INTRODUCTION:

The research project will deal with the study of doctrine of Marshalling and the doctrine of
Subrogation and there will a comparative study between both the doctrines with respect to the
Transfer of property act, 1882. The doctrine of marshalling in the property deal with
marshalling of securities will be explained in the sections of 56 and 81 of the transfer of
property act that will deal with Marshalling by subsequent purchaser and Marshalling of
securities respectively. The doctrine of subrogation will be dealt in the sec.92 of the transfer
of property act with the support of sec.91 of the act. The main concept of marshalling will be
that to arrange and put, i.e., “the principle that a creditor who has the means of satisfying his
debt out of several funds shall not, by the exercise of his right, prejudice another creditor
whose security comprises only one of the funds in line”1 and the doctrine of subrogation will
be based on “is a right of a person to stand in the place of the creditor after paying off his
liabilities. In case of mortgage, subrogation takes place only by redemption. Therefore, in
order to be entitled to subrogation a person must pay off the entire amount of a prior
mortgage”2. ‘The concept of Marshalling is kind of inherited from the legal maxim "sic utere
tuo ut alienum non-laedas", which says that one should exercise their right in such a manner
that it does not unfairly prejudice on their neighbour's. The Organizing assets or securities
which are in the order in which they are adequate to serve different demands is known as
marshalling’3, The doctrine of marshalling protects all mortgagees' rights. The doctrine of
subrogation will be based upon “the insurer the right to receive the benefit of such rights and
remedies as the assured has against third parties in regard to the loss to the extent that the
insurer has indemnified the loss and made it good. The insurer is, therefore, entitled to
exercise whatever rights the assured possess to recover to that extent compensation for the
loss, but it must do so in the name of assured.” 4 The need of subrogation is also based on the
mere concept that might have the principle of indemnification inclusively in it in certain cases
and will have a detailed analysis of the implication of the process of subrogation. The
concepts of marshalling and subrogation will tend to vary in the scope and application and
the need and the value of the doctrines will have historical perspective to justify the need and

1
MacDougall, Bruce, “Marshalling and the Personal Property Security Acts: Doing unto Others”, 28 U. Brit.
Colum. L. Rev. 91 (1994)

2
M.V. Chandramathi, “ONE THOUGHT ON: THE DOCTRINE OF SUBROGATION UNDER TRANSFER OF PROPERTY
ACT”, International Journal of Mechanical Engineering and Technology (IJMET)
3
Radhika Saxena, Doctrine of Marshalling and Contribution, 20 January, 2020
https://indianjudiciarynotes.com/notes/transfer-of-property/doctrine-of-marshalling-and-contribution/
4
Idib 2 .
requirement of it and how far does the applicability is fairly used and justified in the Indian
legal system. The need for both the doctrines in the scope of property law will have different
reasons to be distinguished to the need and applicability of marshalling and subrogation in the
transfer of a property specified in Transfer of property act,1882 which will have the ambit of
law and legal fairness in it. The means of the perfectness in introducing in the Indian property
law aspect is to be compared and analysed, like the elements required for the doctrines to be
applied with the help of case laws and comments on the doctrines, As The project will be
dealing the evolution of the doctrines and analysing the scope and applicability of the
doctrines seek with limitations on the concept in the context of Indian property law.

STATEMENT OF PROBLEM:

The research paper will have the limitation or problem that these two doctrines are not
completely related to each other in the basic instance during the and will have different scope
of its application in the ambit of property law. The main issue will be concept of marshalling
and subrogation will fall under two categories of purchaser and securities and all these
happen through a pre-requisite of contracts that will lead to check for the principle to apply
for the benefits of the doctrine, but if the initial contracts made to carry this act are void or
void ab-initio then will the doctrines apply to the matter of the mortgaged property at the
instance, then what is the position of the doctrines with regard to it and check the problem in
benefit or loss.

RESEARCH OBJECTIVE:

The main objective of the research will be:

 To analyse the scope and applicability of both the doctrines of marshalling and
subrogation
 To study the evolution of the both doctrines in Indian law
 To study and analyse the elements of the doctrines and limitations that exists in the
legal system with applicability of the doctrines in property law.

