Object 1

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STUDY MATERIAL

LAW OF PROPERTY

KHRUKU SHIJOH
LL.B
# DEFINITION OF PROPERTY? OBJECT AND PURPOSE OF
PROPERTY TRANSFER BETWEEN LIVING PERSON

The word “property” is derived from the Latin word proprietary and the French equivalent
properties, which means a thing owned. The concept of property and ownership are very similar to
each other. However, there is a fine line that distinguishes the two terms. It will not be incorrect to
state that humans have been aware of their rights to possess what they rightfully own for long. The
term property has been widely interpreted by various jurists such as Salmond, Bentham and Austin.
Close observation of the definitions given by them will help us understand the concept in a better
manner
Section 5 of the Transfer of Property Act, 1882 defines the term transfer of property. According to
this section, 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 other living persons.

Objectives of Transfer of Property Act, 1882:

• As per the preamble of the Act, the Transfer of Property Act, 1882 is to define, amend or
regulate the law relating to the transfer of property by the acts of the parties.
• The Act provides a clear, systematic and uniform law for the transfer of immovable property
between living persons.
• The Act is an extension to the Code of Contract since it is an enacted law for transfers that
take place in the consequence of a contract.
• With provision for inter-vivos (between two living persons) transfers, the Act, provides a
law parallel to the existing laws of testamentary and intestate transfers.
• The Act is not exhaustive because it does not cover the entire dimension of transfer of
property. Hence we can say its scope is limited.
• The Act provides scope to apply the principles of Justice, Equity and Good Conscience if a
particular case is not governed by any provision of law.
• The Act envisages the following six types of transfer: 1) Sale, 2) Mortgage, 3) Lease, 4)
Exchange, 5) Gift and 6) Actionable claim.
Here are some key purposes of the Transfer of Property Act:

1. Legal Framework for Property Transactions: The Act provides a legal framework for the
transfer of property, outlining the rights and obligations of parties involved in such
transactions.

2. Types of Transfers: It classifies and defines different modes of transferring property,

including sale, mortgage, lease, gift, and exchange. Each type of transfer is regulated by
specific provisions to ensure transparency and fairness.

3. Rights and Liabilities of Parties: The Act delineates the rights and liabilities of both the
transferor (seller) and transferee (buyer) in a property transaction. This helps in avoiding
disputes and ensures that the interests of both parties are protected.
 4. Conditions and Restrictions: It establishes conditions and restrictions on property
transfers to safeguard the interests of the parties involved. For example, certain transfers
may be subject to specific conditions or restrictions imposed by law.

5. Rights of Transferees: The Act outlines the rights of transferees, including the right to
possession, use, and enjoyment of the property. It also specifies the remedies available to
them in case of any breach of terms or disputes.

6. Legal Formalities: It prescribes the legal formalities and procedures that must be followed
in various types of property transfers. This includes the requirement of a written instrument,
registration, and attestation in certain cases.

7. Doctrine of Lis Pendens: The Act incorporates the doctrine of lis pendens, which means
that pending litigation concerning a property should be disclosed to potential buyers,
ensuring that they are aware of any legal disputes related to the property.

8. Void and Voidable Transfers: It distinguishes between void and voidable transfers,
providing a legal framework for determining the validity of different types of property
transactions.

9. Wills and Succession: While the Act primarily deals with inter vivos transfers (transfers
made during one's lifetime), it also has relevance in matters related to wills and succession.

# DIFFERENCE BETWEEN MOVABLE AND IMMOVABLE

PROPERTY

Parameter Movable Property Immovable Property

You can transport this type of

You can hardly transport these
property from one location to another.
properties from one location to another.
Concept You do not need to make significant
If you move, they might lose their original
changes in their shapes, sizes, or
shape, size or other qualities.
other qualities while moving them.

It allows the right of worship, decree It allows the right to collect the rent of
Rights of sale of a mortgaged property and immovable property, ferry, fishery, way,
royalty. etc.

