Section 93 of Transfer of Property Act, 1882 - Prohibition of Tacking

Section 93 of the Transfer of Property Act, 1882 establishes the prohibition of tacking in mortgage transactions. It prevents a mortgagee from improving the priority of an existing mortgage merely by paying off an earlier mortgage, and generally prevents a later advance from taking priority over an intervening mortgage. The provision expressly preserves the exception under Section 79.

Section 93 - Full statutory provision

What does prohibition of tacking mean?

Tacking refers to an attempt to combine a later payment or advance with an earlier mortgage so that the later amount benefits from a more favourable priority against an intervening mortgagee. Priority is the order in which competing mortgage interests are entitled to satisfaction from the mortgaged property. Under Section 58(a), a mortgage is a transfer of an interest in specific immovable property for securing payment of money or performance of an obligation that may give rise to pecuniary liability.

Section 93 protects the priority of intervening mortgage interests. A mortgagee cannot, simply by discharging a mortgage that predates an intermediate mortgage, promote the ranking of the mortgagee's original security. Nor can the mortgagee ordinarily treat a new advance as having priority over an intermediate mortgage.

Two principal rules under Section 93

1. Paying off a prior mortgage does not improve the original security

Suppose a property is mortgaged first to A, later to B and then to C. If C pays off A's prior mortgage, that payment does not, by itself, elevate C's original mortgage above B's intermediate mortgage. The provision applies whether C had notice of B's mortgage or not. Any separate rights claimed on another legal basis must be examined on their own terms; Section 93 itself does not confer the claimed improvement in original priority.

2. A subsequent advance generally does not obtain earlier priority

Suppose A takes a mortgage, B subsequently takes an intermediate mortgage, and A later lends additional money to the mortgagor. A cannot ordinarily attach that later advance to the earlier mortgage so as to defeat B's intervening interest. Notice or lack of notice of B's mortgage does not alter the general prohibition. The express exception is the situation governed by Section 79.

Exception under Section 79: mortgages securing future advances

Section 79 concerns a mortgage made to secure future advances, performance of an engagement or the balance of a running account, where a maximum amount is expressed and the conditions specified in that section are met. In that situation the mortgage may have priority for the amount secured, up to the expressed maximum, notwithstanding an intervening mortgage. This is a specific statutory exception, not a general permission to give every later advance earlier priority.

Practical example

On 1 January, an owner mortgages land to Lender A for Rs. 10 lakh. On 1 March, the owner mortgages the same land to Lender B for Rs. 6 lakh. On 1 June, A makes a further advance of Rs. 4 lakh. Under the ordinary rule of Section 93, A cannot automatically claim that the additional Rs. 4 lakh ranks ahead of B's March mortgage merely because A holds the January mortgage. Whether Section 79 applies depends on the original mortgage instrument and the statutory requirements for future advances.

Likewise, if a third mortgagee C later pays A's first mortgage, C cannot simply use that payment to move C's own original mortgage ahead of B's intervening security.

Section 92 subrogation compared with Section 93 tacking

Section 92 (subrogation) provides, subject to its conditions including full redemption, for specified persons to acquire the redeemed mortgagee's rights. Section 93 addresses a different question: it prevents a mortgagee from gaining enhanced priority for that mortgagee's original security merely through payment of a prior mortgage or through subsequent advances, except as expressly allowed. The distinct requirements of the two provisions should not be conflated.

Points to examine in a priority dispute

• Dates of each mortgage and each advance, together with the property interests covered.
• Mortgage deeds, registration records, terms concerning future advances and any expressed maximum amount.
• Whether the alleged priority is for an original loan, a subsequent advance, or a separately asserted right arising from redemption.
• Whether the conditions of Section 79 or Section 92 are actually satisfied.
• Applicable local amendments and binding judicial decisions affecting the particular transaction.

Official legislation and related reading

Consult the Transfer of Property Act, 1882 (India Code official text) and the Transfer of Property Act overview. See also Section 92 - Subrogation and Section 94 - Rights of mesne mortgagee.