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Transfer of Property Act, 1882
Introduction
Transfer of Property Act, 1882 is the general law relating to transfer of immovable
property. The principal objectives of the Act are:-
 To lay down uniform rules for transfer of property; and
 To complete the code of contract law so far as it relates to immovable property.

Meaning of Immovable Property

Section 3 only states the Immovable property doesn’t include standing timber, growing
crops and grass.
According to the General Clauses Act,1897, Immovable Property includes land,
benefit to arise out of land, things attached to the earth, or permanently fastened to
anything attached to the earth.
Thus, by combining the aforesaid two definitions, we can say that the Immovable
property includes land, benefits arising out of the land, things attached to the earth,
etc., but doesn’t include standing timber, growing crops and grass.
Examples of Immovable Property
The following have been recognised as immoveable property:
 Right to collect rents of immovable property;
 A right to way;
 The equity of redemption;
 The interest of mortgagee;
 Right to collect lac from trees;
 A right of fishery;
 Right to receive future rents and profits of land;
 Reversion in property leased;
 A factory

Meaning of Movable Property

The Transfer of Property Act does not defines the term "moveable property".
Therefore, it is to be defined with the help of other statutes. For e.g., it has been
defined in the General Clauses Act, 1897 as to mean “property of every description
except immoveable property”. The Registration Act defines "moveable property" to
include property of every description excluding immoveable property but including
standing timber, growing crops and grass.
For the purpose of law, moveable property is sometimes regarded as immoveable property.
This may happen when a thing of chattel is attached or embedded in earth.

For Example – A machinery installed on a cement platform and held in position by being
attached to iron pillars fixed in the ground was held to be immoveable property as the
annexation was made by the person who owned the buildings as well as the machinery
(Mohamed Ibrahim v. Northern Circars Fibre Trading Company, A.I.R. 1944 Mad. 492).
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Examples of Movable Property

The following have been held to be movable property;
 Right of worship;
 Government promissory notes;
 Royalty;
 A right to recover maintenance allowance;
 Copyright;
 A decree for sale on a mortgage –deed;
 A decree for arrears of rent;
 A machinery which is not permanently attached to earth;
 Standing timber , growing crop and grass.

Distinction between moveable and immoveable property

The distinction between moveable and immoveable property was explained in the case of
Sukry Kurdepa v. Goondakull, by Holloway J. as moveability may be defined to be a
capacity in a thing of suffering alteration. Immoveablity for such alteration e.g., a piece of
land in all circumstances is immoveable. If a thing cannot change its place without
injury to the quality it is immoveable. Certain things e.g. trees attached to the ground are
so long as they are so attached, immoveable when the severance has been effected they
become moveable.

Transfer Of Property[Section 5]
Section 5 of the Transfer of Property Act, the term “transfer of property” means an act by
which a living person conveys property in present, or in future, to one or more other living
persons, or to himself, and one or more other living persons and "to transfer property"
is to perform such an act.
"Living person" includes a company or association or body of individuals whether
incorporated or not.
A transfer of property not in existence operates as a contract to be performed in future
which may be specially enforced as soon as the property comes into existence
(Jugalkishore v. Ram Cotton Company, (1955) I SCR 1369).

Who Can Transfer The Property?

Every person who is competent to contract and entitled to transferable property, or
authorised to dispose of property is competent to transfer such property.
According to Indian Contract Act, a person is competent to contract when he is a major
and of sound mind and is not disqualified from contracting by any law to which he is
subject. But a minor can be a transferee as there is nothing in the Transfer of Property Act
to disqualify a person, who is a minor to be a transferee. Thus, a mortgage can be validly
executed in favour of a minor who has paid the consideration (Hari Mohan v. Mohini,
Raghava v. Srinivasa). Persons who are authorised to transfer property can also transfer
property validly. Although a minor is not competent to be a transferor yet a transfer to a
minor is valid.
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EXCEPTION
If a person holds himself out is the owner with the consent of the owner i.e. doctrine of
holding out or if a person represents to be the owner i.e. doctrine of feeding the grant by
estoppel.

Formalities of Transfer
1. Attestation
Attestation, in relation to a document, implies the fact of authentication of the signature
of the executant of that document by the attestator by putting down his own signature
on the document in proof of the fact of its execution. All transfers do not require
attestation. For example, a sale or a lease does not require attestation. But a mortgage
or a gift requires that a mortgage deed or a gift deed must be attested by two or more
witnesses. Attestation is valid and complete when two witnesses sign the instrument.

2. Registration
Registration is an essential legal formality to effect a valid transfer in certain cases. The
advantage of registering a document is that any person who deals with the property
would be bound by the rights that are created in earlier registered document.

3. Notice
Notice, may be actual or constructive. If a person knows about a fact, he has an actual
notice. But, in certain circumstances law treats a man who ought to have known a fact
even though he did not in fact know it. This is called constructive notice. The equitable
doctrine of notice is recognised in various Sections of this Act. Where a transfer is made
of property out of which a person has a right to receive maintenance, the transferee
takes subject to that right if he had notice of it, but not otherwise. Similarly if A conveys
to C property, which he had by a previous contract agreed to sell to B, then B can
enforce the contract against C, if C had notice of it, but not otherwise. If C had notice of
the prior contract, he purchases with knowledge that it was unconscionable of A to sell
to him, and it is therefore, unconscionable of him to buy.

The words “wilful absentation” suggests want of bona fide in respect of particular
transaction (Joshua v. Alliance Bank). Thus, a person who refuses to receive a
registered letter is, deemed to have constructive notice of its contents.
Similarly, if a person proposes to sell his property to X who, at the same time knows that
rents due in respect of the property are paid by the tenants to a third person Y, X will be
fixed with notice of the rights of Y (Mernt v. Luck (1902) 1 Ch. 429).
In so far as gross negligence is concerned, it does not mean a mere carelessness but
means carelessness of such an aggravated nature as to indicate mental indifference
to obvious risks. For example, if A buys property from B and does not care to ask
whether any amount by way of municipal tax is due on that property and if the

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municipal corporation asks him to pay the arrears of tax, then B is responsible, and
if does not pay, then the arrears of tax may be made a charge on the property.

Transferable Property [Section 6]

Section 6 provides that, in general, every kind of property can be transferred from one person
to another.
However, following are the exceptions to this general rule i.e; in the following
cases, property can’t be transferred from one person to another:

1. Chance of an Heir Apparent/Spes Successions

The technical expression for the chance of an heir apparent succeeding to an
estate is called spes successions. It means succeeding to a property.
This means an interest which has not arisen but which may arise in future. It
is in anticipation or hope of succeeding to a estate of a deceased person. Such
a chance is not property and as such cannot be transferred. If it is transferred, the
transfer is wholly void.
For Example A, a Hindu who has separate property, dies leaving a widow W and a
brother L, L’s succession to the property is dependent upon two factors, viz.,
 his surviving the widow, W, and
 W leaving the property intact.
L has only a bare chance of succession to the property left by A. This is spes successionis,
and therefore, cannot be transferred (Amrit Narayana v. Gyan Singh,).