Ownership The ownership of this type of The ownership of this type of property
 comes under the regulations of the
property rests with contact laws and
Deeds Registries Act and the Sectional
other common laws. Any practitioner
Titles Act. Only property law
of common law can deal with it.
practitioners can deal with these.

One must register every immovable

You do not need any legal registration
property exceeding ₹ 100 under the
for movable properties. However, you
Registration Registration Act, 1908. You cannot enjoy
can get it if you want or the others
immovable properties without a
want to get it.
registration.

This type of property is subjected to

This property type is mainly subjected
stamp duty according to the Indian
to the Good and Services Tax (GST).
Taxation Stamp Act, 1899. You will have to pay
You might have to pay GST while
the stamp amount for registering this
dealing with these.
property.

These properties can be easily It is difficult to divide and inherit such

Inheritance inherited and divided. Anyone can properties. You also need to undergo
give it to others as per requirements. more legal actions to inherit these.

When it comes to security, one can These properties can be kept as a

Security type pledge these properties. The security mortgage in terms of security. It is a
level is therefore not high. higher form of security.

# TRANSFER FOR BENEFIT OF UNBORN PERSON , HOW TO

CREATE AN INTEREST
SECTION 13-TRANSFER FOR THE BENEFIT OF UNBORN PERSON
Section 13 gives effect to the general rule that a transfer can only take place between living
persons. If at all an interest has to be transferred for the benefit of an unborn person, section
13 lays down the mechanism.
The term unborn refers to not only those who might have been conceived but not yet born
i.e. a child in the womb, but also those who have not yet been conceived as well. Whether
they would be born or not is also a possibility but a transfer nevertheless can be effected for
their benefit.
Section 5 of the Transfer of Property Act, 1882 (TPA) provides that transfer of property must
take place between living persons.

•The law relating to transfer for the benefit of unborn person is laid down in Section 13 of Transfer
of Property Act, 1882.
Section 13 - Transfer of Property Act,1882
•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.
Illustration - 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.
•In simpler terms it can be explained as - A transferred property to B in trust for A and A's
intended wife, successively for their lives. After their deaths, it was to go to the eldest son of the
intended marriage for life, and after his death, to A's second son. However, the interest for the
benefit of the eldest son is invalid because it doesn't cover the entire remaining interest in the
property.

Principle Underlying Section 13

•The underlying principle of Section 13 is that a person disposing of property to another shall not
fetter the free disposition of that property in the hands of more than one generation.

Rules Underlying Section 13

•No Direct Transfer
Property cannot be transferred directly to an unborn person, but property can be transferred for the
benefit of an unborn person, subject to following conditions:
•Transfer for the unborn must be preceded by a life interest in favor of a person existing at the date
of transfer.
•Only absolute interest may be transferred in favor of an unborn person.
•Prior Life Interest
The transfer for the benefit of an unborn person must be preceded by a life interest in favour of
person living person in existence at the date of the transfer. So that such a living person holds the
property during his life and till the time the unborn would come in the existence. After the
termination of this life interest the property would pass on ultimately to the unborn person who, by
that time comes into existence.
A transfer his house to X for life and thereafter to the unborn son of A. The transfer of house in
favour of unborn is valid. Here since unborn is not in existence at the date of the transfer, A could
not transfer the house directly to him. So, A had to make a direct transfer of life interest in favour of
X who is a living person at the date of the transfer. After the death of X, the interest of the house
shall pass on the unborn who is the ultimate beneficiary.
•Absolute Interest
Only the absolute interest of the property may be transferred in favour of an unborn person.
Limited or life interest cannot be given to an unborn person.
Section 13 enacts that interest given to the unborn person must be the whole of the remaining
interest of the transferor in the property.
•Illustration: A transfers his properties to X for life who is unmarried and then to the eldest child of
X absolutely. The transfer in favour of eldest child of X is valid.
Legal Consequences
•The intermediary person living at the date of transfer is to be given only life interest. Giving the
life interest means giving him a right for the enjoyment or possession. He has to preserve the
property like a trustee. After the termination of life interest, the whole property or interest would be
given to unborn person who came into existence.
•The unborn must come in existence before the death of the person holding the property for life. If
the unborn person comes into existence after one month, the property would be reverted back to the
transferor or his legal heirs.
This takes place because after the termination of life interest, it cannot remain in abeyance.

