Marshalling securities
Section 81 of the Transfer of Property Act, 1882 deals with marshalling securities. If the owner of two or more properties mortgages them to one person and then mortgages one or more of the properties to another person, the subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior mortgagedebt satisfied out of the property or properties not m The Act came into force on 01 Jul 1882.
1[81. Marshalling securities.-- If the owner of two or more properties mortgages them to one person and then mortgages one or more of the properties to another person, the subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior mortgagedebt satisfied out of the property or properties not mortgaged to him, so far as the same will extend, but not so as to prejudice the rights of the prior mortgagee or of any other person who has for consideration acquired an interest in any of the properties.]
Section 81, The Transfer of Property Act, 1882 (Act 4 of 1882).
Cross-references
Extracted from the operative text of the enactments themselves. Every destination below exists in our corpus.
Referred to by 1
Related judgements & precedents
These are some judgments that construed this section, and hold precedence value. They hold authority on how to read, interpret and use this section.
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J. P. Builders vs A. Ramadas Rao
Court's Decision & Legal Precedent
In a suit for specific performance of a property sale agreement, the plaintiff must establish continuous readiness and willingness to perform his obligations from the date of contract to the date of decree through conduct, part-payment, and financial capacity. Readiness refers to financial capacity while willingness refers to conduct of the plaintiff. When a contract involves obtaining clearance from a third party (such as a bank) for release of mortgaged property, such obtaining of clearance is an incidental and implied covenant on the vendor's part and does not make the contract contingent or impossible to perform. The equitable doctrine of marshalling under Section 56 of the Transfer of Property Act, 1882 is available to a decree holder in a suit for specific performance to ensure that the mortgagee exhausts its remedy from other properties of the mortgagor before proceeding against the property sold to the subsequent purchaser, provided such application does not prejudice the mortgagee's rights. A pure question of law can be raised for the first time at the appellate stage even if not specifically pleaded at trial, particularly when larger relief was prayed in the plaint.
On this section: Deals with marshalling by subsequent mortgagee; distinguished from Section 56 which applies to sales; both rest on principle that creditor with multiple funds should not prejudice other creditors
The holding above is the ratio decidendi as extracted from the judgment by eCourts India, reproduced unaltered — it is a rendering of the court's reasoning, not a substitute for its words. Read the order itself before relying on it.
Questions about Section 81
What have the courts held on Section 81 of the Transfer of Property Act?
J. P. Builders vs A. Ramadas Rao (22 Nov 2010) is the leading judgment on this section among those set out below: Deals with marshalling by subsequent mortgagee; distinguished from Section 56 which applies to sales; both rest on principle that creditor with multiple funds should not prejudice other creditors.
How do I find court cases under Section 81 of the Transfer of Property Act?
In judgments and charge sheets this section is written several ways, and each form finds a different set of orders. These search the full text of every order eCourtsIndia holds, best matches first: TP Act 81, section 81 TP Act, section 81 of the Transfer of Property Act. People searching for it also type tpa 81a. Each opens the full list of orders on eCourtsIndia, where it can be narrowed by court, year and outcome. 1 reported judgment on this section is set out on this page, beginning with J. P. Builders vs A. Ramadas Rao (22 Nov 2010).
What should I read with Section 81 of the Transfer of Property Act, and has it changed?
1 other provision in this corpus refers back to it.
When did Section 81 of the Transfer of Property Act come into force?
Section 81 of the Transfer of Property Act, cited as TP Act 81, came into force on 01 Jul 1882, having been enacted on 17 Feb 1882. It is in force as at the date shown on this page.
Other sections of this Act
- 55. Rights and liabilities of buyer and seller1096 words
- 108. Rights and liabilities of lessor and lessee1030 words
- 69A. Appointment of receiver892 words
- 3. Interpretation-clause658 words
- 35. Election when necessary614 words
- 58. Mortgage , mortgagor , mortgagee , mortgage-money and mortgage- deed defined554 words
Source and method. Compiled from the enactments of Parliament and of the State legislatures as published on India Code, and republished together with commentary and other original matter under section 52(1)(q)(ii) of the Copyright Act, 1957. Structured, cross-referenced and maintained by eCourtsIndia. Text as in force on 15 Oct 2026. This page is not a substitute for legal advice.