UNIT 2

I) Conditions

q) ) A sells his house to B with a condition that B cannot transfer the property to
anyone. Will this condition be valid ? What will be the status of such transfer ?
Discuss. (7.5) / Discuss the law relating to conditions restraining alienations

ans: No, the Condition will not be valid. As per section 10 of the TPA Where
property is transferred subject to a condition or limitation absolutely restraining
the transferee or any person claiming under him from parting with or disposing
of his interest in the property, the condition or limitation is void. Restraint on
alienation is said to be absolute when it totally takes away the right of disposal.
Section applies to a case where property is transferred subject to a condition or
limitation absolutely restraining the transferee from parting with his interest in
the property. For making such a condition invalid the restraint must be an
absolute restraint. Thus, in Kannammal v. Rajeshwari, where the settlor
intending to create a life estate in favour of his son-in-law "M", handed over the
title-deeds of the said property to M indicating that he had divested himself of
all rights in the property but imposed absolute perpetual restraint on alienation,
it was held that the restraint was void since the transfer was an absolute transfer
in favour of “M” Under the provisions of section 10, the sale deed made by the
heirs of M in favour of appellants was a valid sale because the heirs were
entitled to ignore the restraint on alienation and deal with the property as
absolute owners.

However, it may be noted that where A total restraint on right of alienation is

void but a partial restraint would be valid and binding. Thus in the case of
Muhammad Raza v. Abhas Bandi Bibi, the condition restricted the transferee
from transferring the property to strangers, i.e., outside the family of the
transferor, it was held by the privy council that the condition was merely a
partial restraint which was valid and enforceable.

Further, this section also provides certain exceptions:

a) Lease: Lease is a transfer of a limited interest where the lessor (transferor)

reserves the ownership and transfers only the right of enjoyment to the lessee
(transferee). A lessor can impose a condition that the lessee will not assign his
interest or sublease the property to any other person. Such a condition will be a
valid condition. Such condition, although it is a restraint on the lessee
(transferee) against alienation, is valid and he can not transfer his interest
without the consent of the lessor.

b) married woman: Where a property is transferred to a married woman who is

not a Hindu, Muslim or Buddhist, the transferor can validly impose a condition
restraining alienation. Such Condition will not be void under Section 10.

In conclusion, the transfer will itself be valid but the condition itself is void.

q) ) X sells his house to Y with the condition that he can transfer this house to
anyone except Z. will this condition be valid? Discuss with the help of relevant
provision (5)

ans: Not sure but the condition should be void

II) Vested and contingent interest (not satisfactory, might redo it)

q) explain both vested and contingent interest:

ans: As per section 19, interest is vested in the following instances:

a) where No time specified: A person gets a vested interest in a transfer of

property where the terms do not specify the time when it is to take effect. For
example, a person sells his house to another person. The purchaser gets the
vested interest from the day of sale though the possession may not be given to
him immediately.

b) where it is to take effect forthwith: The interest created in favour of the

transferee is vested where it is specified that it is to take effect forthwith, i.e.,
immediately, without

c) on the happening of an event: The interest is a vested interest where the

operation of the transfer is made to depend upon some specified certain event.
The event must be clearly specified, explained and it must be certain to happen.
For example, death of a person is certain to happen, likewise sunset and sunrise
are bound to happen, etc

Thus, in the above cases, unless a contrary intention appears from the terms of
the transfer, the interest is vested

Further it may be noted that vested interest is not defeated by the death of
transferee before he obtains possession. In Usha Subbarao v. BN
Vishveswaraiah, the SC observed that An interest is said to be a vested interest
when there is immediate right of present enjoyment or a present right for future
enjoyment. Thus, when the interested is vested, as soon as the transfer is
complete, the interest accrues to the transferee with immediate effect and the
transferee's title is complete.
The explanation attached to this section also makes it clear that An intention
that an interest shall not be vested is not to be inferred merely from a provision
whereby:

(i) the enjoyment of the property is postponed: Sometimes the transfer may be
done by the transferor without the right of enjoyment. The right of enjoyment
may be postponed till a future date or happening of an event. Such transfers are
also transfer of vested interest

(ii) a prior interest in the same property is given or reserved to some other
person: Similarly, it is not to be inferred that an interest shall not be vested
merely by a provision whereby a prior interest in the same property is given or
reserved for some other person. Where a prior interest is created there is only
postponement of enjoyment and not the vesting of subsequent interest. For
example, where A transfers property to B for life and then to C, here the interest
of C is vested interest but only due to the prior interest created in favour of B
his right of enjoyment is postponed till the life of B.