Leading Case Laws

•Girjesh Dutt v. Data din (1934)
Facts: A made a gift of her property to her nephew’s daughter B for life and then absolutely to B’s
male descendants if she should have any, but in the absence of any male child of B, to B’s daughter
without power of alienation and if B has no descendants male or female then to her nephew. B
died issueless.
Judgment: The court held that the gift for life to B was valid because B was living person at the
date of transfer but gift in favor of B’s daughter was void under Section 13 TPA because she was
given only limited interest, she had not given absolute interest. Since this transfer was invalid, the
subsequent transfer depending on it also failed.

# RULE AGAINST PERPETUITY ENDLESS (SECTION 14)

Rule Against Perpetuity (Section 14)
The term perpetuity literally means an indefinite period or infinity. The rule against perpetuity under
Section 14 states that when an interest is created for an unborn, the vesting of such interest cannot
be postponed beyond the life time of those in whose favour a life interest is created plus the
minority of the unborn i.e. before he turns 18.
As seen under section 13 an interest can be created in favour of an unborn if first a life interest is
created in favour of someone else and then an absolute interest in favour of such unborn. The
moment the unborn comes into existence there is a vested interest created in him with respect to the
property so transferred even though he may get possession of it at a later date (i.e. upon the death of
the life estate holder).
However, section 14 stipulates that devolving of such vested interest can also be postponed such
that the unborn does not get a vested interest upon his coming into existence. According to section
14 an interest in the unborn cannot be postponed beyond the period of life of those in whose favour
a life interest has been created plus the minority of the unborn. Thus vesting of interest in favour of
ultimate beneficiary may be postponed only up to life or lives of those in whose favour a life estate
has been created plus minority of the unborn.
Eg. 1) A transfers property to B for life and then to his first child (who is presently not in existence)
when he attains the age of 18 yrs. Here the unborn child would not attain a vested interest in the
property upon his birth but would do so only upon his attaining majority. Such a transfer is a valid
transfer as per section 14 of the Act. But if the first child dies before attaining the age of 18yrs the
property would revert back to A or his heirs as the case maybe.
2) A transfers property to B and then to his unborn when he attains the age of 30 yrs. The vesting is
void as it is hot by the rule against perpetuity as laid down under section 14.
In between the period when last person in whose favour a life interest in created, dies and majority
of ultimate beneficiary the unborn has a contingent interest which becomes vested upon his
attaining majority.

TRANSFER IN PERPETUITY
When a property is being transferred in such a way that it becomes inalienable in future for an
indefinite period of time, this is called transfer in perpetuity. Transfer in perpetuity may arise in two
ways:-
•By taking away from the transferee his power to transfer;
•By creating future improbable interest.
However , section 10 of Transfer of property Act states that a condition restricting transferee’s
power to transfer is void.

RULE AGAINST PERPETUITY

The concept of rule against perpetuity is that according to this rule transfer cannot be made
inalienable for an indefinite period or forever. This rule has been incorporated in Section 14 of the
Act.

THE PERIOD OF THE RULE

1. Lives in being- According to the rule, interest must be conferred within 21 years of the person’s
death.
2. Plus twenty-one years- This is the period in gross.
3. Periods of Gestation- The period of gestation may extend at the beginning and end of “lives in
being” and at the end of 21 year.

OBJECT OF RULE AGAINST PERPETUITY

The purpose of this rule is to enable free circulation of the property for :-
To prevent the property from being tied up forever; Betterment in trade and commerce; Betterment
of the property. Protecting the interest of owner of the property otherwise he will not be able to
dispose of the property even in case of emergency.