2. Right of Re-Entry
This is a right which a lesser has against the leasee for breach of an express
condition of lease which provides that on its breach the leaser may re-enter the
land. The transferor reserves this right to himself after having parted with the
possession of the property. This right is for his personal benefit and cannot,
therefore, be transferred.
3. Transfer of Easement
Easement means an interest in land owned by another that entitles his holders to
a specific limited use or enjoyment.
As an easement confers no proprietary right on its owner, it cannot be
transferred apart from the land itself. For example, the right of certain villagers to
bath in another’s tank cannot be transferred.
4. Interest Restricted in its Enjoyment
The cases which fall under this head includes the following:
a) The right of “Pujari” in a temple to receive offerings.
b) The right of a “Widow” under Hindu law to residence and maintenance. The
rights given in these cases are purely of a personal nature and cannot,
therefore, be transferred. These rights are restricted to the person to whom
they belong.

5. Right to Future Maintenance

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A right to future maintenance in whatsoever manner arising, can’t be transferred.
It is solely for the personal benefits of the person to whom it is granted.
However, the arrears of the past maintenance can be transferred.
6. Mere right to sue and actionable claim
The ‘right to sue’ is a personal right annexed to the ownership of property and cannot
be severed, from it. It is based on the principle of public policy to prevent multiplicity of
suits; the object is mainly to prevent the abuse resulting from trafficking in litigation.
Mere rights to sue can’t be transferred. The right refers to a right to damages arising
both out of contracts as well as torts. However, if it is incidental to transfer of another
right, it can be transferred.

For example, A commits an assault on B, B can file a suit to obtain damages; but
B cannot assign the right to C and allow him to obtain damages. In contract also, the rule
is the same. If A breaks a contract which he has entered into with B, B can bring action
for damages, but B cannot transfer this right to C to recover damages.
There is clear distinction between an actionable claim and a mere right to sue. An
actionable claim is property and the assignee has a right to sue to enforce the claim.

7. Public Offices and Salaries ,Stipends, Pension, Etc .

Transfer of public offices and salaries, stipends, pension etc., cannot be transferred
on the grounds of public policy.

Conditional Transfer
When an interest is created on the transfer of property but is made to depend on the
fulfillment of a condition by the transferee, the transfer is known as a conditional
transfer. Such a transfer may be subject to a condition precedent or a condition
subsequent. If the interest is made to accrue on the fulfilment of a condition, the
condition is said to be condition precedent.
For Example, A agrees to sell his land to B if B marries C. This is a condition precedent.

Validity of conditions as per Section 25

 The condition must not be impossible to fulfil.
 The condition must not be forbidden by law.
 It should not be of such a nature that if permitted it would defeat the provisions of any
law.
 It should not be fraudulent.
 The condition should not be such as to cause injury to the person or property of another.
 The condition should not be immoral or opposed to public policy.

Distinction between condition precedent and condition subsequent

In condition precedent, the condition comes before the interest; whereas in condition
subsequent, the interest is created before the condition.
The one precedes the vesting of right and the other follows the vesting. In condition
precedent, the vesting of right is delayed until the happening of an event. In condition
subsequent, there is no postponement of vesting of right though it is to be destroyed or
divested by reason of non-fulfillment of condition.
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Illegal Restraints On Certain Alienations [Sections 10, 11 & 12]

Conditions Restraining Alienation [Sec. 10]

Where property is transferred, subject to condition, absolutely restraining the
transferee from parting with or disposing of his interest in the property, the
condition is void.
It may be noted that absolute restraint is void but partial restraint qualified
as to place or person may be valid and binding.
For e.g. A transfers property B on the condition that he should not alienate it in
favour of C, who is A’s competitor. This is only a partial restraint and is valid.
But it is not permissible to restrict the alienation to a particular time. Such a
restriction is not partial but an absolute restraint and as such invalid.

Restraint on Enjoyment [Sec. 11]

When a property is transferred absolutely, the transferee should be free to enjoy the
property in any manner he likes. If the transferor imposes any restraint on the
enjoyment of the property by the transferee, the restraint is treated as clog in the
enjoyment of the property by the transferee; the restraint is treated as void.
For e.g. A sales his house to B and he adds the condition that only B shall reside in
the house. The condition is invalid.
It may be noted that if a person transfers a property to another keeping some
other property for himself, he can impose certain conditions which may interfere
with the rights of enjoyment of the transferee so that the transferee can enjoy
the transferred property in a particular manner only.[Exception to Section 11].

Condition making interest determinable on insolvency or attempted alienation

[Section 12]
If a person transfers property to anyone subject to a condition that if the
transferee becomes insolvent, the property should revert to the transferor, such
condition is void.
This rule is subject to an exception in the case of lease. Thus, if a landlord
imposes a condition in the lease that if the lessee becomes insolvent, the lease
should come to an end , the condition is valid.

Transfer subject to illegal, impracticable condition, etc. [Sec. 25]

Section 25. provides that any interest created in a property under transfer, which
depends on a condition the performance or satisfaction of which is either
impracticable or disallowed under law or fraudulent or harmful to the person or
property of another, is invalid.

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Transfer For The Benefit Of Unborn Person And People[
Sections 13,14 & 16]
Transfer for the benefit of unborn person [Sec.13]
Section 13 deals with the transfer of property for the benefits of unborn persons.
Following are the important provision of Sec. 13:
a) No transfer can be made directly to an unborn person;
b) The interest in favour of unborn person must be preceded by a prior interest;
c) The prior interest must also be created by the same transfer ; and
d) The unborn person must be given the whole of the remaining interest of the
transferor in the property.
Thus if a property is given to an unborn person, two conditions should be
satisfied :
 it should be preceded by a life estate in favour of a living person; and
 it should comprise the whole of remaining interest of the transferor so that
there can be no further interest in favour of other.

For example, A transfers property of which he is the owner to B in trust for A and
his intended wife successively for their lives, and after the death of the survivor,
for the eldest son of the intended marriage for life, and after his death for A’s
second son. The interest so created for the benefit of the eldest son does not take
effect, because it does not extend to the whole of A’s remaining interest in the
property.

Rule Against Perpetuity [ Sec . 14]

The rule against perpetuity prohibits the vesting of interest beyond a certain
reasonable period. It prescribes the maximum period within which a future
interest must vest, and if the vesting is postponed beyond such period, the vesting is
void for remoteness. Such maximum period is called the perpetuity period.

As per Section 14, the perpetuity period consists of the life time of one or more
persons say A, B and C, all living at the date of transfer of property and the further
period of minority of a person, say the eldest son of C, (who shall be in existence
at the expiration of that period) to whom the interest is to belong. In simple words,
‘perpetuity period’ is the life or lives in being and the further period of minority of a
person.