(iii) income arising from the property is directed to be accumulated until the
time of enjoyment arrives: There may be a condition regarding accumulation of
income until the time of enjoyment arrives. In that cases also, it is transfer of
vested interest.

(iv) if a particular event shall happen the interest shall pass to another person.
limitation.—The interest shall not be vested is not to be inferred from a
provision that if a particular event shall happen the interest shall pass to another
person. This type of provision is called a "conditional limitation." A conditional
limitation divests an already vested estate and transfers it to another person.

In Sunder Bibi v. Rajendra Narain, the terms of a compromise stated that L

would have a life estate, and after L's death, R would become the full owner of
the estate if he survived L. If R did not survive L, the estate would pass to R's
male descendants according to the rule of primogeniture. Before L’s death, a
question arose about whether R had a contingent interest or a vested interest that
could be attached.

The court held that if the provision had only stated that R would get the estate if
he survived L, R's interest would have been contingent on his survival.
However, the additional condition that the estate would pass to someone else if
R did not survive L created a conditional limitation. This meant R's estate was
vested but could be divested if he did not survive L. The court reasoned that the
condition affected the retention of the interest, not its acquisition. Therefore, R
had a vested interest, subject to divestment.

The primary differences between vested and contingent interests are as under.

(i) In a vested interest, there is an immediate right of present enjoyment or a

present right for future enjoyment and in a contingent interest, the right of
enjoyment is made dependent upon some event or condition, which may or may
not happen. It is only on the happening of that event or condition that the
interest becomes vested.

(ii) Vested interest is heritable and transferable even if the enjoyment is

postponed, but contingent interest is transferable, but not heritable. Where
contingent interest is transferred, the transferee simply stands in the shoes of the
transferor and would be able to take the contingency or condition specified in
the original deed.

iii) Vested interest can be attached by a decree of the court, i.e., a court decree
can be executed against it. However, a contingent interest is not attachable
because of the uncertainty involved.
III) Unborn person

Q) a) A makes transfer of an immovable property to B, an unborn person on 1st

January 2000, with the condition that the will get the enjoyment of property
after attaining the age of majority. And also, by the same transaction created
prior interest in favor of C for 20 years. A dies on 31st December 2015, whereas
B is born on 1st January 2001. What will be the dates of vesting of interest and
getting right of enjoyment in favour of B? explain with the help of relevant
provisions and decided cases (7 ½ )

q) + A makes transfer on 1st January 2010 to his unborn child C and by the same
transaction created prior interest in favour of B for ten years. C did not born on
the 31st December 2019 but he (C) came into mother womb on Such date. Will
transfer in favour of C be valid? Explain with the help of relevant provisions
and case laws (7.5)

q) explain the ingredients which are required for the transfer of property in
favour of unborn person. (10)

ans: Section 13 of the TPA provides that Where, on a transfer of property, an

interest therein is created for the benefit of a person not in existence at the date
of the transfer, subject to a prior interest created by the same transfer, the
interest created for the benefit of such person shall not take effect, unless it
extends to the whole of the remaining interest of the transferor in the property

For transfer of property for the benefit of unborn person two conditions are
required to be fulfilled:
1) Prior interest: it is necessary for a valid transfer of property to an unborn
person that before the transfer actually takes place, a prior interest must be
created in favour of a living person on the date of transfer. The unborn person
must be in existence when the prior interest comes to an end. In this context,
existence means that the person must have been conceived. In Tagore v. Tagore
the privy council observed that foetus in a womb is a person in existence for the
purpose of making a gift to an unborn child.

For example, A transfers his properties to X for life, then to Y for life and then to
Z for life and thereafter to the unborn child of Z. Here X, Y and Z are living
persons. The property may be given to more than one living persons
successively for life before it vests in an unborn child ultimately.

2) absolute interest: It is further necessary that whole of the remaining interest

of the transferor in the property must be given to the unborn person. Only
absolute interest may be transferred in favour of the unborn person and not
limited or life interest, i.e., the whole of the remaining interest is the entire
interest of the transferor less the prior life interest carved out of the ownership.