PRINCIPLE BEHIND THE RULE

The basic principle upon which this rule is made is public policy. In absence of this rule against
perpetuity, all the properties in the world would have been static and of no use to he economy as a
whole.
CONDITIONS NECESSARY:-
1. There is an alienation of property.
2. The transfer being made is for the benefit of an unborn child giving him absolute interest.
3. The transfer of interest to beneficiary is herald by life or limited interest of living persons.
4. The unborn person in favor of whom the transfer is done must be born before the death of last
preceding living person.
5. Conferring of interest to beneficiary may be postponed only to the life of living person plus
minority of the beneficiary; not beyond that.

EXCEPTIONS TO THE RULE AGAINST PERPETUITY

1. Transfer for the benefit of public-where the property has been transferred for the benefit of the
public in the advancement of religion, knowledge, commerce, health, safety, etc.
2. On personal agreement- personal agreement which do not create any interest in property are
exempted from the rule against perpetuity as this rule is applicable only on transfer of property and
not on personal agreement or contract.

RELEVANT CASES
Ø Supreme Court observed and held:-
A contract is enforceable by and against the transferees of the original party. The rule against
perpetuity only applies to contract that create rights of property. The parties of the contract’s rights
are assignable. This rule deals only with the aspects of the law of property and it aims to restrict any
creation of future unconditional interests in property. The Supreme Court therefore, held that the
rule cannot be applied to an agreement of pre-emption though no time limit if there within which it
has to be exercised.[1]
Ø Bombay High Court in this case declared that when the gift was made of movable property in
favor of son with gift of shares in the property to son’s sons son when the attained the age of 21 ,is
void.[2]

CONCLUSION
The rule against perpetuity restricts the period of certain limitations on the use and transfer of
property. This rule provides that bestowing cannot postpone beyond the lifetime of any person
living at the date of transfer. This rule has certain exceptions and is not absolute. Therefore the basis
of the rule is that the liberty of alienation should not be exercised to its own destruction.
[1] Ram Baran Prasad v Ram Mohit Hazra (1967) SCR 2931
[2] Anand Rao Vinayak Vs Administrator general of Bombay (1896)

# VESTED INTEREST AND CONTINGENT INTEREST (SECTION 19&

21)
Introduction to Vested and Contingent Interest
Transfer of Property Act deals with vested and contingent interest. Vested Interest is created where
there is a condition of the happening of a specified certain event. While Contingent Interest is
created on fulfilling a condition of happening of a specified uncertain event.

Vested Interest
Section 19 of the Transfer of Property Act, 1882 talks about Vested Interest. It is an interest which is
created in favour of a person where there is a condition of the happening of a specified certain event
and time is not specified. The person having the vested interest does not obtain the possession of
that property but expects to receive it upon happening of a specified certain event.
Example- A promises to transfer his property to B on him attaining the age of 21. B will have
vested interest in A’s property till the time he does not become 21 years old and gets the possession
of it.
After death, the person (promise) who is having this interest will not have any right over that
property and the interest will vest in his legal heirs.
In the above example, if B dies at the age of 20, then the interest vested in B will pass on to the
legal successors of B and they will get the charge over the property in the mentioned time period.

After death, the person (promise) who is having this interest will not have any right over that
property and the interest will vest in his legal heirs.
In the above example, if B dies at the age of 20, then the interest vested in B will pass on to the
legal successors of B and they will get the charge over the property in the mentioned time period.
All the aforementioned important aspects of a vested interest are written in detail below:
1. Interest should be vested: This basic postulate lays down that interest should be created in
favour of a person where time is not specified or a condition of the happening of a specified certain
event is provided. A person should proclaim to transfer a particular property in order for this
interest to be created.
2. Right to enjoy property is postponed: When interest is vested in a person, he does not
immediately get the possession of that property and hence cannot enjoy that property.
But any person who is not a major and has a guardian is only entitled to the vested interest after he
attains majority.

