NOTES ON

The Transfer of Property Act, 1882

J by

Anil K. Nair
Advocate
High Court of Kerala

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 CONTENTS
1. Introduction 1
2. Definition of Immovable Property 3
3. Attestation 8
4. Notice and Constructive Notice 10
5. Definition of Transfer of Property 13
6. Properties Which Cannot be Transferred 16
7 Oral Transfer 20
8. Conditions Restraining Alienation 2D
9. Restraint on Mode of Enjoyment 23
l 10. Interest Determinable On Insolvency 26

I
~
11 .
12.
Transfer in favour of Unborn Person
Rule against Perpetuity
27
29
13. Class Gift 31
14. Doctrine of Accumulation of Income 32

,
15. Vested Interest and Contingent Interest 34
ii
16. Doctrine of Acceleration 37
17. Conditional Transfer 37
18. Doctrine of Election 40
19. Doctrine of Apportionment 43
20. Transfer by Ostensible Owner 44
21. Doctrine of Feeding the Grant by Estoppel 46
22. Qui Prior Est Tempore Potier Est Jure 49
23. Improvements by Bona fide Holder under Defective Title 51
24. Doctrine of Lis Pendens 54
25. Fraudulent Transfer 58
26. Doctrine of Part Performance 00
27. Sale of Immovable Property 67
28. Mortgage of Immovable Property 78
29 Redemption of .Mortgage 87
30 Doctrine of Consolidation 91
31 . Liabilities of Mortgagor 92
i
I
32
33
Rights and Liabilities of Mortgagee
Doctrine of Marshalling
93
96
34 Doctrine of Contribution 97
f 35 Doctrine of Subrogation 98
36. Redeem Up and Foreclose Down 100
37 Doctrine of Tacking 101
38. Charge 102
39 Lease of Immovable Property 103
40. Tenancy by Holding Over 11 2
41. Exchange 113
42. Gift 11 4
43. Actionable Claim l19
Sovled Problems 121
Previous Questions 126
 THE TRANSFER OF PROPERTY ACT, 1882

Prepared by:
Anil K. Nair
Advocate
High Court of Kerala
Phone :2327390, 2378489(04 71)
2347135(0484)
9447500443(Mob)

TOPIC -I
INTROD UCTION

Th e Transfer of Property Act, 1882 mainly deals with transfer inter vi-
vas (b etween living persons) of immovable property in India. The Act de-
fin es the law relating to transfer of immovable property by · act of parties.
Though the Act mainly deal with transfer of immovable property, there are
provisi ons in the Act to deal with transfer of movable property.

The Transfer of Property Act, 1882 has drawn heavily from both the
principl es lai d down by the Common Law Courts and the Equity Courts in
England. The preamble of the Act declares that it is to "define and amend
certain parts of the law relating to property by act of parties". When there is
no specific provision covering a situation, English law can be applied on the
ground of "justice eq uity and good conscience". Very important changes
were incorporated by the Transfer of Property ( Amendment) Act, 1929.

Thi s Act does not de a l with transfer by operation of law such as sale
on execution of a decree, or disposition of property by means of will or testa-
ment or succe ss ion.

The Act contains general principles of transfer of movable and immov-

able property and specific provisions applicable to sale of immovable prop-
 .1 · ·,1 . 111 ortgag e of immovab le property, le ase of immov ".\ b !e r.,·-.1pe rt y, e :-~ c: han g~
! 11,iw,1ble and immovable property , gift of m o v abl,=: a;·1d : 11m0vab ;;:: pro n~
,·-
! 1 v trn d transfer of 'actionabl e c laims'.

$_~t_:, em e of the Act

Sections 1 to 53 A of the Transfer of P ro perty ft :-:t c :.: .. :ai r :J ~H1f.:r 3.l pti r,.
ci p le s of transfer. Of these general pri nciple s , sec! jcms i - 3 ? app 1'! to t /: o
t ran sfer of both movable and immovab le prop erty. S8 r;~·:.)fs"; 3f "'"'t 53 ~A
ap ply only to transfer of imm ovabl e p roperty.

Sections 54 to 57 deal with sa le o f lmmov ab ic: Prc;:~;e-rt-v

Sect ions 58 -104 deal wi th mortgage of immovabl e pro s:,ert y.
Section s 1 05-117 deal with lease of immovable pro pert·/ .
Section s 11 8- 12 1 deal with exchange of movable a r"d istF JOvabh.~, prep~ ,·/ .
Se cti ons 122-129 de al wit h gift of movab!e an d · irn·':'fW;. V~ ;-•,ie P"TJ? :.:. . ~? -
Sect ion s 130-137 deai with transfer of actiona b le c ~a h :--.i~-

It is to be noted that , by virtue of section 2(d) o t t he j~~t. n othing in t he

second Chapter of the A ct ( sections 5 to 53 A) shall b e d eemed to affect
any rul e of M uha mmadan law. Thus where there is a rule of Muham-
m a d an law which is inconsistent with the general principles cont ained in the
Transf er of Property Act , the rules of Muhammadan law w lll privail over the
pri n c ipl es contained in the Act.

. . ;.
---..et-¢----~,,. .· .
TOPIC -fl
D EFINE THE TERM " IMMOVABLE PROPERTY "
Or
WHAT IS MEANT BY FIXTURE ? WHETHER FIXTURES ARE
fMM OVABLE PROPERTY ?

The Transfer of Property Act, 1882 main ly deals with transfer of immov-
able pro perty by living persons. The Act does not contain a comprehensive
d efiniti o n o f the term immova ble prope rt y ' .
1

Section 3 para 2 of the Act gives a negetive defintiton of the term im-
mo vabl e property.

Ac cord ing to Section 3 para 2 , " immovable property does not include
standing timber, growing crops or grass''. This section does not give a clear
Tre an irig of t he term immovable property.

Th e General Clauses Act, 1897 defines the term immovable property

as fo ll ows:
" Im mova ble property includes land, benefits to arise out of land and
11
things a ttached to the earth

Th e Transfer of Property Act defines the expression "Attached to the

Earth". The expression attached to the earth means-
1. Ro oted to the earth as in the case of trees and shrubs
2. Embed ded in the earth as in the case of walls or buildings
3. Attached to what is so embedded for the permane nt beneficial
enjoym en t of that to which it is attached.

One wh o conside rs the definitions of the word il immovable property"

con tained in the Transfn r of Property Act, 1882 and the General Clauses Act
an d the definitio n of th e exp ression "attached to the earth" in the Transfer
of Property Act will come to til e following conclusion.
1. Land is immovable property

3
 2· Be n efits t o ar ise o ut o f la nd a re immova ble properti es
3· Tre es a nd s hurb s wh ic h a re ro ote d in t h e e a rth are
i mmo v a b l e pro p erti es.
4- Bu il d in gs o r w a lls which a re e mb e dd e d in the e a rth a r e
im m o v a bl e prop e rties
5· Th in gs or c h a ttels which are attached to the building or wa lls
for th e perman ent benefici al enjoyme nt of the building or
w a ll s a re immova ble properti es. Example : Doors, window s etc.
6 Standin g timbers or growing crops or grass are not
i mmovab le properti es.

Decide d Ca ses
1. Marsha ll v. Green (1875) 33 LT 404
T here was a sale of trees ·which are rooted in the earth. But as per the
agre e ment the trees were to be cut and severed immedia tely. The court
he l d t hat the sale wa~ not one relating to immova ble property . Further it was
h e l d t hat "if it was contemp lated that the purchas er should derive a benefit
from th e further growth of the thing sold, from further vegitatio n and from the
nut r i m ent to be afforded by land, it would indicate a transfer of an i nte rest in
i mmova ble property ".

2. S eeni Chettiy ar Shanthn athan (1897) 20 Mad 58 (FB)

v.
In thi s case a person sold his trees which were rooted i n the earth to
another p ers on . The trees were needed to be cut after a period of four
years. The cou rt held that the sale of trees were sale of immova b le prop-
e rty . rt is because t he trees required further vegitatio n from the earth fo r
t o ur years. It is be n efi t t o a r ise out of la nd . _Thus the transact ion should be
by a regi s tered docume n t.

Subba r aya M a yya v. Lakkann a Shetty (1962 KLT 89 4 )

3.
I n thi s ca s e th e trees sta n d in g on the property were sold as per a
written unre gi s t e re d docum e n t . T h e v e nd ee (buyer) was . -~llowed to keep .
the t ree s standing on the p roperty till suc h t ime as he chooses to fell th·em-
ThUS h e w as enti tl ed t o le a v e th e trees growing on the land for an indefinite
\
i

4
 le n g th o f time.
The sale was held to be not of standing timber, but of trees
grow in g on the land and therefor e of immova ble property . The transac tion
req u ire d re gistratio n.Being unregis tered, it is ineffecti ve to confer on the
v e nde e any legal title to the trees in question .

3. J oseph v. Annam ma (1979 KLT 322)

It was held that standin g timber are trees fit for use for building or
repairin g h ouses. This is an exceptio n to the general rule that growing trees
are immova ble property .

4. State of Orissa v. Titahar Paper Mills Co. Ltd. (AIR 1985 SC 1291)
The Govern ment of Orissa and the Compan y entered into a bamboo
co ntract and the Compan y would pay money to the Govern ment for the right
to c u t bamboo from the forest for a number of years .

The Court held that the bamboo contrac t was in respect of benefit aris-
in g out of land and it is a sale of immova ble property . · The deed is to be
reg istered under the Registra tion Act.

5. Anand Behari v. State of Orlssa (1995)

'X ' transfer red the right to catch and appropr iate all his fish in his lake
to Y. y had paid to X large sum of money. The court held that the right to
c atch fi sh from lake is a benefit arising out of land and it is immova ble prop-
erty. Such a transfer should be in a register ed instrum ent for its validity.

FI X T URES
W h e n a chattel or movable property is annexed or attache d to the soil
it become s a fixture.

In E ng l a nd the general rule is that whateve r is planted or built in the

soi! be lo n gs to the soil. The maxim is that 'QUIC QUID PLANTAT OR SOLO,
SOLO, CED IT' . Thus a house become s part of the land on which it is con-
s t ructe d.

5
 rd e d as imm ova ble prop -
In Indi a, t hi ng s e m be d ded in th e ea rth is rega
ruct ed it bec om es imm ova ble prop -
erty . Thu s wh e n a bou nda ry w a ll is co n st
for its perm ane nt ben efic ial enjo y -
erty . If an ythi ng is a ttac h ed to th at w a ll
p rope rty.
men t that thin g a lso bec o m es im mov a bl e

land it bec ome s imm ova ble

Whe n a buil ding is co n s tru c t e d upo n a
atta che d to that buil d ing for the
prop erty . Whe n do o rs a nd wind ows are
rs and wind ows [fixt ures ] will be-
perm an ent ben efic ia l enjo yme nt the doo
com e imm ova bl e prop erty .

bec ome fixtu re two thin gs

In orde r to con side r whe ther a cha ttel has
are t o b e con side red.

1. M ode of Ann exa tion

the floo r the pres ump tion is
If a thin g is rest ing by its own weig ht on
sligh tly to the can d it is fixtu re and
th a t it i s not a fixtu re. If thin gs are fixed
thu s im mov able prop erty .

2. Pur pos e of A n n exa tion

perm ane nt ben efic ial enjo y-
If th ings are atta che d to the eart h for its
men t it bec ome s a fixtu re.

Dec ided Cas es

1. Ho ll and v. Hod gso n ( 187 2 LR 7 CP 328 )
dee d. · On the floo r of the mill -
A m ill was mor tgag ed as per a mor tgag e
nail s. The Hou se of Lord s held that
som e loom s wer e atta che d by mea ns of
ttels .
thos e loom s wer e fixtu re and wer e not cha

2. Moh amm ad lbra hlm v. N.C . Fibr e Tra din g Co. ( ILR 194 0 Mad i·
I

30 4 )
mac hine ry of it was insta lled
A hou se a nd mill wer e mor tgag ed and the
that the mac hine ry inst alle d was
on con cret e pilla rs . The Priv y cou ncil held
the buil di~g and thus imm ovab le
for the perm ane nt ben efic ial purp ose of -~-f"
pro per ty.

6
 '' . . ..... . ·.. ...
·, . ;, , , .

,, . ·. ··· ·.. '

3. United Commercial Bank v. K.F:c (1992 {2)·_, :r, i::.~J 78 5) : . ~·

· . ·,
·->.{ ~ '. .
. ·, .'f

A transformer placed on a cement mortar base and got ea rth -connec - .: •..
tion through iron bars was held to be not imm ovable :p-r ; perty, a~r the·'. a tt~ch- ·
m ent of the immovabfo
me nt was not for the permanent beneficial enjoy_ p~:op- .
erty. A movable property ( chattel) which is attac..hed .to the immovabi-~ prop~_ . ·...
erty will become immovable only if the attachment is for the permanen t ben -
efic ial enjoyment of the immovable.
.. '
.'
.

4. Chellappan Nadar v. Krishnan Nair ( 1963 KLT 750)

X has unauthorisedly constructed a building on the land of another.
Th e owner instituted a suit for eviction of the trespasser. The Gou.r t held
that in India one can own a building separately from the land. If that person
suffers a decree in ejectment, he must, at the option of the owne.r of ··the
land, be entitled to demolish and take away the materials of the build ing
leavin g the land undamaged; or in the alternative, be· paid the value of his
buildin g as compensation. The only right which_the builder has_is that; in t_he
event of he being evicted, he s~ould be ~llowed to take away the matedals
or be paid compensation.

5. Duncans Industries Ltd v. State of U.P (2000) 1 sec 633

There was sale of entire business of "fertilizer". The fertilizer plant
and machinery embedded in the earth was held to be immovable property,
as the intention of the party concerned at the time of embedment was to
have the embedment permanently.

7
 . , .1..,, 'c l~.'.); '. ~·
1
J

'· -~. !,

TOPIC - Ill
ATTESTATION
or
WHAT ARE THE ESSENTIALS OF VALID ATTESTATION

T h e T r a na s f e r of Property A c t 1882 d ea l s with transfer of immovable

pro perty by a living p e rson to a noth e r person. The immovable property may
b e tra n s f erre d by way of sa le , mortgage, lease, exc hang e or gift. Under
t h e Trans f e r of Property Act certain transfers should be by registered instru-
men t . Fo r instance a person can sell his immovable property worth Rs. 100/
- o r m ore only throug h a registered instrument.

Registratio n is a process through which a document is offic ially re-

co r ded. It takes place under the provisions of the Indian Registration Act
190 8 . The proce dure for registration of a document is that the terms of
tran sfer is to be written on the stamped paper of prescribed value. Thereaf-
t e r th e executant i.e., the seller or mortgager has to put his signature and
t w o attestin g witnesses should attest the execution. This document which is
du l y executed and attested is presented · before the Sub -Registrar. The
Sub - Registrar after taking the statements of the executants and the thumb
i m press i on of the executor on the register admits the deed for registration.
T h e registrati on fee prescribed under the law is also to be paid. _ The docu-
me n t is then rec orded in the prescribed register. Thus for the validity of the
document it shou ld be validly attested by witnesses.

According to se ction 3 of Transfer of Property Act the following condi -

tion s are nece s sa ry for a valid attestation.

1) The a tt es tation m u s t be done by two or more persons.

Att e s tation by on ly one witn ess is not v a lid.
2) -The witne ss mu s t b e m a j o r a nd of sound mind .
3) Eac h attesting witn ess must e ither see the executant signing the
document or fixing his mark [Thumb impression on it] A witness
who has not seen the e xecutant signing the instrument can alsO

8
 attest if he has rece ived from the executant a pe rsonal
acknowle d gmen t of his s ignature or mark.
4) A n attestin g wi tness should sign the instrument in the presence
of the ex ecuta nt.
5) The attesti ng w itne ss should not be a party to the transaction.

If a document is not validly attested it is ineffective and the document

cannot be enforced th rough a court of law.

In Marci Celine D'Souza v. Rnie Fernandez (1998 {1) KLT 888) ,

th e C o urt d isc ussed the essential conditions of a valid attestation. They
ar e:
(a) Two or more witnesses must have seen the executant signing
th e inst rum ent or have received from him personal acknowledgm ent of his
signature .
(b ) Th e attesting witnesses should put the signature in the presence
of th e ex ecutant.
(c ) Th e witnesses should have put the signature animo attestendi
i.e. , fo r t he p urpose of attesting that they have seen the executant sign or
have rece ived from him personal acknowledgm ent of his signature.
(d) If a person _has put his signature on the document for some other
pu rpose , for e xample, to certify that he is the scribe or a identifier or a regis-
teri ng offic e r, he is not an attesting witness.

In Eng land th e attesting witnesses should actually see the execution

1f the in strum e nt (s igning the document by the exeuc.tant) ;· Both the wit-
nesses should b e p re sent at the time of execution . _ In India a witness can
att est even on p e rsonal acknowledgm ent of the executant though he has
sont seen the exec ut ion of the document.

9
 ·~-~ii·:i-1(t1)
·~~·t
,?!

TOPIC - IV
NOTICE and CO NSTR UCTIVE NOTICE
Or
Rule in Tllak Dharilal v. Khedanlal

The word notice literally means to become aware of somethi ng. The
Transfer of Property Act co ntemplates three kin ds of notice. They are :
(1) Actu al Notice
(2 ) Constructive Notice
(3) Imputed Notice or Notice to Agent

1. Actual Notice
If a pe rson has direct knowledge of a fact, he is said to have actual
notic e.

Exampl es
(1) A executed a sale deed in favour of B. The sale deed Was prepared by C. Chas
actual notice of the sale deed.

(2) Y is own er of an immovable property. Y mortgaged the property to Z for securing

a loan. Thereafter Y offered to sell the mortgaged property to X. Y disclosed the fact of
existence of mortgage to X. X purchased the mortgaged property from Y. As X has
actual knowledge regarding the existence of mortgage, he is said to have actual knowl-
edge of mortgage.

2. Constructive Notice
Constructive notice is the knowledge which law attributes to a person
upon a presumption of existence of knowledge. The presumption of knowl-
edge attributed by law is irrebuttable. No evidence can be adduced to show
th at there was no actual knowledge when law attributes knowledge upon a
person .Constructive notice arises under the following circumstances:
a. Wilful abstention from enquiry
b. Gross negligence frorr:i conducting enquiry
c . Registration of a document
d. Actual possession

lO
 a. WIifui Abstention from Enquiry
If a perso n propo se s to purchase some immovable property, he has to
verify the title dee ds of the se ller and e nsure that the seller has good title
and no oth ar person has any right or charge over suc h prop e rty. If he fail s to
make necessary enquiry regard in g tl,e titl e of the seller and rights of others
over such propeI1y, the re is w ilful abstention from enq uiry. In such a case ,
he woul d be deem ed to have notice of defects in the title of the sel ler, if any,
and of rights o f others ove r such property.

b. G ross Negl igence

If a pe rson who deals with immovable property is guilty of gross neg li -
gen ce in m aking necessary enquiry regarding title of the transfero r or rig hts
of oth e r over such property, knowledge will be presumed.

In Imperial Bank of India v. U. Raj Gyaw (1923) 50 IA 283 , a

pu rchaser was informed that the title deed was in the possess ion of a Bank
for safe c ustod y. He omitted to make any enquiry from the Bank. Actually
th e titl e deeds were mortgaged to the bank to secure a loan. It w as he ld that
'l e w as gu ilty of gross negligence and was deemed to have not ice of the
ri ghts of th e Bank which had custoc:iy of the deeds.

c. Regi stration of Document

In Ind ia there was conflict of opinion as to whether registration of a
document ope rates as constructive notice. The Mumbai and Allahabad High
-
Courts hel d that registration of a document operates as const ructive notice.
Th e Cal cutta and Madras High Courts decided that a the registration did not
am ount to notice .

, Til ak Dharil a l v. Khedan Lal (48 Cal 1)

In this ca se the Privy Council held that the registration of a document
rn ay sometime operate as notice. It was held that the question whether
registrati on amounts to notice is not a question of law but a qu esti on of fact.

In this ca se X mortgaged his property first to Y by a registered docu-

ll
ment. The v ery same property w as aga in mortg a g e d t o Z . The subsequent
mortgagee (Z) claim e d priority. The subseq u en t m o rtg a g e e can claim prior~
i ty only if he w a s unaw a re of the prior m o rtage. In t hi s ca se t he court held
th a t th e sub se quent mortgagee h ad n o knowl e d ge of t h e prior mortgage
a nd th us he could c laim priori t y.

Amendment In 1929
In 192 9 the Transfer of Pro perty Act wa s amended and it is made clear
th
a t wh en a compulsori ly re g ist rable document is registered it w ill operate
a s c on st r uctive notice to all. Thus the rule in Tilak Dharilal 's case is no
l on ge r a good l aw.

A f te r the ame ndment in 1929 registration operate as constructive no-

ti ce subj ect to th e f ollowing conditions:

1· The i n s trum ent must be compulsorily registrable . Registration if n o t

r equ ired by law, it will not operate as constructive notice. Eg. An agreement
t o se ll.
2. Registrati on must be performed according to the provisions of the
I ndi an Regisrta ti on Act, 1908.
3. Reg i strati on will operate as constructive notice only to subsequent
t ra n s f erees.
4. Registrati on will operate as constructive notice only from the date of
r eg i s t ration.

Ouseph Souro v. Thommen Michael (1959 KLJ 975)

The Kerala Hi gh Court held that by virtue of imputation of notice, a
duty i s cast upon a l l t ran s feree s to search the registry for any prio r transac-

tion .

d. Actual Po ssess ion

If a person is in a ctu a l po sses sion of -immovable property, any one who
deals wi t h that pro p e rty sha ll be d ee m e d to have notice of title of the pos·

s e s s o r.

12
 In Dan iels v. Davison (1 809) 16 Vas. 249) A l e a s ed a house and a
ga rde n to 8 a nd th e n a g re ed to s e ll th e prop e rty to B . A th en sold the
prope rty to C . It wa s he ld that C was affected by con s tructive notice of B's
rigt1ts with re sp ect to th e prope rty. The Court held that where land is in the
occupation of s ome on e oth e r th an v e ndor, th e fac t of the occupation gives
tile purch ase r con structive notice of any rights of the occupying tenant.

(3) lrn.P-Uted Notice of Notice to Agent

A pe rson shall be deemed to have notice of any fact if his agent ac-
qu ires notice. The general rule that the knowledge of the agent is the knowl-
edge of t he principal has certain limitations. They are :
1. The notice should be received by the agent as an agent.
2. The notice should _be received by the agent during agency.
3. The notice should be received by the agent in the course of
the agency business.
4. The notice should be on a matter material to the
agency business.

The knowledge of an agent will not be imputed to his· principal if the

agent has fraudulently concealed the fact and the party charging the princi-
pal with notice was a party to the fraud.

13

~ "'!•WtC4Jlllllli
TOPIC -V
DEFINITION OF "TRANSFER OF PROPERTY"

The Transfer of Property Act, 1882 mainly deals with transfer inter 1;;_
vos (between living persons) of immovable property in India. The Act de.
fine s the law relating to transfer of immovable property by act of parties.
Though the Act mainly deal with transfer of immovable property, there are
provi s ions in the Act to deal with transfer of movable property.

This Act does not deal with transfer by operation of law such as sale
on execution of a decree, or disposition of property by means of will or testa-
ment or succession.

Section 5 of the Transfer of Property Act defines the expression "Trans-

f er of Property".

Transfer of property means an act by which a living person conveys

prop erty to one or more living persons or to himself and one or more other
li v i ng persons. The expression living person includes a company or asso-
c i at i on or body of individuls whether incorporated or not but it does not
i nclude God, idols and dead person.

The following are the essential ingredients of the expression "Transfer

of Property"

1. T wo Parties {Tra nsfero r and Tra n s fere e ) to t h e Tra nsf er

In a transfer of property there should be two persons. They are trans-
fero r and transferee. The person who by his act transfers or conveys his
property to another person is called "transferor". The person to whom the
property is transfered is called "transferee" .

The transfe ror should be a living person. · The transferor may be a

human being or a juristic or legal person such as a company or society. rhe ·
transferor must be competent to contract. He must have attained the age of

14
 majo rity. He shou ld be a pers on of soud mind .

The tran sfere e mus t also be a living pers on. The trans
feree may be a
juris tic pers on such as a com pany or society. The trans
feree need not be a
compete nt pers on. The trans feree may be a mino r
or luna tic.

Bho opat hy Nath v. Ram lal (191 0)

It was he ld that an idol is not a living pers on and thus
a gift of imm ov-
able prop e rty to God is inva lid, but a gift of imm ovab
le prop erty in the nam e
of the adm i nistr ator of the temp le is valid .

One cann ot tran sfer his prop erty to hims elf. But one
can tran sfer his
prop erty to hims elf and one or more othe r living pers
ons.

2. Co nve yan ce
Th e tran sfer or mus t conv ey the prop erty to the trans
feree . Tran sfer-
ring of prop erty invo lves the crea tion of new title or
inter est in favo ur of the
trans fe ree. Part ition of Join t Fam ily prop erty is not
a tran sfer of prop erty.

3. Prop erty
Th e t rans fero r shou ld tran sfer prop erty to the tran
sfere e. Prop erty
mean s bot h mov able and imm ovab le prop erty. It also
inclu des tang ible and
intan gible prop erty. The prop erty whic h is the subj ect
matt er of the tran sfer
sh ou ld be in exis tanc e on the date of trans fer.

In Ada vi Umm a v. • Mam mu Mam mad (195 8 KLJ

521 ), it was held
that wh e re ther e is a cont ract for the tran sfer of
prop erty whic h is not in
exist enc·e at the date of the cont ract, the inten ding tran
sfere e may, whe n the
prope r1y com es into exis tenc e enfo rce the cont ract
by spec ific perf orma nce ,
provi ded the cont ract is of the kind whic h is spec ifica
lly enfo rciab le in equi ty.
.
It is only whe n the tran sfer or volu ntar ily exec utes
a deed of tran sfer the
legal title of the tran sfer or in that prop erty pass es from
him to the tran sfere e.
It the tran sfer or did not do so the tran sfere e can
sue for spec ific perf or-
mance of the cont ract to trans fer.