HYPOTHESIS:

The assumption made in the case of the research is that both the doctrines are inculcated to
check that the transfer of property is carried out in a fair and way to maintain equity in the
system of lending and returning of goods and how far is maintaining equity and equality in
imposing the usage of the doctrines, but are they really followed for good conscience or it
tends to be manipulative in nature. The research paper will focus on the check and sorting of
the issue by a comparative study and seek the possible outcome of the problem.

RESEARCH QUESTION:

 Why will the doctrine of marshalling and subrogation be needed in the context of
property transfer in Indian law?
 What is the possibility finding the similarities and differences between both the
doctrines?

RESEARCH METHODOLOGY:

The Research paper will be based on a doctrinal research and comparative study and there
will certain comparative analysis in the case which will supported by primary and secondary
sources of references to support the area of research and also with the review of literature.

REVIEW OF LITERATURE:

 MacDougall, Bruce, “Marshalling and the Personal Property Security Acts: Doing
unto Others”, 28 U. Brit. Colum. L. Rev. 91 (1994)

In this article the author will mainly discuss about the doctrine of marshalling with
respect to its applicability in matter of securities and that will deal with the matter of
checking of the equities and seek remedies if there is a breach. The need of
marshalling in protecting the rights of the mortgagee who has done the mortgage and
scope of marshalling in protecting the rights during the transfer

 M.V. Chandramathi, One Thought on ―The Doctrine of Subrogation under

Transfer of Property Act, International Journal of Mechanical Engineering and
Technology 8(11), 2017, pp. 942–948.
This research paper the author will discuss about the doctrine of subrogation and look
in it with respect to the Indian law aspect and will look into the types of subrogation
and will check if the doctrine was good even in those parts of India where the Act
 itself was not applicable. This paper analyses as to how this doctrine evolved and was
made applicable in India and how it is applied in the present-day scenario.

 W. Strachan, Marshalling of Mortgages, 22 L. Q. REV. 307 (1906).

In this article MARSHALLING OF MORTGAGES is proposed in this article to state
the concepts helped to form the principles that regulate the doctrine of' Marshalling,'
and to add a few supplementary remarks as a statement, as well as to describe When a
paramount creditor obtains a specific and enforceable claim against separate land,
either implicitly or by operation of statute. though they were all owned by the same
people. Any person who is prejudiced by the exercise of the paramount creditor's
rights against a portion only of the whole properties charged who is involved in the
equity of redemption of that portion is entitled. As the review is mainly based on
English law and never looks into the Indian law aspect it will only be used to
understand the concept of the doctrine in the general sense and help it to interpret in
the Indian law aspect.

 Garnett, C. B, “The Equitable Doctrine of Marshalling the Assets of a Decedent's

Estate for the Payment of Debts.” The Virginia Law Register, vol. 10, no. 3, 1904,
pp. 175–182.
In this article, the author will discuss about the Equitable Doctrine of Marshalling the
Assets of a Decedent's Estate for the Payment of Debts in the scope of a transfer of a
property when mortgaged takes place, and the author studies the doctrine’s
application in the equitability nature of the payments done on the payment on the
remaining debts of a mortgaged property, and this will guide in the idea of having the
payment of debts in case of doctrine of marshalling is been implied and help in giving
more sense into the transfer. The article is more based on English law aspect and quite
few things are not clear in the Indian law relating to the statue that deal with doctrine
of marshalling.
 Weir, Tony. “SUBROGATION AND INDEMNITY.” The Cambridge Law
Journal, vol. 71, no. 1, 2012, pp. 1–7.
In this article, the author tries an effort to distinguish between the doctrine of
subrogation and indemnity and tries to work on how does it work in the system of
work that these are applied and how is one related to another in the scope of the
implication during performance of a period of performance of a contract. The
 discussion will be about Just financial loss from subrogation and indemnity. Now,
unless there is a special relationship, a person who claims solely financial harm as a
result of another's carelessness has no argument under tort law. This law is not an
error – it was deliberately adopted in the German Civil Code in 1896 – nor a
mediaeval skeleton – it has simply been preserved, thank god, by the Court of Appeal.
The instruments of subrogation and donation have the effect of ensuring that the only
people who have a claim for financial losses incurred by strangers' carelessness are
those who have been paying to bear the risk of the harm. The main matter of transfer
of property will not be clearly explained in the Indian law in this work.
 Radhika Saxena, Doctrine of Marshalling and Contribution, 20 January, 2020
https://indianjudiciarynotes.com/notes/transfer-of-property/doctrine-of-
marshalling-and-contribution
The author of this research paper would address the doctrine of subrogation and
analyse it in light of Indian law, as well as the various forms of Marshalling and
whether the doctrine was true even in cases where the Act itself did not apply. This
paper examines how this doctrine developed and was implemented in India, as well as
how it is currently practiced.

