IMPORTANT POINTS
Section 83 of the Code of Civil Procedure makes provisions for the discharge of a mortgage on property after it has become due. This Section also provides for the declaration of an encumbered property, which is the subject matter of a sale, to be free of the encumbrance; however, with a cardinal difference that the court cannot compel the mortgage to accept the deposit in discharge of the mortgage. As far as Order XXXIV Rule 12 of the CPC is concerned, it provides that where any property subject to a prior mortgage is ordered to be sold, the court may, with the consent of the prior mortgagee direct that it be sold free from the mortgage, giving to the mortgagee the same interest in the proceeds of the sale as he had in the property sold.

JUDGMENT :

A very efficacious, substantive and procedural mechanism to facilitate the realisation of the deserving and intrinsic value of encumbered estates and other immovable properties -within the annals of the Transfer of Property Act, 1882 ('the TP Act' for short) -strangely appears very rarely to have been invoked in Courts, which impression is inevitable because the case law on it is scarce, if not, none.

2. The provision in reference is Section 57 of the TP Act, which enables any party to the sale of immovable property burdened by an encumbrance, to apply to Court for a declaration that the said property is freed from such encumbrance on deposit of sums to be adjudged by it; and for the issuance of an order of conveyance or vesting order, proper for giving effect to the sale.

3. The apparent fact that this Section, though in the TP Act for the past more than a century and quarter, has attracted little or no reported judgments anywhere in India, obligates me to examine it very closely and carefully from both its academic and practical ambit.

4. This Section of the TP Act is, with the exception of its last two sub sections, almost verbatim of Section 5 of the English Conveyancing and Law of Property Act, 1881 ('the English Act' for short), which reads as below:

“5.-(1) Where land subject to any incumbrance, whether immediately payable or not, is sold by the court, or out of court, the court may, if it thinks fit, on the application of any party to the sale, direct or allow payment into court, in case of an annual sum charged on the land, or of a capital sum charged on a determinable interest in the land, of such amount as, when invested in government securities, the court considers will be sufficient, by means of the dividends thereof, to keep down or otherwise provide for that charge, and in any other case of capital money charged on the land, of the amount sufficient to meet the incumbrance and any interest due thereon; but in either case there shall also be paid into court such additional amount as the court considers will be sufficient to meet the contingency of further costs, expenses, and interest, and any other contingency, except depreciation of investments, not exceeding one tenth part of the original amount to be paid in, unless the court for special reason thinks fit to require a larger additional amount.

(2) Thereupon, the court may, if it thinks fit, and either after or without any notice to the incumbrancer, as the court thinks fit, declare the land to be freed from the incumbrance, and make any order for conveyance, or vesting order, proper for giving effect to the sale, and give directions for the retention and investment of the money in court.

(3) After notice served on the persons interested in or entitled to the money or fund in court, the court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof.

(4) This section applies to sales not completed at the commencement of this act, and to sales thereafter made.”

5. After adopting the afore Section of the English Act (which, subsequently, was replaced by Section 50 of the Law of Property Act, 1925 in England) with minor modifications like substituting the word 'land' with 'immovable property' or adding that the words 'in execution of a decree' along with sale by court or out of court and such other, Section 57 of the TP Act, through sub-sections (d) and (e) thereof, enable an appeal from any declaration, order or directions issued by a Court thereunder, as if it were a decree and stipulates that 'Court' in this section means either a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction; or the Court of a District Judge within the local limits of whose jurisdiction the property or any part thereof is situated; or any other Court which the State Government may, from time