Simply put, there can be any number of transfers between living major persons,
but if the ultimate, transferee is a minor, the ultimate transfer to him should
transfer all of the interest in the property to him. This is to ensure that the
property is not inalienable for an indefinite period after the death of the original
transferor.

The effect of this rule is that it prevents the property owner from transferring
and controlling his assets for an exceptionally long period after his death – a

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concept generally known as ‘control by the dead hand’. Such a contract would be
inoperative to the extent it violates the rule; the rest it would be allowed to
operate normally.

The rules contained in Setion 14 as regards transfer to unborn persons may be summed up
as follows:
a) If before property is ultimately transferred to an unborn person, it is
transferred to different persons for their successive lives, they should all be living
at the date of the transfer.
b) The unborn person must come into existence on or before the expiration of
the existence life or lives named by the transferor.
c) He must be given the entire estate of the transferor and the transfer must be
absolute.
d) The vesting of the estate can’t be postponed to period longer than is
necessary for him to attain the majority.

Following are the exceptions to the rule against perpetuity:

1. Gift to charity.
2. Personal agreement i.e.; agreement which do not create any interest in the
property.
3. Contracts for perpetual renewal of leases.
4. Charges created on a property. The creation of charge is not a transfer of an\
interest in the property.

Transfer to Take Effect or Not on Failure of Prior Interest [Sec. 16]

Sometimes an interest is contended to take effect after or upon the failure of a prior
interest by reason of rules contained in Sections 13 & 14. In such a case when the
prior interest fails, the subsequent interest also fails.

For e.g. A transfers his property to B and his intended wife successively for their
lives and then to their eldest son for his life and then to C. The prior interest in
favour of the son of B, A fails u/s 13 & therefore the subsequent interst in favour
of C also fails.

When the prior interest fails not by reason of Sec. 13 & 14 but due to any reason,
the subsequent interest doesn’t always fail.
For e.g. A made a bequest to his wife for life and after her death to his death to
his younger son by her. The bequest to wife failed for want of registration but the
interest of the son will not fail, it will be valid.

Vested And Contingent Interest

Vested Interest [Sec. 19]

An interest is said to be vested when it is not subject to the happening of event or

if subject to the happening of an event, then the event is such that it is bound to
happen. For instance, movement of property from ‘A’ to ‘B’ on the death of C. Here,

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B has the vested interest because interest is subject to the happening of an event i.e.,
death of C and which is bound to happen.
It may be noted that a vested interest is not defeated by the death of the
transferee. If the transferee dies before he takes possession of the property, it
passes on to his legal heirs. Further, vested interest can also be re-transferred by
the transferee before he obtains the possession of the property.
Contingent Interest [ Sec. 21]

Where on a transfer of property, an interest therein is created in favour of a

person to take effect only on the happening or non-happening of a specified
uncertain event, such person thereby acquires a contingent interest in the
property. Such interest becomes a vested interest on the happening or non-
happening of the specified uncertain event.

For instance A promise to gift a car to B, if he marries C. Here B acquires a contingent

interest in the car because C may or may not marry B. If C marries B, the
contingent interest of B in the car becomes a vested interest.

It may be noted that a contingent interest is defeated by the death of the tranferee.
If the transferee dies before he takes possession of the property, the property doesn’t
pass on to his legal heirs. Similarly transferee can’t further re-transfer the property
before he acquires the possession of the property.

Distinction between a vested and a contingent interest

The following are the principal points of distinction between a vested and a contingent
interest:
 Vested interest creates an immediate proprietary interest in the property though the
enjoyment may be postponed to a future date. A contingent interest on the other
hand is dependent upon the fulfilment of some conditions which may or may not
happen. In other words, in case of vested interest, the owner’s title is already
perfect; in case of a contingent interest, the title is as yet imperfect but may become
perfect on the fulfilment of a stipulated condition.
 A vested interest takes effect from the date of transfer. A contingent interest in order to
become vested is conditioned by a contingency which may not occur.
 A vested interest cannot be defeated by the death of the transferee before he obtains
possession. A contingent interest may fail in case of the death of transferee before the
fulfilment of condition.
 Since vested interest is not circumscribed by any limitation which derogates from
the completeness of the grant, it logically follows that a vested interest is
transferable as well as heritable. If, therefore, a transferee of the vested interest dies
before actual enjoyment, it will devolve on his legal heirs. A contingent interest, on
the other hand, cannot be inherited though it may be transferred coupled with
limitation regarding fulfilment of a condition.

Absolute Interest
When a person owns property, he has an "absolute interest" in the property.
Ownership consists of a bundle of rights, the right to possession, right to enjoyment and
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right to do anything such as selling, mortgaging or making gift of the property. If A is the
owner of a land, he has an absolute interest in the land.

For example If A sells his land to B, then B becomes the owner and he acquires an
absolute interest in the land he has purchased from A. Likewise if A makes a gift of his
property to B, there again B gets an absolute interest in the property which is gifted to
him. These are instances where persons may have an absolute interest.

Reversion and Remainder

Some interests in the property are called in English Law, reversion and remainders. A
"Reversion" is the residue of an original interest which is left after the grantor has
granted the lessee a small estate.
For example, A, the owner of a land may lease it to B for a period of five years. The
person who grants the lease is the lessor and the person who takes the lease is called the
lessee. Here, after the period of 5 years the lease will come to an end and the property
reverts back to the lessor. The property which reverts back to him is called the reversion
or the reversionery interest. The grantor has a larger and an absolute interest out of which
he carves out a smaller estate and gives to the grantee, i.e. the lessee.

When the owner of the property grants a limited interest in favour of a person or
persons and gives the remaining to others, it is called a "remainder".
For instance, A the owner of a land transfers property to B for life and then to C
absolutely. Here the interest in favour of B is a limited interest, i.e., it is only for life. So
long as A is alive he enjoys the property. He has a limited right since he cannot sell away the
property. His right is only to enjoy the property. If he sells this interest it will be valid
so long as he is alive. So after B’s death the property will go to C, interest is called a
remainder. In the case of a "remainder", the property will not come back to the owner,
but it goes over to the other person.

Important Doctrines
Doctrine of Election [Section 35]
 Election means ‘choice’. Doctrine of Election provides that where a property is
transferred to a person, then the transferee can make a choice between whether
to accept the transfer or to reject it. If he is accepting the transfer, then the
transferee shall, along with the benefits of transfer , also accept the burden of
transfer.
 In nutshell, it means that a man taking a benefit under an instrument must also
bear the burden. In other words, a man cannot approbate and reprobate or blow
hot and cold.
 However doctrine of election could not be applied to deprive a person of his
statutory right to appear invoking extraordinary jurisdiction of the Supreme Court under
Article 136, (PR Deshpande v. MB Haribatti).
 For example, A transfers his house to B, by a gift and in the same gift deed asks
B to transfer his shop to C. B may elect to accept the transfer or reject the
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transfer. If B accepts the transfer, he will get house but in that case he will also
have to transfer the shop to C.