CHAPTER 1: EVOLUTION OF THE DOCTRINES OF MARSHALLING AND

SUBROGATION

This chapter will have the discussion about the evolution of the doctrines of
marshalling and subrogation, the mere concepts was introduced by the ambit of
English law as the idea of modern contracts and property was in India was mainly
governed by the scope of English law and as far the doctrines was implied in the
concept of law.
MARSHALLING:
The doctrine of marshalling is a long-standing fair solution dating back to the mid-
seventeenth century. The idea was given with the case law of Aldrich v. Cooper5
were it was given to be quoted that “A person having two funds shall not by his
election disappoint the party having only one fund, and equity, to satisfy both, will
throw him, who has two funds, upon that which can be affected by him only, to the
5
1803), 8 Ves. 382, 32 ER 402 (LC) at pg. 395
 extent that the only fund, to satisfy both, will throw him, who has two funds, upon
that which can be affected by him only, to the extent that the only fund, to satisfy
both, will throw him, who has two funds, upon that which can be affected by him
only, to the extent that the only.”6 The matter of marshalling in the need refers to the
process of putting together  the Section 81 of the Transfer of Property Act,  will have
the statement that if the owner of two or more properties mortgages them to one
person and then mortgages one or more of the properties to another person, the
subsequent mortgage is entitled to have the prior mortgage-debt satisfied out of the
property or properties not mortgaged to him, unless there is a contract to the contrary.
The entire idea is that the second creditor has an equitable right to compel the first
creditor to satisfy himself from the immunity to which the second creditor has no title.
Otherwise, the first creditor may satisfy himself out of every security in any order,
and if he chooses to satisfy himself out of the security that represents the second
creditor's only security, the second creditor is subrogated to the first creditor's rights
and can stand pro tanto in the first creditor's shoes in relation to the security over
which the second creditor has a claim.
SUBROGATION:
“Subrogation is a roman term, which means 'substitution' 7. Lord Hardwicke in his
decision in Randal V. Cockran8 marked its identification with equity, in his opinion
expressed, he suggested a possible theoretical basis for the doctrine and a justification
for the role of equity in the area of contribution. In a letter to Lord Kames, he had
noted that new commercial conditions, new methods of dealing with property, and
different forms of property made it necessary for equity to play a novel part in the
further development of subrogation.”
The case to adopt the word 'subrogation' was Stringer v. The English and Scotch
Marine Insurance Co9. In this case, the plaintiffs had insured ship cargo with the
defendants for 'taking it at sea, arrests, restraints, and detainment of all Kings, princes
and people.The ship was subsequently captured by a United States cruiser and taken
into New Orleans, where a suit for its condemnation was instituted. The plaintiffs

6
idib
7
Dr. Avtar Singh, The Transfer of Property Act pg 292, 4 th edition.

8
1 Ves. sen. 98, 27 Eng. Rep. 916 (1748).

9
L.R. 4 Q.B. 676 (1868-69).
 contested the action successfully and the captors appealed. The court ordered the
plaintiffs to furnish security against costs, which they could not afford. As a result, the
ship was condemned; the plaintiffs gave formal notice of abandonment of the cargo,
and requested the insurers pay for their total loss. The court, in holding for the
plaintiff, noted that the plaintiff as the assured was free to choose between defending
the appeal before the American court or claiming a loss under the policy. Because the
assured chose the latter, the insurers were obligated to pay. However, having paid, the
insurers were entitled 'to be subrogated to them, and get what they can out of the
hands of the Americans for their own benefit.” The main objective of the evolution of
the concept in English law will elaborate the doctrine of subrogation is a creation of
equity that is not based on a bond, but rather on the parties' relationships. The right to
subrogation in situations of insurance where a third party is responsible to make good
the liability is based on and governed by the strong underlying principle of securing
full indemnity to the claimant on the one side, and keeping him responsible as trustee
for any benefit he may receive over and beyond consideration for his loss on the
other.

