SECTION 56 & 57

Section 56 in The Transfer of Property Act, 1882

Marshalling means arranging something. It means, when several properties are subject to a mortgage and one
of them is sold, free from encumbrance, the mortgagee is required to satisfy his debt from the other party
subject to the mortgage. In this regard, the arrangement has been made u/s 56 of the Act.
Here, it has been used in the sense of the purchaser’s right to make arrangements with regard to the sale of
mortgaged properties in such a manner that the mortgage debt is satisfied out of the property not sold to him. If
the owner of two or more properties mortgages them to one person and later on sells any one of such
properties then, the buyer is entitled to claim that mortgage debt is satisfied first from the properties not sold to
him and thereafter. If needed, property sold to him should be touched.
For instance: A is the owner of properties X, Y, and Z and mortgages these properties to M, and takes a loan of
Rs. 20,000. Later, A sells X to B. here X is one of the properties jointly mortgaged to M. Under this section, if M
enforces the mortgage for recovery of Rs. 20,000, B has a right to insist that the mortgage be realized out of
properties Y and Z alone. But if Y and Z could be sold say, only for 18,000 then the remaining Rs. 2000 may be
recovered from the property X sold to B.
However, this section provides that, if between seller and buyer, there is any contract contrary to this
rule, the buyer may agree to any other arrangement subject to which he consented to take property.
Marshalling under this section applies only between buyer and seller and not between other subsequent
purchasers.
Section 57 in The Transfer of Property Act, 1882
Provision by Court for encumbrances and sale freed therefrom.—(a) Where immovable property subject to any
encumbrances, whether immediately payable or not, is sold by the court or in the 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 encumbrance 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
investment, 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 large additional amount.
(b) Thereupon the Court may, if it thinks fit, and after notice to the encumbrance, 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 encumbrance, 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.
(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.
MP Varghese v Annamma Yacob & Ors (2020 SCC Ker 3321)
Section 57 of TPA provides a mechanism to any party to sale an immovable property which is 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.Facts: The appellant and the second respondent were siblings who had received the property of their father through
a registered partition deed in 1980 (Partition Deed). The Partition Deed contained a covenant that both the brothers must
pay a sum of INR 500 each to their sister, that is, the first respondent, within one year of the Partition Deed, failing
which the first respondent was allowed to recover it, for which purpose, the said amounts would stand charged on the
respective properties of the appellant and the second respondent. While the first respondent accepted the payment from
the second respondent, she refused to accept payment from the appellant due to her personal reasons, as a result of
which the property allotted to him under the Partition Deed (Appellant’s Property) was still burdened with this
obligation.
Section 57 of the TPA enables a party to the sale of an encumbered immovable property to apply to the court for a
declaration that the said property is freed from such encumbrance on deposit of sums as may be adjudged by the
court in accordance with Section and for issuance of a vesting order or an order of conveyance required to give
effect to the sale. 
In the first instance, the appellant had approached the District Court, Ernakulam (District Court) under Section 57 for
effecting the sale free from encumbrance. The District Court disallowed the appellant's plea for discharge of encumbrance on
the Appellant’s Property holding it to be not maintainable.
The appellant argued that Section 57 of the TPA applied to ‘out of court’ sales too, that is, sale transactions that are not
ordered by the court, as is manifested by the use of the words ‘or out of court’ in Section 57(a) of the TPA. The appellant
prayed that since the amount of Rs. 500 was fixed and did not include any additional charges or interest, the sum must be
treated as a capital sum, and he should be allowed to invoke Section 57 of the TPA. The appellant prayed that the impugned
order of the District Court is set aside, and the High Court permits him to deposit the amount of Rs. 500 favoring the first
respondent, and declare that the Appellant’s Property is free of the said encumbrance.
The first respondent submitted that Section 57 of the TPA could not apply to out-of-court sales and the appellant must
discharge the debt according to the provisions of Chapter IV of the TPA which deals with mortgages of immovable properties
and charges. It was further submitted that the first respondent was not willing to accept the money due to a deep-seated
conflict with her brother, the appellant. The first respondent however did not challenge the validity or effectiveness of the
Partition Deed and further admitted that the Partition Deed only charges the Appellant’s Property to the sum of Rs. 500 and
nothing more.
The High Court distinguished the role of the court in ‘court sales’ in which the court can 'direct' payment and the role of the court
in ‘out of court’ sales in which the court can 'allow' payment, and concluded, that Section 57 of TPA is intended to facilitate sale
out of court, as much as it is for sale by a court or in the execution of a decree.
The High Court further struck down the erroneous interpretation by the District Court to the extent that Section 57 can be
invoked only after the sale is over and instead clarified unequivocally that assistance of the court can be sought even while the
sale is proposed.
Applying the aforementioned legal principles the High Court allowed the appeal and set aside the impugned order of the District
Court, consequently, permitting the appellant to tender the amount of INR 500 to the first respondent, by depositing it in the
District Court; in which event, the same will be entitled to be withdrawn by her. The High Court further declared that on such
payment by the appellant, the Appellant’s Property will stand freed from the charge on it, created in pursuance of the terms of the
Partition Deed.