Example- X agrees to transfer the property ‘O’ to Y and commands his guardian Z to give him the
property when he attains the age of 20. Y gets vested interest once he attains the age of 18, the age
of majority.
Other important point to remember:-
1. Contrary Intention: The transferor can specify a time slot as to vest the interest in the person
who will receive the property.
2. Death of the transferee: If the transferee dies before getting the property in his possession, the
interest vested in him will be vested in his legal heirs and they will get the possession of that
property after the condition is fulfilled.
3. Time of vesting: The interest is vested right after the moment when the transfer is initiated.
In the case of Lachman v. Baldeo (1)[i], a person transferred a deed of gift in favour of another
person but directed him that he will get the possession of that property only when the transferor
himself dies. The transferee will have a vested interest even though his right of enjoyment is
postponed till the death event.
Characteristics
1) Vested interest creates a current right that comes in effect immediately, although the enjoyment is
postponed to the time prescribed in the transfer. It does not entirely dependent on the condition as
the condition involves a certain event.
2) Vested interest is a Transferable and heritable right.
3) Death of transferee will not make the transfer invalid as the interest will pass on to his legal heirs.
Section 20 of the Transfer of Property Act, 1882 talks about vested interest to an unborn child.
The interest in the property will be vested in him once he is born. The unborn child might not get
the right of enjoyment of the property immediately after having vested interest.

Contingent Interest
Section 21 of the Transfer of Property Act, 1882 states about Contingent Interest. It is an interest
which is created in favour of a person on fulfilling a condition of happening of a specified uncertain
event. The person having the contingent interest does not get the possession of the property but
receives it upon happening of that event but will not receive the property if the event does not
happen. Contingent interest is entirely dependent on the condition imposed on the transfer.
Example- A agrees to transfer the car ‘X’ to B on the condition that he shall secure 80 % in his
exams. This condition is uncertain on the happening of the event or not happening and therefore B
here acquires a contingent interest in the car ‘X’. He shall get the property only if he gets 80 % and
when the condition is fulfilled.
In the case of Leake v. Robinson (2)[ii], the court upheld that when a condition involves an event
that is to be given ‘at’ a particular age or ‘upon attaining’ a particular age or ‘after’ attaining this
particular age, then it can be derived that the transfer involves a contingent interest.

Characteristics
1. This interest only happens when the condition is fulfilled.
2. Contingent interest is a transferable right, but the condition of heritability depends upon the
nature of such any transfer and the condition.
3. Death of the transferee before getting the possession of the property will result in the failure of
continent interest and the property will remain with the transferor.
Some important aspects of contingent interest are explained in detail below:
1. Interest: In a transfer if a condition is such that the transfer will take effect only upon the
fulfillment of that condition and till that time, the interest is contingent.
2. Exception: When a person who has an expectancy in the rights of ownership of a specific
property, and he for the time being till the happening of the event, gets any sort of income that
arises from that property. This interest in the property does not come under the aspect of contingent
interest.
The following sections of Transfer of Property Act lay down the conditions for contingent interest.
Section 22 talks about the transfer to a group or class of members with a contingent interest.
Example:- there is a transfer to a group of 4 people, and the condition is that the property will be
vested in persons who attain the age of 40 years on a particular date. The persons who have attained
that age will get an interest in the property and people who have not attained, will not get an interest
in that property.
Section 23 talks about a transfer which happens after happening of an event that was mentioned in
the transfer which involves contingent interest. This section writes about what happens after the
happening of the specified uncertain event.
Section 24 states about a transfer to a group or class of members who will get the property on a
condition that they shall be living at the specified date. This is also a contingent interest as an
uncertain event. The transfer will only take place for those people who satisfy the condition of
surviving at a particular date. The legal heirs of the deceased cannot claim an interest in that
property as a transfer involving a contingent interest solely depends upon the fulfillment of the
condition.(3)[iii]

Conclusion for Vested and Contingent Interest

The Transfer of Property Act, 1882 deals with vested interest and contingent interest.
The concepts of vested interest and contingent interest are very important to understand as there are
many sections relating to these concepts.
The transfer of property involving Contingent interest takes effect only after the condition is
fulfilled, if the condition is not fulfilled then the transfer will not take effect. The conditions are
required to be fulfilled and they have to mandatorily synchronize with the preamble rules that talk
about justice, equity and good conscience, the three major principles of the natural law on which
this whole act is based upon.
[i] (1919) 21 OC 312.
[ii] (1817) 2 Mer 363
[iii] The Transfer of Property Act, 1882 by Mulla.