CHAPTER 2: THE DOCTRINES IN TRANSFER OF PROPERTY ACT,1882

UNDER THE INDIAN LAW

The doctrines of marshalling and subrogation has been followed in the Indian law
under the ambit of property law and it is implied in the Transfer of property act, 1882.
The need of the doctrines will be different its area of applicability and its scope of
work will also tend to vary and the area of the doctrines.
MARSHALLING:
The doctrine of marshalling for a subsequent purchaser is given in “Section 56 of the
Transfer of Property Act, 1882: Marshalling by subsequent purchaser: If the owner of
two or more properties mortgages them to one person and then sells one or more of
the properties to another person, the buyer is, in the absence of a contract to the
contrary, entitled to have the mortgage-debt satisfied out of the property or properties
not sold to him, so far as the same will extend, but not so as to prejudice the rights of
the mortgagee or persons claiming under him or of any other person who has for
consideration acquired an interest in any of the properties.”10 The other provision for
10
Section 56, Transfer of Property Act, 1882
 the doctrine is given in the ambit of marshaling of securities and it is defined under
“section 81 of the Transfer of Property Act, 1882 : 1) If the owner of two or
more properties mortgage them to one person and mortgages one or more properties
to another,
2) The subsequent mortgagee is, in the absent of 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 the same will extend.
3) But not so as to prejudice the rights prior mortgagee or of any other person
who has for consideration acquired an interest in any of the properties.”11

The need of the marshalling in the scope of transfer of property can be explained in
the manner when then a mortgage for a transfer of property: when two or more
properties are mortgaged to one person, and one or more of them (already mortgaged
to the first mortgager) is mortgaged to another person, this privilege occurs. If there is
a clause to the contrary, the future mortgage is entitled to have the previous mortgage
debt satisfied from premises not mortgaged to him. The marshalling for subsequent
purchaser and securities will have a difference, as for the doctrine in purchase’s scope
Since the purchaser purchased the collateral of redemption, a poise mortgagee that has
a right of marshalling against a former mortgagee does not forfeit the right and for its
application in securities will be like that if the owner of two or more properties
mortgages one of them to one person and then mortgages one or more of the
properties to another person, the subsequent mortgage is entitled, in the absence of a
contract to the contrary, to have the prior mortgage-debt satisfied out of the property
or properties not mortgaged to him, to the extent that the same will extend, but not to
the extent that it will prejudice the rights of the first mortgagee.
SUBROGATION:
The doctrine of subrogation in the transfer of property act,1882 will be mainly
defined in the “Subrogation-Any of the persons referred to in section 91 (other than
the mortgagor) and any co-mortgagor shall, on redeeming property subject to the
mortgage, have, so far as regards redemption, foreclosure or sale of such property, the
same rights as the mortgagee whose mortgage he redeems may have against the
mortgagor or any other mortgagee. The right conferred by this section is called the
right of subrogation, and a person acquiring the same is said to be subrogated to the
11
Section 81, Transfer of Property Act, 1882
 rights of the mortgagee whose mortgage he redeems. A person who has advanced to a
mortgagor money with which the mortgage has been redeemed shall be subrogated to
the rights of the mortgagee whose mortgage has been redeemed, if the mortgagor has
by a registered instrument agreed that such persons shall be so subrogated. Nothing in
this section shall be deemed to confer a right of subrogation on any person unless the
mortgage in respect of which the right is claimed has been redeemed in full”12 the
concept of subrogation will be supported in the purview of sec.91 supportive of it
“The persons referred in Section 91 of the Act are-
1) Any person other the mortgagor who has interest in the mortgaged property.
2) any surety for the payment of the mortgage-debt or any part thereof
3) Any creditor of the mortgagor who has in a suit for the administration of his
estate obtained a decree for sale of the mortgaged property”13 the need of the doctrine
of subrogation is an equity jurisprudence doctrine. Except insofar as equity is meant
to be imported into the agreement and thereby lift a contract by inference, it does not
depend on the privity of contract, express or implied. The doctrine may be applied in
general where a person other than a mere volunteer pays a debt or a demand that
should have been satisfied by another in equity or good conscience, or where one
person's liability is discharged from a fund belonging to another, or where one person
is compelled to pay a debt for which he is responsible for his own protection or that of
any interest that he represents when a deprivation of right may be contrary to equity
and good faith, or where one person is compelled to pay a debt for which another is
primarily liable, or where one person is compelled for his own protection or that of
any interest which he serves to pay a debt for which another is primarily responsible,
the doctrine would never be allowed.”14
The application of the doctrines of marshalling and subrogation will be completely
different in their scopes but the law abiding these are confined to the statue and
interpretation of the judiciary.

