Sections 81-82 explained: this guide covers what it means, who it applies to, the step-by-step process, documents required, fees, due dates and penalties in India — so you can stay compliant with confidence and avoid costly mistakes.
Sections 81 and 82 deal with fairness among those whose property is tied up in the same mortgage. Section 81 lets a later mortgagee push an earlier debt on to properties that are not mortgaged to him. Section 82 makes co-owners, and the properties of one owner, share a debt rateably. This is explained as per the text of the Act consulted.
Section 81 (marshalling): if an owner mortgages two or more properties to one person and then mortgages one or more of them to another, the subsequent mortgagee may, unless the contract says otherwise, have the earlier debt satisfied out of the properties not mortgaged to him, so far as they will extend, without prejudicing the prior mortgagee or any purchaser for consideration. Section 82 (contribution): properties of different owners, or of one owner in the stated case, contribute rateably to the debt, valued at the date of the mortgage after deducting other mortgages or charges.
Source note
The text consulted is a publisher's print of the Act showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003); later amendments should be checked. Section 81 is printed inside square brackets, and the first paragraph of section 82 is too, which marks inserted or substituted wording. The group is headed "Marshalling and contribution" in the copy.
Printing slip. Section 81 reads "satisfied out of the property to properties not mortgaged to him". It reads as though "or" was meant between "property" and "properties". It is flagged and quoted as printed.
A related idea, marshalling by a purchaser, is in our article on sections 56 and 57. For help in reading such a priority question on your own property, a legal consultation before you lend or buy is a sensible step.
Section 81: marshalling securities
The setting. The owner of two or more properties mortgages them all to one person, and then mortgages one or more (not all) of them to another person.
The rule. The subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior mortgage-debt satisfied out of the property or properties not mortgaged to him, so far as they will extend.
The limit. This must not prejudice the rights of the prior mortgagee or of any other person who has for consideration acquired an interest in any of the properties.
Example. Gaurav owns a flat and a shop. He mortgages both to Bank A for a loan. Later he mortgages only the flat to Neha. Under section 81, Neha can ask that Bank A's debt be recovered from the shop, which is not mortgaged to her, as far as the shop will go. But Bank A's rights are not to be prejudiced, and neither are the rights of someone who bought an interest in the shop for consideration.
Section 82: contribution to the mortgage debt
Section 82 has three paragraphs.
Paragraph 1: separate owners. Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership, their shares or parts are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage. To fix each share's rate, its value is deemed to be its value at the date of the mortgage, after deducting the amount of any other mortgage or charge to which it was subject on that date.
Paragraph 2: two properties of one owner. Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another, and the former debt is paid out of the former property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to the latter debt, after deducting the amount of the former debt from the value of the property out of which it has been paid.
Paragraph 3: the link with section 81. Nothing in section 82 applies to a property liable under section 81 to the claim of the subsequent mortgagee. The word "subsequent" is in square brackets in the copy.
Side-by-side
| Feature | Section 81 (marshalling) | Section 82 (contribution) |
|---|---|---|
| Who benefits | The subsequent mortgagee | Those who bear the debt, by sharing it |
| What it does | Pushes the prior debt to properties not mortgaged to him | Spreads the debt rateably across shares or properties |
| Value measured at | Not stated | Date of the mortgage, after deducting other mortgages or charges |
| Contract can change it | Yes ("in the absence of a contract to the contrary") | Yes |
| Protected | Prior mortgagee; purchasers for consideration | Section 81 claims take priority over this section |
Worked example on contribution
Two sisters, Anjali and Bharti, own distinct plots that were mortgaged together for one loan of Rs. 6,00,000. At the date of the mortgage, Anjali's plot was worth Rs. 10,00,000 with no other burden; Bharti's was worth Rs. 8,00,000 but already carried another mortgage of Rs. 2,00,000. For section 82, Bharti's plot is valued at Rs. 6,00,000 (after deducting the other mortgage). So the two values are Rs. 10,00,000 and Rs. 6,00,000, and the debt is shared in that ratio of 10 to 6, unless a contract provides otherwise. These figures are our own illustration of the method; the Act prints no amounts.
Comparing with the purchaser's rule
Section 56, explained in the article on sections 56 and 57, gives a similar benefit to a purchaser of one of the properties. Section 81 gives it to a subsequent mortgagee. Reading both together shows who can ask for the other properties to be used first.
The idea of sharing a burden among several obligors also appears in a different law. See our article on joint promisors and contribution under the Indian Contract Act, 1872; the reader should check the current law for the corresponding provision of that Act.
Practical points
- Later lenders: check how many properties the earlier mortgage covers; marshalling may help.
- Owners: know how your plot is valued at the mortgage date for contribution, and what other charges it had then.
- Draft the deed: both sections give way to a contract to the contrary.
- Buyers: a purchaser who has paid for an interest in any of the properties is protected from marshalling under section 81.
Need help with multiple mortgages or co-owned security?
If several people own the mortgaged property, or several lenders hold security on the same assets, the order of recovery can turn on these two sections. Our legal consultation team can look at your documents and explain the position.
Key takeaways
- Section 81 lets a subsequent mortgagee have the prior debt met from properties not mortgaged to him, as far as they extend.
- It must not prejudice the prior mortgagee or a purchaser for consideration.
- Section 82 makes separate owners' shares contribute rateably, valued at the mortgage date less other charges.
- It also covers one owner's two properties where the second mortgage covers both.
- Section 82 does not apply to property liable under section 81.
- Both yield to a contract to the contrary.
Read next
- Sections 56 and 57: marshalling by purchaser and sale discharged from encumbrances
- Sections 78 and 79: priority between mortgagees
- Sections 83 and 84: deposit of mortgage money in Court
- Property transfer compliance checklist
Disclaimer: Based on a publisher's print of the Transfer of Property Act, 1882 showing amendments up to the Transfer of Property (Amendment) Act, 2002 (3 of 2003), as consulted on 2 October 2026. State amendments, later amendments, stamp duty and registration charges are not covered and should be checked. This article is general information, not legal advice; check the official text before acting.