there is not only no charge but there is even no personal liability. (ii) If it is part payment—There is a charge unless seller shows that the buyer has improperly refused to take delivery. Part payment is never wholly lost. If it fails to create a charge, it remains as a personal liability of the seller. (4) Whether it is part payment or earnest is matter of contract or intention. 7. The purchaser’s charge can be enforced against the seller and all persons claiming under him. 8. (1) The buyer loses his charge :— (i) By his own subsequent default. (ii) By his improperly refusing to take delivery. (2) Earnest money—There are two purposes underlyning Earnest:— (i) It goes in part payment of the purchase money. (ii) It is a security for the performance of the contract. It becomes part of the purchase money if the contract goes through. It is forfeited, if the contract falls through by reason of the fault or failure of the purchaser. II. AFTER C ONVEYANCE 1. Section 55 (6) (a)— To claim increment. 1. This must be so, because, after conveyance he is the owner. (Page left blank—ed.) Sales free Incumbrances 1. As far as possible, a sale ought to be free from incumbrances. To provide sales being made free from incumbrances T. P. Act contains two sections which make it possible. They are Section 56 and Section 57. zz

SECTION I THE NATURE OF A MORTGAGE I. DEFINITION. 1. Section 58 defines what is a mortgage. According to the section, there are three ingredients of a mortgage transaction :— (i) The transfer of interest. (ii) In specific immoveable property. (iii) For the purpose of securing the payment of money advanced by way of a loan. II. EXPLANATION OF THESE INGREDIENTS. (i) Immoveable property is not an essential ingredient of mortgage : (1) Under the English Law, all kinds of property, personal or real, can be made the subject of a mortgage. The Real estate may be corporeal or incorporeal and the personal estate may be in possession or in action. The Estate may be absolute or determinable i.e. for life: it may be legal or equitable. Not only any kind of property may be the subject-matter of a mortgage but any interest in it may be mortgaged, whether such interest is vested, expectant or contingent. (2) The Transfer of Property speaks only of immoveable property in relation to mortgages. This gives the impression that the law does not recognize the mortgage of a moveable property. This would be a mistake. The Transfer of Property Act merely defines and amends the law relating to property. It does not consolidate the law. It is, therefore, not a complete or exhaustive code of law relating to mortgage. (3) Mortgages of moveables are recognized in India. 9 C. W. N. 14 : 8 Bom. S. R. 344. (4) Law by which mortgages of moveables are governed. The Transfer of Property Act makes no provision: The Indian Contract Act makes no provision. Consequently the principles of English Law will be applicable to such mortgages. 34 Cal. 223 (228) : 27 Bom. S. R. 1449. (5) Mortgage of moveable property may be effected without writing. (6) Mortgage of an actionable claim—in writing—though moveable by reason of Section 130 T.P.—37 Bom. 198. (P. C.) Deposit of insurance policy.