15
 .section 6 of the Transfer of Property Act specifically prohibits transfer
of <?ertain properties and thus such properties cannot be the subject matter
of transfer ( see next topic).

In England the House of Lords decided in the leading case of Holroyd

v. Marshall ( 1862) 1 O HLC 1, that a gift of future property is void. In India
also the transfer of future property is not valid. But there can be an agree-
ment to transfer future property and which may be specifically enforced when
the property comes into existence.

TOPIC - VI
PROPERTIES WHICH CANNOT BE TRANSFERRED
Or
UNDER THE TRANSFER OF PROPERTY ACT PROPERTY OF
ANY KIND MAY BE TRANSFERRED. STATE ITS EXCEPTIONS.

The Transfer of Property Act defines and amends the law relating to
transfer of property by act of parties. The Transfer of Property Act governs
transfer inter vivos of immovable property in India. The Act does not deal
with transfer by operation of law or by means of will or testament.

The general rule under section 6 of the Transfer of Property Act is that
property of any kind may be transferred. There are certain exceptions to
this general rule. They are stated below:

1. Spe s Succe s s lon is

The expression "Spes Successionis" means a mere chance of succes·

s ion .

By virtu e of Section 6 (a) of the . Act, the chance of an heir apparent

succeding to an estate or chance of a relation obtaining a legacy on the ;
death of a kinsman (male relative )or any other mere possibility of a like

16
 11,1tu1 t~ .;nn n o t b e tra n s fe r re d.

O n th o d(}t=t th of fa th e r a son will inherit his property by virtue of suc-

Son is a n h e ir app arent. He cannot transfer his father's prop-
, -( ' ~ :-. i t111 1~1w .

,,it y d u dng th e li fe tim e of fath e r.

T l1 e interes t of a re v ers ioner over the property held by a widow is an

,,,.rn1µ le of spes s uccessionis. Under the Hindu Law on the death of hus-
t, .rn d . th e widow was e ntitiled to hold his property as a limited owner until
11t' I dea th . On h e r d eath the property held by her as a limited owner would

.- ~1m e bac k to the heirs of the last male· holder( Husband) . The persons who
.:.rt? e ntitled to th e property on the death of the widow are called reversion-

~r s . T h e y can not transfer the property during the life time of the widow.

Decided Cases
(1) Holroyd v. Marshall {1862) 10 HLC ·1
In this case the English court held that interest to arise in future (spes
succe ssioni s ) could be transferred. If the interest of the transferor materialises
in fut utre the tra nsferee can claim the transferor to make good the transfer.

In Ind ia Section 6(a) creates a statutory prohibition. If a person trans-

fers a mere chance of succession and even if the hope or expectancy
r1a te riali ses, t he transferee cannot claim the property in India.

(2) A.nan d Mohan Roy v. Gaur Mohan Malik ( 48 Cal 536)

A re versioner transferred the property in the hands of a widow to the
pla intiff. After the death of widow the reversioner succeeded to the property. ·
The p la intiff cla im e d th e property and argued that the rule in Holroyd v.
Ma rsha ll s hould b e a pp li e d and the re versioner should be compelled to m ake
good the transfer.

The court h e ld th a t si nce th e re is a clear statutory prohibition to t rasfer

·. spes s ucc e ss ioni s, a tras feree would not get a ny right. A trans fer of spes
..·- succe s sion is is v oid ab initio and it cannot subsequentl y be made val id .

17
(3 ) Offlclal Aaelgne e Sampath Natdu ( AIR 1933 t;1a(f . 7 3f.. J
v.
X had e x ec uted two mortgag e s over a propert y tn rs spBr..1 o ! '\f-Jr,.r_r_ -~ ~
had only spes success lonis. Aft e r s ometime he succeed ed t0 t4"-, s ~ ·-::.-s ~ 1
and sold them to another person .

The question before the court wa s that whe thBr t h e m')rt.J a;s::
void as it offended section 6(a) of the Tran s fer of PropC:: rty Ac~. 'Tr~
he ld that the mortgag es were void.

(4) Hasan Khani Rawthe r v. Muhamm ed Aawthe r r 2 8'3 ~1 2. 1 t':rl': 2 ,.::.~ .

F ather gave properti es to all his children e:xc-e pt to th s y c ..1 ~ ~s s : ,:r '= :-
lieu of their shares, which they may inherit afte r h is deat h , a s a ta--- 1 c= •.
rangem ent and as part of the arrangem ent the c hild re n exec ...:~ ~ '1 C C/;_,,---:-~~ -'. s
b y whi ch they relinguis hed their claim over the ba la ncs prc;;,s:--.; ·s:.B .-- ~--: =:
the fath er. The father gifted the rema ining prope rti es o r a l,·1 ;, :s ., :. _,... : ~ : - s
y oung est child. After the death of the f at her, the ot h e r cr: il c ,a .,. . ~:-: s-.;::--:s:. ::
inte rf ere with the title and possess ion of th e p r ope rti es g i:'i.s s : :;, _: :. ·... ~; =5""'.
child and one of them filed a suit for part ition of the prope ;-ties , -j ; 2"s~2..· ·: --;

th e f amily arrange ment made at the in stance of the fat h e r. Tr.s : s t: : : --: ~ ~ s
youn gest child filed a suit for declarat ion of h is title a nd possess ;c ~ s ·1s r ~- '=
properti es. Both the cases were tried together a nd th e iow e' co ·J --: : ~*

m issed the suit institute d by the younges t ch il d as he co u ld no\ P'C , s :·~:;

oral gift. Further the held that the properti es are li ab l e to be pan i ~:~-2~ ~3
th e docume nts execute d by the children ( ot her than y oL. n ges~ C'": ' :

relin guishing their ri ght over the father's property w as hit b y se c tion fr a
henc e the said docume nts are inoperat ive.

On appeal the Kerala High Court held that th e pro v is ion s 0~ s2::.,: r
6 (a ) are not applicab le to Muslims and a Mohamm adan h e i r m a y b y h \S : -2r·
duct be estoppe d from claiming inheri tan ce , if the re l ease 1i~t1a·s p a'°t c ; ~ _
compro mise or family settleme ment and if he has benefitt ed b y th a rr2rs1-:.:-· ,
tion. It was held that after the execut i on of docume nt s · r e li ngu is h l r.g t?:'2
right over the fatherjs property , the executa nts can n ot be a ll c 1t1ted t c ~,Jr'.:' ::

18
 round and argue that they are also entitled to get share in the porper ties.
The court held that the younge st child alone is entitled to get the same.

2. Right of Re~e ntry

A mere right of re-entr y for a breach of a conditi on subseq uent cannot
be transfe rred. A lessor may reserve to himsel f a right of re-entr y on breach
of a conven ant in the lease. This right alone cannot be transfe rred. If the
le ssor t ran sfers the owne rs hip of the leased proper ty he may along with that
transfe r the right of re-entr y to the transfe ree .

3. Easem ent
An easem ent alone cannot be detach ed from the domina nt heritag e
an d trans ferre d separa tely. When the domina nt owner transfe rs the domi-
na nt heritag e he can also transfe r the easme nt right.

Inte res t in pro perty restric ted in en ioy ment to owner person ally
An inte rest in proper ty restrict ed for the enjoym ent of the owner of the
prope rty cannot be transfe rred .by him. A service inam is an examp le of such
in terest.

In Anj aneya lu v. Sri Venug opalalu (45 Mad 620 (FB) ), the court
hel d that a person who owns some proper ty by way of service inam cannot
tra ns fer that proper ty. If he transfe rs, the ·alienat ion will be void.

~
\J , A ri ght to future mainte nance
A right to future mainte nace cannot be transfe rred. But a right to ar-
rears of past mainte nace can be transfe rred.

6. A mere ri ght to s ue
A mere right to sue cannot be transfe rred. A right of action for dam-
ages in tort is a mere right to sue and cannot be transfe rred.

In Thoma v.
Govin da Kurup ( AIR 1951 TC 180) it was held that
right to claim mesne profits cannot be transfe rred.

19
 ff i~ er f bl
a la ra y of a Pu b lic O o a pu ic of.
5 ala ry
7. Pu b l ic O f f ice a n d S I f d
nn ot be tra ns fe rre d. Si mi lar Y
A pu bli c of fic e ca du e ca nn ot be tra ns er re
·
af te r it ha s be co me
fic er wh et he r be fo re or

TO PI C - VI I
O RA L TR A N SF ER er y tra ns fe r of pr op er ty ne ed no t
Pr op er ty Ac t ev
Un de r th e Tr an sfe r of th e Ac t a
tra ns fe rs als o. By se cti on 9 of
n be or al
be in wr itin g. Th er e ca in ev er y ca se in wh ich a
de wi th ou t wr itin g
y be ma
tra ns fe r of pr op er ty ma law ex pr es sly re-
pr es sly re qu ire d by law . Th us un les s th e
wr itin g is no t ex ns fe r.
t.io n to be in wr itin g, th er e ca n be an or al tra
qu ire s an y tra ns ac

nc es of or al tra ns fe r.
Th e fo llo wi ng ar e ins ta
(i) Su rre nd er of I.e as e. As . 10 0/ -
mo va ble pr op er ty of th e va lue of les s th an
(ii) Sa le of im
titl e de ed s.
(ii i) Mo rtg ag e by de po_s it of
mo nt h.
(iv ) Le as es fro m mo nt h to

TO PI C - VI II
N D IT IO N S RE ST RA IN IN G AL IE NA TI O N
CO
ge ne ra pr in-
th e Tr an sfe r of Pr op er ty Ac t pr ov ide s fo r a
Se cti on 1 O of le pr op er ty.
e ca se of tra ns fe r of mo va ble an d im m ov ab
cip le ap pli ca ble in th
e tra ns f-
on 1 O of the Tr an sfe r of Pr op er ty Ac t, if th
Ac co rd ing to Se cti te ly re-
s a co nd itio n in th e tra n_sf er de ed ab so lu
po se
er or of a pr op er ty im ty the
m dis po sin g of his in te re st in th e pr op er
e fro
str ain ing th e tra ns fe re iti on wh ich ab so lut ely
no te d th at th e co nd
is to be
co nd iti on is vo id . It e tra ns fe r as
om of ali en at ion alo ne wi ll be vo id an d . th
re str ain ig th e fre ed id co nd i-
re su lt is th at th e tra ns fe re e ca n ig no re th e vo
su ch is no t vo id. Th e ...
n an d tra ns fe r th e pr op er ty to an y on e els e.
tio
If
lut e re str ain t on th e fre ed om of ali en ta tio n.
so
Se cti on 10 pr oh ibi ts ab of
se cti on 1 O is no t ap pl ica bl e. In th e ca se
pa rti al,
th e pr oh ibi tio n is on ly
20
p,-u tial re st rai nt the co n diti o n will b
e v a lid a nd the tran sfe ree will be
bou nd
l'Y th e ~-;ondito n .

~" ·°' 111!-"' It> s

j. A w h o ls ow n er of a h o u se tr a nsf
ers it to B wit h a con diti on tha t
B
~·,0 ut d not alie nat e th e pro per ty dur
ing his life tim e . Th e con diti on is
voi d .
s "' an ig n o re suc h con di tion and tra nsf er the pro per
ty to wh om sov er he
t-' ed ses . The t ran sfe r by B wo uld be uph eld
by the cou rt.

A t ran sfe rs his pro per ty to B with a con

diti on tha t B sha ll not tra nsf er
:"e pro per ty to X but ma y alie nat e it to
any one els e. The res trai nt is onl
y
::artial and h en ce val id. The cou rts
will giv e effe ct to suc h pro hib itio n.

Dec i d ed Ca ses
M o h a m ma d Ra za v. Ab bad San
di Bib i ( 193 2 PC 158 )
In th is ca se the cou rt hel d tha t a
con dito n wh ich res trai ns the tran
s-
:~~-ae trom se ll i ng the pro per ty out sid e fam
ily is val id.

c. . T. V.S ang am Ltd . v. Sh anm ugh a

Su nda ram (AI R 193 9 Ma d. 769 )
In thi s cas e the tran sfe ror ma de a
con diti on in the dee d tha t tran s fere
e
s- : ul d not se ll the pro per ty out sid
e fam ily and if he sel ls the pro per
ty to a
: 3.,.... ,1 y me m ber it sho uld be
at the sta ted pric e. T~e pric e fixe
d in the dee d
v, ::.s ·1e ry lo w and b elo w the ma rke t
pric e. The cou rt
- ~ d tha t th e co nd it ion in effe ct res
ulte d in abs olu te res tain t and thu s
voi d.

-· Ma n oha r v. Ma had eo (AI R 198 8 Bor n. 117 )

The sal e dee d con tain e d a con diti
on tha t the pro per ty sho uld not be
,_,_ 1 to a nyo n e out sid e the fam
ily of the tran sfe ree . The cou rt hel
d tha t the
. ': 'J •vj itio n is voi d.

Att Wa te r v. Att Wa tte r ( 52 ER

131 )
A dee d of tran sf e r con tain ed a con
di tion tha t alie nat ion sha ll be don e
Only in fav our of th e bro the rs
of the tran sfe ror . The cou rt hel
d th at th0
conditi on wa s inv alid .

21

__ J
5. Rosh er ( 26 Chd. 801)
Rosh er v.
subje ct to a
. Rosh er exec uted a Will and gave his estat e to his son
nd1 ton that if he inten ds to sell the prope rty he shoul d g ive his mothe r an
co
ds. T he c ondit ion
optio n to purch ase the estat e at the price of 3000 Poun
com Ir h eld to be a total
pe rng the so n to sell the estat e at an unde r valu e was
restra i n t and henc e void .

6. Par1:1mesw aran Nair v. Jana ki Amm a ( 1956 KLT 69 1)

h t h at in
Th e Cour t held that a limite d restra int on aliena t ion suc as "
to him o r her, it shall
case a ny of the share rs decid e to sell the ;hare allotte d
offers t o purch ase it"
be sold to whom soev er amon g the other share rs who
is a valid restra int.

7· N . M. Kadi r Pillai v.Sathy abha ma Amm a (1963 KLT 355)

of part ition
The Cour t held that the restra int on aliena tion in the deed
being a partia l restri ction is not invali d.

KLJ 433)
8. Fatim a Saro hibi Sure sh v. K. Saras wath i Amm a ( 1985
on trans fer of
The Cour t held that claus es impos ing a total restra int
offen d public policy
prope rty or impo sing rules which keep it out of circul ation
a deed of trans fer, a
i rresp ectiv e of whet her such condi tion are impos ed by
will or simp le contr act.

g. Chee ru v. Kelu Nair ( 1987 2 KLT SN 19 P. 16) .

The Cour t held that thoug h partit ions do not involv e trans fer, the prin-
.
of partit ions also. If
ciple unde rlying in sectio n 10 is applic able in cases
tion must go along
what i s obtai ned is abso lute owne rship powe r of aliena
policy and will be
w ith it . Any restra int of that powe r will be again st public
which is oppos ed to
deem ed to be void other wise it will lead to perpe tuity
ferab le.
publi c policy beca use prope rty is alway s consi dered trans

22
 ~ xcep tions
The re a re two e xcep tions to th e princ iple th at ab solut e
rest ra ints are
v o id . The foll owi ng are the exce ption s:
1. Lea s es
In the case of a lease the landl ord may abso lute ly restr
ain the right of
al ienat ion of the inter e st of the less ee. Th e lesso r may
stipu late for the rig ht
of re-en try if les see com mi ts brea ch of the cond ito n.

2. P rope rty trans ferre d to Wom en

In Engl and bef ore 1935 there was a law valid ating abso
lute re stra int
on ali enat ion im pose d on marr ied wom en durin g cove
rture . It w as for t he
prote ct ion of t he wom en. This rule has been aboli shed
in Eng lan d in 193 5 .
In India s uch a law is reco gnise d in the case o·f Chris tian
wom en. T his ru le
is not appl icabl e to Hind us, Moha mma dans , Budh ists and
Pars i.

TOP IC - IX
RES TRA INT ON MOD E OF ENJ OYM ENT

Sect ion 11 of the Tran sfer of Prop erty Act incor pora tes
anot her gen-
eral princ ip le with rega rd to the trans fer. of mova ble or
immo vable prop e rty.

By v irtue of secti on11 in the trans fer of abso lute inter

est (own ersh ip)
of a pro perty , if the trans feror impo ses any cond ition restr
ainin g the mod e of
its enjoy men t, the cond ition is void and the trans feree
is not boun d by the
con ditio n.

Whe n o w ners h ip of prop erty is trans ferre d, the trans feree

gets the right
of enjoy men t of the prop erty as he pleas es. A cond ition
or direc t ion in a
sal e, exch ange or gift that the trans free can or cann
ot use or en joy the
Prop e rty in a parti cula r man ner is repu gnan t to the right
of owne rsh ip and is
there fore void .

.Q:arn ples
1 A sells his agric ultura l land to 8 with a condition that 8 can cultiv
ate only whea t

23
but cannot grow the crops of paddy. The condition is void and B is free to grow the
crops of paddy.
2. A gifts a house to B with a condition that he can only reside in the house and
c a nnot us e it a s a godown or shop . The condition is void a nd B can use it as a godown
o r shop .
Exceptio ns

1 . Transfer of partia l inte rest .

Section 11 is inapplicab le when the transfer is merely of partial interest
in t he p roperty. In the transfer of partial or limited interest there is no trans-
fe r o f owne r ship. Lease is a transfer of partial interest. The lesssor may
im pose any condition regarding the mode of enjoymen t of the property. The
lessee would be bound by that condition.

Examp l e
A leases his agricultura l land to B for 1 o years with a cond iti on tha t B
s h o uld not plant mango trees. The direction is valid and B cannot plant
man go trees on the land.

2. Tra n sfer of part of property

A condition or direction regarding the mode of enjoy m e nt may b e i m -
posed by the transferor if it is for the beneficia.1 enjoymen t of trans feror 's
own adj oining ' property. When the transferor alienates only a part of h is land
and reta i ns the other part with him, a direction may be imposed regard ing
the mod e of enjoymen t of the transferre d property for the b eneficial enjoy -
ment of t hat part which he retains.

Example
X o w ns 1 O c ents of landed property and he resides in a building situ-
ate d i n th e pro p e rty. H e s ells to Y 5 cents of bare land out of the total extent
of 1 o ce nts a nd re tain s 5 cents including,,,t~a building. X imposed a condi-
·. . .....

tio n in th e s al e de e d that Y should not construct any permanen t structures or ·

,l

build i ng o n the land which is sold to him because the constructi on would 1;
1

obstruct the air and light to the House of X . The condition restraining Y from

24
 . .. .

c;o n :; tri, c tln g tJu il rJlng l~i v a l id a nd h A ca nn o t co n s tru c t building on t i1e lanq _··- - ·

Nu<;a t1v o ~,nu I >()'j I ti VO Covo nunt::;

n os trl c tlv o Co v e nant s m a y b e N ega tiv e or Po s it ive. If th e co nditio n in
ttH) trnn s fnr d oo d is not to construct a bu:lldi n g on the land it is negetiv e
c:onvo n o t. If 1h e cond iti o n is to c on s truct a build ing on t he land, it is a
f 'os it ivo Co v e n a nt. Both N ege tiv e a nd Po s itive co n venants are b i ndi n g on
ll~o t ran s f oree. In th e case o f s ub seque nt tra n s f e rees n ege t iv e re s trictive
co nve n a nts a re bindi n g if th e y are having notice of s uch restrict ive con v enan t.

-
Ncge tive co v e n a nts run with the land.
- - - - -- - -- -- ·-
Positive covenants are binding o n ly
on the tr a nsf e r ee a nd subsequent transferees are not bound by posit ive .
co n vena nts .

Tul k v. Moxhay ( 2 1848 Phill 774)

T ow n e d a p iece of land in London. This land had a garden surrounded
by ho uses . T sold the garden to E with a covenant that E and his · succes-
sor s or as s ignees shall keep the garden in tact as an ornamen·tal garden
an d shall not construct any building on it. After sometime E sold the garden
to an othe r p erson. He sold it to some other person and one after the other
the ga rden was purchased by M. He had notice of the restrictive covenan t .
He attempte d to build upon the land . T filed a suit and sought for injuncti on.

The Co urt held that negetive convenants are binding on transferee

and s ubseque nt transferees if they have notice of it and injunction was
gra nted. Rest ri ct ive covenants are annexed to land and they run with land.

In Josep h v. Chacko Thomas (1992 1 KLT 6 ) it was held that a

negati v e covenant if impo se d on one land for the beneficial enjoyment of
ano the r la nd w ou ld b e bindin g not only on the original parties, but even on
subse qu e nt tran s fe rees. In o t h e r words, unless the coven a nt effecting the
enjoymen t of land i s for t h e b e n e fit of a noth e r la nd or the portion of the land
Which re t a in e d b y th e transf e ro r it will not b e binding on any one not even
between th e contract in g pa rti es.

25
 In -Lee la v. Amb ujak shi ( i 9 89 2 KLT 142 ) , it w ns
hold th a t lh er~
can not b e any d isp u t e th a t und e r s e c t io
n 1 ·1 of th e T ra n s f er of Pro pert y Aq
n o re s t ri ctio n on t he en joy m e nt of pr·o p ert
y t r a nsf erre d ob s olut e ly is }usti f'iect .
T h e v e nde e i s e nt it l ed to i gno re a c ond
iti on whi c h c ut s dow n hi s e njoy m e nt
of the a bso lu te righ t of prop ert y . a nd
a n y dir e ct io n i n s al e d e e d wh ic h is
c o nt r a ry to the en j oym ent o f su c h a bso
lut e e s t a t e i s vo id a nd un c nfor cea b1
0
a n d w o ul d be trea ted a s non -est und e r
th e fir st p a rt of s ec t i on 11 of th e A ct .
T h e o n l y pe r son enti tled to im po se a nd
enfo rce suc h a con d iti on is th e t ra n s-.
f e r o r a n d t h at too on l y for the ben efic ial
e njoy men t o f the po rt ion re tain e d by
h im at t h e time of tran s fer. It can not
be enfo rced b y th e tr a nsfe ree of a n -
oth e r port i on. A con trac t only bind s the
part ies or thei r p r ivies . T h e tra n sf-
e r o r can not i mpo se such a con ditio n for
the ben efit of a noth er pers on. Sec -
t i o n 40 of t h e Act dea ls with enfo rcem ent
of the the rest ricti on by t he tran sf-
e r or o r hi s ass igne e aga inst purc has er
from the tran sfer ee. Tha t sect ion
a tso pre- s upp ose s exis tenc e of a righ t
to rest rain the enjo yme nt o f his ow n
pro p e rty. Eve n und er sect ion seco nd
para of sect ion 40 the re m ust be a
r i g h t or obli gat i on for that purp ose aris
ing out of a con trac t and ann exe d to
th e own ersh ip of imm ova ble prop erty
for the purp ose of its enfo rc eme nt
aga in st a grat ituo us tran sfer ee or a tran
sfer ee for con side ratio n with noti ce
of righ t or obli gati on.

TO PIC - X
CO ND ITI ON MA KIN G INT ER ES T
DE TE RM INA BL E ON
INS OL VA NC Y OR ATT EM PTE D ALI ENA
TIO N

By virtu e of sect ion 12 of the Tran sfer

of Prop erty Act if a prop erty is
tran sfer red with a con ditio n that the inte
rest crea ted by such tran sfer shal l .
com e to an end on the inso lven cy of
the tran sfer ee or on his atte mpt to
tran sfer it, the con ditio n shal l be void .

Exa mpl e
. i
X gifts his prop erty to Y with a cond ition that )~,
temp ts to alien ate the prop erty his inter est in
in case Y beco mes inso lven t or he at- I
ceas e to be own er of the prop erty and the prop
the prop erty wi_ll be dive sted and he ~~all I
impo sed in the deed is void .
erty will be vest ed in x. The cond1t1on
!"-"
I
t1
f,
26 ~:;'
·.• ,
[·
;:i
 Th e re is one exce ption to the abov e state d rule . A
- lesso r may impo se
a cond ition in t h e le a se d e ed to the e ffect that if the
lesse e beco mes insol -
ve nt or attem pts to tra nsfe r his inter est in the leas ed
prop erty the lesse e's
inter est shal l ceas e to exist . S uc h a cond ition will be
valid .

TOP IC - XI
TR ANS FER FOR TH E BEN EFIT OF UNB ORN PER
SON
Or
GIFT IN FAV OUR OF UNB ORN PER SON

Sect i o n s 13 and 14 of the Tran sfer of Prop erty Act

deal with gene ra l
prin c iple s to be follo wed in the case of gift in faVa our
of an Unbo rn Pers on .
An un born p erso n mea ns a pers on who is not in exist
ence even in moth er's
wom b. If a pers on want s to mak e a gift of prop erty
in favo ur of an u nbor n
perso n the f ollow ing cond ition s are to be follo wed.

1. H e cann ot direc tly trans fer the prop erty to an unbo rn

pers on.

2. H e shou ld crea te a prior inter est (life inter est) in

favo ur of a living
perso n. A life inter est hold er can poss ess and enjo y
the prop erty durin g his
li fe tim e. H e will not get abso lute owne rship .

3. Wh a t is rema ining after crea ting the life inter est (ie.,
owne rsh ip) shal l
be abso lutel y trans ferre d to the unbo rn pers on.
Thus own ersh ip shou ld be
trans fe rred in favo ur of the unbo rn pers on. Limit ed or
life inter est cann ot be
given to an unbo rn pers on. Tran sfer of life inter
est in favo ur of an unbo rn
pers on is v oi d .

4. The t ran s fe ror ca nnbt po stpo ne the vest ing of prop

erty in the unbo rn
child beyo nd atta in me nt of hi s m ajori ty. In othe r word
s the prop erty shou ld
be abso lutel y v es ted in th e child on or befo re the attai
nme nt of majo rity.

