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Charge

The document outlines the concepts of Charge, Actionable Claim, and License as defined under Indian property law. A Charge is a claim against immovable property for payment, distinct from a mortgage, while an Actionable Claim refers to a debt or beneficial interest in movable property that can be enforced legally. A License grants a personal right to use property without transferring interest, and it is revocable by the grantor.

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53 views5 pages

Charge

The document outlines the concepts of Charge, Actionable Claim, and License as defined under Indian property law. A Charge is a claim against immovable property for payment, distinct from a mortgage, while an Actionable Claim refers to a debt or beneficial interest in movable property that can be enforced legally. A License grants a personal right to use property without transferring interest, and it is revocable by the grantor.

Uploaded by

ratnakumari
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Charge, Actionable claim and License

Charge:
According to section 100 of the Transfer of Property Act, 1882, when
the immovable property of one party is (by an act of parties or
operation of law) pledged as security for the payment of money to
another, and the transaction does not constitute a mortgage, the later
would acquire a charge over the property.
In simple terms, a charge is a claim against an immovable property
acquired by one person (by the act of parties or by operation of law) as
security for payment to another, and the property is not mortgaged.
Example.
X has two daughters, P and Q. X gives his entire property to P and
puts a condition that P would be under an obligation to pay Rs 10,000
out of the property every month to Q. This amount of money would
constitute a charge in favour of Q. If P sells the property to a third
person (say Z), then Q can enforce her right against the third person
provided he (the third person, Z) has notice of this charge.
Essentials of Charge
(i) Immovable property of one person is made security for the payment
of money to another.
(ii) By the act of parties or by operation of law.
For example: An order of the court creates a charge upon certain
property of the husband to support her deserted wife for the
remainder of her life.
(iii) This transaction does not amount to a mortgage.
charge represents neither a transfer of property nor a transfer of
rights but rather the creation of a personal obligation or a right to
payment out of a specified property. All mortgages have a charge, but
no charges are mortgages.
JK Bombay Private Ltd vs New Kaiser-I-Hind Spinning and
Weaving Co Ltd (1968), the Supreme Court noted that a charge
doesn’t convey a property interest but rather a right to take payments
from the property, whereas a mortgage transfer a property interest.
Furthermore, it is not necessary to use a specific phrase to establish a
charge. The court said that to make a property security for payment,
there only needs to be a clear intent to do so.
Differences between Charge and Mortgage
Charge Mortgage
S.NO
Defined in section 100 of the Defined under section 58 of
1 TPA the TPA
2 No transfer of interest. Transfer of an interest in the
property.

3 There may or may not be a Transaction for the security


debt. of repayment of a debt

4 It can be in oral and written It must be in writing


form.
5 It is Right in Personam It is Right in Rem
6 Registration is compulsory Registration is compulsory.
only when it is created by
the act of the parties.

7 It is created either by an act It can be created by an act of


of parties or the operation of parties.
law.

Actionable Claim:
Actionable Claim is a species of property which is capable of
ownership and transfer. Sections 3, 130, 131 and 132 of TPA contain
provisions in relation to Actionable claim.
An actionable claim under the Transfer of Property Act (TPA) is a claim
to a debt or beneficial interest in movable property that can be
enforced by legal action.
 An actionable claim is a claim to a debt that is not secured by a
mortgage, pledge, or hypothecation.
 It can also be a claim to a beneficial interest in movable property
that is not in the possession of the claimant.
 The debt or beneficial interest can be existent, accruing,
conditional, or contingent.
llustrations
 A borrows Rs. 1000 from B and mortgages his house to him. The
mortgage debt is not an actionable claim.
 C owes Rs. 1000 to D. D’s claim is an actionable claim.
Instances of Actionable Claim
 Unsecured Debt
 Maintenance allowance payable in future
 A claim for return of earnest money
 Fixed deposit in bank
 Hire-purchase agreement
 Arrears of Rent
Transfer of Actionable claim:
 An actionable claim can be transferred by executing a written
instrument.
 The instrument must be signed by the transferor or their
authorized agent.
 The transferee can sue or institute proceedings for the claim in
their own name.
Jugalkishore Saraf Vs Raw Cotton Co. Ltd.,

The Supreme Court held that a judgment debt or decree is not an


actionable claim for action is necessary.

Lachmi Koeri Vs the State of Bihar

The Court has been pointed out the transfer of arrears of rent is a type
of a transfer of actionable claim. And the transfer of arrears of rent could
be transferred in accordance with the provisions of the Transfer of
Property Act.
License

 According to Section 52 of the Indian Easements Act, 1882 where


one person grants to one or more than one person a right to do in
or upon a certain immovable property something which would, in
the absence of such right, be unlawful, and such right does not
amount to an easement or an interest in the property, the right
thus created is called a license.

Essentials of a license

 Grant: A license is granted by the owner of the property, called


the grantor.
 Personal right: A license is a personal right to the person who
receives it, called the grantee.
 Revocable: A license can be revoked, except in certain
circumstances.
 Permissive: A license allows the grantee to do something that
would otherwise be illegal.
 No interest: A license doesn't give the grantee any interest in the
property.

Examples of licenses

 A driver's license allows someone to drive a vehicle


 A copyright license allows someone to use a copyrighted work
 A license to fish allows someone to fish in a certain area

Case Law:

Pradeep Oil Corporation vs. Municipal Corporation of Delhi


(AIR 2011, SC),
the Supreme Court explained certain other essentials of a license
as follows:
 A license cannot be assigned to someone else.
 The licensee cannot sue a third party in their own name.
 The grantor can revoke the license.
 The license is terminated when the grantor assigns the property
to someone else.

 Difference Between
Differences between easement and License-

License Easement

1.It defines right attached with the


1.It defines right in personam
property

2.It is revocable on the will of


2.It is not revocable at the will of grant
sgrant

3.It is non-transferable right 3.It is transferable right

4.continuous use is not necessary 4. continuous use is necessary

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