For example, A creates a life estate in favour of his friend B, and a life estate for
the benefit of B’s unborn first child UB 1 and then absolutely to B’s second
child UB 2. The second transfer is of a limited interest in the property for the
benefit of an unborn person and would therefore be void and incapable of taking
effect in law. After the death of B, here, the property would revert back to A or
his heirs as the case may be.

An important case law in this regard is Girjesh Dutt v. Data Din where, “A”
made a gift of her property to “B” for her life and then to her sons absolutely. B
had no child on the date of execution of the gift. The deed further stated that in
case “B” had only daughters, then the property would go to such daughters but
only their life. In case “B” had no child then after the death of “B” the property
would go absolutely to X. B died without any child. It was held that The gift in
favour of B’s unborn daughters was void because it was a gift of only limited
interest. The court held that where a transfer in favour of a person or for his
benefit is void under s. 13, any transfer contained in the same deed and intended
to take effect or upon failure of such prior transfer is also void. Here, as the
transfer in favour of X was to take effect on failure of the third transfer
stipulated in the contract that was void, the transfer in favour of X also became
void. Hence, X’s claim was defeated.

There are some other provisions for the transfer of property to an unborn child
that require discussion:

1) What is given to unborn person need not necessarily vest in him at his birth.
For example, the transferor may say that the interest in the property shall vest
with the unborn child when the unborn child attains majority at the age of 18.
However, vesting must take place within the time period as laid down in section
14 which states that No transfer of property can operate to create an interest
which is to take effect after the lifetime of one or more persons living at the date
of such transfer, and the minority of some person who shall be in existence at
the expiration of that period, and to whom, if he attains full age, the interest
created is to belong.

2) Section 20 says where on a transfer of property an interest therein is created

for an unborn person, he acquires a vested interest on his birth, although he may
not be entitled to the enjoyment thereof immediately. This provision is not
applicable if a contrary intention appears from the terms of the transfer.
IV) lis pendens

q) what is the doctrine of lis pendens (7-10)

ans: The doctrine of lis pendens is derived from the maxim “ut lite pendente
nihil innovetur”, meaning that nothing new should be introduced into a pending
litigation. This doctrine is enshrined in Section 52 of the Transfer of Property
Act, 1882 (TPA).
According to this section, during the pendency of any non collusive suit
or proceeding, where a right to immovable property is directly and specifically
in question before a court of competent jurisdiction, the property cannot be
transferred or otherwise dealt with by any party to the suit in a manner that
affects the rights of any other party under any decree or order that may be
passed. However, the property may be transferred or dealt with if done under
the authority of the court and in accordance with the terms imposed by it.

The principle underlying the object of this provision has been explained
by the Gujarat High Court in Narendrabhai Chhaganbhai Bharatia v Gandevi
Peoples Co-op Bank Ltd, wherein the court observed that the object of the
provision is to maintain the status quo unaffected by the act of any party to the
litigation pending its determination. Further the court observes that the
principles contained in this section are in accordance with the principle of
equity, good conscience or justice because they rest upon an equitable and just
foundation, that it will be impossible to bring an action or suit to a successful
termination if alienations are permitted to prevail.

The essential conditions required for the application of this doctrine have
been clearly laid down by the Supreme court of India in Dev Raj Dogra v. Gyan
Chand Jain wherein the court laid down the following conditions for the
application of section 52 of the TPA: (1) A suit or a proceeding in which any
right to immovable property must be directly and specifically in question, must
be pending.

(2) The suit or the proceeding shall not be a collusive one.

(3) Such property during the pendency of such a suit or proceeding cannot be
transferred or otherwise dealt with by any party to the suit or proceeding so as
to affect the right of any other party thereto under any decree or order which
may be passed therein except under the authority of court. In other words, any
transfer of such property or any dealing with such property during the pendency
of the suit is prohibited except under the authority of court, if such transfer or
otherwise dealing with the property by any party to the suit or proceeding
affects the right of any other party to the suit or proceeding under any order or
decree which may be passed in the said suit or proceeding.