The tran s fer in favo ur of unbo rn child is a cont inge

nt inter est and the

27
. f th life interest holder. Th
child should b e bo r n a live prior to the death o e e
int e re st creat e d in favour of child will be elapsed if the child is not born alive
b e fore th e d eath of the life interest . holder. In case the intereS t is elapsed
t11e i nte rest transferred in favaour of the child will be reverted to th e transf-
eror o r his legal h e irs .

6. Even if the terms of transfer provides for vesting of property in the

chi ld i mmediately on his birth or on the attainment of his majority, the IHe
inte rest holder can possess and enjoy the property until his death though
th e ownership is vested in the child.

In Tagore v. Tagore ( (1872) 9 Seng LR 377), it was held that a gift in

fav our of an u·nborn person is void under Hindu Law. However after the
e n actment of the Transfer of Property Act, 1882 a gift ·made by a Hindu in
f a v our of an Unborn Person is valid.

A gift to a person not in existence, on the date of transfer, is void

un der Muslim Law. The provisi?ns of the Transfer of Property Act dealing
wi t h gift are not applicable to Muslims and thus a Mussalman cannot make a
v a li d g ift of property in favour of an Unborn Person.

Girijesh Dutt v. Data Din (AIR 1934 Oudh 35)

'A' gifted her property to her nephew's daughter 'B' for life and then
absolutely to B's male descendants, if any. If there is no male child of B, ·
then to B's daughter without power of alienation and if B has no descen- .
dants male or female, then to her nephew.

B died without a child. The court held that the gift for life to B was valid . •
as B was a living person at the date of transfer. Gift in favour of B's unborn :,
male issue was also valid since absolute interest was t b
. o e veste d •in the ~ :;.
unborn on its birth . But gift in favour of B's unborn d h .d be· ,:
__ aug ter was voI "·
cause it was a gift of only limited interest. Since the "ft . ·born ~
. . . g1 m favour of un -~
daughter of B ,s void, the subsequent transfer in f :
. avour of the nephew a 150 :
failed . .,,

28
 TOPIC -XII
RUL E AGAIN ST PERPE TUITY

Rule in WHITB Y V. MITCH ELL

Section 14 of the Transfer of Property Act , 1882 dea ls with Rule again st
Perpetui ty. "Perpetu ity" means unendin g transact ion or transferr ing th e prop -
erty in such a way that life interest only is created for gen e ration s.

If by a transfer, life interest is created in favour of a living person, say

X, an d by the same transfer life interest is created in favour of unborn child
of X, and a life interest is created in faour of uborn child of that unborn child
of X and so on it is a transfer in perpetui ty. If this transfer is allowed to
operate th e property cannot be alienate d for generati ons and the transfer
will be viol ative of section 1 O of the Act.

By virtue of section 14, by a transfer the property should not be tied up

forever by creating life interest for generati ons. A person can create life
interests in favour of any number of living persons at the date of transfer
and th e absolute ownersh ip can be transferr ed to an unborn person. He can
postp one th e vesting of ownersh ip in the unborn child upto the date of at-
tain ment of majority . He cannot postpon e the vesting of absolute
, owner-
ship in the un born child beyond attainme nt of majority.

Under Section1 4 the maximum permiss ible remoten ess of vesting of

abso lute ownersh ip is the life or lives in being plus minorit y of the
ultimate benefic iary ( unborn child at the_date of transfer) .

~ xamples
(1) A transfers his property to B(a living person) for life, th en to C( a living person)
for life and then to 0( a living perso n) for life and then to the first unborn child of B
absolutely with a condition th at the property will be vested in the child on its attainment
of majority. The transfer is valid since it is not against Section14 of the Act. However
the child should be born alive before the death of D.

29
(2) A transfers his property to B (a living person) for life , then to th e firS t u~born Child
of B absol~tely with a cond ition that the property will be absolutely ~eS t ed in th e Child
only on hi•s attainme
•
nt of 30 year s. Th e tran sfer ·in f avour of unborn child of B . is void
since the vesting of property in the unbo rn ch ild should not be poS t P0 ned beyo nd attain-
ment of majority.

(3) A t ransfers his property to B( a living person) fo r life, then to C ( a livi ng person)
for life and then to D (a living person) for life and th en to the unborn child of B for life
and then to unborn chil d of C for life and then the unborn child of D for life and then
absolutely to unborn child of B's unborn child on his attainment of majority. The t ransfer
in favo ur of B , C and D is valid but transfer in favour of unborn chi ld of B is void since
only life interest is created in favour of that child. The subsequen t transfers in favou r of
unbo rn chil dren of C and Dare also void. The transfer o·f absolute interest in favou r of
unbo rn child of B's unborn child is also void.

In E n g land the transferor can tie up the property for life or lives in
b e in g plu s 21 years from the death of last life interest holder. Thus by a
tr a n s f e r if life interest is created in favour of a living person and then to an
unborn person with a condition that t~e property will be absolutely vested in
th e u nbo rn person only after 21 years of the death of the life interest holder,
t h e tra n s f e r is valid. In India the property should be absolutely vested in the
un born chil d on his attainmen t of majority.

Whitby v. Mitchell (1890) 54 Ch D 85

The t rasferor gifted his property to B ( a bachelor) for life, then to un-
b o rn child of B for life , then to the unborn child of that unborn child forever.
Th e English C ourt held that the transferor had streched his imaginatio n too
f ar. A child to a b ac helor is a possibility. A child to an unborn child is a ;
po s s ibil ity upon a po ssi bility. It is a transfer in perpetuity and hence void.

The rule in Whitby v. Mitchell is also known as the rule against double '1
po s s ibilitie s . The rul e a g ai n st perpetuity is not applicable to a case where a ~
p ro p erty is t ran s fe rred for th e benefit of the public.

30
 TOP IC - XIII
CLASS G IFT
or
Ru le in LE A K v. R O BIN SON

Secti on··, 5 of th e T ran sfe r of Prop o rty Act' deals with gift in fav our o f a
L:I GSS o f pe rso ns or C lass Gift.

A person can transfer his p rope rty fo r the be nefi t of a sin g le unborn
person o r fo r the benefit of a cl as s of such pe rson s. Wh en a g ift is made in
~,w our of unbo rn ch il dre n of X it is a class gift . Even if th e gift is made in
+J vour of u nborn perso ns the provisions of section13 and 14 shoul d b e sat -
;sf1 ed for its validity. In a class gift it may so happen that some of t he m may
not be entitl ed t o take the property due to the violation of -sections 13 a nd 14
:·1 their ca se. In such a situation, the question is whether the other persons ,
,r whos e cases th e transfer is valid, can take the property.

In Leak v. Robinson (35 ER 979) the English Court held that in a

class gift, if it fa ils in part, it would fail in toto (completely). The result o f th is
deci sion is that n o one can take the benefit of gift if it fails in part.

Th e rule in Leake v. Robinson was originally applied in India. But in

1929 secti on 15 was amended and it is made clear that a class gift which
fa il s in regard to s ome persons will not result in failure to the _whole class.
Thus th e persons in whose cases the trasfer is not violative of sections 13
and 14 c an take t he p roperty. The resut is that the rule in Leak v. Robinson
is no longe r a good law in India .

.EY8mple
'X' transferred his property to 'Y' ( a living person) for life and then absolutely to first three
unborn children of Y with a condition that the property will be vested in the unborn ch ildren
only when the third child attains majority. It is a class gift. In this gift sections 13 and 14
violate in the case of first two children. In such a case the last child can take one -third of
the property. The rem aining two- third prop erty will revert to X or his legal heirs.

31
TO PIC - XIV
DO CT RIN E OF AC CU MU LA TIO N OF
INC OM E

Sec tion 1 7 of the Tra nsfe r of Pro pert y

Act dea ls with rule aga inst dire c-
tion for acc umu latio n of inco me.

The tran sfer or of prop erty may give

dire ctio n to acc umu late the in-
com e from the pro per ty eith er who lly
or in part . A dire ctio n f or acc umu lation
of inco me as suc h is not void . It will
be void only whe n it exc eed s the peri od
pre scri bed in sec tion 17.

By virtu e of sec tion 17 a dire ctio n can

be give n · by the tran sfer or to
acc umu late the inco me from the prop
e·rty for eith er of the follo win g peri od-

1. The life time of the tran sfer or, or

2. Eig htee n yea rs from the date of the
tran sfer .

If the dire ctio n is to acc umu late inco

me for a peri od long er than the
abo v e stat ed pre scri bed peri od, the
dire ctio n sha ll be void for that peri od
whi ch exc eed s the pre scri bed peri od.
Thu s if the dire ctio n is to acc umu late
i nco m e for 50 yea rs from the date
of tran sfer the tran sfer ee is bou nd to
acc umu late inco me for 18 yea rs and
the inco me•can be disp ose d of as if the
per iod d urin g whi ch the acc umu latio
n has bee n dire cted to be mad e had
el a pse d . Any dire ctio n for acc umu latio
n whi ch exc eed s the max imu m per-
mis sibl e pe r iod is void and inop erat ive
.

Exa rnp le~

1. x gi ft s h is imm o vab le pro per ty to Y with a con ditio n
that Y sho uld ac-
cum ula te inco m e from the gifte d pro
per ty dur ing the life time of X. The
dire ctio n f o r ~cc umu latio n of _inco me
is vali d.

2
. x gi f ted h is i mm o vab l e pro per ty to Y with a con ditio
n that y shou ld ,:~
acc umu l ate the in co m e from th e prop e ,!
rty for 18 yea rs or life time of x, whic h-
!
eve r i s l o n ge r. X liv e d 3 0 y ea rs from the date of tran sfer . y is bou nd to
&_:

32
 accum ulate the incom e for 30 years . If X had only lived for 1 0 years
, then y
is liable to accum ulate incom e for 18 years .

3. X gifted his immo vable prope rty to Y with a condi tion that Y shoul
d
acc umula te the incom e from the prope rty tor 25 years form the date
of trans-
fer. Y must follow the direct ion for accum ulatio n for 18 years and
the period
excee di ng 18 years can be ignore d . At the end of 18 years the accum
ulated
incom e can be dispo sed of as if the whole period of 25 years has
elaps ed.

EXCE PTIO NS

There are three excep tions to the gener al rule that the direct ion
for
accum ul ation shall not excee d the life time of transf eror or 18 years
form the
date of transf er. They are -

1. Paym ent of Debt

T he rule again st accum ulatio n embo died .in 17 (1) is not applic able
if
th e p urpos e of such accum ulatio n is paym ent of debts incurr ed by
the trans-
feror or transf eree.

Exam ple
A, makes a gift of his house to Y with a direct ion that out of the month
ly rent
from t h e buildi ng an amou nt of Rs. 500/- shall be accum ulated to
clear off ·
his debt of a total amou nt of Rs.2, 00,00 0/- . The direct ion for
accum ulatio n
cf incom e is valid event hough the period of accum ulatio n contin
ues after
th 8 life t ime of the transf eror or 18 years from the date of transf
er.

2. P ro vi s ion of portio ns for ch-i ldren

If t he direct ion for accum ulatio n of incom e is for provid ing portio
ns (
ma inte n a nce ) for childr en or remot er issue s of the transf eror the
accum ula-
tion of incom e may e xceed the life time of the transf eror or 18 years
from til e
date of tra n s f er.

31
3- Prese rvatio n of Prop..e..r.ty
Direct ion to accum ulate incom e of the prope rty for a longe r perio(j
than the presc ribed period under sectio n 17 is valid if such direct
ion is for
the maint enanc e or prese rvatio n of the prope rty transf erred.

The princip le contai ned in sectio n 17 of the Trans fer of Prope rty Act
is
based on the decisi on of an Englis h Case - Thellu son v. Wood
ford.

In this case Thellu son execu ted a will and beque thed his prope rty
to
h is sons and grand sons with a directi on to accum ulate the whole
incom e
duri ng the lives of his 3 sons and 4 grand sons who were alive at
the time of .
hi s death . The Englis h Court held that the directi on for accum ulatio
n was
v a li d .

The decisi on led to the passin g of the Accum ulation Act, 1800. The
Act
is popul arly known as Thellu son Act. This enactm ent restric ted the
power of
th e transf eror to give direct ion to accum ulate incom e. In Engla nd
the trans-
f e ro r can give direct ion to accum ulate incom e for the life time of
transf eror
or 21 years from the date of transfe r. The Indian rule has been
frame d on
th e lines of Englis h Law.

TOPIC - XV
VEST ED INTEREST and CONTINGENT INTEREST

Sectio n 19 of the Trans fer of Prope rty Act deals with Veste d Intere
st
and sectio n 21 of the Act deals with Conti ngent Intere st.

When a perso n transf ers his prope rty to anoth er the intere st which
the
tran s feree gets may be vested intere st or contin gent intere st.

Veste d Intere st
A perso n gets vested intere st in the prope rty when the prope rty ·•.· l
is !::
transf erred in hi s favour under any of the follow ing circum stance
s: t r
C:

34
 1. If the prope rty is transfe rred withou t specify ing the time when it is to take
effect ; or

2 . If th e terms of transfe r specifi es that the transfe r is to take effect forth-

witt1; o r

3. If the te rm s of transfe r specifi es that the transfe r is to take effect on t h e

happen ing o f a n event which is sure to happen .

Exam ples

a) A gifts his proper ty to B withou t specify ing the time when the gift is to
take effect . The donee 's interes t in the proper ty is vested interes t.

b} A g ifted his proper ty to B with a stipula tion that the gift will take effect
forth with. The interes t of the donee is vested interes t.

c) A so ld his proper ty to B with a conditi on that the sale will take e ffect
on th e d eat h of C. The death of C is an event which is sure to happe n. The
interes t of th e buyer is vested interes t.

A veste d interes twill not be defeat ed by the death of the transfe ree
ev en thou gh he has not obtain ed posses sion . In case of death of the tra ns-
fe re e whos e inte rest in t he proper ty is vested , his legal heirs can claim the
propert y. In othe r words the vested interes t is an heritab le interes t.

kQ.n t i ngent Inte res t

A pe rs o n gets only contin gent interes t in the proper ty if the transfe r is
rnade u n der a ny of the followi ng circum stance s.

1. If t he term s of transfe r specify that the transfe r will take effect only on the
· happen i n g of a s pecifie d uncert ain event; or

.2 If th e terms of tra n s fer specify th a t the transfe r will take effect only on the

15
n o n - h nppo ninn n'f n !ipo c lfloct un co tt 11 ln o v o nt .

If th o t errn s o f t ro n s for s po c lfy th n t u,o t rnn n fo r w ill tnk () oHo c t on ly c;n

th e lu 1pp e ning o f n speclflod Ull cortn ln o v o nt., th e c ontlnnont lnto rt-)~Jt w,11
b ec orn a v e s t ed lnto ro s t wh o n th o s p ecl fl od unc ortnln ov o nt h o ppon-1.

If th e t erm s of t ra n sfo r spec ify th a t. th o tra n s for will t ak o e ffe ct on ly on

th e non - h appenl r 1g of a s p ec ifi e d un ce rta in e v e nt, th o contingen t inte re:.11
will b eco 1T1 e veste d interest on th e non -h a ppe ning of th e s p eclfe d uncertain
e v e nt .

.E:xa mpl~

( 1) A gifted tiis property to B with a condition that the gift would come into
operation only if the house of B is destroyed by flood within six months. B' s
in te r est in the gifted property is a contingent interest. B's house ls d e-
stroyed by flood within six months. The contingent interest becomes veste d
i nterest on the expiry of six months.

( 2) A gifted ·his property to B with a condition that the gift would come into
op e ration only if the house of B is not destroyed by flood within six months.
B ' s i nterest in the gifted property is a contingent interest. B ' s house did not
de s tr oy by flood within six monts. The contingent interest becomes vested
i ntere s t on the expiry of six months.
If th e transferee, who has only contingent interest, dies before the
happeni ng or non - happening of the specified uncertain event , the contin·
gent i nterest will be defeated. The legal heirs of the transferee cannot
claim the property even if the condition is fulfiled after th e death of the trans·
teree. In other words the contingent interest is not heritable.

Both vested interest and contingent interest are transferable .

36
 TOPIC -XVI
DOCTRINE OF ACCELERA TION

Section 27 of th e Tra nsfer Property Act deals with Doctrine of Acc el-
eration .

By virtue of section 27, if an interest is created in favour of one person

and by the s ame tran saction an ulterior disposition of the same interest is
mad e in favour of a nother person on the failure of the prior interest in a
parti cular mann e r, the subsequent interest shall take effect upon the failure
cf th e prior inte rest although the failure may not have occured in the man-
ner contemplated by the transferor. It is the doctrine of acceleration.

Exam p le
A makes a gift of his property to B, who is wife of his son X. In the gift deed
it is provided t hat in case of dissolution of B's marriage by death of X , the
property gifte d to B will go to Y who is dautghter of X. The marriage be-
tween B and X is dissolved by divorce. By virtue of doctrine of Acceleration
the ulterior disposition in favour of Y shall take effect though the prior d ispo-
sition fai led in another manner.

TO PIC -XVII
CON DITION PRECEDE NT and CONDITION SUBSEQU ENT

11
Law leans in favor of vesting and is against divesting" . Com-

Doctrine of Cy pres

A trans fe r of property may be absolute or conditional.

In the case of absolute transfer there will be no condition wit h regard

to the vesting o f p ro pe rty in the transferee or divesting of property from the
,t ransferee. T he vesting of prope rty will not be depended on the happening

37
 II\ a \r,\mi ft H (1t· pi 1•."pn 1ty. lh c) t1 ntH ~f cH P l 11 H\V :\ll p\ll n l u un ri d ltlo nn \N ill)
rcynr d tu Vfi s tlng . ,_,t p 1\ , ptH ly In th n t, n ,,nfcil ct t } Pl d lv n :t lll' \J
1.)t pro pcH \y fran,
t h G tn\ll ~ hH ot, . t'; \ 1d , ,~,)lhilk ~rn i ,,c, ~tr\l dlt ,~ vn u tll1\l n nd d lvd n
1 tlnu of p , () fH.n ty
may bt..) c ln ~~!:\ lti,H.i Int (, two . 11,ov 111 o

i . c ~)ndl t lo n r'f<_) ,~cHi rn ,t

2. C\.) th.il t l"H' ~ub ~,u quun t.

A Con ct\t\o n t::> n _

l ,; tid u nt I~ ,\ eo nd ltl o ll 1..'I' f'ul11 t'u u v o nt :a lput ntoci In th o
tc)rrns of' tr._\l, ~tor c1ood . on th o ll ,,pp u riln o c) 1 n o n h n pp
o n l n g of w hich th o
lnt~ro !:it which I~ n o t yut vu~ t o d In t h o tn tn ~fcHu o will l) tH':
0 111t.> vo~ toei .

A Con d itio n S u bsoQL1o nt 1::-l n co 1Hi ltlc)n <YI' fuh11 t1 o v u nt o n

th o hnpp (H\·
i ng or non - hnpp o n i n g of whh)h th o lntoro st wlll c ll ,~ n l r,Ht
d y Vt)Sto d In til e
trans feree w il l b e div est e d .

E ~an1.P_Lu
A exec uted a gift d00 d In f o v o u r o f h l:5 so n' s w ldow • B'
. w ith n s tlp ul ntlon
ttiat the propo rty w ill b o v es to d In h or fo rthw ith . It ls f ut11
cH µ ro v l d ecl In the
d eed that In case s l1 0 re - m arries , t h o p ro p orty Vt')s t o ci i n
ll o r w lll b o d lv osted
t1 om her a nd It w ill b a v est e d In ll o r dnugh to r ·c·.
Afto r tw o yonrs of t11ls
tr a nsfer, ·s·
re m arrie d . T h e p ro p 0rty vost tHi l n h e r w o u\ ct t10 d\v os t od
tro in
her and It w ou ld be v est e d In 'C' . Th o ro - mnrrl u g o of B opo.n:
,tos us a ~o ndi•
tlon prece dent as for as C Is co ncorn o d an d It o p orn tes H!:i co n ctl tlon s ub se·
quen t for B .

P.oci.r,no oJ Cy Pro a
The e x pross io n Cy Pres ( p 10 1h) ll1h; o it t, ~i ·soo P rny·) lll t->n n s ·ns rllHl rl y
as possi b l e '.

Wh e n th ero ls i:, co nditio n p reco d e nt. by virtu e of secti on 26 . tth!

p ro p e rty wlll be v os t o d In th o lt a n s t oroo o v n n th o u g h th
e '-;o n dlt lon i~ 1101
 strictly fulfilled . In order to vest the property in the transferee the substantia l
complia nce of the condition prece d e nt is suffici ent. It is because law leans
in fa vour of vesti ng .

~Je
A exec uted a gift deed with a conditio n that the proerty gifted to B will be
ve sted in her only if she marries C with the consent of D,E and F. Before the
marria ge of B with C , F bec ame an unsound pe rson . B married C with the
con sen t of D and E. The condition is substantia lly complied with though not
stri ctly fu lfil led . By virtue of doctrine of Cy Pres the property will be vested
in B. Caw leans more in favaour of vesting.

When there is a condition subseque nt, by virtue of section 29, the

prop erty w ill not be divested from the transferee unless the condition is
strictly fulfil led . Here the law leans more in favour of vesting and it is
cgain st d ivesting.

executed a gift deed with a condition that the property gifted to B will be
ested in her forthwith and in case she marries C without obtaining conse nt
,f D, E and F the property will be divested from her. Before marriage of B
virh C, F di ed. B married C without consent of D and E. Here the condition
rrp osed in th e gift deed became impossibl e to fulfil strictly due to the death
f F. Since t here is no scope for strict complianc e, the vested interest will
ct be divested eventhou gh B married without the consent of D and E. Law
iews with disfavour the divesting of estates once vested.

39
TOPIC -XVIII
DOCTRINE OF ELECTION
I 5 with Doctrine of Elec.
Section 35 of the Tran s fer of Property Act dea .

tion . The w ord 'e lectio n' means 'choose one from alternatives'· This doc.

trine was enu nci ated by E quity Courts in E ngland.

The founda tion of the doctrin e of election i s that a person ta king a

benefit und er an instrument s hould b e ready to bear the burden . The doc-
trine of election is based upon the principle that a p erosn cannot approbate
and re probate at the same time. It means that one cannot accept and reject
under the same instrument.

If the transferee claims the advantages conferred by an instrument he

should also be ready to bear the burden of such transaction. One who likes
ro se fl owe r shall not fear the thorn. One cannot have hot and cold at the
same time.

In order to apply the doctrine of election the following conditions are to

be satisfied.

1. A person(say A) should have transferred his property to another

person (say 8).

2. That other person's (B's ) property should have bee n t rans f erred
to yet another person (say C) by the transferor(A) .

3. Both the transactions (conferring the beneft 1 t 0 transferee(B ) and

. .
trans ferring his property to third person(C) ) 5 h .
ould be in the same
document.

4. The transferree(B ) to whom the tra f · _\·

. ns eror(A) has conferred
benefit can make the transaction va1·d 1 1•f he(B) w · .
objection with respect to the transt f . aives his
er o his property.

40
 If all the above conditions are satisfied the person to whom the benefit
is conferred (B) will be put in e lection either to accept the instrumen t in toto
or to rej ect it. He cannot at the same accept and reject.

Exa mole
--
"A" is owner of 20 cen ts of land on the opposite side of Governme nt
sec retariate , Stat ue, Thiruvana n thapuram . "B" is owner of 1 O cents of land
at Neyyat inkara.
"A" executed a gift deed in favour of "B" and transferre d his 20 cents
of land to B. By the same documen t" A" transferre d B's land at Neyyatink ara
to "C" . Here re a lly "A" has no right to transfer B's Land to C. However, if B
waives hi s objectron with respect to the transfer of his property to C , the
tran saction becom es valid. Here the doctrine of election becomes appli-
cabl e.
"B" shou ld signify to the transferor (A) or his represent atives his inte:-: -·
!i on to conform or to dissent from the transfer. If B fails to inform his
,r:en ti on wit hin one year the transferor (A) or his represent ative may require
E to make h is election. If he does not comply with such requisition with in a
reason ab le time after he has received it, he shall be deemed to have e lected
to confi rm the transfer.
If B want s to take the benefit under the gift deed he should be ready to
£Ive his land to C. B cannot take the benefit and reject the burden in the
·r st rum e nt .
If B rejects th e document , B is called 'refractory donee' and C be-
com es 'disappoin ted donee'. A can retain his property and B can retain his
rr0p erty. In such a case the obligation to compensa te C would arise.

he rul es rega rd ing compensa tion to the disappoin ted donee is as follows:

If A , the original transfe ror, is alive on the date of rejection and is

apab te of making a fres h transfer and the transfer was free and without
ny considera tio n , no body is under any obligation to compensa te C.
) If there was considera tion , A is bound to compensa te C .

41
 ~

th e property of A com es
c) If A ls d e ad on th e dnto whon B reJecte d ,
bllgatlon to compe n sate c
b a ck to A's h e irs a nd th e y a ro unde r a s ta tutory O · - . ·
8
Th e c ompans Atlon will b e e qu a l to th o v a lu e of prop e rty of ·
d) If A Is ,,ot d ea d but Is In c apa b le of m a king a fres h tran s fer ( due to
uns ound m ind) hi s lo gHI re prese ntati v e s a re under a st atutory obligation to
c omp e nsa te C In all cases wh ether the original tran sf e r w a s free or for con.
sid aration .

In Engl a nd the refractory donee m a y retain the benefit and may refrain
fron, tra nsfe r ring his property to disappointed donee . But he shall incur the
lia b i lity to give com pensation to disappointed don·ee. But in India, refractory
donee cannot do so. In case he rejects the benefit he is not bound to com-
pensate the disappointed donee. He cannot take the benefit and reject the
burden by paying compensatio n to the disappointed donee.

