Transfer of property Act, 1882
Dr. Tanmoy Mukherjee
[Advocate]
PRIORITY OF RIGHTS [Section 48 of the Transfer of Property Act, 1882]-
Tanmoy Mukherjee
[Advocate]
Section 48 of the Transfer of Property Act, 1882 deals with priority of rights (related by transfer). Section 48 is based on the English equitable maxim 'qui prior est tempore, potiorest jure', which means "he, who is first in point of time has a better claim in law". This is a principle of natural justice that if rights are created in favour of two persons over the same property at two different times, the one that has been created first shall have advantage in law.
Section 48 runs as follows:
Where a person purports to create by transfer at different times rights in or over the same immovable property, and such rights cannot at all exist or be exercised to their full extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created.
Example-
A mortgages property X to B and then mortgages the same to C and again mortgages the same X to D. Now property is not sufficient to meet the debts of B, C and D under Section 48, B will get priority over C and D; and C can also get the priority over D.
-If two mortgages executed on the same date, priority would be given on the basis of evidence, which is firstly, executed.
Exceptions-
Many exceptions have been recognized to this rule, viz-
(1) Section 78 of this Act provides that where through the fraud, misrepresentation or gross negligence of prior mortgagee, another person has been induced to advance money on the security of the mortgaged property, the prior mortgagee shall be postponed to the subsequent mortgagee.
(2) Section 50 of the Registration Act gives a subsequent registered deed priority over a prior unregistered deed of which registration is optional. This exception, however, is subject to the doctrine of notice.
(3) In-a suit for partition, if a receiver, under the direction of the Government mortgages the whole or part of the estate, the mortgagee would be entitled to priority over an execution creditor by whom the property was attached after the commencement of the suit for partition.
(4) A lien of a co-sharer for owlety money on partition is entitled to precedence over prior mortgagees of property allotted to the co-sharer who is liable to pay owlety.
(5) Under Section 98 of the Bengal Tenancy Act, 1885, a previous mortgage by a co-owner of his share was subject to a subsequent charge created by a manager over the whole estate.
Transferee's right under policy (Section 49)-
-Where immovable property is transferred for consideration, and such property or any part thereof is at the date of the transfer insured against loss or damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to the contrary, require any money which the transferor actually receives under the policy, or so much thereof as may be necessary, to be applied in reinstating the property.
Rent bona fide paid to holder under defective title (Section 50)-
-No person shall be chargeable with any rents or profits of any immovable property, which he has in good faith paid or delivered to any person of whom he in good faith held such property, notwithstanding it may afterwards appear that the person to whom such payment or delivery was made had no right to receive such rents or profits.
Illustration-
A lets a field to B at a rent of Rs.50, and then transfers the field to C. B, having no notice of the transfer, in good faith pays the rent to A. B is not chargeable with the rent so paid.
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