Section 100 of TPA : Section 100: Charges

Explanation using Example

Imagine John takes a loan from a bank to start a business. Instead of creating a mortgage, they agree that if John fails to repay the loan, the bank will have a charge over his commercial property. This agreement is documented and registered, creating a legal charge over the property. One day, John faces financial difficulties and cannot repay the loan. The bank decides to enforce the charge to recover the money owed.

In this scenario, Section 100 of the Transfer of Property Act, 1882, would apply. John's commercial property acts as security for the loan repayment, and the bank has a charge over it. The provisions that apply to a simple mortgage would, to an extent, also apply to the bank's charge, giving the bank certain rights to recover the loan by selling the property or taking legal action to enforce the charge.