In this post of distinctive law terms, I publishes two different forms of security over immovable property, viz charge and lien. Sections 100 and 101 of the transfer of property act in India deals with charge. It arises when one person takes money from another as debt and gives his immovable property as a security for the repayment of that money so as to get discharged from the debt. This is very much similar to simple mortgage.
On the other hand, a lien is a type of security interest created over an immovable property in order to secure the payment of a debt.
Now we should examine the distinctive features which separates the charge and lien.
- Charge can form by the act of parties or by the operation of law. Lien arises by operation of law only.
- To whom property is mortgaged is called Charge holder in case of Charge and in lien it is Lien holder.
- Charge is applicable in case of securing debt over immovable property. A lien forms in case of securing debt over both immovable and movable properties.
- Charge is not possessory. Lien is possessory.
- Legal remedy for charge holder is by way of selling property for realizing money charged upon it by way of debt. A lien holder can make a private sale of property for getting the money back and thereby debt is discharged.