Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property;
and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge.
Nothing in this section applies to the charge of a trustee on the trust-property for expenses properly incurred in the execution of his trust, and, save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.
Legal Commentary & Landmark Judgments: Section 100
Section 100 of the Transfer of Property Act, 1882 defines a 'charge', establishing the critical legal distinction between a charge and a mortgage, and protecting bona fide purchasers for value without notice.
Crucially, the second paragraph establishes that no charge shall be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge.
Statutory charges arise frequently by operation of law: municipal property tax arrears, maintenance decrees under Hindu law, and unpaid vendor charges under Section 55(4)(b) TPA. However, unlike a registered mortgage which binds the world via constructive notice, an unrecorded statutory charge cannot be enforced against an innocent buyer who purchased without notice.