The essential conditions are explained in detail below:

a) Pendency of suit or proceeding: The first requirement of this section is that

there must be a pending suit or proceeding in a court of competent jurisdiction.
Here, competent jurisdiction mean a court having the territorial jurisdiction. The
pendency of a suit or proceeding begins from the date of the presentation of the
plaint or institution of the proceeding in a court of competent jurisdiction and
continues until it is disposed of by a final decree or order, with complete
satisfaction or discharge of such decree or order, either by being obtained or
becoming unobtainable due to the expiry of the period of limitation prescribed
for the execution thereof by any law for the time being in force. However
it is important to note here that the Supreme court has observed in Yogesh
Goyanka Vs. Govind that the doctrine of lis pendens as provided under Section
52 of the Act does not render all transfers pendente lite to be void ab-initio, it
merely renders rights arising from such transfers as subservient to the rights of
the parties to the pending litigation and subject to any direction that the Court
may pass thereunder.

Additionally, in Hardev Singh v. Gurmail Singh, the Supreme Court reaffirmed

that a transferee pendente lite steps into the shoes of the transferor and is
bound by the outcome of the pending litigation. The Court held that a transfer
made during the pendency of a suit is not void, but the transferee cannot assert
any rights beyond those of the transferor and is bound by the decree passed
against the latter.

b) Collusive proceeding: another requirement is that the suit or proceeding must

not be collusive. If the suit is collusive, a transfer during its pendency would not
be hit by the rule of lis pendens. It was observed by the SC in Nagubai Ammal
v. B Sharma Rao that in a collusive proceeding, the claim put forward is
fictitious and the contest over it is unreal, and the decree passed there is a mere
mask having the similitude of a judicial determination and worn by the parties
with the objects of confounding third parties. Thus in Periamurugappa Asari v.
Manicka Chetty wherein then the parties to a suit entered into an agreement for
the purpose of defeating the rights of a transferee and obtain a decree in terms
of the agreement, the court held that the suit is collusive and the rule of lis
pendens will not apply.

3) Right to property must be specifically in question: requirement of the section

is that right to immoveable property must be

directly and specifically in issue in the suit or proceeding. The subject matter of
the suit must be clearly and pointedly in contest, the property must have been
property described by definite legal or general descriptions of its character,
status, etc., so that it can be identified by description.

4) Disputed property must be transferred or otherwise dealt with: another

requirement of the section is that the property must be transferred or otherwise
dealt with by any of the parties to the litigation. The wording of the section
makes it clear that the operation of this doctrine cannot extend to alienation by a
third party who is not part of the litigation nor does it affect the right of the
parties claiming title paramount to the parties to the suit. Even a transfer made
by a person before he is made a party is not affected by lis pendens.

5) the transfer must affect the other party: the last condition of this section is
that the transfer must affect the other party to the dispute. The very object of this
doctrine is to protect only the parties to the litigation against alienations by their
opponents pending the suit. The phrase any other party mean any other party
between whom and the party alienating there is an issue for decision which
might be prejudiced by alienation. The doctrine of lis pendens cannot be availed
of by the transferor, it is really intended for the benefit or protection of the other
party, i.e., party in the suit other than the transferor

It is important to note that in Kulandaivelu v. Sowbagyammal, the madras high

court observed that Section 52 makes no exception in favour of a bona fide
transferee for value without notice and it hits against all transfers which would
affect the rights of the other party
V) Part performance
UNIT 3

I) Sale

q) define sale and explain its ingredients. Also distinguish between contract of
sale and contract for sale (10)

ans: Sale has been defined under section 54 of the TPA as a transfer of
ownership in exchange for a price paid or promised or part paid and part
promised. Therefore sale is transfer of ownership for money consideration. An
owner has three basic rights over his property, a right of title, an exclusive right
to possess and enjoy the property and an exclusive right to alienate it. In a sale
of property, all these rights are conveyed by the owner with his free consent in
favour of the transferee who is called a buyer. No rights remain with the seller,
thus, the transfer of this totality of rights is called an absolute transfer. In
contrast, a lease and a mortgage are transfer of a right in the property, but not
absolute transfers. For instance, in a lease, there is a transfer of a right to
possess and enjoy the property, but the title and a right of alienation remain with
the owner. Similarly, in a mortgage, what is transferred is a right to cause the
property to be sold in the event of non-payment of loan by the mortgagor in
favour of the mortgagee. In a sale, all the rights are transferred in favour of the
transferee.

