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Court can declare a property free from encumbrances even against will of the encumbrancer: Kerala High Court

Kerala High Court

Court can declare a property free from encumbrances even against the will of the encumbrancer as per Section 57 of the Transfer of Property Act, 1882: Kerala High Court

Kerala High Court

Synopsis: A property can be declared to be free from encumbrances by the court even if the encumbrancer does not allows for the same.

On 5th August 2020, the Kerala High Court explained the procedural mechanism for lifting encumbrance from an immovable property pursuant to Section 57 of the Transfer of Property Act 1882.

The order was demonstrated in the case of M.P.Varghese v. Annamma Yacob, where the appellant filed an appeal against the Additional District Court’s order, Ernakulam, rejecting his petition for discharge of encumbrance on his property under Section 57 of the Transfer of Property Act (TPA), 1882, for effecting the sale.

The property of the appellant bear a charge of Rs. 500, payable to the Respondent, his sibling. This sum was charged on the property in the partition deed executed by his father in favour of his sister. The conflict arose when the Appellant wanted to sell the encumbranced property in order to get his daughter married while the Respondent declined to accept the amount because of her personal reasons.

The District Court dismissed the Appellant’s application pursuant to Section 57, holding that the provision can not be enforced “where a payment direction is required to be imposed in a partition deed.”

The High Court bench, led by Justice Devan Ramachandran, highlighted the “powerful and substantive” mechanism under the same provision and the judgment implies relevance as there is no precedent in this matter.

Section 57 of the Transfer of Property Act, 1882, provides that when an immovable property subject to any burden is sold by a court or by execution of a judgment or out of court, the court may, if it deems fit, order or require payment to the Court, upon application by any party to the sale, finds it appropriate to dispense with such notice, declare the property to be released from such encumbrances.

Transfer of Property

In Wilberforce v. Wilberforce, (1915) 1 Ch 94, the court relied on the decision of an English court, under which it was held that the purpose as a whole is not to disturb any rights acquired or otherwise more than is necessary, but to enable the sale to take place and the property to be transferred to the purchaser, in spite of the fact that there may be on the ground a liability for payment of a future sum which would have clearly prevented the sale of the land free of encumbrances, but for the provisions of that section.

The Court has clarified that Section 57 of TPA, has been enacted to assist any party in the sale of an immovable property that is subject to an encumbrance, in order to bear profit in case of sale for its fair value. This is enabled by allowing the buyer of the immovable property to receive either the capitalized value of the periodic charge or the amount of capital charged on the property, as the case may be, along with incidental charges, in deposit.

The High Court has made it clear that the provision allows for the transfer of immovable properties, whether ‘by a judge’ or ‘out-of-court’ as well as ‘in enforcement of an order.’

It was held that the provision further provides that, in the case of the sale of immovable property subject to an encumbrance being sold by a court, or in the execution of a decree, or out of court, any party to it can appeal for a declaration that the immovable property is free of any rights; in that case, the appropriate court may direct or allow payment, necessary to satisfy the encumbrances on the property, to the property.

Therefore, the appeal was allowed and the impugned order of the District Court was set aside.

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