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Section 97: Application of proceeds [Repealed]

Transfer of Property Act • Official Statutory Text & Practice Guide

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Act 1882
Section 96 All 137 Sections of Transfer of Property Act Section 98

Legal Commentary & Landmark Judgments: Section 97

Section 97 historically regulated the application of proceeds of a mortgage sale (repealed and codified in Order 34 Rule 12 and 13 CPC).

  • Sale Proceeds Distribution: Prescribed the statutory hierarchy of applying auction sale proceeds: expenses of sale, prior encumbrances, principal and interest, and surplus to mortgagor.
  • Procedural Transition: Repealed by CPC, 1908 and re-enacted in Order 34 Rule 13 CPC.
Key Landmark Precedents:
  • B. Arvind Kumar v. Govt. of India, (2007) 5 SCC 745: Examined distribution of auction sale proceeds under Order 34 Rule 13 CPC.
  • Asset Reconstruction Co. (India) Ltd. v. S.P. Velayutham, (2022) 8 SCC 210: Affirmed statutory priority of mortgage recovery out of auction proceeds.
Courtroom Practice & Strategic Litigation Guidance:

In execution of mortgage sale decrees, surplus sale proceeds after full debt satisfaction must be paid directly to the mortgagor under Order 34 Rule 13 CPC.

Section 96 All 137 Sections of Transfer of Property Act Section 98