# CONDITIONAL TRANSFER (SECTION 25)

The conditional transfer is regulated by Section 25 of The Transfer of Property Act of 1882. Any
transfer that has conditions attached to it from one party to the other party is conditional in property
law.
For example, X offers to transfer his property to Y, but the condition attached is that Y has to give
up his car. So this transfer is completed when Y agrees and gives his vehicle for receiving the
property.
This is a conditional transfer in property law.
Conditional Transfer in Property Law
Some key points make the conditional transfer in property law a valid one.
•The conditions should not be prohibited by law.
•The conditions imposed should not involve any fraud or coercion acts.
•The conditional transfer in property law must not expect impossible or life-threatening
tasks or acts.
•There should be no public policy and interest violations when making a conditional transfer
in property law.
•The party should not transfer based on any immoral motives.
•The conditional transfer in property law should be free from any act that causes harm and
damage to a person or any property.
Different Types of Conditional Transfer in Property Law
As per the Transfer of Property Act 1882, there are three types of specific conditional transfer in
property law, and other types are imposed at times when transferring land documents.
The types should also abide by the requirements of a valid conditional transfer in property law as
per Section 25.
1. Condition Precedent: As per Section 26 of the Transfer of Property Act 1882, the conditions
that must be fulfilled before the property transfer is called a condition precedent.
• It is not mandatory or strictly followed by the parties when the actual transfer occurs as per
the conditional transfer in property law. It can also be done with substantial compliance with
the Transfer.
• Any party can ask for a condition with substantial compliance before the land documents are
transferred to the other party’s name.
Example case:
Wilkinson vs. Wilkinson
• The party asked the other party to end the marriage and divorce the husband for the transfer
to be completed.
• This is an immoral act that violates the other party’s interests. Hence, it was termed void,
and the court held it invalid to go through with an act against public policy.
2. Condition subsequent: As per Section 29 of the Transfer of Property Act 1882, the conditions
that must be fulfilled after the property transfer is called a condition subsequent.
• It is a mandatory condition that is to be strictly followed and completed. The transfer can be
completed only after the subsequent has been done.
• An essential factor and requirement are that the conditional transfer in property law should
be lawful and must not have fraudulent actions involved. If found to be unlawful, it will be
void and cancelled by the court.
• For example, X offers to transfer the property to you on the condition that Y causes injury to
Z. This is immoral and void. The transfer cannot go through with such types of conditions.
3. Condition collateral: Simultaneously fulfilling the conditions after the property transfer is
condition collateral.
•This is to be followed accordingly and strictly to keep the transfer valid and avoid it from
going invalid.
•The transfer will break down once the necessary has been done.
•The Hon’ble Supreme Court clarified during a case (2018) that if there are no signs about
the acceptance of the transfer of property if the donor has possession of the gift involved
during his lifetime.
•If the gift is not transferred, it will be cancelled at the option of the donor because there was
no violation of principle and interests involved.
•The donor has such rights for cancellation of gift deeds and takes necessary legal
consultation for understanding the process.
The other types of conditional transfer in property law.
As per Section 27 of the Transfer of Property Act 1882,
•A transfer can be made again by a party if one of them fails the first time they do it.
•Transferor A can choose C as transferee B has not completed the task as per the law.
•The prior disposition of the conditional transfer in property law is to be taken seriously.
•Only valid conditions can be fulfilled again if the prior task fails.
•The subsequent transfer comes into effect to break down the conditional transfer in property
law.
Conclusion
Some many crucial factors and conditions are stated in the conditional transfer in property law as
per the Transfer of Property Act 1882. An individual must be knowledgeable about the different
provisions related to it to take better responsibility and resolutions.

# DOCTRINE OF ELECTION (SECTION 35)

Election simply means to choose. In legal terminology the Doctrine of Election is based upon
principle of equity and is an obligation imposed upon a party by the court to make a choice between
two inconsistent rights and that he should not enjoy both.