:=-~------ . . . :--:.::::-:~~ordas (14 Born 438)

A Hindu widow died after executing a Will in respect of some property
b e longed to her deceased husband and which she was holding as limited
ow ner. By th at will she disposed of the property to X and she, out of her
own money, gave Rs.2000 to P.
Both X and P were reversioners. They were entitled to the property. P
c la imed Rs. 2000 /- and one- half of the property as the reversionay heir.
The Court held that the doctrine of election is to be applied and p must
el ect to take either the legacy (Rs. 2000/-) under the will or one -half of the
i mmovable property. If he elects the legacy under the will he would get Rs.
200 0/- but he should give one-half of the property, which he is entitled as
re v e rsi oner, t o X . If he rejects the legacy under the will he would get one ·
h a lf o f th e pro p e rty. In suc h a case R s. 2 000/- will go to legal heirs of the
widow . Th e legal heirs of the widow s hould compensate x {disappoi nted
don ee ) th e v a lu e of one - half of th e prop e rty.

42
 coo per v. Coo per ((18 74) LR 6 Ch. 15)
The bas i s of the doc trin e of elec tion was
exp lain ed by the Hou se of
Lords in this cas e. The fact s of the cas e
wer e like this :
X gav e som e pro per ty in trus t to se ll afte
r his dea th. The sale pro -
ceed s wer e to be held in trus t for his chil dre
n and afte r his wid ow' s dea th the
n,oney was to be divi ded amo ng his 3
son s as per the dire ctio ns of his
wid ow.
The wid ow e xec ute d a dee d and dire cted
tha t the sale pro cee ds wer e
to be divi ded equ ally amo ng the thre
e son s, A ,B and C.
Late r she exe cute d ano the r Will and by
whi ch she gav e the ent ire sale
proc eed s to A and a lega cy of her own pro
per ty to two son s, B and C.
A filed a suit aga inst C and two son s of
B ( B die d bef ore the suit is
fil ed) to elec t bet wee n the ir clai ms und er
the dee d of app oin tme nt and the
will .
W hil e dec idin g this cas e the Hou se of Lor
ds held " the re is an obl iga -
tion on him who tak es a ben efit und er
a will or oth er inst rum ent to give full
effe ct to tha t inst rum ent und er whi ch he
take s a ben efit ." Thi s is the bas ic
princi p le of doc trin e of elec tion .

TO PI C - XIX
DOCT RIN E OF AP PO RT ION ME NT

Sec tion 3 7 of the Tra nsf er of Pro per ty Act

dea ls with app orti onm ent of
b i:;n efit o r obl iga tio n on sev era nce of
the pro per ty. If as res ult of a tran sfe r
he p rop ert y is divi ded and held in sev
era l sha res and the ben efit of any
tlig ati o n re latin g to tha t pro per ty as
a who le pas ses from one to sev era l
wne rs, the obli g atio n mu st be per fqrm ed
in fav our of suc h sev era l own ers
n the pro por tion t o t he valu e of eac h sha
re in the pro per ty.

~ a r012.Le.

was own e r o f a buil ding . He had let it out to Y for a mo nth ly ren
t of Rs.
000 / - fo r a per iod of 10 yea rs . X sold
the pro per ty to A, B, and C. A
urch a sed on e- h a lf s har e. B pur cha sed
one - fou rth sha re. C pur cha sed
.ne~four th sha re . Y has to pay the ren t to
A, Ba nd C in the rati o of 2:1 :1 .

43
~~:~s~~R B Y O S T E N S IB L E
OWNER or APP
Or A R E N T OWNEi:i
D O C T R IN E O F H
O L D IN G O U T

S ec tio n 41 of th e
T ra ns fe r of P ro pe
rt y A ct de al s w i th
tr an sf e r ef fe ct ed va lid ity of th e
by an O st en si bl e
O w ne rs .

Th e ex p re ss io n O
st en si bl e O w ne r
so m e pr op er ty is re fe rs to a pe rs on
pu rc ha se d by an ot in w ho se na m e
he r pe rs on w ho ha
fo r th e sa m e . s pa id co ns id er at
io n

If yo u pa y th e pr ic e an d
pu rc ha se so m e im
na m e an d al lo w m ov ab le pr op er ty
m e to ac t as ow ne in my
r in th e ey es of pu
ow ne r bu t on ly an bl ic , I am no t a
os te ns ib le ow ne r. real
If so m e pr op er ty
na m e of H u sb an is pu rc ha se d in
d, fo r th e sa ke th e
of av ai lin g a bu ild
go v er nm en t de pa in g lo an fr om th e th
rt m en t in w hi ch he e
is w or ki ng , ou t of
w ife by h er fa th er th e m on ey pa id
, th e H us ba nd is to th e
on ly an os te ns ib le
re al ow ne r. \t is be ow ne r. T he w ife
ca us e th e co ns ie 1e is the
ra tio n fo r pu rc b _
a st ng th e pr op er
w if e , th ou gh th e do ty is of
cu m en t is ta ke n in
th e na m e o f H us ba
nd .
T he ge ne ra l ru le
re ga rd i_ng th e tr an
ca nn ot tr an sf er a sf er of pr op er ty
be tte r tit le th an th is th a t a pe rs on
at he hi m se lf po ss
i s co nt ai ne d in th es se s. T h is pr in
e m ax im "n em o ci pl e
da t qu od no n ha
os te ns ib le ow ne r be t" . T he tr an sf er by
co ns tit ut es an ex
ce pt io n to th is m
tio n 41 a tr an sf er ax im B y · t 1

by os te ns ib le ow . v, r ue o f S
ne r co nf er s go od ec· 1
T hi s se ct io n is em tit i\e to th e tr an sf
bo di ed on th e ba si er ee . ,
s of "d oc tr in e of
h \ct·
o m g ou t'.
E xa m pl e
A is th e re al ow ne
r of so m e im m ov
. ab le pr op er t H f
ow ne r of th e pr op
er ty in th e ey es of y. e al lo w ed B to ac -
pu bl ic B ff t as r::
th e pr es en ce of A, 0
an d C pu rc ha se d · er ec t th e pr op e t f ··
th e p al e in
lie vi ng th at B w as r Y or 5
th e re a\ ow ne r. ro
A de lib erpe rt y fr om B in d f ·th be·
go o a, _
at el y ke pt se cr
et th e correct ~," '
44
 info rma tion from C . A can not rec ove
r the pro per ty from C. It is bec aus e of
the doc trin e of Hol d ing Ou t.

In ord er to a ppl y th e doc trin e of hol

din g out as con tain ed in sec tion 41
of the Act the foll ow ing con d itio n s
are to be sat isfi ed:

1. T he tran sfe ror s hou ld be an ost ens

ible ow ner of the pro per ty.

r. Th e ost ens ible ow ner sho uld be hol

din g the pro per ty with the
c ons ent of the rea l ow ner .

~ The ost ens ible ow ner sho uld hav e

tran sfe rre d the pro per ty wit h
th e exp res s or imp lied con sen t of the
rea l ow ner

The tran s f ere e sho uld hav e pai d con

sid era tion and act ed wit h
rea son ab le car e and goo d fait h

If a ll th e abo ve sta ted con diti ons are

sat isfi ed the tra nsf ere e w ill get a
::.li d titl e.

am Co om ar v. Ma cqu een (18 72, 11 Sen g LR 46 P.C

)
In thi s ca se Mc Do nal d pur cha sed
som e imm ova ble pro per ty in the
: me of hi s mis tres s Bun nu Bee bi. She
wa s onl y a bee nam ida r( a len der of
.m e) fo r the t ran s act ion . As bet we
en Mc Do nal d and Bun nu Bee bi the
rea l
ner shi p wa s wit h Mc Do nal d eve nth
oug h the sal e dee d wa s tak en in the
rm e of Bun nu Bee bi. Bu nnu Bee
bi wa s onl y an ost ens ible ow ner or
app ar-
tt °Jw ne r.
1

Bun n u Bee bi o ff e red the pro per ty

for sal e. X pur cha sed the pro per ty
,rn he r be li e vin g tha t s he is the rea l ow n e r.
X too k the pos ses sio n of the
)pe rty . T h ere wa s no obj ect ion from
Mc Don a ld .

Afte r few y ear s, Mc Do nal d exe c ute

d a will a nd beq uet hed the pro per ty,
ich was tran sfe rred by Bun nu Bee bi
to X , in fa vou r of his son , Ma cqu een
.

45
 Ma cqu een file d a suit aga inst Ram
Coo ma r for the rec ove ry of Prop_
erty . Ram Coo ma r was the son of
dec eas ed X, the pur cha ser of prop
erty
from Bun nu Bee bi.

The Priv y Cou nci l hel d tha t Bun nu

Bee bi was an Ost ens ible Ow ne r
and whe n suc h an Ost ens ible Ow ner ma kes a tran
sfe r for con side rati on
th e pur cha ser
who has act ed in goo d fait h will get I

a goo d title .

In Sub ram oni a Pill ai v. Kum ara

Pill ai (19 86 KLT SN 12 P.7 ), it was
hel d tha t to attr act sec tion 41 of the
Act the foll owi ng con diti ons are to
sat isfi ded : be

( 1) The tran sfe ror sho uld be an ost ens

ible own er.
( 2) The tran sfe r sho uld be for goo d con
side rati on.
(3) The tran sfe ree sho uld act in goo d
fait h, sho uld be dili gen t, tak ing
rea son abl e car e to asc erta in tha t the
tran sfe ror had req uis ite pow er
to tran sfe r.
If any of the se ins epa rab le ele me nts
is wan ting , the tran sfe ree can not
see k the aid of the sec tion .

TO PIC -XX I
DO CT RIN E OF FE ED ING TH E GR AN
T BY ES TO PP EL
or
ES TO PP EL BY DE ED

Sec tion 43 of the Tra nsf er of Pro per

ty Act dea ls with the com mo n law
doc trin e of Fee din g the Gra nt by Est
opp el.

The doc trin e of fee din g the gra nt

by est opp el pro tec ts a tran sfer ee
wh o pur cha sed the pro per ty in goo
d _fai th from a per son wh o has no
title,
The doc trin e of fee din g the gra nt
by est opp el or est opp et ·by dee d
can bB
exp lain ed with the hel p of an exa
mp le:
X is not the ow ner of a par ticu lar pro
per ty. He has no aut hor ity toi ·
tra nsf er it. He frau dul ent ly rep res ent ed tha t he
has aut hor ity to tran sfer jl:.

46
a'.

i; .
,J\·
 and offer ed the prop erty for sale to Y. Y purc hase
d the prop erty in good
faith tor cons idera tion. Whit e this cont ract of sale
is s1...1bsisting, X acqu ires
or gets o wn ersh ip in t he prop erty. Then the trans
feree gets, by virtu e of
doctr ine of feed ing the gran t by esto ppel , an optio n
to claim the title of X or
to rejec t the prop erty and claim the retur n of
cons idera tion whic h he has
p a id to X.

In orde r to appl y the doct rine of feed ing the gran t by

esto ppal as con-
ta ined in sect ion 43 of the Tran sfer of Prop erty Act
the follo wing cond ition s
are to be satis fied:

1. A pers on shou ld have trans ferre d some imm ovab le

prop erty to
anot her pers on.

2. Th e Tran sferr or shou ld not have a valid title to the

prop erty or
lega l auth ority to trans fer the prop erty.

3. Th e trans feror shou ld have fraud ulen tly or erron eous

ly repr esen ted
th at he has title to the prop erty or lega l auth ority to
trans fer it.

3. The trans feree shou ld have paid cons idera tion and
acte d upon
the faith of the fraud ulen t repre sent ation of the trans
feror .

The trans feree shou ld have acte d in good faith .

Whil e the cont ract of trans fer is subs istin g the trans
feror shou ld
have eithe r acqu ired or got an inter est in the prop erty.

If all the abov e cond ition s are satis fied the trans
feree can claim the
i nte rest whic h the trans feror has acqi red in such prop
erty or rejec t the trans fer
and claim the retur n of cons idera tion whic h he has
paid .

47
 In Tila kdh ari lal v. Kh eda n Lal , PC
. (48 Cal 1 ( · ) ' the doc trin e of fe
e(j,
ing the gra nt by est opp e l was exp
lain ed by Lor d 8 u ckm ast er as foll ow :

" If a m a n wh o has no title wha tso

eve r to pro per ty, gra nts it by con
vey anc e
wh ic h in form wo uld car ry the leg
al est ate , and he sub seq uen tly acq
uire s an
i n t ere st suf fici ent to sat isfy the
gra nt, the est ate ins tan tly pas ses
(to the
tran sf r ee )" .

In Bh arg avi v. Lak shm i ( 198 6 KLT SN 11 3 P. 71) , the Go

u rt held
tha t sec tion 43 app lies wh ene ver
a per son tran sfe rs pro per ty to wh
ich he
h as n o t it le , on a rep res ent atio n
tha t he has a pre sen t and tran sfe
rab le inte r-
est th e rein , and act ing on tha t rep
res ent atio n, the tran sfe ree tak es
a tran s-
f e r for con s ide rati on. In ord er to
attr act sec tion 43 the gra nte r mu
st hav e
pu rpo rted to gra nt an inte res t in
lan d whi ch he did not at the tim e
pos ses s,
b ut s u bse que ntly acq uire s. The
prin cip le of sec tion 43 is tha t the
ben efit of
th e acq uis itio n mu st go aut om atic
ally to t.h e ear lier gra nte e. Se ctio
n 43
e m bod ies a rule of est opp al and
ena cts tha t a per son wh o ma kes
a rep re-
se nta ti on sha ll not be hea rd to alle
ge the con tr_ a ry as aga ins t a per son who
act s on the rep res ent atio n. Wh
en the tran sfe ree kno ws tha t hi_s
tran sfe ror
doe s not hav e the title pro fes sed
to tran sfe r he can not be sai d to hav
e acte d 1
o n a fra u dul ent or err one ous rep
res ent atio n. Act ing on a wro ng rep
res ent a-
ti o n b e l ie v i n g it to be cor rec t is
the bas is of the sec tion and the
bas is if the
rul e e m b o die d in the sec tion tha t
est opp al will fee d the gra nt by ope
rati ng on
any inte res t wh ich the tran sfe ror
ma y acq uire in the pro per ty. Tha
t prin cipl e ·
has n o app lica tion wh en the true
fac ts are kno wn to the tran sfe ree
and he t
tak es t he t ran sfe r with kno wle dge
of abs enc e of title .

Se ctio n 43 ma kes it cle ar tha t if

the tra nsf ero r ma kes a tran sfe r
of hi s i nte re st in the pro per ty to
ano the r per son for con sid era tion
and . E
the tra n s fer ee has acc ept ed the
tra nsf er in goo d fait h and wit hou
not ice of the e xis ten ce of the opt t-
ion of the prio r tra nsf ere e, his inte
est wil l be pro tec ted and the prio r- '. _
r tra nsf ere e can not cla im the inte
est of the tra nsf ero r. r· :/f.
· ii
l

48
 Example
X is not the real owner of an immovable porperty. He is not authorised to
alienate the property. He fraudulently represented to Y that he is authorised

to sell the property. Y purchased the property from X in good faith and for
consideration. X subsequently acquires the ownership of the property. He

offered the property to Z for sale and Z purchased the property in good faith
and for conside ration from X without the knowledge of the existence of
option available to Y. Under such a circumstace, the right of Z over the
property will be protected.

Renu Devi v. Mahendra Singh (2003) 10 SCC 200

The Supreme Court held that the doctrine of feeding the grant by es
toppel which is in essence a principle of equity stands statutorily recognised
in india by s.43 of the Transfer of Property Act. The principle is based partly
on the common law doctrine of estoppel by deed and partly on the equitable
doctrine that a man must make good his contract when he acquires the power
of performance. The rule is that if a man, who has no title whatever to the
property, grants it by a conveyance which in form carries the legal estate,
and he subsequently acquires an interest sufficient to satisfy the grant, the
estate instantly passes. Equity treats that as done which ought to be done.
The doctrine may not apply if the deed of transfer itself was invalid or if the
third party has acquired title bona fide, for consideration and without notice.

TOPIC XX1
QUI PRIOR EST TEMPORE POTIOR EST JURE

The maxim means " prior transferee in point of time has better title in

law. Section 48 of the Act deals with the priority rights of different
transfer
ees of an immovabie property.

An owner of an Immovable property can create by transfer rights in

avour of different persons with regard to the same property. An owner of
immovable property can mortgage his property for any number of times.
ne
mortagees may be different persons. While a
mortage is in existence
 n. After creating
very same property to
another poo
"Can mortgage the in such a
another person.
same property to
ys
ne may gift the very The donee's
first charge over the property.
e rst mortgagee will get
title will be subject to the earlier mortgages.

later transfer
of the same property the
t h e r e a r e s u c c e s s i v e transfers

transfer. This general principle is contained in

will be subject to the prior
Qui Prior Est Tempore Potior Est Jure".
"
the maxim

Exceptions
There are certain exceptions to the general principle of priority. They
are

1.
1. By virtue of Section 78 of the Transfer of Property Act, if through the

fraud, misrepresentation or gross neglect of a prior mortgagee, another

person has been induced to advance money on the security of the mort-
gaged property, the prior mortgagee shall be postponed to the subsequent
mortgagee.

2. Section 79 deals with second exception. If a mortgage is created for

present and future advances and the maximum amount to be secured is
expressed at the time when the first
mortgage is created, the first mortagee
can claim priority over the intermédiate mo rtgagees even for future ad-
vances. In order to claim priority the intermediate mortagees should have
notice of prior mortgage.

Example
A mortgaged his property to B as
seccurity for a loan of Rs. 1,00,000/-
future advances and for
upto a maximum of Rs.2,00,000/-. The
mortgage deed is
The mortgagor
(A) subsequently mortgaged the very same registered.
for a loan of Rs.
property to C as a
50,000/- After creating the second secutity
mortage, B lent Rs.
on the security of the
earlier mortgage. In this case B 1,00,000/- to A
shall have
total amount of Rs.2,00, 000/- eventhough he has lent Rs.
priority over C. far the
1,00, O00/- to A after
lent Rs. 50,000/- to A. It is because C had c hoad
notice of the earlier mortage.
50
 TOPIC XX|
IMPRIMPROVEMENTS MADE BY BONAFIDE HOLDER UNDER
FECTIVE TITLE DE
Or
pOCTRINE OF
EQUITABLE ESTOPPEL BY ACQUISCENCE
Section 51 of the Transfer
of Property Act deals with right of
sation of a transferee who holds the compen
property under defective title and made
some improvements in the
property in good faith that he is entitled to the
property.

By virtue of Section 51 a transferee, who holds the property under

defective title and has made
for the
some
improvements, can claim compensation
improvements made by him from the better title holder who evicts
him from the property.

In order to apply section 51 of the Transfer of

Property Act the follow-
ing conditions are to be satisfied.
A person should have taken
possession of a property as a
transferee. He should not be a trespasser
2. He should have believed in
good faith that he is absolutely
entitled to the property.
3. He should have done some
improvements in the property.
His title should be defective
The real owner should have
opeted to evict the
holder of property
under defective title from the
property
If all the above
conditions are satisfied the real owner of the
has an
option either to evict the holder of property under
property
Sell his defective title or to
interest to the hoider of the
property.. In case he opts to evict the
nolder, he should pay
in the
compensation for the improvements made by the holder
property. In case he opts to sell his
interest to the
the
market value of the
holder, he can claim
property excluding the value of improvements made
by the holder.

51
 B, thout any
with thority
Examplea i m m o v a b l e
property.

that he is A. C in
A is the real owner ofan
representing

fraudulentiy

to C by in s u c h a case,
A has got
from A sells A's property property.
building
on that to C. If A
aith a sell the property
oOd constructed
o r to
property
from the made by c
a
Option either to evict C value of improvemts

pay to C the
u e c i d e s to evict C, he
should shall be the estimated
improvement
in respect of
The amount to be paid f he decides to sell the
the time
of eviction.
of the improvement at excluding the
of the property
Value

the market price

property to C, he can claim contained in Section
the principle
by C. This is
value of improvements made

Property Act.
51 of the Transfer of

that the holder

the Court heid
Basavarayappa,
In Narayana Rao v.
the value of improvements as
of property under defective title is entitled to
on the date of actual eviction.

129) the court held that the

In L R. Creet v. Gangari, (AIR 1937 Cal
principle of section 51 does not appiy to trespassers.

In Kedar Nath v. Mathu Lal, (40 Cal 55 (PC), a Hindu widow sold
estate without
property in which she had only a widow's estate or limited
legal necessity. The vendee made some improvements in the property. The
reversioner filed a suit to set aside the sale and recovery of property. The
court held that the reversioner should pay compensation to the vendee for
the improvements he had made in the property.

In Sarasamma v. Laisal Either (1993 (1) KLT 37), it was held that
the right to claim value of improvements should be put forward in the suit
itseld, in answer to the claim for recovery of possession at least as an alter
nate plea. Execution court is bound to execute the decree as it
stands and
cannot grant any other relief other than what is
granted as per the decree,
unless there is any provision of law
specifically empowering the executing
court to do so. If the claim for value of
improvements is put forward for the
first time before the executing court, it cannot
give necessary relief unless
52
 the decree contains a provision for the same in the decree.

Doctrine of Equitable Estoppel by Acqujescence

In England the doctrine of equitable estoppel by acquiscence protect
bona fiode holders under defective title from eviction by the real owner.
Acquiscence means that a person abstains from interfering while a violation
of his right is in progress. It operates by way of estoppel against the true
owner.

The doctrine of equitable estoppel Lord Cranworth in

was explained by
the following words in the leading case of Ramsen V. Dyson (1866)

"If a stranger begins to build on my land supposing to be his own and

, perceiving his mistake, abstain from setting him right and leave him to
persevere (continue) in his error, a Court of Equity will not allow me after-
wards to assert my title to the land (and recover the land) on which he had
expended money on the supposition that land was his own."

In order to apply the doctrine of estoppel by acquiescence three condi-

tions are to be satisfied:
1. The person expending money should have believed himself to be
building on his own land
2. The real owner at the time of the expenditure knows that the land
Delongs to him and not to person expending the money.
3 The real owner should have abstained from
interfering with the
work of construction of
building by the holder of property.

The doctrine of Equitable Estoppel by Acquiesence

prevent the real
Owner from
evicting the person holding the property under defective title
Dut
section 51 allows the real owner to evict the holder of property under
defective property by paying compensation for the improvements made by
him.

53
 TOPIC -XXiV
THE CONSEQUENCES OF TRANSFER
OF "IMMOVABLE PRO VABLE PROP
ERTY" WHICH IS THE SUBJECT MATTER OF A PENDING SUIT
SUIT
Or
DOCTRINE OF LIS PENDENS
Section 52 of the Transfer of Property Act deals with doctrine of Li
Fendens as expressed in the maxim " Ut Lite Pendente Nihil Innovetur

he maxim means nothing new should be introduced in a pending litigation

he expression "Lis Pendens" means "a suit pending before a coun

of law".

Section 52 of the Act, which deals with the transfer of property during
the pendency of a suit in a court of law regardig immovabe property, gives
answers to the following questions.

1. Whether either party to a suit can transfer immovable property, which

is the subject matter of the suit, while the suit is pending in a competent
court without permission of that court?

2. property is transferred without permission of the Court, what are the

COsequences?

By virtue of section 52 of the Act, during the pendency of any suit or

proceeding in a compentent court either party cannont transfer the immov
able property, which is the subject matter of the suit or proceeding, except
under the authorithy of the court and on such terms as it may impose. Thus
the general rule is that before making a transfer of property which is the
subject matter of dispute leave of the court is to be obtained.

A suit is said to be pending from the date on which the plaint is

instituted in the court and until the the complete satisfaction or discharge of
final decree passed in the suit.
a

54
 If during the pendency of the suit one of the parties to the suit transfers
the property without consent of the court, the transferee will be bound by the
decree as i ne is the transferor eventhough he was unaware of the suit.

The transfer as such is not void. It is because section 52 does not prohibit
the transfer of property during pendency of the suit. Thus if the decree is in
favour of the transferor, the transferee a n claim the benefit of decree. If
the decree is not in favour of the transferor, the transferee will be bound by
the terms of decree eventhough he is not a party to the suit.

In order to apply the doctrine of lis pendens the following conditions

are to be satisfied.

1. A suit or proceeding should be pending in a court in India.

2. The court should be a competent court to decide the dispute.
3 The dispute should be regarding the right of parties with regard to

immovable property.
4. There should not be collusion between the parties to the suit
5. One of the parties to suit should have transferred the property
without the consent of the court.

If all the above conditions are satisfied the trasferee will be bound by
the terms of decree as if the transferor himself. This is the doctrine of lis

pendens.

Example
w a s owner of the immovable property. X gifted the property to Y and

possession is delivered to him. The giftvitiated by fraud. X filed a suit

was

O set aside the gift deed on the ground of fraud. While the suit is pending
in the court, Y transferred the property to Z without the consent of the court.
The
e possession of the property was delivered to Z. Z was not impleaded as

dparty in the suit. The suit ended in favour of X and the court set aside the
9 t deed and directed delivery of possession. In such a case Z is bound to

IVe possession of the property to X. He cannot claim any protection.

