Question

Which of the statements regarding the characteristics of ‘Charges’ given under Section 100 of the Transfer of Property Act, 1882, is not true?

• A. A charge may be created on the property by act of parties
• B. A charge may be created on the property by operation of law
• C. A charge on the property amounts to a mortgage
• D. All the provisions of the Transfer of Property Act, 1882 relating to simple mortgage shall, so far as may be, apply to charge

Hint:

Remember: every mortgage is a charge, but every charge is not a mortgage.

Answer 1

The Correct Option is C

Step 1: Meaning of charge under Section 100 TPA.
A charge is a security created over immovable property for payment of money, without transferring any interest in the property.
Step 2: Modes of creation.
A charge may arise either by act of parties or by operation of law, which makes options (A) and (B) correct.
Step 3: Distinction between charge and mortgage.
A charge does not amount to a mortgage because, unlike a mortgage, it does not involve transfer of interest in the property.
Step 4: Applicability of mortgage provisions.
Section 100 expressly provides that provisions relating to simple mortgage apply to charges so far as may be, making option (D) correct.
Step 5: Conclusion.
Thus, the incorrect statement is (C).