Statutory Provision
The doctrine is dealt with under Section 35 of The Transfer of Property Act, 1882 (TPA).
Essentials of the Doctrine Under Section 35
•The essentials can be enumerated as follows:
The transferor professes to transfer property which is not his own.
In the same transaction, benefit is conferred upon the owner of the property.
The owner must either confirm the transfer or dissent from it.
In case he dissents, he shall relinquish the benefit so conferred.
•The benefit so relinquished reverts back to the transferor or his representative where:
The transfer is gratuitous and transferor before election dies, becomes incapable of making a fresh
transfer and
The transfer is for consideration.
Then, the disappointed transferee has to be made good (compensated) the losses equal to the
amount of property attempted to be transferred.
•Transfer – Section 5 of TPA defines transfer as an act by which a living person conveys property,
in present or in future, to one or more other living persons, or to himself, or to himself and one or
more other living persons; and “to transfer property” is to perform such act.
•Transferor - A person who makes a transfer or conveyance of property.
•Transferee - A person to whom a conveyance is made.
Illustration:
The farm of Sultanpur is the property of C and worth Rs. 800. A, by an instrument of gift professes
to transfer it to B, giving by the same instrument for Rs. 1,000 to C. C elects to retain the farm. He
forfeits the gift of Rs. 1,000. In the same case, A dies before the election. His representative must
out of the Rs. 1,000 pay Rs. 800 to B.
Disappointed Transferee
A transferee who chooses to reject the benefits conferred, dissents from the transaction and can no
longer take the property is a disappointed transferee.
Choice of Election
A person not entitled to a direct benefit but to an indirect benefit under the transaction need not
elect.

Case Law
•Valliammai V Nagappa (1967), the Supreme Court (SC) held that the question of election arises
only when the transferee takes the benefit directly under the transaction.
Exception to the Doctrine
•Where a particular benefit is expressed to be conferred on the owner of the property which the
transferor professes to transfer, and such benefit is expressed to be in lieu of that property, if such
owner claims the property, he must relinquish the particular benefit, but he is not bound to
relinquish any other benefit conferred upon him by the same transaction.
This simply means that if someone offers a benefit in place of property during a transfer and the
property owner chooses the property, they have to give up that specific benefit. However, they don't
have to give up any other benefits offered in the same transaction.

Mode Of Election
•Acceptance of the benefits by the person on whom they are conferred constitutes an election if:
He is aware of his duty to elect.
He is aware of those circumstances which would influence the judgment of a reasonable man in
making an election, or
•He waives enquiry into the circumstances.
•In the case where the owner, after complying with the above-said provisions has knowingly
accepted the benefits, it signifies he has accepted the transaction. A presumption is drawn towards
acceptance where:
He enjoys the benefit for two years without doing any act to express dissent.
He does some act by which it is impossible to restore the parties to their original position.

Illustration:
A transfers to B an estate to which C is entitled, and as part of the same transaction gives C a coal-
mine. C takes possession of the mine and exhausts it. He has thereby confirmed the transfer of the
estate to B.
Limitation Period
•Where the owner does not within one year after the date of the transfer, signify to the transferor
or his representatives his intention to confirm or to dissent from the transfer, the transferor or his
representative may, upon the expiration of that period, require him to make his election.
If he does not comply with such requisition within a reasonable time after he has received it, he
shall be deemed to have elected to confirm the transfer.
Effect Of Disability
In case of disability, the election shall be postponed until the disability ceases, or until the election
is made by some competent authority.