55
 OVer if the suit collusive one,
Z is not bound by the decree.
was a

Dellemy v. Sabine (1857) (1 De G &7, 566)

X filed a suit against Y for setting aside of a sale deed and recovery of

possession of the property. After the institution of the

suitY transferred the
property to Z. X continued the suit aginst Y without knowledge of this trans-
fer. The action ended in favour of X. The court set aside the sale deed
executed by X and directed X to make certain payments to Y. Z challenged
the decree on the ground that he was neither a party to the suit nor aware of

the decree. The court held that Z who is the transferee from Y pending the
Suit was bound by the decree eventhough he of the
was unaware pending
Suit. However he is entitiled to receive from x the amount which X owes to

The effect of the doctrine of lis

pendens is that the transferee is bound
by the decision of the court. It does not prevent the
vesting of the title in him
but makes it subject to the
rights of the parties as decided in the suit. The
transfer pendente lite is valid and
good to the extent that it does not conflict
with the rights of the
parties in suit as the established under the decree.

in Saraswathy Amma v. Bhaskara Pillai (1987 (1) KLT SN

the Court held that the 63 P.47)
doctrine of lis pendens is founded
law and
equity. The rule is not based on the
on
principles of
doctrine of notice, but on
expediency, i.e., the necessity for final
adjudication. It is
the alienee immeterial whether
pendente lite had, or had not, notice of
The conditions
required are:
pending proceeding.
(1) Pendency of a suit
(2)
or
proceeding in any court
having authority.
The suit or
proceeding is not collusive.
(3) Any right to immovable property is
(4) The directly or
specifically in
property is transferred by a
party during the pendency
question.
of the suit.
If all the above conditions are
satisfied the
becomes representative -in purchaser pendente lite
comes bound by the decree interest of the partywho sells to him
passed against and be-
him. There is no
duty cast upon
56
the plaintit to inform the transferee or give warning to him as a condition
precedent to the applicability of the rule of lis pendens. When the document
is hit by the rule of lis pendens the transferee takes the document only sub-
ject to the ultimate result of the suit. The doctrine of estoppel is not appli
cable in a case coming under section 52 of the Act. Thus the purchaser

pending litigation cannot plead that the silence of the plaintiff would operate
as estoppel against him.

In K.A. Khader v. Rajamma John Madathil (1993 (2) KLJ 575), it

was held that the effect of the doctrine is not to annul all voluntary transfers
effected by parties to the suit, but only to make the decree passed binding
on the transferee even if he is not a party to it. The transfer will be valid

subject to the result of the suit.

Problem
X, who is owner of immovable property, executed a mortgage by conditional
sale of his property in favour of Y for securing a loan of Rs. 1,00,000/-. He

amount within one year. X also indebted to 7

agreed to repay the loan was

an amount of Rs. 25,000/- at that time. It was an unsecured debt. X failed

to repay the amount to Y and Z. Z instituted a suit for recovery of money. Z

The court
applied for attachment before judgement of the property of X.
passed an order of attachment of property of X which was mortgaged to Y.
At the end the trial court passed a decree in favour of Z. Thereafter Y

suit for foreclosure of the mortgaged property. While

this suit
instituted a
was pending before the court, Z applied for execution of decree passed in

his favour and the court sold the property of X. The property sold in execu-
On of the decree was purchased by A. The suit instituted byY was decreed

in his favour and court declared that he is not liable to be redeemed. Dis-

Cuss whether A is bound by the decree.

Answer
A, who is purchaser pending litigation, is bound by the decree passed
n the suit filed by Y. In this context the following decisions of the Kerala

High Court are relevant.

57
 in Cheriya v. Kumaran (1988 (2) KLT 704), it was held that
the
principle of lis pendens is applicable to involuntary alienations like coun
sale also. The purchaser pendente lite is bound by the result of the litigation
on the principle that since the result must bind the party, so must it bind the
person deriving his right, title and interest from or through him.

In Vasudevan Pillal v. Ramesh Nair ( 1989 (2) KLT SN 48 P.40) it

was held that though section 52 of the Transfer of Property Act does not

apply in terms to involuntary sales, such as court auction sale, the principle
of is pendens would apply A court sale in
to such aliena tions as well. ex
ecution o f a money decree held subsequent to the institution o f a mortgage

Suit is vitiated by the rule of lis pendens. This is so even if the property had

been attached before the institution of thee mortgage suit.

TOPIC xxv
FRAUDULENT TRANSFER3s

Section 53 of the Act deals with fraudulent transfers. This section

deals with two types of fraudulent transfers.

The first part of Section 53 says that a transfer made with intention to
defraud the creditors of the transferor will be voidable at the option of the
creditor. If the transfer of property is made in good faith and for consider
ation the transfer is not voidable at the option of the creditor.

Examples
1. X was owner of an immovble property called Black acre. He owed one
lakh rupees to Y. X transfe rred his property Black acre to Z without consid-
eration. The transfer is voidable at the option of Y.

2 was owner of immovable property called Green acre. He owed one

lakh rupees to Y. He sold his property Green
to Z for two lakhs rupees
acre

and used that money for meeting marriage expenses of his daughter. The

58
 transferee nas purchased the property fromX in good taith and for consider-

ation. Y cannot treat the transfer as voidable.

The second part of section 53 says that a prior transfer made without
consideration to defraud subsequent transferee for consideration shall

voidable at the option of the subsequent transferee.

Example

x is owner of immovabale property Black acre. X is a Mussiman. He orally

qifted the immovable property to Y and subsequently sold the very same
oroperty to Z for consideration. The subsequent transferee can file a suit to
set aside the earlier gift

Twynes Case (1601) ( Reported in Smith's Leading Cases- Vol 1)

X owed four hundred pounds to T and two hundred pounds to P. x
transferred his movable properties to T in satisfaction of the debt. Even
after the transfer X continued in possession of the property. P filed a suit
against X for recovery of the money and obtained a decree in his favour. P
moved fot attachment and sale of movable property in the possession of X.
T claimed that the property was transferred to him for consideration( 400
pounds owed to him) and thus not liable to attachment and sale.

The court held that the transaction between X and T was kept secret
and the secrecy is badge of fraud. Eventhough there is consideration there
is no good faith and thus the transfer to T was not valid. It was held to be a
fraudulent transfer.

In United industries v. Mathal Joseph ( 1984 KLJ 885), it was held

that there could be no doubt that where it is established that the debtor
transferred the immovable property with intent to defeat or defraud credi-
TOrs, it is
for the transferee to prove that he purchased the
propety for sutti
Cient consideration and in
good faith, without being aware of the deceitful
intention of the vendor.

59
 Kesavan
Damodaran (1987 (2) KLT
LT sE.
551), it
Abraham v.
In Ithaku seeking to
was bar against
subsequent
creditor
avoid
au
a
s held that there is no

53 of the ransfer of Property Act. A trans

transfer
dnsfer a ass provided
provided in section
vOIdable at their instans
ntented to cheat future creditors would be equally nce

TOPIC XXVI
PERFORMANCE (Section 53 -A )
DOCTRINE OF PART

deals with Doctrine of Pan

Section 53 A of the Transfer of Property Act
was evolved in England. It
Performance. The doctrine of Part Performance
Performance.
s a doctrine propounded by Courts of Equity in England.

that all contracts relat.

In England the Statute of Frauds, 1677 required
that an action
ing to land to be in writing. Section 4 of the Statute provided
could not be brought upon a contract for the sale of land unless the contract
the Statute of
was in and signed by the transferor. The object of
writing
Frauds was to guard against the fraud by avoiding oral evidence.

Examplee
Xis owner of Black acre. Y' is owner of White acre which is lying adjacent
to the property of 'X'. X' needs the White acre for carrying out some devel.

opmental operation. Y' was not ready to sell the property to X'. If oral
evidence regarding agreements for sale of immovable property is admis
sible X can procure two or three witnesses and try to establish that Y' has
agreed to sell the property at a lesser price and obtain specific performance.
This types of fraudulent activities could be avoided by the Statute of Frauds.

But the stringent provisions of the Statute of Frauds was utilised by

ingenious persons to commit fraud. The owners of property orally agreed to
sell the property and after receiving price and delivering possession of prop
erty succeeded in avoiding the specific performance of the contract and evict
ing the innocent buyers only for the reason that the agreements for sale
were not in writing as required under the Statute of Frauds. n order to

avoid such fraudulent activities the Equity Courts evolved the Doctrine o

60
 Part Performance and protected the possession of the buyer on the ground
that a Statute cannot be allowed to make an instrument of fraud.

In order to apply the doctrine of part in

performance England the fol-
iowing conditions are to be satisfied.

1) There must be an oral agreement to transfer immovable property.

2) The statute should make it clear that the contract must be in writing
and signed by the transferor.

3) On the basis of the oral agreement the transferee must have put in
possession of the property or done some act which would be
referable to the contract. An act of part performance (ie., taking
possession or doing some act) must be done in performance
of the contract.

The transferee should be ready and willing to do his part, if any.

If all the above conditions are satisfied, the transferor cannot evict the
transferee from the property
tract
or avoid the specific performance of the con-
only on the ground that the contract was not in writing as required by
the statute. This principle is known as Doctrine of Part Performance.

In Maddison v. Alderson (1883), A induced a woman to serve him

as a house- keeper without
wages for many years by a verbal promise to
eave her in his will a life-estate in his land. He died without
making any
wIll. At the
time of A's death the woman was in possession of his esatate.
he
leglal heir of A filed a suit for eviction of the woman. The woman de-
ended the suit on the ground of part perofrmance. She contended that her
TVICe with A was part performance of the promise and thus she is entitled
pOSsession until her death. The court held that her continuance in the
servic of A did not refer
ETVICe directly to the contract and thus
alleged
her Claim. Thus inorder to claim an act as part performance of the reje cted
as

contract

51
 referable to the alleged
the act performed must be unequivocally contract.
n India section 53 (A) of the Transfer of Property Act deals with the

doctrine of Part Performance. apply the doctrine the

In order to tollowing
conditions are to be satisfied.

1 here must be a contract to transfer immovable property for

consideration.

2 the contract must be in writing and signed by the transferor or his

agent.

3 The transferee should

have, in part performance of the contract,
taken possession of the
property.

If thetransferee was already in possession of the

property, he
should continue to be in possession in
part performance of the
contract and has done some act in furtherance of the contract.

On the part of the transferee, he should be ready and

willing to do
hispart of contract. He should be ready to pay the consideration if he
has not already paid it.

If all the above conditions satisfied, eventhough the transfer has

are
not been completed in the manner
prescribed therefor by the law for the
time being in force, the transferor or
any person claiming under him
debarred from enforcing against the shall be
transferee and persons
him any right in claiming under
respect of the property of which the transferee
has taken or
continued in possession, other than a
of the contract.
right expressly provided by the terms

62
ImpactoI Section 17(1A) of the Registration Act,1908
AS per section 17 (1A)of the
Registration Act,1908, the docu-
ments containing contracts to transfer for consideration, any immov
able property for the purpose of section 53A of the Transfer of
Prop-
erty Act shall be registered if they have been executed on or after the
commencement of the and other related laws (Amend-
Registration
ment) Act,2001, and if such documents are not registered on or
after
such commencement, then, they shall have no effect for the purpose
of the said section 53A.

Example
A who is Owner of an immovable property agreed to sell his property by a
written document to B for a total price of Rs.
5,00,000/-. B paid an amount
of Rs.1,00.000 as advance.
The possession of the property was handed
over to Bin part performance of the contract. By virtue of section 53A of the
Transfer of Property Act, 'A' cannot evict 'B' from the property so long as B is
ready to pay the balance price. As per section 17 (1A) of the Registration
Act.1908, the contract to transfer the
property should be a registered one to
get the protection of section 53 A.

in order to apply the doctrine of part performance in India the contract

for transfer should be in writing and
signed by the transferor. But in England
the agreement need not be in
writing. It may be oral.

In India the transferee should take possession of the

property or if
already possession he should have done some act in furtherance of the
in

agreement. But in England transferee need not take

possession of the
property. Any act on the part of the
transferee is sufficient to apply
the
doctrine provided that the act should be in frutherance
of the contract and
exclusively referable to the alleged contract.

InGovind Rao Mahadik v. Devi Sahai (AIR 1982 SC

989) the
Supreme Court held that a person
claiming the benefit of section 53- A must
always be shown to be ready and willing to
perform his part of the contract.
63
 Iit is
shown that ho was not
t h a t ho was not roady and willing to perform hiS
roady
part o f the

COntract, he will ot the doctrine of part

not quality for protection pertormance
Nanu v. Karthiyant Amma (1987 (2) KLT 762), the Kerala High
u onsidered the essential conditions nocessary for making out a de-
O
O part performance to an action for oviction by the owner. h e TOllow-
g a r e the essential
conditions for invoking section 53A as a detence to an
action for eviction
by the owner.

1 he transferor should have contracted to transfer for consideration any

immovable property by writing
signed by him.
2 The transferee
should have, in part performance of the contract, taken
possession of the property or any part thereof.
3. I the transferee was already
he should continue
in possession, in
possesion and should have done some act in furtherance of the
contract.
A The transferee should have performed his part of the contract or hne

should be ready and willing to perform his part of the contact.

It was further held that no period of limitation is

prescribed for invoking
section 53A of the Act. Even if the suit for specific performance is barred
by
limitation, the transferee is neverthless entitled to resist the transferor's suit
for ejectment and to defend his own possession.

In Kutty Kuttapai Pappen Appukuttan (1989 (2) KLT SN 61 P.50),

v.

it was held that a person who obtained possession persuant to an agree-

ment for sale and has performed acts in furtherance of the contract and has
performed or is willing to perform his part of the contract can invoke the
section as a shield to defend the action by the owner to evict him from the
property. Section 53A can only be used as a defence to an action for evic-
tion. In order to invoke the section the detendant must have performed his
part of the contract or he should be willing to to perform his part of the
contract.

64
 1n kunjamma Daniel v. wilfred Moses (1986 KLT SN 72 P. 44), it

was held that tour conditions are necessary for making out the defence of

the equitable relief of part performance to an action in ejectment by the

owner. They are:
1. h a t the transferor has contracted to transfer for consideration any

immovable property by writing signed by him.

2. That the transferee has in part performance of the contract taken pos-
session of the property or any part thereof, or continues in possession in

part pertormance of the contract.

3. That the transferee has done some act in furtherance of the contract.

4.
That the transfree has performed or is willing to perform his part of the

contract.

It was further held that in order to establish the defence under section
53A to get the equitable relief by denying the right of the owner to get recov

ery of possession, it is for the defendant to establish by positive evidence

that he or she has performed or willing to perform her part of the contract.

In Sultan v. Zohra Beevi (1989 (1) KLT 149), the court held that what
is conferred by section 53A is only a right available to the defendant to pro-
tect his possession. It does not create a title in the defendant. For invoking
in
the benefit under section 53A it must be satisfied that the transferee has,
performance of the contract, taken possession of the property
or any
part
part thereof or the transferee being already in possession, continues to be in
act in
possession in part performance of the contract and has done
some

furtherance of the contract. One of the essential conditions to be pleaded

under section 53A of the Act is that the transferee has performed or is willing
to perform his part of the contract. No amount of evidence can be looked
into if there is no pleadings to that effect. To attract section 53A there must
be pleading that he continues to retain possession of the property in part

performance of the contract and had done some act in furtherance of the
Contract. Section 53A postulates that the transferee must obtain possession
Or the property as per agreement. A defendant who has no possession of
tne property cannot claim the benefit of section 53A of the Act.

65
 KLT B61),
KLT 861), the
(1989 (1)
n Mohammadunni Haji V . R a m a c h a n d r a n

53A Or
the
Act
invoking
section ie
t h e essential conditions for ror consider.
There should be immovable property
a contract to transfer the by or on
must be signed
ation. The contract must be in writing. The contract

The terms
Dehalf of the person sought to be charged under the secto
SuCil a
reasonable.
In Con
uGssary to constitute the transfer should be
should
tahe pos.
dt the transferee as in part performance of the
contract
is aireaay in
Session of the property or anv part theraof f the trasferee
in possession in
POSsession on the basis of a contract and if he continues
f u r t n e r a c e of
p a t pertormance of the contract and has done some act in
his part or the
t e contract. Further the transferee should have performed
contract or he should be willing to perform his part of the conta

heid tnat
n P.c Thomas V. Lalitha Beevi (AIR 1993 Ker. 335),it was
wnen n e
a person claiming the benifit of the doctrine of part-performence,
already in possession prior to the contract should do something indepen
iere
dent of the mere retention of possession to evidence part performence.
be
continued possession though quite legal and valid by itself could hardly
an act of part performence unequivocally referable to the subsequent con
tract.

In Devasia Chacko v. Venkitakrishna lyer (1992 (1) KLT 850), it

was held that there may arise situations in which it could be open to a trans
feree coming under section 53A of the Transfer of Property Act to file suit for
injunction to restrain the transferor or persons claiming under him from
interferring with his possession. A suit for injunction by transferee against
transferor is maintainable to protect his possession.

In Radha v. Narayanan Nair (1994 (1) KLJ 51), the court held that in
order to attract the section taking possession or continuing in possession
must bein part performance of the contract. Possession obtained subse
quent to the agreement and not referable to it, is not an act of part perfor
mance. An act of trespass is not an act referable to the contract or in part
performance of it, and hence a transferee-trespasser cannot claim the ben

66
 section 53A.
efit of

V. Syed Karimuddin (2001) 1 SCC 414, it was held that

O
when a motgagor / vendor agrees to sell the mortgaged property to the

mortgagee putative vendee in possession, the mortgagee's status is

subsummed or merged in his right as a putative vendee under section 53A

against the transferor, provided of course the pre-conditions for the applica-
tion of section 53A are fulfilled. In such a situation the equity of redumption
in the mortgagor /vendor is lost to the extent that the mortgagor cannot re-
left with the
claim possession of the mortgaged property. The only right
owner is to sue for the completion of the contract.

TOPIC XxVII
SALE OF IMMOVABLE PROPERTY
Or
Definition of Sale
Or
Difference Between Contract of Sale' and 'Contract for Sale
Or
What are the Rights and Liabilities of Seller and Buyer
Or
Doctrine of Marshelling by Subsequent Purchaser

Sections 54 to 57 of the Transfer of Property Act deal with the sale of

immovable property in India.

Act defines sale. Section 55

Section 54 of the Transfer of Property
and seller. Section 56 deals with
deals with rights and liabilities of buyer
Section 57 deals with
doctrine of marshelling by subsequent purchaser.
of encumbrances on sale.
discharge

Definiton of Sale
Act defines Sale. Sale is a
Section 54 of the Transfer of Property
in exchange for a price.
transfer of ownership of immovable Property

67
 or promised to pay. Tne not bbe
price need not be
fully paid.
The price may be paid
promised to pay.
It may be partly paid and partly

transters his absolute ownershin

In a sale the vendor
or sellor inthe
property to the buyer or vendee. The buyer has to pay consideration. The

should be money.
consideration should be price and it

Essentials of Sale
The following are the essentials of a sale.

1. Iwo Paties
In a sale there will be two parties. They are seller and buyer. The
seller or vendor must be a person competent to transfer the property. He
must be competent to contract. He must have titile to the property. The
The
Buyer or vendee may be a minor. A sale in favour of minor who has paid
consideration is valid.

2. Subiect matter
The property which is sold should be transferable under section 6 of
the Transfer of Property Act. The properties
which cannot be transferred are
given in section 6 of the Act. Spes successionis is an example of non-
transferrable property. The subject matter should be transferrable
immov
able property. The sale of movable property is
governed by the Sale of
Goods Act, 1930.

3 Consideration
In a sale the seller transfers
ownership over the immovable
property to
the buyer for
consideration. The consideration should be
be
price and it should
money. If consideration is given in the
form of any other
not be a sale, but it will be an
property it will
exchange. The price may be paid or promised
or partly promised to pay.

4. Conveyance
If the value of the
subject matter of sale is less than
one hundered
68
r u p e e s
and is tangible immovable property, the sale can be effected by
nere delivery of possession. If the value of property exceeds one hundred
m e r e

pees, the transfer can be efected only by a registered instrument. 1n the

rupe
15e of intangible property, sale can be effected only by a registered instru-
case

ment irrespective of the value of the property.

In Illikkal Devaswom v. Narayanan Raghavan (1965 KLT 1081)

(FB), it was held that sale of immovable proporty worth more than Rs. 100 by
delivery without registered instrument would be of no avail. Such a sale can

he effected only by a registered instrument.

Distinction between Sale(contract of sale) and Agreementforsalefcontract

forsale)

In the case of sale the ownership is transferred from the vendor to the
vendee with immediate effect. In the case of contract for sale the ownership
in the property will be transferred only on a future date.

Sale creates a right in rem in favour of the buyer. Contract for sale
does not create any interest in or charge upon such property. Contract for
sale creates a right in personam. In England a contract for sale will give
rise to an equitable right in favour of the buyer.

in Kochuvareed v. Mariappa Gounder ( 8 DLR TC 573), it was held

that in English law an equitable estate is created in favour of the purchaser
who has entered into contract for the sale of immovable property. Under the
Indian law unless and until a sale deed is actually brought into existence by
act of parties or under a decree of court, the party who has contracted for

tne purchase cannot be said to have acquired an ownership over the prop-

erty.

In Konar v. Thiruvadinatha Pillai ( 1956 KLT 880), it was held that

an
agreement for sale does not create any interest in property in favour or
the buye.

,9
 In Kumaran Unni v. Mohammed Kani ( 1958 KLT 836), it was held
that the contract for sale by itself would not create
any interest or charge on
e
immovable property in favour of the promisee.

In
India a contract for sale of immovable
property need not be by a
registered instrument
(Explanation to section 17 of the Registration Act, 1908).
However in order to file a suit for specific performance of the contractit
should be on a
stamped paper.
Rights and Liabilities of Seller and
Buyer
Section 55 of the Transfer of Property Act, 1882 deals with rights and
liabilities of seller and buyer. The rights and Liabilities of the buyer and
seller can be classified and studied into two heads. They are

1. Rights and Liabilities Before Completion of Sale

2. Rights and Liabilities After Completion of Sale.

1.Rights and Liabilities before Completion of Sale

A. Sellers Liabilities Before Completion of sale

(a) Duty to disclose material defects[Sec. 55 (1) (a) ]

A seller is under an obligation
disclose any material defect in the
to

property to the buyer. He is bound to disclose only those defects which the
n r could not with an ordinary care discover and the seller is
aware of it.
t1 seller has failed to disclose the latent defect which
are known to him
tiuppression of the material defect amount towould fraud and the buyer
a suit toset aside the sale.

70
aajapatht V.
Alagia (1886)9 Mad 89
A 8Ola &
property
to B. Atter he has accepted
the conveyance, B dis-
Overed that under a decree of oartition a 0ortion of the property had been

alloted t o . AB omission to disclose the oxistence of the decreg was neld

to be fraudulont and the court set aside the sale deed at the instanGe of B.

Exceptlon to Caveat Emptor

The age old rule is caveat emptor(let the buyer beware). It is for the
buyer to see whether the property is suitable for his purpose. But as an
exception Dy S.55(1) (a) the seller is bound to disclose material defects
he property which the sellor is aware( i.e.. latent defects). But it may be
said that patent defects are within the caveat emptor rule.

b Duty to produce title deeds for inspection [ Sec.55 (1) (6) ]

A seller is under an obligation to produce all documents of title relating

to the property which are in the seller's possession to the buyer for exami-
nation. This duty arises only when the buyer makes a request.

Bishandas v. Hazi Fazal (1937) Pesh 8

If the seller fails to produce the title deeds for inspection of the buyer
on his demand it would entitle the buyer to repudiate the contract for sale.
He can also claim refund of the earnest money, if any, with interest.

Maung Po Te v. Maung Shwe Ko (1916) 35 IC 373

In this case the court held that there is no obligation to produce title
deeds unless the buyer makes a request. In the absence of a request the
duty under this section does not arise.

(C) Duty to answerquestions as to tilte [ Section 55 (1) (c) 1

The seller is bound to answer to the best of his information all relevant
question put to him by the buyer in respect of the property or title deed.

71
 (d) Oexecute section 55 (1) (d) J
conveyance [
seller is b o u n d to
to execute
execute
If the tenders the price the
buyer pays
n e buyer
pay or
proper conveyance of the property.

(e) Duty to take care of property

Aiter the date of contract of sale and before the delivery of property a

Seler is bound to take care of an ordinary prudent man of the property and

all the documents of title relating to it.

(f) Duty to pay out-goings

h e seller is bound to pay all public charges due in respect of property

upto the date of sale. If the sale is not subject to encumbrances, tha seller
has to discharge all encumbrances on the property existing on the date of
sale deed.

In Thampatty v. Thampan (1956 KLT 302), it was heid that under

section 55 (1) (g) of the Transfer of Property Act, when the sale is not sub-
ject to encumbrances, the seller is bound to discharge all encumbrances on
the property existing on the date of sale deed. The seller must be deemed
to have made a contract of indemnity if it turns out that there were encum-
brances on the property on the date of the sale.

B. Buyer's Liabilities Before Completion of Sale.

(a) Duty to disclose facts materially increasing the value

The Buyer is bound to disclose to the seller as to any fact with respect
to the nature or extent of sellers interest in the property of which the buyer is
aware but the seller is not aware it the fact would increase to value of the
property.

(b) Duty to pay price

The buyer is under an obligation to pay the price to the seller at the
time of completing the sale.

72
C. Seller's Rights Before of Sale
Completion

(a) Rightto rent and profit

By virtue of section 55 (4) (a) the seller is entitled to the rents and
profits of the property till the ownership is transferred to the buyer.

D. Buyer's Rights Before Completion of Sale

ia) Right to charge for price pre-paid.

By virtue of Section 55 ( 6) (b) the buyer is entitled to a charge on the

property which the seller has agreed to sell for the price which he has al
ready paid.
ready paid. By virtue of the charge, the buyer can file a suit to sell the
property of the seller for recovery of the prepaid price.

In Ibrayi v. Pokkan (1989 (1) KLT 581), it

held that under section
was
55 (6) (b) of the Transfer of Property Act the buyer has got a charge for the
price prepaid, in anticipation of the completion of the agreement. This charge
attaches from the moment the buyer pay any part of purchase money and is
only lost in case of his own subsequent default. The charge on the property
is enforceable not only against seller but all persons claiming under him. A
transferee for value with notice or without would be liable under section 556
(6) (b) of the Act. Thebuyer's charge under this section is statutory charge
a
and he is entitled to enforce against property and plea of want of notice by
third party purchaser is of no avail.

2. Rights and Liabilities After Completion of Sale

A. Rights of Seller After Completion of Sale

(a) Charge for Price not paid: Unpaid Vendor's Charge (s. 55(4)(b)
By virtue of Section 55 (4) (b) the seller has a charge for the balance of
price unpaid if the sale is completed and the price is unpaid. If the owner-
Snip and possession of the property have passed to the
buyer the seller is
73
not entitled to get the possession back. If the sale is complete and the

ownership has passed to the buyer the seller cannot refuse to deliver the
possession to the buyer eventhough the price is not paid.

