Transfer of Property Act Section 57 — Provision by Court for incumbrances and sale freed therefrom
CHAPTER III OF SALES OF IMMOVEABLE PROPERTY — Discharge of Incumbrances on Sale
General
Summary
When a property that has a loan or other charge on it is sold through a court or under a court order, the court can allow the buyer to pay the money owed on that charge into court instead of directly to the lender. The court decides how much money is needed to cover the charge, including interest and possible extra costs, and can set aside a small additional amount for unexpected expenses. Once this money is paid in, the court can declare the property free of the charge and handle the transfer of ownership to the buyer. The court will then distribute the money to the people who are entitled to it, and any decision made by the court under this process can be appealed like a regular court judgment.
Official Text
(a) Where immoveable property subject to any incumbrance, whether immediately payable or not, is sold by the Court or in execution of a decree, 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,—
(1) in case of an annual or monthly sum charged on the property, or of a capital sum charged on a determinable interest in the property—of such amount as, when invested in securities of the Central Government, the Court considers will be sufficient, by means of the interest thereof, to keep down or otherwise provide for that charge, and
(2) in any other case of a capital sum charged on the property—of the amount sufficient to meet the incumbrance and an 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 reasons (which it shall record) thinks fit to require a larger additional amount.
(b) Thereupon the Court may, if it thinks fit, and after notice to the incumbrancer, unless the Court, for reasons to be recorded in writing, thinks fit to dispense with such notice, declare the property to be freed from the incumbrance, and make any order for conveyance, or vesting order, 1. The words “with notice of the payment” omitted by Act 20 of 1929, s. 17. 2. Subs. by s. 18, ibid., for s. 56. proper for giving effect to the sale, and give directions for the retention and investment of the money in Court.
(c) 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.
(d) An appeal shall lie from any declaration, order or direction under this section as if the same were a decree.
(e) In this section “Court” means
(1) a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction,
(2) the Court of a District Judge within the local limits of whose jurisdiction the property or any part thereof is situate,
(3) any other Court which the State Government may, from time to time, by notification in the Official Gazette, declare to be competent to exercise the jurisdiction conferred by this section.