The essential elements of sale are discussed below:

a) Parties: the parties to a sale are the transferor who is called a seller and the
transferee who is referred to as the buyer. It has been held in Mirahul
Enterprises v. Mrs. Vijaya Sirivastava, that a contract of sale must be based on a
mutual agreement between the seller and buyer.

For constituting a valid sale, the transferor or the seller must be a person
competent to contract, i.e., he must be a major and of sound mind, and should
not be legally disqualified to transfer the property. It is also necessary that the
seller is either the owner of the property which he is going to sell or he has
authority to dispose of the property. For example, a tenant cannot sell the
tenanted property because he is not the owner of the property and neither does
he have the authority to dispose the property but an agent having a power of
attorney to sell the property can also sell it without being the owner of the
property. In A. Bhagyamma v. Bangalore Development Authority,
Bangalore, the court held that when a General Power of Attorney expressly
authorizes the holder to "transfer" a property, the term cannot be given a
restricted meaning. The word "transfer" carries a broad legal connotation,
encompassing various forms of conveyance, including lease, gift, mortgage,
will, and sale. Therefore, in this case, the authority granted under the General
Power of Attorney was sufficient to authorize a sale. Consequently, the holder
of the power of attorney was deemed competent to sell the property.

Likewise, the transferee must be a person competent to receive a transfer in his

favour. He should not be subject to a legal disqualification. For instance, an
actionable claim under s. 136 cannot be purchased by a judge, legal practitioner
or an officer connected with the court.

b) Subject matter of sale: A property that is not in existence cannot be

transferred by sale under the Transfer of Property Act. Further, the property
must be in existence at the date of transfer.

c) money consideration: The definition indicates that the transfer of ownership

has to be for a ‘price paid or promised to pay or part-paid and part-promised’.
Price or money consideration, thus constitutes an essential ingredient of the
transaction of sale. At the time of contract of sale the price must be ascertained
for which the property is going to be transferred. The price may be paid at the
time of execution of sale, before it in advance or after the sale. It is also not
necessary that the whole of the consideration or price should be paid at one
time. Even if the whole of the price is not paid but the document is executed and
registered, the sale would be complete, if it is promised to be paid.

The real test is the intention of the parties. In order to constitute a ‘sale’,
the parties must intend to transfer the ownership of the property. They must also
intend that the price would be paid either in present or in future. The intention is
to be gathered from the recital in the sale deed, conduct of the parties and the
evidence on record.

The inadequacy of consideration does not affect the validity of the sale.
But such inadequacy may be a ground to presume fraud, coercion or mistake in
the transfer of property, which may lead the court to decide against the validity
of the sale. The consideration must however not be illusory. Price is the essence
of sale and in the absence of price there cannot be a valid sale. Here price
includes money only, thus in Madam Pillai v. Badrakali Ammal it was observed
that a transfer not made in exchange for a money consideration, e. g., a transfer
made in pursuance of a compromise of a family dispute, would not be a sale. In
this case, since no price was paid or promised, the transaction held to not be a
sale.

D) conveyance: Section 54 has provided two modes of transfer of immovable

property:

i) Delivery of possession: Where the property is tangible immovable

property of a value less than one hundred rupees, its transfer may be made
either by a registered instrument or by delivery of the property. Delivery of
tangible immovable property takes place when the seller puts the buyer or such
person as he directs in possession of the property.

ii) registration of sale deed:

q) explain the law relating to marshalling by subsequent purchaser (8)

q) what are the essentials of a valid sale? explain the law relating to marshalling
by subsequent purchaser (7 ½ )

q) define sale. Discuss its elements. Also highlight the law relating to marshalling by
subsequent purchaser (10)

q) Define sale. discuss its elements. also distinguish between sale and gift ( 7 ½ )
II) Mortgage

q) Define mortgage. Distinguish between simple mortgage and usufructuary mortgage. Also
highlight the various kinds of mortgage ((10) + “Once a mortgage always a mortgage”
Explain (5-7)

q) Define mortgage. Discuss its kinds (10) + Distinguish between simple mortgage and
usufructuary mortgage (5) [2022]

q) what do you mean by the mortgage? Discuss its ingredients. Also highlight various kinds
of mortgage (10) + distinguish between simple mortgage and usufructuary mortgage (5)

q) what is simple mortgage? (2) / what is usufructuary mortgage (2)

q) explain the rights of mortgagee to redeem (8)

q) distinguish between simple mortgage and mortgage by conditional sale