Example 2 – A transfers his property to B’s son and by the same instrument transfer
B’s property to C. In this case B need not to elect and can keep his property. His son
can have his gift.
 There is, however, an exception to the doctrine of election. That is, if the transferor
gives two benefits to a person and one particular benefit is in lieu of an item of property
belonging to that person which the transferor has asked to transfer to a third-party then
if the person elects to retain his property, he can retain the other benefit.
 Example 3 – Under A’s marriage settlement, his wife is entitled, if she survives him
to the enjoyment of the estate of Sultanpur during her life. A by his will donates to his
wife an annuity of Rs. 200 p.m. during her life, in lieu of her interest in the
estate of Sultanpur, which estates he bequeaths to his son. A also gives his wife a
legacy of Rs. 1,000. After the death of A, his widow elects to take what she is entitled
to take under the marriage settlement (i.e., the enjoyment of estate of Sultanpur). In this
case, the wife has to forfeit the claim of Rs. 200 which her husband has given to her. But
she can claim other benefit i.e., Rs. 1,000.
 It may be noted that the question of election arises only when a transfer is made by
the same document. If the transferor makes a gift of property by one deed and
asks the donee, by another deed, to part with his own property, there is no
question of election.
 In case the person upon whom, a benefit is conferred rejects it, the property
which was attempted to be transferred to him will revert to the transferor and
it is the transferor who will compensate the disappointed transferee. If the transferor
dies, before the transferee makes the election, then the legal heirs of the
transferor will compensate the disappointed transferee out of the inherited
assets.
Doctrine of Holding Out ‘OR’ Transfer by Ostensible Owner [Section
41]
 Doctrine of Holding Out makes an exception to the rule that a person cannot
confer a better title than he himself has. An ostensible owner is one who has
all the indicia of ownership without being the real owner.
 Where the true owner of property, expressly or impliedly, permits another person
to hold himself as the true owner of the property and a third party, in good
faith, deals with the person permitted, then such third party will acquire a good
title as against the true owner.
 Following conditions are required to be complied with, so as to provide the
protection to the third party against the true owner:

 The transferor is the ostensible owner;

 He is ostensible owner by the express or implied consent of the true
owner;
 The transfer is for consideration;
 The transferee has acted in good faith.
 For example, Ramesh made a gift of property to Suresh but continued in possession of
the gifted property. He purported to exercise a power of revocation and then
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transferred the property to the defendant. The gift, however, was not revocable as
it was an unconditional gift. Suresh seeks to recover possession from the defendant.
The defendant invoked protection under Section 41.
In the given example, the donor is not an ‘ostensible owner’ holding the property with
the consent of the real owner. The defendant cannot, therefore, invoke the protection of
Section 41.
 Example 2 – The manager of a joint Hindu family consisting of some minor members
alienated the ancestral house to P without any necessity and the alienee transferred it
to the defendants. The minors challenged the alienation. The defendants sought
protection under Section 41. Here Section 41 has no application for “P was not the
ostensible owner of the ancestral family house with the consent, express or, implied, of
the persons interested in the said ancestral house in as much as the plaintiff, who had
an interest in the said house, did not and could not by reason of the disability of infancy
give their consent”.

Doctrine of Feeding the Grant by Estoppel [Section 43]

 Doctrine of Feeding the Grant by Estoppel provides that where a person
fraudently or erroneously represents that he is authorized to transfer certain
immovable property and professes to transfer such property for consideration,
such transfer shall, at the option of the transferee, operate on any interest which
the transferor may acquire in such property at any time during which the
contract of transfer subsists.
 In order to invoke this section, the transferee must prove that:
 There was a fraudulent or erroneous representation;
 It was to the effect that the transferor is entitled to transfer the immovable
property;
 The transferor is found to have subsequently acquired the interest;
 The transfer of property was for consideration;
 The transferee has not rescinded the contract;
 The transferee acted in good faith.
 For example, Santa, a Hindu, who has separated from his father Banta, sells to Janta
three fields, X, Y and Z, representing that Santa is authorised to transfer the same.
Of these fields, Z does not belong to Santa, it having been retained by Banta on
the partition, but on Banta’s dying, Santa as heir obtains Z. Janta, not having rescinded
the contract of sale may require Santa to deliver Z to him. Thus, where a grantor
has purported to grant an interest in land which he did not at that time possess,
but subsequently acquires, the benefit of his subsequent acquisition goes
automatically to the earlier grantee or as it usually expressed, feeds the estoppel.

Doctrine of Lis Pendens ‘OR’ Lite Pendente [Section 52]

 The expression lis pendens means a pending litigation. The doctrine of lis pendens is
expressed in the maxim ‘ut lite pendente nihil innovateur’ which means
nothing new should be introduced during the pendency of a suit.
 Doctrine of lis pendens provides that where a suit or proceeding is pending in
any Court between two persons with respect to any immovable property, the
property cannot be transferred or otherwise dealt with by any party, except under
the authority of the Court. If any party transfers or otherwise deals with that
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property the transferee will be bound by the result of the suit or proceeding,
whether or not he had notice of the suit or proceeding.
 For example, there is a dispute between A and B with regard to ownership of
property X. A files a suit against B in a Court of law. A may either win or lose the
suit. If he wins, he gets the property. If he loses, B gets the property. Now suppose
during the pendency of the suit, A, professing to be the owner of the Property,
sells it to C. If the suit ends in A’s favour, no difficulty arises. If it ends in B’s
favour, C cannot retain the property. C is bound by the decree of the Court and
must return the property to B. He cannot even take the plea that he had no
notice of the pending litigation.
 It may be noted that the doctrine of lis pendens applies only when the property
has been transferred by a party to the litigation and it does not apply when
property has been transferred by as stranger i.e., the person who is not a party
to the litigation.