If the ownership of the property has passed to the buyer before pay-
ment of the whole of the purchase money, the seller is entitled to a charge
the
upon the in the hands of the buyer. By virtue of the charge,
property
seller can file a suit for a decree for sale of the property through court and

for recovery of the is available to the seller only if there is a

price. This right
contract to the contrary.

the
In Webb v. Macpherson (1904) the seller sold his property to
a seperate agreement,
the
buyer and possession w a s delivered to him. By
in instalments. The buyer failed to pay
buyer has agreed to pay the price
the instalment and the seller filed a suit to enforce his right of charge.

the suit on the ground that the seller's right is lost

The buyer defended
to pay the purchase price in instalments. He
since there is an agreement
contract to the contrary and because of this agreement
that it was a
argued
of agreement
lost. The court held that the execution
an
the right of charge is
instalments will not amount to a contract to
money in
to pay the purchase
the right of charge.
contrary to destroy

Raja v. Sakthi Takies (1967) Mad 127, the court held

In Sundara
a kind of security (a cheque
that merely because the vendor has accepted
the vendor's charge in respect of the unpaid purchase
or a promissory note)
would not be lost.
In order to loose the charge the terms of contract
money
will not be available to the seller
state that the charge
should clearly

Moopil v. Narayanan Prabhakaran (1993 (1)

KLT
In Narayanan
ot the property which is the subject matter of
41). it w a sheld that if the price
is not paid, the vendor cannot on that account the aet
reaistered sale deed
AlI that,he can do in such Circumstance is only to s u e fof
a l e deed avoided.

price
that
and mount will get a charge on the property a s unpaid
ourchase

74
purchase money under section 55 (4) (b) of the Transfer of Property Act.

In Mani J. Meenatoor v. Mrs. Amy Homi Colabwalla (1986 KLT

355), it was held that a seller is entitled to a charge on the property for the
of section 55 of
unpaid purchase money as provided for in sub-section (4)
is entitled to take
the Act. There cannot, therefore, be any doubt that he
The court granted in-
Such steps to see that the security is not depleted.
junction from cutting trees from the land sold.

B. Buyer's Right After Completion of Sale

(a)Right to Rents and Profits (Section 55 (6)(a)

of the property has
By virtue of Section 55 (6) (a) if the ownership
in the
passed to the buyer, he will be entitled the benefit of improvements
property and to the rents and profits.

C. Seller's Liability After Completion of Sale

(a)To deliver possession (Section 55 1) (0

the
By virtue of Section 55(1) E) the seller is bound to give to the buyer
possession of the property. This duty arises only when the buyer makes a
demand. The seller cannot refuse to deliver the possession on the ground
of non-payment of price.

(b)ImpliedCovenant for Title (Section 55 (2)

By virtue of section 55 (2) of the Transfer of Property Act the seller
shall be deemed to contract with the buyer that the interest which the seller
transferred to the buyer subsisted at the time of transfer and he has power
to transfer the same. If it is found that the seller had no title at the time of
transfer or he had only defective title, the buyer can repudiate the sale and
recover the price which he has paid to the seller This is the implied cov-
enant for title. By virtue of this covenant for title the buyer has a remedy of
repudiation in case the seller's title is found to be defective after convey-

ance.

15
 in Balakrishna Menon v. Kesavan (1985 KLT 862). it was heid that

p E r Section 55 (2) of the Transfer of Property Act. a seller shall be d e e m e d

to contract with the buyer that the interest which the seller proc
transfer to the buyer subsists and that he has power to transter me
n i s warranty of title subsists whether the buver is aware of the detec tn

title or not.

(c)To deliver titie deeds on receipt of Price

(Section 55(3)
By virtue of section 55 (3) the seller is
bound to deliver to the duye a
documents of title
relating to the property when the buyer pays the price.

D. Buyer's Liabilities After Completion of Sale

(a)Bare loss to the Property (Section 55 (5)

After the
(c)
compietion of sale if the
property sole is destroyed, the buyer
has to bare the loss.

(6)ToDay outgoings (Section 55 (5) (d)

After
completion of sale the buyer is bound to pay all public charges in
respect of the property.

Doctrine of Marshelling by Subsequent Purchaser

Section 56 of the Transfer of Property Act deals with
doctrine of mar-
shalling by subsequent purchaser. It is a right available to a
purchaser of
property which is
already mortgaged to another person. If 'A' who
of two
is owner
properties mortages both the properties to 'M and
sells one of the properties to the
subsequently
"B subsequent buyer (B) of the property
can demand M to proceed first against the
proeprty which is not sold to R for
satistying his claim. This is called o
right marshelling by
chaser. subsequent pur.

The doctrine of marshelling by subsequent purcnaser can be illustrate

with the heip of a diagrarm. ated

76
 ( x

A M

in the above diagram, suppose A is owner of two immovable proper

ties X and Y and A mortaged both the properties to M for securing a loan.
While this mortage is subsisting A sells property Y alone to B. B is the
Subsequent purchaser. By virtue of the provisions of the Transfer of Prop-

erty Act M (mortagee) can proceed against property X or Y or both for the
purpose of recovery of mortgage money. If M proceed against Property Y
first and his claim is satisfied by the sale of the property, B will be in diffi-

culty. So section 56 says that B can direct M to proceed first against prop-
erty X which is not sold to him. This right of B is known as marshelling. M
has to first proceed against property X. If his claim is satisfied from property
X itself he should leave property Y for B. If M's claim could not be satisfied

from property X , he can proceed against property Y.

77
TOPIC -XXVIII
MORTGAGE OF IMMOVABLE PROPERTY
Or
Define Mortgage, Mortagor and Mortagee
Section 58 (a) defines
Mortgage. A mortgage
an interest is transfer of
inspecific immovable property for the
purpose of securing the payment of
money advanced or to be advance
by way of loan. A mortgage is a security
for a debt. It may be created for securing an existing or future debt.

In
Veerankutty v. Mohammed Hassan (1990 (1) KLT SN.18 P.17, it
was held that a
mortgage is the transfer of an interest in specific immovable
property for the
purpose of securing the payment of a loan.

The person who borrowed

money and transfered his interest in the
property to secure the payment of
money advanced by way of loan is called
mortgagor.

The person in whose favour the interest is

transferred is called mort-
gagee. He is the person who has lent money to the mortgagor.

The principal money and interest of which payment is secured are called
the mortgage money.

The instrument by which

the interest in the
specific immovable prop
erty is transfered is called mortgage deed.

The following are the ingredients necessary to treat a transfer as mort

gage.

1 There must be a transfer of an interest in specific

immovable property.
2 The transfer of interest must
be made to secure the
payment of an existing or future debt

78
 In Abdul Rahman v. 1939 All 539) the COurt
Bismillah Beequm (AIR
held that inorder to bring a transaction within the category of mortgage tne
relationship or debtor and creditor must subsist between the parties.

ne mortagor should be a person who is competent to contract. A

mortgage by a minor is void abinitio. It was so held in Mohori Bibi V.

Dharmadas Ghose (30 Cal 539 (Pc). A mortgage executed in favour of a

minor is valid. The minor can be a mortgagee. The amount advanced by

him can be recOvered from the mortgagor.

In order to create a valid mortgage the property mortgaged must be

specific immovable. The general description is not sufficient.

A mortgage is a security for the payment of a debt. It may be a secU

rity for the performance of an engagement giving rise to a pecuniary liability.

Mortgage can be created only by act of parties.

Different Kinds of Mortgage

There are six kinds of mortgages. They are the following.

1. SimpleMortgage

Section 58 (b) of the Transter of Property Act defines Simple Mort-

gage. The following are the ingredients of a Simple Mortgage.

(a) The mortgagor binds himselt personally to pay the mortgage money In
other words the mortgagor covenants personally to pay the mortgage money.

(b) The mortgagor also agrees that in case of default of payment the mort-
gagee shall have the right to recover the mortgage money by causing the
order of court.
property to be sold under an

79
(C) The mortgagor retains the possession of the property with himself.

In a simple mortagage what is transferred to the mortgagee is a right

to sell the
property through court.

The most important element of simple mortgage is that the mortgagor

gives a personal undertaking to the mortgagee to repay the mortgage money.
By virtue of this personal covenant or undertaking simple mortgagee can file
a suit for recovery of money and after obtaining a decree for recovery of

money the mortgagee can execute the decree by attaching any other prop
erty of the mortgagor. Thus a simple mortgagee has two fold remedies against
the mortagor. They are:

1. He can file a suit to recover money from the mortgagor on the basis of the

personal covenant to repay the money.

2. He can file a suit to sell the mortgaged property (Hypothica) on the basis
of the hypothication clause in the mortgage deed.

A simple mortgagee is not entitled to the possession of the property.

He cannot file a suit for foreclosure. When a mortgagee files a suit to
declare him as the owner of the mortgaged property, the suit is called suit
for foreclosure). A simple mortgagee has no remedy by way of foreclosure.

2.Mortgage by Conditional Sale

In a mortgage by conditional sale the mortgagor ostensibly sells the

mortgaged property to the mortgagee. The sale shall be subject to any of
the following conditions:

In case of detault ot payment of the mortgage money on certain date

1.
the sale shall become absolute, or

80
 On the payment of mortgage money the sale shall become void, or
2

On the payment of the mortaage

3 money the mortgagee snau
td
he mortgaged property to the
mortgagor.
In order to treat a sale as mortaade by conditional sale the documeT

by which sale is effected should contain anv of the above stated three condl

tions.

If any of the above stated conditions is in a seperate document it is n o

condition of retransfer.
a mortgage Dy conditional sale. It will be a sale with a

If the transaction is only a sale with a condition for reconveyance the

mak-
buyer will become the absolute owner on the date fixed in the deed for
ing payment in case the seller defaults to pay.

will
mortgage by conditional sale the mortgagee
If the transaction is a
the
not become the absolute owner eventhough the mortgagor fails to pay
he
mortgage money within the date fixed for making payment. Eventhough
has failed to pay the money he can still recover the property by filing a suit

for redumption within a period of 30 years.

The remedy of a mortgagee in a mortgage by conditional sale is to file

a suit for foreclosure after the expiry of the period fixed in the mortgage
deed for payment of mortgage money. A mortgagee under a mortgage by

conditional sale is not entitled to possession.

In Veerankutty v. Mohammed Hassan (1990 (1) KLT SN 18 P.17), it

was held that a mortgage is the transfer of an interest in specific immovable

property for the purpose of securing the payment of a loan. When the mort

gagor ostensibly sells the mortgaged property on condition that on default of

payment of the mortgage money on a certain date, the sale shall become

absolute or on condition that on such payment being made,, the sale shall

Gecome void or on condition that on such payment being made, the buyer

81
 seller,
the
transaction is called a mortgage
ca

to the Wth a conditin

property
f
Shall transfer the
other
hand,
a saie

retra
On the be mort
by conditional
sale,
mortgage.
A
A document
d o c u e n t
c
ca n
an a
tgage by condi,
i s not a in the samo

ent.
nt Bu
embodied
repurchase
or also
is
condition
sale only if a The mere
The m ere fact tthat
hat
the
th.

tional

n e e d not
always
hold good.
have the e t .
conditio is
the converse necessarily
of
therein the same
document

conditional
need not

sale. In s u c n situation,
especiail,
hen the
treatin
it as a mortgage by tne same doCument, it in
in
been incorporated for th
condition itself has
that the d o c u m e n t
is not a mortgage bist but an outrigh
a s s e r t s
mortgagee, who i n t e n d e d as an outrirh

sale, to prove that the transaction w a s really ight sale

discharged in two ways. In
the first piace, it can be t
That burden could be
in the d o c u m e n t
indicative of the intent:.
showing the express words
clear enougn, n e can prove
not surroundi.
those words are ambigous or
in
such a conclusion.
circumstances justifying

3. Usufructuary Mortgage

Section 58 (d) of the Transfer of Property Act defines Usufructuan

Mortgage. The following are the essential characteristics of an Usufructuan
Mortgage.
1. The mortgagor delivers the possession of the mortgaged property t
the mortgagee or he may agree to deliver possession.

2. The
mortgagor authorises the mortgagee to retain the possession un
the payment of the mortgage money.

3. The mortgagee is entitled to receive the rents and

the property. profits acruing

4. The mortgagee has to

appropriate the
est or in rents and profits in lieu of inte
payment of the
mortgage money.
5 The remedy of a
mortgagee in an eno
ment of the
property until the usufructuary mortgage
age Is the
is
u
mortgage money is fully paid oft.

82
6 C

lagor does not incur anv personal liability to repay the money.

7 The
mortgagee cannot file a suit for foreclosure or saie

8. there Cannot be two usufructuary mortgages on the same land at the

same time.

4. English Mortgage

Section 58 (b) of the Transfer of Property Act defines English Mort-

gage. The
gage following are the characteristics of English Mortgage
1. The mortgagor binds himself to repay the mortgage money on a cer
tain date.

2. The mortgagor transfers the mortgaged property absolutely to the mort-

gagee.

3. The mortgagee agrees to retransfer the mortgaged property to the

mortgagor upon payment of the mortgage money.

4. The mortgagor undertakes a personal liability and thus the English

Mortagagee can file a suit for recovery of money on the basis of personal
undertaking.

5 The mortgagee can file a suit for the sale of the

property which is
mortgaged to him.

6. The mortgagee cannot file a suit for foreclosure.

7. The mortgagee is entitled to possession. If the
session he has to account for the
mortgagee is in pos-
rents and profits received and apply them
in
reduction of mortgage money.

83
8 t h e mortgagor is in possession of the mortgaged property, he is
en
e d to profits and need not account to the mortgagee.

Distinction between Enalish Mortgage and Mortgage by Conditional Sale

ne following are the main distinction between English Mortgage
and
Mortgage by Conditional Sale
1 In the mortgagor binds himself to repay the money,
English Mortgage
In Mortgage by Conditional Sale the mortgagor has not personal

liability.

2. In English Mortgage the ownership is transferred to the mortagagee.

In Mortagage by Conditional Sale only ostensible ownership is
transferred to the mortgagee.

3 In English Mortgage the mortgagee has a right to possession of the

mortgaged property.
In Mortgage by Conditonal Sale, the mortgagee is not entitled to
possession.

4. In Engish Mortgage the remedy of a court sale is available.

In Mortgage by Conditional Sale the suit for foreclosure is the remedy
of a mortgagee.

5 Mortgage by Deposit of Title Deeds or EquitableMortgage

Section 58(f) of the Transfer of

Property Act de fines mortgage byd
nnsit of title deeds. The follwing are the essential
characteristics of Equ
table Mortgage.

1 The mortgagor delivers to the

mortgagee documents of title to im
able property.

84
 In
Syndicate Bank v. 550) DB, it was
that unless and
Modern T.C. Works (1980 KLT
held until it is made out that the original
titie
de
certified COpy ot a document cannat he canside red to be a document or e

forthe purpose of creating an equitable mortgage. But in C. Assiamma v.

State Bank ot India (1990 (1) KLT SN 19 P.18 (DB), the court held that it

could not De said

that only in title deed is lost
cases where the original tna
deposit ot a
registration Thus
copy can validlv create an equitable motgage
an equitable mortgage can be created by deposit of registration copy ot title
deeds, even though the original title deed is not lost. It is sufficient if the

deeds deposited bona fide relate to the material evidence

property or are o
title or are shown to have been deposited with the intention of creating a

security thereon.

2. The deposit of title deeds is done with the intention to create a secu-

rity.

3. This type of mortgage can be created only in the following towns.

Calcutta, Madras and Bombay or any other town which the State Gov-
ernment may by notification in the official gazette specify. The Govern
ment of Kerala have notifed under section 58(1) the cities of Trivandrum,
Cochin and Calicut, where Equitable Mortage can be created.

4 The mortgagee in this form of mortgage is not entitled to the posses-

Slon of the mortgaged property.

5. The equitable mortgage need not be registered.

6 A property which situate in rural area can also be mortgaged in notified

towns by depositing documents of title with the mortgagee.

In Virdhachalam v. Chaldran Syrian Bank Ltd. (1960 KLT 442), it

was held that the fact that the properties are not in a town notified under
Section 58(1) of the Act will not prevent the creation of a mortgage by the

85
S O t the title deeds in a town notified under the section. The restriction
to the Owns named refers to the places where the deeds are delivered, and
not to the
situation of the property mortgaged.

in Syndicate Bank v. Modern T.C Works (1980 KLT 550), it was

held that once it is made out that the deposit of title deeds is effected within
a town coming under the purview of section 58(f), the mortgagee need not
Turther establish that the properties secured are situtated within the limits of

that town because section 58 (t) mentions only the place of deposit and
does not refer to the location of the properties of which the title deeds are

deposited.

7 h e remedy of the mortgagee in equitable mortgage is a suit for sale of

the mortgaged property.

6. Anomalous Mortgage
Section 58 (g) of the Transfer of Property Act defines anomalous mort
A
gage. mortgage which is not
simple mortgage, a mortgage by
a
condi
tional sale, an Usufructuary Mortgage, an English Mortgage or a
Mortgage
by Deposit of Title Deed within the meaning of section 58 is Anomalous

Mortgage.
Anomalous mortgages are composite mortgage formed by the combi-
nation of two or more of the primary types. A mortgage with possession and
covenant to pay the mortgage money in an example of anomalous mort-
gage. A simple mortgage with possession to the mortgagee is also an anoma
lous mortgage.

Formalities for Creation of Mortgagge

Section 59 of the Transter of Property Act deals with the formalities to

be complied with for the creation ot mortage. The following are the rule:

1. 1f the orincipal money secured is Hs. 100 or more a

mortgage can be
effected only by a registered instrument signed by the
mortaaaor and
86
 ed by atleast two
ested

In the
witnesses.
ase of mortgage by deposit of title deeds eventhough the prin
2
cipal money secured
is Rs.100 or
or more a registered
intrument is not essen-

"
In order to effect a mortgage by deposit of title do
tial.

hould depos title deeds with the mortgagee with intention to treat it a s
the
for the debt.
a ecurity
nay
3. f the principal money secured is less than Rs. 100 a mortgage
of the
ated either by a registered instrument
create
delivery of possession
or by
property.
in tne Case of simple mortgage eventhough the principal money se
cured is less than Rs. 100 the mortaage can be created only by a registTered

instrument.

TOPIC XXIX
RIGHT OF REDEMPTION OF MORTGAGOR
Or
"ONCE A MORTGAGE ALWAYS A MORTGAGE" - COMMENT
Or
"CLOG ON REDEMTION ARE VOID" - COMMENT

Section 60 of the Transfer of Property Act deals with Right of Redemp-

tion of mortgagor.

A mortgage is a security for a debt. Once the mortgagor pays the

nortgage money, there is no necessity of future security and the mortgagee
Snouid give back the security to the mortgagor.

By virtue of section 60 of the Transter of Property Act, at any time after

ng tne mortgagor has

principal money has become due a right on payment
or tender of the mortgage money to require the mortgagee-

to deliver to the mortgagor the mortgage deed and all

(a)
documents relating to the mortgaged property which
of the mortgagee:
are in the possession
87
 possession of the mortgaged property
(b) to deliver the
of the property;
it the mortgagee is in possession

the cost of
(c) to retransfer the mortgaged property at
the mortgagor.

This right of the mortgagor is called Right of Redemption or Equity of

Hedemption. A suit to enforce this right is called Suit for Redemption. Once
d mortgage is executed it cannot be made irredemable. After the mortgage

at any time before

the lapse of limitation period( 30
money has become due
the property. Any condition in
years) the mortgagor can file a suit to redeem
the mortgage deed which prevents the mortgagor from getting back the propP

erty is void.

mortgage. This maxim contains the

Once a mortgage is always a

cannot be made irredeemable

and a stipulation
principle that a mortgage
which prevents the mortgagor from exercising his right of redemption is void.

Lord Davey in Noakes and Co. v. Rice (1902)) AC 24 interpreted the

maxim as
"
that a mortgage cannot be made irredeemable and a provision to

that effect is void."

The mortgagor is entitled to exercise his right of redemption at any

becomes due. Anything calculated to create
time after the mortgage money
fetter or impediment on the
exercise of right of redemption is invalid as a
a
clog on redumption.

Mohammad Sher Khan v. Swami Dayal (1922) 44 All 85 (PC)

The mortgagor executed a registered mortgage deed and agreed to
repay the money within tive years. There was a stipulation in the mortgage

d e e d that in c a s e t h e mortgagor l a l s to repay the m o r t g a g e d m o n e y within

0eriod of five years the mortgagee would be entitled to possession of the

mortgaged property for a period of 10 years and during that period the mor mort

88
gagor will have no
right to redeem the property.
n this case the mortgagor has failed to pay the mortgage money within

five years period and the mortgagee was put in possession of the mortgaged
property. After three years the mortgagor filed a suit to redeem the prop-
erty. The mortgagee contented that he would be entitled to possess the
property until the expiry of 10 years and during that period mortgagor shall
have no right to redeem the property.

The court held that the stipulation which prevents the mortgagor from
exercising his right of redemption is a clog and hence void. The right of

redemption available to the mortgagor cannot be destroyed by the parties by

agreement.

In Stanly v. Wild (1899) 2 Ch 474, it was held that any condition in

the mortgage deed which takes away the mortgagor's right of redemption
within the statutory period was invalid and it should be ignored.

In Narayanan v. Kochupennu (1953 KLT 743), it was held that a

stipulation in a mortgage, that in default of payment of the mortgage money
on the date fixed the mortgagor shall sell the property to the mortgagee at a
fixed price or a price to be settled by an umpire is invalid as a clog on the
equity of redemption. The right of redemption cannot be controlled by any
agreement made as part of the transaction of mortgage.

In Mathai v. Daniel (1954 9 ILR TC 61), it was held that if a transac-

tion is essentially a mortgage, any provision inserted in the deed of mort
gage, which is repuganant to or inconsistent with the mortgagor's right of
redeeming the security will be deemed to be a clog or fetter on the equity of

redemption and treated as void. Consequently a condition in a mortgage

deed that in the event of the non-payment of the loan within a stipulated
time, the mortgage shall become sale, will be treated as a clog on redemp-
tion and will therefore be void and ineffective.

89
Collateral Advatage - Whether Clog on Redemption

Any stipulation in the mortgage deed which confers additional benetit

to the mortgagee over and above the interest is a collateral advantage.

t h e mortgagor has agreed to sell the mortgaged property only to the

mortgagee if he decides tosell it during the period of mortgage, the stipula.

tion is a collateral advantage. In Noakes and Co. v. Rice (1902) the

House of Lords held that collateral advantages are clog on redemption and
hence void.

The present view is that a stipulation for collateral advantage need not
be void provided that the collateral advantage should not be unfair and it

should not create a fetter on the equity of redemption of the mortgagor.

Kerlinger v. New Patagonia Meat and Cold Storage Co. Ltd (1914) AC
25
Xwas carryingbusiness of meat preservation.
on X borrowed from Y
some money and executed a mortgage of his business premises for secur
ing the loan amount. Y was engaged in the business of buying and selling of

sheep skins. The mortgagor agreed to repay the loan amount with 6% inter
est within aperiod of 5 years. In addition to this he agreed that he will sell
sheep skins only to the mortagee for 5 years if the mortgagee is willing to

buy it at the best market price. After 2 years the

mortgagor paid the mort
gage money. The mortgagee demanded that the mortgagor should sell
sheep
skins only to him for the next 3 years. The court held that the
mortgagors
right of redumption is not affected by imposing a condition to sell sheep
skins to the mortgagee. h e collateral
advantate is not void because of
three reasons.

(a) It was not untair and

unconsionable
(b) It was not in the nature of penalty.
(el It has not created a fetter on
right of redumtion.

90
Partial Redemption
A mortgage debt is considered to be indivisible. If a person has mort-

gaged his landed property to B as a security for a loan of Rs. 1,00,000/-,

he cannot claim
redemption of half of the property by paying
Rs. 50,O00/-
and interest. If two or more persons have jointly executeda mortgage deed

and borrowed an amount from the mortgagee, one of them shall not be entitiled
to redeem his property on payment of a proportionate part of mortgage money.
Section 60 of the Transfer of Property Act confers right of redemption on the

mortgagor but partial redemption is not allowed.

here is one exception to this rule. If the mortgagor has sold a part of
his right of redemption to the mortgagee, then the mortgagor can claim par-
tial redemption.

Example
A mortgaged 50 cents of his land to B for
securing a loan. Subsequently A
sold 25 cents of land to B. Then A redeem 25 cents
can by paying mortgage
money.

TOPIC -XXX
DOCTRINE OF cONSOLIDATION

The Doctrine of Consolidation is anequittable principle under English

Law. Under this doctrine if two or more
mortgages are created in favour of
the same mortgagee, the mortgagee could require the mortgagor to redeem
all the mortgages jointly.

Example
A created two
mortgages of his two properties X and Y to B. The
mortages
were made on two occassions. In such a Situation B can direct A to redeemm
Doth the properties together.

The equity of Consolidation was abolished in England by Section

98 of
the Law of Property Act,1925.

91
 Act, 1882 d o e s not recognise
ection 61 of the Transfer of Property
the mort.
cannot require
in India. The mortgagee
C
eguity of consolidation
Unless there
together.
and redeem
g g o r to consolidate all the mortgages
different mortgages
c a n redeem
c O n r a c t to the contrary the mortgagor

simultaneously or separately.

Example
deeds were
A X and Y to B. The mortgage
mortgages two properties
to redeem either property X
executed seperately. The mortgagor has a right
the doctrine of consolida-
or Y
or both. If there is a contract to the contrary,
tion will be applicable in India and in such a case the mortgagor can only

redeem all the properties together.

TOPIC XXXI
LIABILITIES OF MORTGAGOR

Sections 65 and 66 of the Transfer of Property Act deal with Liabilities

of Mortgagor. The liabilities of mortgagor can be classified under the follow
ing heads.