12
Section 92, Transfer of Property Act, 1882

13
Section 91, Transfer of Property Act, 1882
14
Biswar Prasad v. lal Sarnam Singh (1907) 6 Cal. L.j. 134
 CHAPTER 3: THE COMPARITIVE ANALYSIS OF DOCTRINES OF
MARSHALLING AND SUBROGATION
The main point in the doctrines is that marshalling and subrogation are different in
their application levels and have different types and areas were these are being
applied different works on a transfer of a property or a contract at the instance as the
needs of the doctrines will vary and the elements of the doctrines will tend to vary as
the matter in Marshalling is concerned the elements of the “ (1)The mortgages may be
two or more persons but the mortgager must be common i.e. there must be a common
debtor,(2) The right cannot be exercised to the prejudice of the prior mortgagee,(3)
the right cannot be exercised to the prejudice of any other person having claim over
the property.”15 And there are no specific elements required for subrogation will differ
as it has two types in it that is legal subrogation and conventional subrogation. The
scope of legal subrogation can be occurred by operation of statute which is based on
the refund theory. If a person wishes to make a reimbursement that another person is
lawfully obligated to make, the person must be reimbursed when the payment is
made, and the other type of conventional subrogation will be applied in the case were,
when a stranger makes a deposit to a borrower in the intention of being replaced as
the creditor, he is entitled to the replacement. The concept of legal subrogation will
have to satisfy elements and it is applied to persons like the following persons are
included as having a right of subrogation: - 1) A puisne mortgagee, 2) A surety; 3) A
co-mortgagor; and 4) A purchaser of the equity of redemption. However, the
generally accepted doctrine is that a Conventional Subrogation can only result from a
direct agreement to that effect made with either the creditor or the debtor, and that it is
not sufficient for a person paying another's debt to do so merely with the
understanding that he will be subrogated to the creditor's rights, even though the
agreement has been made and a form has been signed. The basic aspect of the
elements is to be fulfilled while subrogation to take place and the way of relating it
with marshalling is completely out of the box work as the need of the doctrines is
done cannot be ascertained as the need for the doctrines has the specific purposes to
be fulfilled and the main objective of both the doctrines is to ensure the scope of the
transfer is taking place with a mortgaged properties and its assets or securities are
transferred or to indemnify from liabilities during such transfers of the properties take
15
Nandi, N., The Transfer of Property Act, 1882, 2nd Ed., Dwivedi Law Agency, Allahabad, 2010.
 place will the common aim of both the doctrines but still can be contrary or can be
interpreted.

CONCLUSION:

The main idea of this research is to study about the doctrines of marshalling and subrogation
and the main scope of the need of it is to give protection of a mortgaged property for a person
who does the transfer or the one who buys it and the irregularities will be seen only when
these doctrines are been applied only on the specific application only when the elements are
requirements of the doctrines to take place and for marshalling can be explained as when
there are two methods for marshalling, Either the senior creditor will be forced to use the
singly guaranteed fund, or the junior creditor will be able to subrogate to the senior creditor's
stake in the fund. Or other terms, compulsion marshalling or subrogation marshalling. The
scope of subrogation will be a factor to indemnify or seek to escape from the liability arising
from the contract relating to the transfer of the property the body that have inherited the
common law tradition will almost often have a theory of subrogation, though the doctrinal
foundation will vary based on how much Equity is a separate body of law in that jurisdiction.
The matter of relatability between these two doctrines will be different and the area of the
working of the doctrines will be varying and the scope of the doctrines in Indian law is
always been ambiguous as the clear nature of the doctrines in always open to interpretation
based on the circumstance and should abide by the statute.