DOCTRINE OF FRAUDULENT TRANSFER

 Where a person transfers his property so that his creditors shall not have anything out
of the property, the transfer is called a “fraudulent transfer”. A debtor in order to defeat
or delay the rights of a creditor, may transfer his property to some person, who may be
his relative or a friend. The law does not allow this.
 Section 53 embodies the principle. It states :
“Every transfer of immoveable property made with intent to defeat or delay the
creditors of the transferor shall be voidable at the option of any creditor so defeated or
delayed.”
 Thus, where an owner of the property contracts a debt and then transfers his property
to someone so that the creditor cannot proceed against the property to realise his debt,
such a transfer is voidable at the option of the creditor. The transfer is valid so long as
the creditor does not challenge it in a Court of law and gets a declaration that the
transfer is invalid.
 A suit instituted by a creditor to avoid a transfer on the ground that it has been made
with intent to defeat or delay the creditors of the transfer or shall be instituted on
behalf of, or for the benefit of all the creditors. Once the creditor sues the debtor and
says that the debtor has the intention to deceive him, the transfer can be declared
invalid by the Court. The creditor has to satisfy the Court that there was an intention
on the part of the debtor to defeat his rights. If he does not prove this, then the creditor
will fail and the transfer is valid. The question arises as to when we can say that the
transferor has the necessary intention to defeat the claim of the creditor. This can be
gathered from the surrounding circumstances.
 For Example a man takes a loan from the creditor. He does not pay the loan. Then the
creditor sues him in a Court to get back his debt. On seeing this the debtor transfers his
property to a friend of his or some other person who simply holds the property on
behalf of the transferor. Again, the debtor may make a gift of his property to his wife or
sell it to a friend who will afterwards retransfer the same to the transferor.

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Under these circumstances, we can easily say that the debtor’s intention was to prevent
the creditor from taking the property by a suit in the Court and to realise his debt.
 Example 2 -: A debtor has several creditors and he transfers his property to one of his
creditors in satisfaction of his whole debt to him. Is this also a fraudulent transfer?
The answer is No. For a mere preference of one creditor over the others is not
fraudulent under the Section, even if the whole property is so transferred and nothing
is left for the other creditors. But the other creditors may file a petition in the Court
within three months of the transfer praying that the debtor be declared insolvent. If the
debtor is adjudicated an insolvent, their interest will be protected and the transfer
will be declared as fraudulent preference. The transfer will be set aside and the
property will be distributed among all the creditors.

Doctrine of Part Performance [Section 53 A]

 Doctrine of part performance prevents a transferor from taking any advantage on
account of non-registration of documents, provided that the transferee has
performed his part of the contract and in pursuance to that performance, the
transferee has taken possession of some part of the property.
 Essential conditions for the operation of the doctrine of part-performance:
1. There must be a contract to transfer immoveable property.
2. It must be for consideration.
3. The contract should be in writing and signed by the transferor himself or on his
behalf.
4. The terms necessary to constitute the transfer must be ascertainable with
reasonable certainty from the contract itself.
5. The transferee should have taken the possession of the property in part
performance of the contract. In case he is already in possession, he must have
continued in possession in part performance of the contract and must have
done something in furtherance of the contract.
6. The transferee must have fulfilled or ready to fulfill his part of the obligation under
the contract.
 The right conferred by this section is a right only available to a defendant to protect his
possession. This section does not create a title on the defendant. It merely operates as
a bar to the plaintiff asserting his title. It is limited to cases where the transferee
had taken possession, and against whom the transferor is debarred from enforcing any
right other than that expressly provided by the contract. The section imposes a bar
on the transferor. When the conditions mentioned in the sections are fulfilled, it
debars him from enforcing against the transferee any right or interest expressly
provided by the contract. So far as the tranferee is concerned, the section confers a
right on him to the extent it imposes a bar on the transferor (Delhi Motor Co. v.
Basurkas)
 For example, a contract for the sale of land has been entered into between A
and B. The transferee has paid the price entering into possession and is willing
to carry out his contractual obligation . As registration of the transfer of land has
not been effected, A , the transferor, seeks to evict B from the land. In such
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a situation, doctrine of part performance operates and it provides that A cannot
evict B from the land as B will not be allowed to suffer simply because formality
of registration has not been complied with.
 Exception : However, nothing in this section shall affect the rights of a
transferee for consideration, who has no notice of the contract or of part
performance. Thus, the doctrine of part performance shall not affect the rights
of a subsequent transferee for consideration without of the earlier contract and of
its being party performed.

ACCUMULATION OF INCOME
Section 17 does not allow accumulation of income from the land for an unlimited period
without the income being enjoyed by owner of the property. The law allows
accumulation of income for a certain period only. The period for which such
accumulation is valid is :
a) The life of the transferor, or
b) eighteen years from the date of transfer.

Any direction to accumulate the income beyond the period mentioned above is void
except where it is for:
 the payment of the debts of the transferor or any other person taking any interest
under the transferor,
 portions for children or any other person taking any interest in the property under
the transfer, and
 for the preservation and maintenance of the property transferred.

Lease & Licence

Definition & Meaning of lease
The term ‘lease’ has been defined under Section 105 of the Transfer of Property Act,
1882. As per this, lease is a transaction whereby one person (i.e., lessor) transfers
the right to enjoy in an immovable property to another person (i.e., lessee) either
for a certain time or in perpetuity, in return of a consideration.
Following are the essential elements of a lease transaction:
1. There must be transferor (lessor) and a transferee (lessee) , both of whom have
agreed for the construction.
2. The lease must be for certain time or in perpetuity
3. There must be transfer of the right to enjoy immovable property.
4. The transaction must be in consideration of a price paid or promised.
5. The transaction must be in consideration of money.

Definition and Meaning of Licence

The term ‘licence’ has been defined under Section 52 of the Indian Easements Act, 1882
as follows:
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Where one person grants to another, or to a definite number of other persons, a
right to do, or continue to do, in or upon the immovable property of the grantor,
something which would, in the absence of such right, be unlawful, and such right does
not amount to an easement or an interest in the property, the right is called licence.
Thus, if a document gives only a right to another to come on the land or premises
and use that in some way or the other, while it remains in the possession and
control of the owner , it will be licence.
A licence is a personal right between the licensor and the licensee, and therefore,
a transferee from the licensor is not bound by the licence.

Difference between Lease and Licence

Lease Licence
 In a lease there is a transfer of  While in case of a licence, there
interest in land. is no such transfer, although the
 Leases are generally heritable. licensee acquires a right to
 Death of the lessor does not occupy the land.
terminate the lease.  Licences are not heritable.
 Generally the leases are not  Death of the licensor terminates
revocable at the will of the lessor. the licence.
 The transferee of the lessor is  But bare licences can be revoked
bound by the lease . at the will of the licenser.
 In the case of breach of lease deed, the  the transferee of the licensor is
aggrieved party can claim for the specific not bound by the licence.
performance  In case of breach of licence deed
the aggrieved party can onl
claim the compensation.