1. Covenant for Titile

By virtue of section 65 every mortgagor shall be deemed to contract
with themortgagee that the interest which he professes to transfer to the
mortgagee subsists and the mortgaor has power to transfer the
same. The
breach of this covenant would rise to a right to claim compensation from the
mortgagor.

2. Covenant for defence

The mortgagor shall be deemed to contract to the
will defend the title to the property. mortgagee that he

92
3. Covenant for payment of Public
Charges
h e mortgagor shall be deemed to contract the mortgagee that he will

pay all public charges in respect of the mortgaged property.

4. Covenant for discharge of prior mortgage

In the case of second mortgage of property it shall be deemed that the
mortgagor contracted with the subsequent mortgagee that he will pay the

interest and the mortgage money in proper time and discharge the prror
encumbrances. If there is a breach of this convenat, the mortgagee can

claim the mortgage money from the mortagagor because a personal liability
would arise against the mortgagor.

5. Not to commit waste

A mortgagor who is in possession of the mortgaged property should
not commit any act which is destructive or permanently injurious to the mort-

gaged property.

TOPIC XXXII
RIGHTS AND LIABILITIES OF MORTGAGEES

Mortgagee is a person who advances loan to the mortgagor on secu-

rity of an immovable property. The security is taken with a view to recover
the loan. The basic
right of every mortgagee is to recover the money with
interest. If the mortgagor fails to pay the money within the stipulated
date,
the mortgagee has a right to recover the money from the
security. The
Transfer of Property Act, 1882 gives the tollowing rights to the
mortgagee to
recover money.

1. Rightof Foreclosure
By virtue of section 67 a mortgagee by conditional sale or a mortgagee
under an anomalous mortgage by terms of which he is entitled to
foreclo-
Sure is entitled to institute a Suit for foreclosure at any time after the
mort
gage money bas become due to him and before a decree for redumption is
passed
93
 shall b e absolutely de.
mortgagor
decree that a a Suit for
A suit Obtain a is Called

mortgaged property
redeem the
Ot his right to
C
foreclosure.

2 Right of Sale or a n English Mortgagee or

mortgagee
Virtue of section 67 a simple saie ot the
y the
file a suit for
Mortgagee by Deposit of Title Deeds can

property
can be filed
suit for s a l e of the mortgaged
g g e d property. The
to n i m .
b e c o m e due
money has
a any time after the mortgage

3 Right to Sue for Mortgage Money if the

t h e mort-
mort
Transfer of Property Act,
the
By virtue of section 68 of the m o r t g a g e e can
the mortgage money,
9agor has bound himself to repay
property is
money. If the mortgaged
file a suit for recovery of the mortgage If
mortgage money.
suit for
mortgagee can
file a
destroyed, then also the of the mort-
wrongful act o r default
due to the
t h e mortgaged property is lost
AA mortgagee
mortgagee who
mortgage money.
file a suit for
gagor, the mortgagee c a n
if the mortgagee
c a n file a suit for mortgage money
is entitled to possession
has failed to deliver the possession.

4. Right to exercise power of private sale of sale

Section 69 of the Transfer
of Property Act deals with power
By virtue of section 69 the following mort
without intervention of the
court.
without intervention of the court and
gagees c a n sell the mortgaged property
recover the debt.

Neither parties should be Hindu, Muslim or

English Mortgagee (
a
1 An

Budhist).
The Government (If the mortgagee is Government and power of sale
2.
without the intervention of the court has expressly conferred on the mort

gagee).
If the mortgaged property is situated within the towns of Culcutta, Ma
3.
dras, Bombay or any other notied town and the power of sale is expresly

94
given in the
mortgage deed.

berore exercising the right of orivate sale a notice requiring the pay-

ment of the principal money should be served on the mortgagor. Private

sale can be effected only after 3 months of such service.

5
5. Right to appoint Receiver
By Virtue of section 69 A of the Transfer of Property Act a mortgagee
who has right to exercise the power of sale is entitled to appoint by writing9
signed by him a receiver of the income of the mortgaged property.

Liabilities of Mortgagee

A mortgagee in possession of the property has the following liabilitiees.

a) He has to manage the property as a man of ordinary prudence.

b) He has to collect rents and profits of property

c) He has to pay Government dues unless there is a contract to the contrary

d) He has to make necessary repairs of the mortgaged property.

e) He has to apply any money received under an insurance policy in restor-

ing the property or in reduction of discharge of the mortgage money.

f) He has to keep proper accounts of receipts and payments. He has to give

the mortgagor true copy of accounts.

95
 IC-XXXII MORTGAGEE
SUBSEQUENT
MARSHELLING BY
TINE O.
with marshelling by
Property Act deal
of
ection 81 cf the Transfer of two Immov.
section 81 if the o w n e r
virtue of
Quent mortgagee. By a n d subse.
properties to a mortgagee
the
propeities morgaged both
the s u b s e q u e n t mort
them to another mortgagee,
entty mortgages one of which
to proceed against that property
J g e e Can require the prior
mortgagee
or mortgage
mortgagee for recoverty
n o t mortgaged to the subsequent
marshelling by subse
mortgagee is called
money. This right of subsequent

quent mortgagee
the help of a
dia
Tne doctrine of marshelling can be explained with

gram.

Mortgagee (1)
Mortgagor

Y Mortagee (2)

In the diagram suppose Mortgagor is owner of two properties, X and Y.

He first mortages both the properties to Mortgagee (1) and subsequently
mortgaged property Y alone to Mortgagee(2). The prior mortgagee can pro

ceed against property X or Y or both to recover the mortgage money. If

Mortgagee (1) decides to proceed against property Y alone, it will cause
injustice to the subsequent Mortgagee(2). So the doctrine of marshalling
savs that Mortgagee(2) can require the prior mortgagee (1) to proceed first
against property X for the recovery or the
mortgage money due to him if that
will not prejudicially affect his interest.

96
TOPIC XXXIV
DOCTRINE OF cONTRIBUTION

Section 82 of the Transfer of Property Act deals with the principle of

contribution. The word contribution means providing money for a common

fund by different persons.

Section 82 says the rules relating to contriburion of money by different

mortgagors towards the mortgage debt. If the mortgaged property belong to
two or more persons having different shares, then each of such sharer is

liable to contribute rateably to the debt secured by the mortgage.

in order to determine the ratio at which each mortgagor has to contrib-

ute, the value of the properties mortgaged on the date of mortgage is to be
ascertained and the contribution is to be made at the ratio of the value.

Kedar Nath v. Harila

A,B and C jointly mortgaged their properties to D for securing a debt of
Rs.10,000/-. The money they borrowed was divided among themselves as
follows:
A Rs. 2000/-
B Rs. 3000/
C Rs. 5000/

The value of the property of A on the date of mortgage was Rs. 30,000. The
value of property of B on the date of mortgage was Rs.20,000. The value of
property of C on the date of mortgage was Rs. 10,000. On the due date of
mortgage money, the principal and interest comes to Rs. 15000. The court

held that the mortgage money is to be contributed between A, B and C in the

ratioof 3:2:1.

The total amount of Rs. 15000 Is to be divided into 6 parts and 3 parts

are to be contributed by A and his contribution will be Rs.7,500. B has to

contribute 2 parts ie., Rs.5000. C has to contribute Rs. 2500.

97
 ne above stated rule is
applicable when there is no contract to the
COntrary. Thus the
co-mortgagors may enter into a contract fixing the duo
of contribution among themselves.

TOPIC -XXXV
DOCTRINE OF SUBROGATIONN

Section 92 of the Transfer of

Property Act deals with the right of subro-
gation. The word
subrogation means substitution. The right of sudrogauon
is an equittable doctrine.
By virtue of section 92 a person who pays the
mortgage money to tne
mortgagee and redeems the property under
mortgage will be entitled to Suo-
stitute in the place of
mortgagor and he will have all the rights of the mort-
gagee. In other words he
will step into the shoes of the mortgagee.

Subrogation may be of two types.

1) Legal Subrogation
2) Conventional Subrogation

Legal Subrogation
By virtue of section 92 the following persons can claim the right of
subrogation on redumption of the mortgaged property.

1 Any person who has interest or charge upon the mortgaged

property.
2 Any surety for the payment of the mortgaged debt.
3 Any creditor of the mortgagor who has obtained a decree for the
sale of the mortgaged property.
A co-mortgagor.

When a mortgage is redeemed by any one of the

above stated four
persons he can claim the right of subrogation and will be entitled to all the
all th
98
remedies of a mortgagee. It is known as Legal Subrogation .

conventiona l Subrogation
Convent ional Subrogation takes place when a stranger to the mort-
gage advances money to the mortgagor under an agreement that he would
be sub rogated to the rights of the mortgagee if the mortgagor redeems the
pri or mortgage by such money. The person who advances money to the
mortgagor for redemption need not be interested in the prior mortgage. He
may be a stranger to the earlier mortgage. He must have provided money to
th e mortgagor only for redemption and not for any other purpose .
Exampl es

1. ' A' mortgaged his property X to 'B' for Rs. 10,000/-. He subsequently
mortgaged prop erty X to 'C' for Rs. 10,000 /-. By virtue of section 92, 'C '
can redeem 'B' and claim subrogagtion because C has interest in the . mort-
gaged prop erty. C can claim all the rights of B and he is entitled to all the
remed ies whi ch were available to B against A. This is legal subrogation.

2 . A mortgaged his property X to B for Rs. 10,000/- He subsequently

mo rt gaged the very same property to C for Rs .1 0000/-. He executed a third
mortgag e to D of the same property for Rs.10000/-. Thereafter A entered
in to an agreement with E for the purpose of redeeming B and C. E re-
deem ed B an d C . In such a case E can claim conventional subrogation and
he will be substituted in the place of B and C . The result is that E will get
prio rity over D .

J an aki Nath Roy v. Pra mathat Nath Malia (67 IA 82)

In thi s case M mortga ged hi s prope rty X to M1. M2, M3 and M4 . There
after he e nt ere d into an ag ree ment with Y to redeem the earlier 4 mort-
gage s. Y re dee ~ ed fi rst three mortgages . The fourth mortgagee (M4) claimed
priority over Y. Th e co urt he ld that sin ce Y had redeemed first three mort-
gages as per the agreement between M an d Y he is entitled to conventional
subrogation and M 4 can not claim priority over Y.

99
 R ed e e me d b y Y as
M per a greeme n t

TOPIC - XX X VI
R E DEEM UP AN D FO R EC LO S E DOWN

Tile ri g ht of a m esne mortgagee or intervening m ort g agee is explained

i n th e well kn o wn max i m redeem up and foreclose dow n . This maxim means
th at a me s n e m ortgagee has all the rights of his mortgagor as ag a inst prior
mortgag ees . He can redeem any prior mortgagee . A mes n e mortg a g ee can
foreclo se a n y subsequent mortgagee.

E x am p l e
A m ort gaged his property X to B,C, D, E and F successively. D is a mesne
m o rt gagee. He can redeem either C or B or both. He can foreclose E and F.
F can forec lsoe only the mortgagor. B can foreclsoe C, D, E, F and A. F can
r edeem E , D , C and B and foreclose A.

Secti on 91 and 94 of the Transfer of Property Act deal wi t h the r i ght to

red e e m up and foreclose down.

The doctrine of redeem up and foreclose down is applicable both in

E nglan d and India. Under the Engli s h law a mesne mortgagee can redeem
only th e i mmediate prior mortgagee . A fifth mortgagee cannot redeem first,
second or th i rd mortgagee before redeeming the fourth mortgagee . He should
f i rst red e em fourth mortg a gee. Thereafter redeem the third mortgagee and
so on . A mesn e mortg a g ee c a nnot foreclose a subsequent mortgagee with-
out foreclosing th e mortg a gee ju s t subsequent to him.

100
r

In India a fifth mortgagee can redeem first or second or third mort-

gagee with o ut redeeming the fourth mortgagee .

roPIC - XXXVII
ooCTRI NE OF TACKING

The ow ner of an immovable property may create several mortgages

tor securing differe nt advances made by same or different persons. Thus
·A" wh o is own er of an immovable property, may create firstly a mortgage in
favour of B for securin g an amount of Rs. 1 0,000. Thereafter he may create
a second mo rtga ge of t he very same property in favour of C for securing a
loan of Rs.5000 an d a third mortgage in favour of D for securing a loan of Rs
2000. There is nothing preventing A from creating a fourth mortgage of the
v e ry same property in favour of "B" for securing a new loan of Rs.3000. In
such a ca se , th e general rule of priority is that B can claim first priority only
for fir st loan . Wi th regard to the fourth loan he will be postponed until the
claim s of C and Dare satisfied. In England, the doctrine of tacking permited
B to tack his further advances to his first debt and claim both together from
th e property, before the other intermediate m9rtgagees were satisfied. In
ord e r to claim tacking the first mortgagee should have made subsequent
advance with out knowledge of existence of intermediate mortgages . The
doct rine of tacki ng was abolished in England.

In India doctrine of tacking is not recognised except to the extent al-

lowed by se ction 7 9 of the Act. By virtue of section 79 of the Act, if a mort-
gage is created to sec ure present and future advances and the maximum is .
limi ted, a sub seque nt mortgage of the same property shall , if made with
notice of th e p rior mortg age, be postponed to the prior mortgage in respect
of all advance s not exceeding the maximum though made with notice of the
subsequent mortgage .

Example
A created a mo rtg age of property X in favour of B for securing a future loan

IOI
<J I H·1 10 , ()()() on ly n •} (,J O()() _ Triere aft'3( A go PS
/\, IJ(Jfr() W'l to C, 11<-1ho is
J
. R
:iw i 1 10 rJ f th o fl1 a1 rn o rtqno o, ond borro wn an arnou nt o f s. 2 000 afte r giving
Th• • pr o p<Hty X n~1 ·w cIir1 1y. La l or '; 1111 , he goo s to B r:1nrj bo rrows Rs .4000
• 1~, ° C ,, , H1110t n~,y th n 1 13 nhoulcJ be p Rl d fir s t o nly Rs .6000 n d
a Rs .400o
't~l <Hilcl h o pni<l o nly ,Jfl <H ~,i :i c la im Is s a ti s fi~c.J . Thu s A is p
ermit te d to tack
lw, lu 1,1, I) ncJva ncon up to th o limi t fi xe d in th e first mo rtgag
e.

.
In or <1()r l o ;1 pp ly trw doc tnn o o f. tackin
. •
g th e follow ing cond itions shou lrJ
l)f) :;;t1 i,; ti ocJ:

1• fhor0 s ho uld b e a mortg age of immo vable pro perty for

ftituro a<.Jvac os.

?. f ho mortg age deed s hou ld menti on a limt.

3. T h o ::;ub soq u e nt mortg agee s hould have know led ge of th e

p ri o r mortg ag e.

TOP IC - XXX VIII

WH AT IS CHA RGE ? DIST INGU ISH IT FRO M MOR TGA GE

Se c ti o n 100 of th e Trans fer of Prope rty Act deals with Char

ges . If
1rnmo v a bl e prope rty of on e perso n is made secur ity for the paym
ent of mone y
to ano th e r a nd th e tra nsact ion does not amou nt to a mortg
age , the perso n
o nt 11led to reco v e r mon ey will get a charg e over that prope rty.
A charg e may
be c r0a tcd by ac t of partie s or by opera tion of law . . A perso
n who has
cha rge o v e r a prope rty can file a suit for the sale of the immo
vable prope ry
throu yh co urt fo r roco v e ry of th e amou nt due to him.

Ex :;3. rnpl<JS
1) A o w oH to 13 nn .im_o un t o f Rs . 1 ,00,0 00/- H e agree d to B that
he will
not •~oll hi:; irnrn o vabl o propo r ty X Imlil th e paym e nt is made
He A .
· re by his
u <,I c r, 1 at ,.HJ a c l 1n rn o in I;:ivou r 8 . If A fail s to pay th e mone y
Bc t· .
' a n 1le a suit
fo r u,,J •"; 11 10 u f p ro polly X th ro u(Jh court a nd recov e r th e
a ni .
c h r:iruo c , o u tod i>Y ar. t o f pnrtio ~.. Tllu c harge s creat ed by ac aunt. It 1s a
t of .
Partie s must
be effect e d throug h a regist e red docum ent.

2) A sold his immo vable prope rty to B for an amoun t of Rs .1 ,00 ,000. B
paid an an, ount of Rs.50 ,000/- toward s price and agree d to pay the balanc
e
amont after 3 month s . B failed to pay the mon ey in time. By virtue of
section 55 ( 4) (b) the unp aid sellor gets a charge over the prope ry sold
by
\lim and he can f ile a suit for the sale of the prope rty for the recove ry of the
balanc e price. It is a charg e create d by operat ion of law.

Q.itterenc e betwe e n Charg e and Mortgage

1. In the case of charg e there is no transfe r of any intere st in the immov -
able prope rty in favou r of the charge holder. Mortg age is create d by
trans-
ferrin g an intere st in the immov able proper ty to the mortga gee.
2. A ch arge can be create d by act of parties or by opera tion of law.
A
mo rtgag e can be create d -only by act of parties.
3. A charge holde r's remed y for recovery of money is only sale throug
h
court. A mortg agee has other remed ies such as foreclo sure, private sale
etc.
4. A charg e by act of parties can be created only by a registe red deed. A
mortg age by depos it of title deed can be create d withou t a registe red deed.

103
TO PIC - XX XIX
LE AS E OF IMM OV AB LE PR OP ER TY
Or
DE FIN E LEA SE . DIS TIN GU ISH LEA SE
FR OM LIC EN CE
Or
WH AT AR E TH E RIG HT S AN D LIA BIL
ITIE S OF LE SS OR AN D
LE SS EE

Sec tion 105 to 117 of the T ra nsfe r of Pro

per ty Act dea l w,·th lea ses of
imm ova ble prop erty .

A leas e of imm ova ble pro per ty is a tran sfer

of righ t to enjo y pro per ty
for a spe cifie d per iod. The per iod may be
exp-ress or imp ried . The tran sfe r
is mad e for con side rati on. The con side
ratio n may be paid or pro m ised t o
pay . Th e con side rati on my be mon ey, sha
re of crop s or any oth er valu ab le
thin g s. The con side rati on may be mad e
per iodi call y or on spe cifie d occ a-
s ion s.

The con side rati on whi ch is paid is kno wn

as pre miu m or re nt. The
tran sfer or is call ed 'les sor' and the tran sfer
ee is call ed 'le sse e '. The le sso r
and less ee sho uld be a com pete nt to con
trac t.

The leas e sho uld be for a spe cifie d peri

od. In the abs enc e of a con -
trac t a leas e of imm ova ble pro per ty for
agr icul tura l or ma nuf actu ring pur -
pos e sha ll be dee med to be a leas ~ from
yea r to yea r. S uch a lea se can be
term inat ed by six mon ths noti ce issu ed
eith er by the less or or less ee. A
leas e of imm ova ble pro per ty for any othe
r pur pos e sha ll be dee me d to b e a
leas e from mon th to mon th. Suc h a leas
e can be term inat ed by fifte en day s
noti ce issu ed eith er by the less or or the
less ee.

A leas e of imm ova ble pro per ty from yea

r to yea r or for
cee ding on yea r can be mad e only by. any term ex-
a reg iste red inst rum
leas es of imm ova ble pro per ty may be ·mad ent . All oth er
e eith er by a re .
men t or by ora l agr eem ent acc omp anie d . st
by deli ver y of pos s gi .ere d ins tru-
ess ,on .
104
Difference between Lease and Licence
The following are the differences between lease and licence .

1. Section 105 of the Transfer of Property Act defines lease. Section 52

of the Indian Easments Act, 1882 defines licnece.

2. In the case of lease the lessor gives exclusive possession of the prop-
erty to the lessee. In the case of licence exclusive possession of the prop-
erty is not given to the licencee.

3. In the case of lease the lessor transfers an interest in the property to

the lessee. In the case of licence the transferor gives only a permission to
do something in or upon the property. No interest in the property is trans-
ferred to the licencee.

4. A lease is not revocable. A licence is revocable.

5. A lessee can bring an action for trespass. A licencee ca not sue for
t respass.

6. A leasehold right is heritable interest. A licence does not survive to the

heirs of the licencee.

In Moideenkutty Haji v. Muhammadali (1987 (2) KLT SN.28 P.21 ), it

was held that a licence is a personal privilage to do something on the premises
which otherwise would be unlawful. It does not create any interest in the im-
movable property in favour of the licencee. In the case of lease an interest in
the property is created in favour of the lessee. In determining whether an
agreement creates between the parties the relationship of landlord and tenant
or me rely that of licencer and licencee the decisive consideration is the inten-
tion of th e parties. If the document creates an interest in the property, it is
lease; but if it only permits another to make use of the property, of which the
legal possession continues with the owner, it is a licence. The intention of
parties has to be gathered from the language used by them in the agreement.

105
 12
In Chidambaram v. Arunachalam Pillai (1987 (1) KLT SN. P- ), it
was held that the real test to determine whether a transaction is tease or
. . the intention the
licence is the intention of the parties. In order to ascertain
s ubsta nc e of the document has to be preferred to its form. If th e document
. . d t 0 be a tease be-
creates an interest in the property it could be cons1dere
· h . t t · n the land. If the
ca use in t e case of a licence there will be no in eres 1
. h legal posses-
a greement permits only to make use of the property, of w h IC
sion continues with the owner, it is evidently a licence . If the agreement is to
use the property only in a certain way and on certain terms while th e prop-
. · · eement will
erty remains in the possession and control of the owner the agr
operate only as a licnece even if there are words appropriate for a lease.

In Ayurvedic Oushada Nirmana Vyavasaya Co.op Ltd v. Abraham

( 1987 (1) KLT 853), it was held that in the interpretation of a docume nt to
ascertain whether it creates the relationship of landlord and tena nt o r t hat of
licensor and licensee, the decisive consideration is the intention of th e p a r-
ti es. Even in cases where transfer of possession is exclus ive, it need not
necessarily be an indication of the creation of a lease. Exclusive posses-
sion is by no means decisive of a lease. A man may be a licensee , even t hough
he has exclusive possession. It is substance of the agreement t hat gov e rns
the matter. The court must look at the agreement as a whole and see whether
a tenance really was intended.

Rights and Liabilities of Lessor and Lessee

Section 1 08 deals with rights and liabilities of lessor and less

ee.

1.Liabilities of the Lessor

a. Duty of disclosure
The lessor must disclose to the lessee any material defe t .
. c 1n the prop·
erty of which the lessor 1s aware and the lessee is not aware
. . . and Which the
lessee could not discover with ordinary care .

106
 b . Outy to g iv e posso ss io11
T h e lesso r is boun d to pu t the lesse e in po s sess ion of t h e
pro p erty o n
l11s re quist . Duty of a less or to de live r posse ssio n
o f th e le a sed prop ert y
,11 ises on ly wt1en th e lesse e ma l<es a reque st to
t h at eff ect.

c. C_ovcna nt for qu~t enjoy ment

The lesso r s hould give to t he lesse e posse ssion of t he p rope
rty and
allow him to hold the pope rty durin g the lea se perio d whith out
any interu ption .
If the lesse e pay s t h e rent and perfo rms the contr act bindin
g on him , the
lesso r or his lea gal heirs or any other perso n claim ing throu
gh him shou ld
not distur b the q uiet enjoy ment of the lesse e. In case of tresp
ass by stran ger
the lesse e has to prote ct himse lf.

In Katy aya ni Debi v. Udoy Kuma r (1925 ) 52 Cal 417), 'A' lease d
c ertain prope rty to ' B '. A portio n of the prope rty was in the
poss essio n of a
tre spas ser and was not taken posse ssion of by B. B failed
to pay the rent.
A brou ght the suit fo r rent. The suit was resist ed by B on the follow
ing t w o
gro unds:

1. The fail u re o f the les sor to put her in posse ssion of

part of the prope rt y
entitl ed a suspe nsio n of the entire rent.

2. The re shou l d be a propo rtiona l abate ment of the rent

as there was a
breac h of the cov ena nt for quiet enjoy ment .

The P rivy Co u nci l he ld t h at a ga inst ill e gal encro achm ent

the lesse e
has to prote ct him se lf. B di d not de m a nd to A to put her in
posse ssion of the
e ntire prope rty a nd thus A h as not viol a ted any coven ant
in the lease and
thu s B is liab le to pay the e ntire re nt a s p e r the terms of the
le a se d d
ee .

107

l
 Rights of Lessee

The following a re the rights of a lessee.

1 · Right to enjoy accretions

If during the continuence of the lease any accession is made to th e

pro perty the lesse can enjoy the accession.

2 . R ig h t to a v oid the lease

If by fi re , tempest or flood or violence of army or mob o r othe r irres iSt able
force an y material part of the property is destroyed or ren dered subs ta n t ia l ly
a n d p e rmanently unfit for the purpose for which it was let , the le ase sh a ll b e
v o id at the option of the lessee.

If the injury to the property is occassioned by the wro n gfu l act o r de -

f a ult of the lessee, he shall not be entitled to treat the lease as void .

3. Right to repair the property

If the lessor neglects to make any repair which he is bound to ma k e
wit h i n a reasonable time after notice, the lessee may make t he necessary
r epairs and deduct the expenses of such repairs with interest from the rent
o r otherwise recover it from the lessee.

4. Right to make payments

If the lessor neglects to make any payment which he is bound to make ,
t he lessee may make such payment and deduct it with the interest from t h e
rent or otherwise recover it from the lessor.

5. Right to remove fixtures

After determination of lease the lessee can remove a l l things which he
has attached to the earth. He should remove the things while he is in pos-
sess io n of the property.

6 . R ight to t h e bene fi t of c ro ps ( e m bl e men t s)

The lessee vvho has planted or sown in the leased property can take

108
 nd fo r tha t pur-
the bene fit of c rop s e v en a ft e r ll1 0 d e te rmin atio n o f lease a
ca rry th e m.
pose t1e has a rig ht to free in g ress and eg ress to gath e r and

7. F3iQ1 tJo assi_Q.O_IJis intere st in thJLW_a~ed proQEH:1Y-

1

tra n s fe r
lf there is n o c ontra ct to th e c ont ra ry, th e lesse e h as a ri g ht to
11is lease hold inte re st to anoth e r pe rson .

