Doctrine of priority 

Introduction                             

The doctrine of priority is governed by Section 48 of the Transfer of Property Act of 1882 (TPA). In a case where the court's interests are in conflict, this doctrine aids the court in choosing which party's rights should take precedence over the other. The necessity for this notion emerges when a property transferor deals with the same property with two different people at the same time. As a result, this answers the court's difficulty to a considerable part.

 

Doctrine of priority

 

This doctrine is founded on Natural Justice Principles, which state that if rights are granted to two people at separate times, the person who has the advantage in time will also have the advantage in law. This principle, however, only applies in situations where the parties' competing equities are otherwise equal. The Section 48 priority theory is based on the legal adage, who prior est tempore potior est jure, which essentially means "first in time, best in law." This section establishes an important principle: no one can convey a title other than the one he has. This means that if a transferor transfers the same property to multiple transferees, each transferee will have the same claim to the property as the previous transferee. According to this doctrine, if a person has previously set a transfer of property in motion, he cannot disregard his grant and deal with the property without regard to the rights established in a previous transaction. This section is absolute in nature and protects or reserves in favour of the transferee, who may or may not be aware of the previous transfer. The principle of the doctrine of priority explained under Section 48 is applicable where there is competition among the mortgagee by retaining title deeds and a subsequent transferee.

 

Essentials of the doctrine of priority

There ought to be one owner or transferor of the property and more than one transferee. 

It is only applicable only to immovable property.

The transfer should be created at different times and at these different times there ought to be created rights to the transferee. 

This right cannot be exercised to the fullest at the same time.

 

 

Illustration

A is the owner of the immovable property. He mortgaged that property to B in the month of August. Later, in July A transferred the same property to C. Here in this case all the essentials are satisfied and as per the rule of priority, B will get all the rights of the property prior to C. In case of default on the payment of the loan, the mortgagee can sell the property as the latter transfer is in accordance with the earlier transfer.

 

Effect of the document registered under doctrine of priority

Under the rule of priority, registration of the document does not affect the rights of the prior transferee. That means if the document of the prior transferee is unregistered whereas the document of the subsequent transfer is registered, still the rule of priority would be applicable to the prior transferee and not the subsequent transferee unless and until the subsequent transaction is made with bonafide intention and without the knowledge of the prior transaction. Registration does not create any right in the property. It is merely proof of intention to transfer the title of the property.

 

Conclusion

 

When there are many transferees, Section 48 establishes the priority. In the absence of a special contract or reservation, it protects the rights of the first transferee. It expresses the fundamental notion that no one can bear one's rights and titles more effectively than oneself. As a result, the transferor cannot infringe on the transferee's rights by engaging in subsequent transactions with the property. It cannot disregard the rights established by the previous transfer. In addition, the rule of precedence now applies to the Registration Act and the Insolvency and Bankruptcy Code.