The question whether a particular grant/document amounts to a lease or licence depends

upon the intention of the parties and it is the substance of the agreement which is the
decisive consideration (Associated Hotels of India v. R.N. Kapoor)

Types of Tenancies
Following are the various types of tenancies:
1. Tenancy from year to year: A tenancy from year to year may be made by a grant of
land from year to year. If the tenancy is for a year to start with but after the expiration
of one year the lessee continues to be in possession and pays the rent to the landlord,
the tenancy is regarded as a year to-year tenancy. If, in case of a tenancy for a period
more than a year the landlord wants to terminate or end the lease, he has to give a six-
month’s notice to the lessee to quit. In case of a tenancy from month to month, a fifteen
days notice to quit is necessary. The monthly tenancy may be created either by
contract or may be presumed from the nature of the tenancy to be one, from month to
month.
2. Tenancy-at-will: Tenancy-at-will is a tenancy recognised by law. This comes into
existence where a tenant holds over with the consent is let into occupation. We have
stated above that if the tenant continues to be in possession after the expiration
of tenancy and pays the rent to the landlord, the tenancy may be one from year to year
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or from month to month. During a period when the tenant is in possession after expiry
of the period, if the tenant stays with the consent of the landlord till such time as
further period is fixed or a fresh contract is made, the tenant is called a tenant-at-will.
The landlord will decide for what further period shall the tenancy be given. ‘A
tenancy-at-will is implied when a person is in possession by the consent of the owner
and is not held in view of any tenancy for a certain time. The tenancy-at-will does not
mean that the landlord has to give a proper notice to quit. The tenant-at-will cannot
sublet during that period because no valid contract for further extension in his favour
has been made. The death of the landlord or tenant determines the tenancy, i.e., the
tenancy comes to an end.
3. A tenancy by sufferance: This is a tenancy which is created by fiction of law. If a
tenant continues to be in possession after the determination of the period of the lease
without the consent of the landlord, he becomes a tenant by sufferance. A tenant-at-
will is in possession with the consent of the landlord, whereas a tenant by sufferance is
in possession without his permission after the term of the lease comes to an end. This
type of tenant is not regarded as a trespasser because the tenant had in his favour a
valid lease to start with. No notice is necessary to such a tenant for eviction. This tenant
is not responsible for rent. He is liable to pay compensation for use and occupation of
the land.

Requirements of a valid notice: In order that a notice to quit is valid it must be a proper
notice. The notice must convey the intention to terminate the tenancy as a whole and
must specify the date on which the tenancy would expire. As mentioned earlier, if the
lease is a lease from month to month, 15 days, notice is required. If it is from year to
year 6 months’ notice is required. A lease of the moveable property for agricultural or
manufacturing purposes shall be deemed to be a lease from year to year. The notice
should expire with the end of the period of the tenancy. If it is a lease from month to
month and the notice is given by the landlord, the tenant should be asked to quit at the
end of the month of the tenancy. The landlord cannot ask his tenant to quit at any time
before the expiry of a month or a year of the tenancy.

Determination of leases: Section 111 of the Transfer of Property Act spells out the
various contingencies in which a lease comes to an end.
A lease is determined, i.e., comes to an end in the following ways:
1. By efflux of time or lapse of time: A lease for a definite period, such as a lease for a
year, or for a term of years, expires on the last day of the term and the lessor or any
person entitled to get back the property may enter without notice or any other
formality. Since a lease is a transfer of interest in the property, if during the period for
which a lease is valid, the lessee dies, the heirs of the lessee can continue the lease till
the expiry of the period.
2. By the happening of a special event: When a lease is granted subject to the happening
of an event, it comes to an end when the event takes place. Thus, if B grants lease to A
for life, it comes to an end on the death of A. Similarly, if a lease is granted for the
duration of the war, it comes to an end when the war ends.

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3. Merger: A lease comes to an end when the lessee buys the property of the lessor or
when the lessee takes the lessor’s interest by succession. Here the right of the lessee
merges in that of the lessor. Naturally, the lessee becomes the owner of the property
after he acquires it. So there will be no more a lease.
4. By surrender: A lease may come to an end by surrender. Surrender may be either
express or implied. Express surrender arises when the lessee yields up (gives up) his
interest under a lease by mutual consent.
Implied surrender occurs, as follows :- if during the subsistence of the lease, a new lease
is granted to the tenant to commence at once in substitution for the existing lease,
it operates as a surrender of the old lease. For example, a lessee, accepts to take
effect during the continuance of the existing lease. This is an implied surrender of the
former lease and such lease comes to an end. Mere non-payment of rent does not
amount to surrender.

5. By forfeiture: A lease also comes to an end by forfeiture. A forfeiture occurs when

there is breach of a condition in a lease contract by the lessee. Under the Transfer
of Property Act, forfeiture occurs in the following circumstances – the first case in
which forfeiture occurs is the case when the lessee breaks an express condition which
may be of various types such as, if the lessee does not pay the rent regularly, or if
the lessee becomes insolvent, or where the lessee sublets the property to another
person. In all such cases there will be a forfeiture. But the condition that the lessee
breaks must be an express condition which must have been incorporated in the
contract of lease. Then only the lessor can re-enter the leased property and claim that
the lease shall be forfeited.

Duties of the Lessor:

Following are some of the duties of the lessor:
a) The lessor is bound to disclose to the lessee any material defect in the property with
reference to its intended use of which the lessor is and the lessee is not aware. This rule
applies only to physical defects of the property such as the condition and the nature of
the property leased. You will note that the lessor is not bound to disclose whether or not
he has title to the property.
b) The next duty of the lessor is to put the lessee in possession of the property. A lease is
a transfer of possession the consideration being rent and, therefore, it follows that the
landlord cannot recover the rent unless he has delivered possession to the tenant.
If a contract of lease has been executed and the lessor does not give possession
of the property to the lessee, the lessee can sue the lessor for possession.
c) The next duty that is cast on the lessor is what is usually called convenant for quiet
enjoyment. The covenant, that is the right to undisturbed possession, so long as the
lessee pays the rent, presupposes possession and, therefore, no action can be
brought on this convenant unless the lessee has first obtained possession. The
covenant for possession gives the lessee the right to obtain possession; the covenant for

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quiet enjoyment gives the lessee a right to continue in such possession. If the lessee’s
possession is disturbed, he can sue for damages or, in case a part of the leased
property is taken possession of either by the lessor or by any third-party; the lessee can
hold a part of the leased property and pay a proportionate rent.

Duties of the lessee:

The lessee has the following duties:
a) The lessee is bound to disclose to the lessor any fact as to nature or extent of the
interest that the lessee is about to take, of which the lessee is, and the lessor is not
aware and which materially increases the value of such interest.
b) The lessee is bound to pay or tender at the proper time and place, the premium or
rent to the lessor or his agent in this behalf. We have already seen that in case the
lessee does not pay the rent, he may incur forfeiture of the tenancy. The liability to
pay the rent commences from the date the tenant is put into possession.
c) The next duty of the lessee is that he uses the property as a person of ordinary
prudence would make use of. But he shall not permit another person to use the
property for purposes other than that for which it was leased.
d) He should not do any act which is destructive of or permanently injurious to the
property.
e) The lessee must not, without the lessor’s consent, erect on the property any
permanent structure except for agricultural purpose. If he wants to erect certain
fixtures or chattel on the leased property, it must be done without causing any
damage to the property. Before the termination of the lease, he can remove all the
things attached to the earth. If permanent fixtures are to be made, the lessee must
obtain the consent of the landlord.
f) If the lessee comes to know of any proceedings by way of suit to recover the property of
the lessor, the lessee should immediately inform the lessor. Since, the tenant is in
possession of the property he is the person who is not likely to know of any
encroachment on the landlord’s property and he should therefore inform the
landlord.
g) The lessee should hand over the property at the end of the lease.