Liabilities of t he less ee

The follo wing are the liabili ties of lesse e

1. Duty to disclo se mate rial facts

would
A lesse e is unde r a duty to disclo se to the lesso r all facts which
and the lesso r
mate ri ally incre ase the value of lease hold if he is aware of it
is not aware .

2. Duty to pay rent

agree -
The le s see is unde r a duty to pay rent as per the terms of lease
ment.

3 . D uty to kee p the p rop erty in good condi tion

it w a s at
The lesse e is bound to keep the prope rty in good condi tion as
the time when he was put in posse ssion .

4. Duty to resto re the posse ssion

rt y in
The le ssee is un der a duty to restor e the posse ssion of th e prope
good condi tion on the termi n ation of lease .

5 . .[)utY. to_g ive pe rmiss ion to inspe ct

upon
T he lesse e sho ul d allow th e less o r at all reaso nabl e ti me to e nter
is an y defec t
the prope rty and inspe ct th e co nd iti on o f th e pro pe rty. If th ere
e to m ake
in th e co nditi on of the pro pe rty th e lesso r ca n de m a nd th e lesse
un d to m ake
good th e defec t. If th e de fec t is ca used by th e lesse e , he is bo

109

J
good within three months .

6 - Du ty not to construct
st ructure
The lessee must not errect on the proper ty any perma nent
whitho ut the lessor' s consen t.

Determ ination of Lease

A lease of immov able proper ty determ ines under the fo llowin g circum -
stance s

1. B y efflux of time
A lease determ ines on the expiry of period of lease fi xed in the lease
deed .

2 . On the happen ing of conting ent event

If th e lease deed contain s a provisi on that the lease will be determ ined
on the happen ing of a future conting ent event, the lease will be dete rmin ed
o n the happen ing of the event.

3 . By Merge r
If the lessee purcha ses the leasho ld proper ty during the period of lease,
the lease will be determ ined.

4 . By expres s surren der

If the lessee surren ders his interes t under lease to the lessor by mu-
tual consen t the lease will be determ ined.

5 . By implied surren der

1f the le ss ee by his conduc t surrend ers his leaseh old interes t there is
irnp ::E-J d surren der and the lease will be c;feterm ined.

. ..
•
.
I •

. , . t '

, , .. . .
. ... ...., . ,,, ... , ":- ·, ......: . . . .
,
 forf eitu re
6_By
term ina ted by forf eitu re und er the foll owi ng circ um st anc es:
A lease will be

th e
late s an exp res s con diti on in the lea se dee d a nd
a) If the les see vio
lessor has a righ t of re-e ntry .

les sor by set ting up a title in a

b) If the les see den ies the title of the
sel f.
third person or by cla imi ng title in him

7. By giving a No tice th
of a ten anc y -at -wil l the les sor can giv e a not ice to qui t e
In the cas e th8
exp iry of the per iod pre scr ibe d in the not ice
/eased pro per ty. On the
lease will be term ina ted .

ova ble pro per ty det erm ine s on the

By sec tion 111 (h) a lea se of imm
par ty
pro per ty leas ed, dul y give n by one
the exp irat ion of a not ice to quit the
wa ive d ,
ice give n und er sec tion 111 (h) is
to the oth er. By sec tion 113 a not
by any
the exp res s or imp lied con sen t of the per son to who m it is giv en,
with
lea se
it sho win g an inte ntio n to trea t the
act on the par t of the per son givi ng
as sub sist ing . Sec tion 113 give s two illus trat ion s.
sed .
A, the less or, give s B, the less ee, not ice to qui t the pro per ty tea
(a)
in
ice exp ires . B ten der s and A acc ept s, ren t whi ch has bec om e due
The not
ice is
exp irat ion of the not ice . The not
res pec t of the pro per ty sinc e the
wai ved .
sed .
A, the less or, give s B, the less ee; not ice to qui t the pro per ty lea
(b)
in possess·1on . A giv· es to B . as les see .a ·
The not ice exp ires , and B rem ains
ice is wai ved .
sec ond not ice to quit . The firs t not

.. . .., ..... . .

111

. ' .J
I ... . ..
: : ...;
-·
~ .•. • t .
TOPIC -XL
TENANC Y BY HOLDIN G OVER
TENANC Y BY SUFFER ENCE
TENANC Y AT WILL

If a lessee of property remains in possessio n of the property after de-

terminatio n of the lease grated to the lessee and the lessor or his leagal
represent ati ve accepts rent from the lessee or other wise assents to his
continuing in possessio n the tenancy is called tenancy by holding over . In
th or
such a case the tenancy will be treated as renewed from month to mon
year to year according to the purpose for which the property is leased. Thus
if th e property was originally leased for the agricultura l or manufactu ring
purpose it shall be deemed to b~ a lease from year to year and it shall be
terminabl e by giving six months notice to quit. If the original lease is for any
other purpose it will be trated as a lease from month to month and termi-
nable by fifteen days notice. A tenant by holding over is liable to pay rent.
H e is not liable to be evicted without a notice.

If a lessee of property remains in possessio n of the property after de-

termin ation of the lease granted to the lessee without consent of the lessor
the tenency is called tenency by sufferanc e. . A tenancy by sufferenc e is
one created purely by fiction of law. If a tenant continues to be in posses-
sion after the determina tion of the period of the lease without consent of the
landlord he becomes tenant by sufferance . He is not be regarded as a
trespasse r. He is not responsib le for rent. He is liable to compensa te for
use and occupatio n. He is liable to be evicted without a notice to quit. A
tenant by sufferance is considere d to be slightly superior ~o a trespasse r.
So he is not liable to pay damages as a trespasser .

A tenancy at will arises by implication of law in cases of permissiv e

occupatio n. When a person holds the land of another with the consent of
owner as a tenant without settling the terms of lease or by agreemen t that
the lessor may have the right of re-entry at his own will and pleasure the
tenancy is called tenancy at will.

11 2
 A ·tena ncy a t Will ' has the follow ing ch a racte ristics :
1· It ca n b e Put a n end to by a dem and for posse ss ion on th e
part o f the la ndlor d .

2. It is te rmina ble by the death of eithe r the landlo rd or the

ten ant

3. It c omes to an end when eithe r the landlo rd or the tenan t

assig n s his intere st.

TOPIC - XLI
EXCH ANG E

ange .
Secti ons 118 to 121 of the Trans fer of Prope rty Act deal with exch

for the
Whe n one perso n trans fers owne rship of a thing or prope rty
n is calle d
own ership of a thing or prope rty of anoth er perso n the trans actio
rship of one
excha ng e. In exch ange two perso ns mutua lly trans fer the owne
ion for the
thin g for th e o w nersh ip of anoth er thing. In excha ge consi derat
ion is mone y
trans fer of o w n ers hi p is owne rship of anoth er thing. If consi derat
mone y and
:h e tran s a ctio n b e co m es sale. Even if the consi derat ion is partly
owne rshi p of a th in g the trans action is excha nge.

a selle r
In exch a nge a part y to the trans action has dual capac ity. He is
. By virtue of
as to th at which he gi ves and a buyer as to that which he takes
liabil ities of a
sectio n 120 , a party t o a n excha ge shall have all the rights and
r or charg e
sell er and buye r. How eve r the right of charg e of an unpa id selle
ange .
for prepa i d price shall not be availa ble to the partie s to an exch

y,
By virtue of sectio n 119 if , due to the defec tive title of the other part
taken , he can
a part y to an excha ng e is dep rived of the thing which he has
party . If the
claim back the p rope rty w hich he has trans ferred to the other
cons idera tion
oth er party has t rans ferred the prope rty to anoth er perso n for
this right will not be a vai la bl e.

11 3
 TOPI C - XLII
GIFT OF MOV ABLE AND IMMO VABL E PROP ERTJ ES

th g ift of
Sectio ns 122 to 129 of the Trans fer of Prope rty Act deal w i
movab le and immov able prope rties.

Sectio n 122 define s gift. The follow in g are th e essen tia ls of g ift.

1· Gift is the transf er of certain existin g movab le or immov able

prope rty by one person called donor to anoth er perso n ca lled
donee .

2. The transf er · should be made voluta ril y and withou t cons iderat ion .

3. The transf er must be accep ted by the donee or any othe r perso n
on behal f of the donee .

4. The accep tance must be made during the life- tim e o f the do nor
and while he is still capab le of giving .

5. If the donee dies befor accep tance, the gift is void.

6. The donor should be compe tent to contra ct. He should have

attain ed the age of majori ty and is of sound mind.

7. A minor is incom peten t to contra ct and a gift made by minor is

void.
a. The donee may be a minor. A gift may be made to an unbor n
child. In such a case the condit ions prescr ibed in sectio ns 1 3 and
14 of the Act are to be fulfille d.

In Kalya nasun daram Pillai Karup pa Moop anar, (50 M d

v
a .193),
it is accep ted by the donee or
the court held that a gift would compl ete when
any other perso n on behalf of the donee . A minor 's guard ian rn ay accep t a

114
gift for him . The acceptance must be in the lifetime of the donor and if th e
donee dies before acceptance there is no gift. If the gift is accepted but th e
donor dies before the deed is registered, the transfer may be completed by
registration after the donor's death.

In Krishnan v. Vasu (1991 ( 2 ) KLT SN 67 P.58), it was held that

acceptance of a gift is an essential element to constitute a valid gift both
under the English Law or under the Transfer of Property Act. But u nd er
English law acceptance of the gift by the donee is presumed until the contracy
is proved . Under section 122 of the Transfer of Property Act there is no
presumption of acceptance of gift as the case of English law. A person
relyin g on the gift must establish actual acceptance of it by the donee during
the lifetime of the donor.

A gift of immovable property must be effected by a registered inSt ru-

me nt signed by or on behalf of the donor and attested by at least two wit-
nesses. A gift of movable property may be effected either by a regiS t ered
instrument or by delivery of possession.

In John v. Thaikkad Panchayat (·1 990 (2) KLT 721 ), it was held that
actual transfer of possession without a registered document will not make a
gift complete in law. A registered document is necessary to complete the
transfer.

In State of Kerala v. Oomman (1991 (2) KLT SN 9 P.8), it was held

that a gift of immovable property can be effected only by a registered instru-
ment. A gift deed is not valid even in a case where it is registered but not
attested by two witnesses. A gift of immovable property not satisfying the
requirements of section 123 cannot be considered to be a gift in the eye of
law.

The provisions of the Transfer of Property Act dealing with gift are not
applicable to gifts made by Mohammedans. Under Mohammedan Law a gift of
an immovable property may be made orally by simple delivery of possession . .

115
 The s u b j ec t ,nn tt o r o f 91 ft ~1 ho ul d h o in ox is t0 n ce on t h e d a te o f gi ft.
Gi ft o f fu t ure p , o p o rty i~ vo id . A g ift cu rn p ri s in g 110 H1 ex ist ing a r1 cJ f utu re
p roper ly is v o id Gs to th e la tt e r.

th
W hen a gif t o f a thin g is made to tw o or rn ore don ees a nd one of em
does not accept , th e g ift is vo id to th e e xt e nt t: o whi c h he is e n t it le d h acJ he
Rcce pt ed.

Suspension or Revocation of Gift. (Conditional gift and Resumable

gift} (Section 126)

The general rule is that the gift is not revocable. Once a gift is made it
,s not revocable. However the donor and donee may agree t h at o n th e
h appe n ing of any specified event which doe·s not depend on the will of th8
don o r a gift shall be suspended or revoked. Thus a condition s ub se qu e nt
m ay b e imposed in the gift deed. On the happening of the cond itio n subs e-
quent th e gift will become terminated. It is a conditional gift. Suc h a gift is
v a li d.

A resumable gift is one which is revocable at any time at the m ere w ill
of the donor. Such a gift is void ab initio.

A gift may be revoked if the consent of the donor is obt ai n ed b y coer-

cio n , undu e influence, misrepresentation or fraud.

Examp~
1 ) A g ifts a property to B with a condition that if B dies without leav·
mg any
h eir the property would go back to A. It is a conditional gift. If 8 dies
with o ut he irs before the death of A the property will revert to A.

2) A mak es a gift of his property to B with a condition that A sh

. . a 11 have the
right to revoke the 91ft at any time during his life -time. It is a re
surnable gift.
It is void ab initio.

116
 "1

In Pich a Gan gad hara n v. Pac hl Kam alak

shi (199 3 (2) KLJ 97 4 ), it
h
held t11at a gift d ee d w h'1ch has been acce pted and acte d upo n by t e
was
iciou s man ner. a tran sfer
donee cann ot be can celle d by the don or in a capr
ee and once it has com e
by gift is very muc h bind ing on the don or and don
gnm ent or tran sfer . Mer ely on
into oper atio n, it is as goo d as any othe r assi
has und ergo ne cha nge
the ground that don or's attit ude towa rds the don ee
it .
after exec ution of the gift dee d, he cann ot revo ke

In Vann athi Vala pil Jan aki v. Puth iya Pura

yil Paru ( AIR 198 6 Ker.
th e
11O). it was held that gift of imm ovab le prop
erty can not be revo ked on
dono r.
ground of folly or imp rude nce of the part of the

Onerou s Gift s (Sec tion 127 )

gift is mad e to a sing le

One rous gift refe rs to a gift with burd en. If a
ene d by an obli gati on, the
pers on of seve ral thin gs and one of them is burd
pts it fully .
don ee can take noth ing by the gift unle ss he acce

e sep arat e and inde -

If a don or mak es gifts in the form of two or mor
ral thin gs, the don ee is at lib-
pen den t tran sfer s to the sam e pers on of seve
one rous gift.
erty to acce pt the ben efici al gift and reje ct the

acce pted the gift bur-

A don ee who is not com pete nt to cont ract and
ce. But if he reta ins the
den ed by oblig ation is not boun d by his acce ptan
with kno wled geo f the burd en,
prop erty afte r beco ming com pete nt to cont ract
he will be boun d by the oblig ation .

Univ ersa l Donee (Se ction 128)

erty to a don ee, the
Whe n a pers on mak es a gift of his who. le prop
ee is und er an oblig atio n to
done e is calle d Univ ersa l don ee. A univ ersa l don
the exte nt of the valu e of the
clea r off the deb ts and liabi lities of the don or to
gifte d prop erty .

117
 In Indian Overse as Bank v. Balakr ishnan (1988 (2) KLT SN 114
P. 75), it was held that when the gift consist s of whole proper ty of the donor,
the donee will be univers al donee within the meanin g of section 128 of th0
Transf er of Proper ty Act. Such a donee is person ally liable for all the debts
due by and liabiliti es of the donor at the time of the gift to the extent of th e
proper ty compri sed in the gift.

Donati o Mortis Causa ( Death -bed G ift)

A gift made in contem plation of death or Donati o Mortis Causa is gov-

erned by section 191 of the Indian Succes sion Act, 1925 . The followi ng are
the princip les regard ing donatio moris causa.

1. A death bed gift should be of movab le propert y.

2. It cannot compri se immov able propert y.

3. The donor should be sufferin g from illness and expect to die shortly
of his illness.
4. The gift should be made by deliver ing posses sion of movab le
proper ty.

5. It is resuma ble by the giver and shall not take effect if the donor
recove rs from the illness

4. It takes effect only on the death of the donor.

118
roPIC XLIII
oEFINITION OF ACTIONAB LE CLAIM
or
otSCUSS T H E RULES REGARDIN G TRANSFER OF ACTION-
AB LE CLAIMS

s ectio n 3 of the Transfer of Property Act defines an Actionable Claim .

By virtue of th e definitio n the following are actionable claims

1. A claim to any debt ( existing, accruing, conditional or contingent)

other t han a debt secured by mortgage of immovable property or
by hy pothication or pledge. Thus a claim for an unsecured debt
is an actionable claim.

2. A claim to any beneficial interest in movables not in possession of

the claimant.

Th e following are examples of actionable claims

a) A claim for arrears of rent
b) Amount due under -a policy of insu ranee
c) Fixed deposit in Bank
d) Interest of the partner in a dissolved partnership .

T he foll owing are not actionable claims

a) Claim for unliquidated damages
b) Mortgage- debt
c) Sha re in a company
d) Claim to mesne profit.
e) A decree

Sections 130 to 137 deal with transfer of actionable claim. The follow-
ing are the principles governing the transfer of actionable claim.

1. The assignment of an actionable claim should be in writing.

l I9
2. It shou ld be sign ed by th e tran sfero r or hi s agen t.

3. A writt en notic e shou ld be g iv en to th e debt o r.

4. The notic e shou ld be iss ued b y the tran sfe ror.

5. If th e trans feror re fu ses to give notic e the trans feree can

issu e notic e .

6. The notic e shou ld conta in the name and addr e ss of the

trans feree .

7. If notic e is given to the debto r, he shall not give the mon

ey
to the origin al credi tor. If notic e is not given , the debt
or wil l
be disch arge d when he bona fide pays mone y to the
trans feror . Thus for the prote ction of the trans feree a
notic e shou ld be given to the debto r.

12()
 PROBLEMS
Raiu leased a public house l o DaDu who agreed not to keep any publiç house within
Examine whether Unny is
a f the permises.
Babu assigned the leases to Unni.
a m
agreement.
bound by the
Property Act deals with validity of condi-
Hint:Section 11 of the Transter
o
the mode of enjoyment. The general rule is that in the
tions restraining
the t r a n s f e r o r cannot impose any condition
interest,
transferor of absolute
of the transferee. If any condition' re
the mode of enjoyment
restraining
the condition is void.
of enjoyment is imposed in the transfer,
straining mode condition regard-
c a s e of lease, the
lessor may impose any
However in the
lessee. The condition may
the mode of enjoyment of the property by the
ing
one. Both positive and negetive cov-

be a positive covenant or negetive

The negetive covenants a r e binding
enants are binding on the transferee.
im-
In the given problem Raju has.
on the subsequent transferees also.
is binding on Babu and Unni ( Read Topic- VII)
posed a negetive covenant. It
leased. The notice expires.
2. P the lessor gives Q the lessee notice to quit the property
rent which has become due in respect of
The notice expires, Q tenders and P accepts
of notice. Is the notice waived ? Give reasons.
the property since the expiration

or

the property leased. The notice expires. Y

X the lessor gives Y the lessee notice to quit
to the of the notice.
tenders and X accept rent due for a period subsequent expiration
Xwants to evict Y on the basis o fthe notice. Will X succeed ?

Hint: By section 111 (h) a lease of immovable property determines on the

the expiration of a notice to quit the property leased, duly given by one party
to the other. By section 113 a notice given under section 111(h) is waived,
with the express or implied consent of the person to whom it is given, by any
act on the part of the person giving it showing an intention to treat the lease

as subsisting. Section 113 gives two illustrations.

(a) A, the lessor, gives B, the lessee, notice to quit the property leased.

The notice expires. B tenders and A accepts, rent which has become due in
respect of the property since the expiration of the notice. The. nötice is

121
 waived.

(0 A, the lessor, gives B, the lessee: notice to quit the property leased.
The notice A gives to B as lessee a
expires, and B remains in
possession.
second notice to quit. The first notice is waived.

The given problems are based on the illustration (a) to section 113 of

the Transfer of Property Act. w e apply the principle contained in section

s read with illustration (a), it can safely be decided that the notice given by

P is waved. Once notice is waived, to succeed in a suit for eviction by the

lessor, a fresh notice is to be
given.
3. Bindu makes a gift of a site to Krishna with a condition that she should not construct

any building upon it so as to obstruct the view of the sea from his house. Krishna
makes constructions in the site. ls there any remedy for Bindu

Hint: Section 11 of the Transfer of Property Act de als with validity of condi-

tions restraining the mode of enjoyment. The general rule is that in the
transferor of absolute interest, the transferor cannot impose any condition
restraining the mode of enjoyment of the transferee. If any condition re-
straining mode of enjoyment is imposed in the transfer, the condition is void.
However there are two exceptions to the said rule. By one of the excep-
tions, a condition or direction regarding the mode of enjoyment may be im-
posed by the transferor if it is for the beneficial enjoyment of transferor's
own property. When the transferor alienates only a part of his land and
retains the other part with him, direction. may be imposed
a
regarding the
mode of enjoyment of the transferred property for the
beneficial enjoyment
of that part which he retains.

In the given problem, Bindu makes a gift of a site to Krishna with a

candition that she should not construct any building upon it so
as to obstruct
the view of the sea from his house. Krishna makes
constructions in the site
Bindu can seek injunction from a civil court.

4, A transferred the properties to the leagal nelrs or an

unborn person
who is
in the womb. Examine the legality.

Sections 13 and 14 of the Transter or

Froperty Act deal
with aeneral

122
arinciples to be followed
n ne Case of gift in favaour of an Unborn Person.

means a peiSOn who is not in existence even in mother's

An unborn person
To ake a gitt ot property in favour of an unborn
womb. If a person wants
conditions are to be followed.
person the following

transfer the property to an unborn person.

He cannot directly

prior interest (life interest) in favour of a living

He should create
a
2
holder can possess and enjoy the property during his
person. A life interest
get absolute ownership.
life time. He will not

interest (ie., ownership) shal1

3. What is remaining after creating the life
unborn person. Thus ownership should be
be absolutely transfered to the

transferred in favour of the uborn person. Limited or life interest cannot be

unborn
to unborn person. Transfer of life interest in favour of an
given an

person is void.

postpone the vesting of property in the unborn

4. The transferor cannot
attainment of his majority. In other words the property should
child beyond
be absolutely vested in the child on or before the attainment of majority.

5. The transfer in favour of unborn child is a contingent interest and the

child should be born alive prior to the death of the life interest holder. The
interest created in favour of child will be elapsed if the child is not born alive

before the death of the life interest holder. In case the interest is elapsed
the interest transferred in favaour of the child will be reverted to the transf
eror or his legal heirs.

6. Even if the terms of transfer provides for vesting of property in the

child immediately on his birth or on the attainment of his majority, the life
interest holder can possess and enjoy the property until his death though

the ownership is vested in the child.

In the given problem, A transferred the properties to the leagal heirs of

123
 unborn person who is not even in the womb. Bv virtue of section 4 0 u

Ct, One cannot transfer

property in favour of unborn child of an unbo
child. The transfer is hit by section 14 and hence void.

. a m u allowed his heir to park his car in his house. After sometime Ramu rerusea o

The neighbour to park in his house. Ramu's neighbour claimed it as easement rignt

int:In the given problem, the claim of Ramu's neighbour will fail, as Hamu

nas and
granted an easment right ( right to park the car) only to his heir io
to his neighbour. Ramu'S neighbour can succeed in his claim only if he

shows that he has either an easment by grant, or easment by prescription or

any other easement. (Read Notes on Easement Act)

6. A transferred his property to B during the pendency of litigation before appropriate

cOurt concerning such property as subject matter in dispute. Examine the validity or

the transfer.

Hint: y virtue of section 52 of the Act, during the pendency of any suit or

proceeding in a compentent court either party cannont transfer the immov-

able property, which is the subject matter of the suit or proceeding, except
under the authorithy of the court and on such terms as it may impose. Thus,
the general rule is that before making a transfer of property which is the
subject matter of dispute leave of the court is to be obtained.

A suit is said to be pending from the date on which the plaint is

instituted in the court and until the the complete satisfaction or discharge of
a final decree passed in the suit.

If during the pendency of the suit one of the parties to the suit transfers
the property without consent of the court, the transferee will be bound by the
decree as if he is the transferor eventhough he was unaware of the stit.
The transfer as such is not void. It is because section 52 does not prohibit

the transfer of property during pendency of the suit. Thus if the decree is in
favour of the transferor, the transferee can claim the benefit of decree. If

the decree is not in favour of the transferor, the transteree will be bound
by
the terms of decree eventhough he is not a party to the suit.

124
7.Albert is the owner of a land through which his neighbour Richard has been walking,

as there was no other way for him, for the last 36 years. After the death of both Albert

and Richard, the sons of Albert refused permission to the sons of Richard to walk over

their land. Discuss whether any right of Richard's family members is violated by such

refusal.

Hint: The right of easement by prescription available to Richard's family

members is violated by the refusal of sons of Albert. (Read -Notes on Ease-

ments)

125
 Second Year LL. B. Degree (l1I Year & IV LL. B. [V Years))

Examination
Part Paper IV
Transfer of Property & Easements

Time: 3 hours Max. Marks: 80

Section-A
Answer any ten of the following.
1. Inter vivos

Actionable claim
3. Attestation
4. Doctrine of fictures

5. Condition Subsequent
6. Oral transfers
7. Profit-e-prendre

8. Constructive notice
9. Marshalling
10. Merger
11. Donatio moritus causa

12. Foreciosure
(10 x 2 = 20 marks)

Section - B

Answer all the four questions

13. X, trarnsferred the properties to the legal heirs of an unborn person who
s in the womb. Examine the legality of the transaction.

allowed his neighbour to park his car in his house. After sometimes
14. X,
x refused to park the cark in his house X's neighbour claimed if as a

easmentary ight. Decide.

15 A , mortgaged his property to B to Rs. 5 lakns with a condition that A has

no right to redeem it for 50 years. A got pize worth of Rs. 25 lakhe in a

n

lottery. Now he wants to redeen his mortgage. Breguses. Deida.

borrowed rmoney by merely handing over the L i policy on hie life
16.A,
from a Bank. Later A, dies leaving his wife. The widow as well as the bank
claimed the money from LIC against the policy. Decide who will succeed ?

(4x 6 = 24 marks)

Section - C
Answer any three questions.
17. What properties are not transterable under T.P. Act ?
18. Write a note on doctrine of election.
19. Explain the doctrine of feeding the grant by estoppel.
20. Define easement and explain the grounds for extinction of
easements.
21. Define lease and explain the law regarding detemination of lease.

(3 x 12 = 36 marks)