Rights of the lessee:

The lessee enjoys the following rights:
a) If during the continuance of the lease any accession is made to the property, such
accession is deemed to be comprised in the lease, the lessee has a right to enjoy the
accretions of the leased property.
b) Where, under the contract, the landlord has agreed to repair the property, the lessee
can carry out the repairs and deduct the expenses from the rent if the landlord fails to
do so.
c) If the lessee has made payment which the lessor is bound by law to pay such as
payment of Government revenues or municipal taxes on the property, the lessee can
deduct the amount from the rent and pay the balance to the lessor. He can even take
interest on the amount he has paid.
d) The lessee has a right to remove the fixtures he has erected-during the term of the
lease.
e) If, due to no fault of his, the lease comes to an end (i.e., when the lease is of uncertain
duration), the lessee or his legal representatives are entitled to all the crops planted or
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grown by the lessee. The lessee or his representatives have got a right to come and carry
away the crops, etc., which are growing on the land. If the lease is of a definite period,
such a right cannot be claimed, particularly, when lessee has committed a fault, e.g.,
where he has committed a breach of a condition entailing forfeiture.
f) The lessee may avoid the lease, if property is wholly or partly destroyed by tempest,
flood, or fire so as to make it impossible to continue the lease for the purpose for
which it was let.
g) The lessee has right to transfer absolutely or by way of mortgage or sub-lease, the
whole or any part of his interest in the property. We have also noticed that the
lessee’s rights are transferable.

Sale
Under Section 54 of the Transfer of Property Act, "sale" has been defined as a transfer of
ownership in exchange for a price paid or promised or part paid and part-promised.
Essentials
 The seller must be a person competent to transfer. The buyer must be any person who
is not disqualified to be the transferee under Section 6(h)(3).
 The subject matter is transferable property.
 There is a transfer of ownership. This feature distinguishes a sale from mortgage, lease
etc., where there is no such transfer of ownership.
 It must be an exchange for a price paid or promised or part paid and part promised.
 There must be present a money consideration. If the consideration is not money but
some other valuable consideration it may be an exchange or barter but not a sale.

Mode of transfer by sale

Sale of an immoveable property can be effected,
a) Where such property is tangible
 by a registered instrument if it is of the value of Rs. 100 and upwards, and
 by a registered instrument or by delivery of property when it is less than Rs. 100
in value, and
b) Where the property is tangible or a reversion, only by a registered instrument.

Contract for sale

A contract for the sale of immoveable property differs from a contract for the sale of goods
in that the Court will grant specific performance of it unless special reasons to the contrary
are shown.
The rights and liabilities of a seller and buyer are dealt with in Section 55 of the
Transfer of Property Act.

Mortgage
Definition and Meaning of Mortgage
The term mortgage has been defined under Section 58 of the Transfer of Property
Act, 1882. As per this, a mortgage is the transfer of an interest in specific immovable
property for the purpose of securing any of the following :
a) The payment of money advanced or to be advanced by way of loan; or
b) An existing or future debt; or
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c) The performance of an engagement which may give rise to pecuniary liabilities.

In a mortgage, out of the bundle of rights which constitute ownership, some are
transferred to the mortgagee and other rights remain vested in the mortgagor.
The word ‘specific’ shows that the description of the immovable property
should not only be free from ambiguity and uncertainty, but that it should be specific
as distinguished from general. A proper description of the property is necessary
to create a mortgage and for its registration.
It may be noted that in order to constitute a mortgage, the transfer of interest in
immovable property must be for one of the aforesaid purposes. The word
‘engagement’ means a contract and the qualification “as may give rise to pecuniary
liability” means a contract the non-fulfilment of which may result in liability to
pay money.

Kinds of Mortgage
1. Simple Mortgage
 The mortgagor undertakes personal liability for repayment.
 The mortgaged property is not required to be delivered to the mortgagee,
 On mortgagor’s default in making payment, mortgagee is entitled to cause
mortgaged property to be sold, after obtaining a decree from the court .
 There is no foreclosure of the mortgaged property

2. Mortgage by Conditional Sale

 The mortgagor ostensibly sells the mortgaged property.
 Here the condition being that the sale shall be absolute in default
of payment by a particular date or that the sale shall be void on payment
by a particular date and the property retransferred.
 The possession of the mortgage property is required to be delivered.
 The remedy to the mortgagee is by way of foreclosure and not by way
of sale.
3. English Mortgage
( It is a combination of Simple Mortgage and Mortgage by Conditional Sale)
 The mortgaged property is transferred absolutely by the mortgagor to the
mortgagee.
 There is a personal covenant to repay on a certain date
 The remedy to the mortgagee is by way of sale and not by way of
foreclosure.

4. Usufructuary Mortgage
 The profit of the property is appropriated by the mortgagee towards
discharge of the advance.
 There is delivery of possession of the mortgaged property to the mortgagee.
 The property is returned when the amount due is personally paid or is
discharged by rents and profits rececived.
 There is no remedy to the mortgagee either by way of sale or by way of
foreclosure.
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5. Mortgage by deposit of Title Deeds/ Equitable Mortgage

 It is created by delivery of the material Title Deeds in respect of the
mortgaged property to the mortgagee.
 All the provisions relating to Simple Mortgage shall apply to this kind of
mortgage.

6. Anomalous Mortgage
 This mortgage is the combination of two or more other kinds of mortgages.
 The remedy to the mortgagee may be by way of sale or by way of
foreclosure, depending the terms of the Deed.

Right of Redemption [Section 60]

Right of redemption means the right to resume those rights which the mortgagor
has parted with. The right of redemption is exercised after the payment of the
mortgaged money to the mortgagee at the proper time and at the proper place.

Any provision or condition which prevents this right of redemption is called ‘clog
(obstruction) on redemption’ and is such void. For example, a stipulation in a
usufructuary mortgage that if the mortgage is not redeemed within a certain
period from the date of mortgage, the mortgagee would become the absolute
owner. This is a clog on right of redemption of the mortgagor and, hence, is
void.

Marshalling [Section 56]

 Where the owner of two or more mortgaged properties sells one of them to
another, the purchaser has the statutory right to insist on the mortgage-debt
being satisfied out of the property or properties not sold to him. This right
is called the right of marshalling by a subsequent purchaser.
 It may be noted this right of the purchaser cannot prejudice the rights of the
mortgagee or persons claiming under him. Nor this right can be enforced, if there
is a contract to the contrary.
 For example, A the owner of three properties X, Y and Z, mortgages them to
B. Subsequently A sells the property X to C. Here C has the right of marshalling,
i.e., he can vompel B to satisfy his mortgage-debt out of the properties Y and Z,
not sold to him.
 It may be noted that doctrine of marshalling is also dealt under Section 81 of
TOPA. Section 81 protects the rights of subsequent mortgagee in the same
manner as Section 56 protects the rights of subsequent purchaser.

Mortgage Charge
A mortgage is transfer of an interest in the A charge is not the transfer of any interest
property made by the mortgagor as a in the property though it is security for the
security for the loan payment of an amount
A mortgage can only be created by act of A charge may be created by act of parties
parties. or by operation of law

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A mortgage deed must be registered and Charge need not be made in writing, and if
attested by two witnesses reduced to writing, it need not be attested
or registered
In certain types of mortgage (viz., But in charge, the charge-holder cannot
mortgage by conditional sale and foreclose though he can get the property
anomalous mortgage) the mortgagor can sold as in a simple mortgage
foreclose the mortgaged property
In a mortgage, the transferee of mortgaged A charge as a general rule, cannot be
property from the mortgagor, can only enforced against a transferee for
acquire the remaining interest of the consideration without notice
mortgagor, and is therefore, only bound by
the mortgage
In a mortgage, there can be security as In a charge created by act of parties, the
well as personal liability specification of the particular fund or
property negatives a personal liability and
the remedy of the charge-holder is against
the property only

Important Terms
1. Charge
A charge is created when immovable property of one person is made security for
payment of money to another. No interest in the property is transferred. The
concept of charge is regulated by the provisions of Transfer of Property Act, 1882
which are applicable to a Simple Mortgage.

2. Exchange
The term ‘exchange’ has been defined in Section 118 of the Transfer of
Property Act, 1882. This section defines the term exchange in the following
words: “When two persons mutually transfer the ownership of one thing for
ownership of another, neither thing or both things being money only, the
transaction is called “exchange”.
Essentials –
 The person making the exchange must be competent to contract.
 There must be mutual consent.
 There is a mutual transfer of ownership though things and interests may not be
identical.
 Neither party must have paid money only.
This Section applies to both moveable and immoveable property.
An exchange can be immovable property as well as movable property. An
exchange of immovable property is governed by the provisions of Transfer
of Property Act, 1882 whereas an exchange of movable property is called barter
and it is governed by the provisions of Indian Contract Act, 1872.
For example, exchange of car for two scooters or exchange of house for 10
hectares of land.

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3. Gift
Section 122 of the Transfer of Property Act, 1882 defines the term ‘gift’. As
per this, ’gift’ is the transfer of certain existing movable or immovable
property made voluntarily or without consideration, by one person, called the
donor, to another called the donee, and accepted by or on behalf of the donee.
Thus, the essentials of a valid gift are:
 Gift must be existing property and not of future property;
 Gifts must be voluntarily i.e., it should not be induced by coercion, undue
influence, fraud, misrepresentation;
 It should be without consideration i.e., it can be for natural love and affection
or for past consideration barred by law of limitation but it cannot be for
present or future consideration;
 It must be accepted by the donee.

According to Section 123, a gift of immoveable property must be made by a registered

instrument signed by or on behalf of the donor and attested by at least two witnesses. A gift
of moveable property may be made by a registred instrument or by delivery of property.
Where the donee is already in possession of the moveable property, as no future delivery
is possible, the donor may make a declaration of the gift in his favour.
For example, where a piece of furniture or a television set belonging to the donor is
lying with a friend of his, the donor may simply declare that he makes a gift of the
furniture or the television set and the gift is complete.

The declaration must be clear and the donee must accept the gift. A gift of immoveable
property, as said above, must be effected by registration. Where a gift in favour of
someone is registered but it is not accepted by the donee, the gift is incomplete.
Suppose, a document is executed by the donor who makes a gift of immoveable
property and the deeds are delivered to donee, and the donee accepts the gifts but the
document is not registered. Will the gift by valid? It has been held by the Courts that the gift
is valid. While registration is a necessary formality for the enforcement of a gift of
immoveable property, it does not suspend the gift until registration actually takes place.
The donee in such a case can ask the donor to complete the gift by registration. Thus, the
most essential thing for the validity of a gift is its acceptance. If the gift is accepted but
not registred it is a valid gift. The Privy Council in Kalyan Sundram v. Kumarappa,
decided that after acceptance of the deed of gift and before registration, the donor
cannot revoke the gift. The gift which is accepted by the donee, will take effect
from the date of the execution of the document by the donor, even though it is
registered at a later date.

For Example, A gives a field to B, reserving to himself, with B’s assent, the rights to take back
the field in case B and his descendants die before A, B dies without descendents during A’s
lifetime. A may take back the field.

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Onerous gift: It may be that several things are transferred as a gift by single transaction.
Whereas some of them are really beneficial the others convey burdensome obligations. The
result is that the benefit which it confers is more than counter balanced by the burden it
places.
For instance, A makes a gift of shares in the companies X and Y. X is prosperous but
heavy calls are expected in respect of shares in Y company. The gift is onerous.

Actionable Claim
The term ‘Actionable Claim’ has been defined in Section 3 of the Transfer of
Property Act, 1882. As per this section, actionable claim means a claim to any
debt, other than a debt secured by mortgage of immovable property or by
hypothecation or pledge of movable property, or to any beneficial interest in
movable property not in the possession, either actual or constructive, of the
claimant, which the Civil Courts recognize as affording grounds for relief, whether
such debt or beneficial interest be existing , accruing , conditional or contingent.
Simply stated, an actionable claim means a claim to any unsecured debt or a claim to
any beneficial interest in movable property, not in possession of the claimant. The
debt or beneficial interest may be existing , accruing, conditional or contingent.

For example, A borrows Rs. 5000/- from B at 12% per annum interest on 1st
April, 2006 and promises to pay back the amount with interest on 1st July, 2006. Till
1st July, 2006, the debt is an accruing debt and is an actionable claim.

It may be noted that a person can have a actionable claim, even without consideration.
Further, such person’s claim will not be affected by claim of subsequent transferee with
consideration.
Illustrations of actionable claims:
i. Arrears of rent accrual constitute a ‘debt’ so it is an actionable claim (Sheu Gobind
Singh v. Gauri Prasad, ).
ii. Provident Fund that is standing to the credit of a member of the Provident Fund.
iii. Money due under the Insurance Policy.
iv. A partner’s right to sue for accounts of dissolved partnership is an actionable claim
being a beneficial interest in moveable property not in possession (Thakardas v.
Vishindas).

Illustrations of Non-actionable claims

i. Debentures are secured debts and therefore not regarded as actionable claims.
ii. Copy right though a beneficial interest in immoveable property is not an actionable claim
since the owner has actual or constructive possession of the same (Savitri Devi v. Dwarka
Bhatya).

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