Case Laws
•Cooper v. Cooper (1873): The principle of the doctrine of election was explained by the House of
Lords in this leading case in following words:
•“... there is an obligation on him who takes a benefit under a will or other instrument to offer full
effect thereto instrument under which he takes a benefit ; and if it’s found that instrument purports
to affect something which it had been beyond the facility of the donor or settlor to eliminate, but to
which effect are often given by the concurrence of him who receives a benefit under an equivalent
instrument, the law will impose on him who takes the benefit the requirement of carrying the
instrument into full and complete force and effect.”
•Muhammad Afzal v. Gulam Kasim (1903), it is a landmark case on the topic described below:
•Facts – On death of Nawab of Tank, the Government transferred cash allowance to Nawab's
second son. Nawab, during his lifetime had already transferred villages to his second son for his
maintenance.
•Question – Whether both transactions were a part of the same transaction, and can doctrine of
election be applied in this case?
•Verdict – Privy Council in this case held, as the second son acquired grants through two different
sources, they do not form part of same transaction and second son cannot be put to election.
Application
The Doctrine is applicable to both Hindu Law as well as Muslim Law.

Conclusion
Doctrine of elections is based upon the Latin maxim ‘quod approbo non reprobo’ which translates
to ‘that which I approve, I cannot disapprove’. A person who elects thus cannot choose to select the
part of instrument or transaction that is beneficial to him and choose to reject the other part. As this
doctrine forms a part of the rule of estoppel, a person must also bear the burden if he receives the
benefit.

# TRANSFER BY OSTENSIBLE OWNER (SECTION 41)

An ostensible owner is a person who has all the indications of ownership and looks like the
owner of a property but is not the real owner. Section 41 of the Transfer of Property Act, defines
an ostensible owner.
In simple words, a person may have possession and enjoyment of the property and may also have
his name entered in the official records, but even then, he may not be the real owner of that
property.
Such a situation may arise in case if a person purchases a property in the name of another person. It
is called a Benami transaction, and the person in whose name the property is purchased is
called Benamidar. So, a Benamidar is an ostensible owner.

Ostensible owner
Transfer of a property by and ostensible owner is such a concept which was incorporated to protect
the rights of innocent third parties vis-à-vis the property owners. This principle was first used in the
much celebrated case of Ramcoomar Koondoo v. John and Maria McQueen(1872) 11 Beng LR
46, p 52. by the Judicial Committee.

In the case of Ramcoomar Koondoo v. John and Maria McQueen case the plaintiff who had

inherited a property by way of a will came to know that someone else had already purchased this
property in her name and subsequently sold this property to a third person, by making him

believe that he had good title over that property. The whole transaction was a ‘benami’ transaction
but was not known to anyone except the person who sold the property. The plaintiff sued the third
party for recovery of the possession of the land but the committee held that:
“ It is a principle of natural equity, which must be universally applicable, that where one man
allows another to hold himself out as the owner of an estate, and a third person purchases it for
value from the apparent owner in the belief that he is the real owner, the man who so allows the
other to hold himself our shall not be permitted to recover upon his secret title, unless he can
overthrow that of the purchaser by showing, either that he had direct notice, or something which
amounts to constructive notice, of the real title, or that there existed circumstances which ought to
have put him upon an inquiry that, if prosecuted would have led to discovery of it.”

It was there by held that the plaintiff cannot take back the property form the third party and that

the transfer was a legitimate transfer in the eyes of the law. This wordings used in this case can be
seen in the S. 41 of the Act which deals with Ostensible owner.

Section 41 of the Act deals with ostensible owner and it has been defined as:

“Transfer by Ostensible Owner: Where, with the consent, express or implies, of the persons
interested in immovable property, a person is the ostensible owner of such property and transfer the
same for consideration, the transfer shall not be voidable on the grounds that the transferor was not
authorized to make it: provided that the transferee, after taking reasonable care to ascertain that the
transferor had power to make the transfer, has acted in good faith.”

The section lays down certain requirements to avail the benefit of this section. They are:
• The primary condition is that the person who is transferring the property should be ostensible
owner.

• There should be consent form the real owner, which can be implied or express form.(Abdul
Gaffer v Nawab Ali, [1949] A.I.R. 17 (Assam))

 The ostensible owner should get some consideration in return of the property.

 Reasonable care has to be taken by the transferee about the authority of transferor to the
property and the transferee had acted in good faith.( Chandini Prasad Ganguly v
Gadadhar Singh Roy, [1949] A.I.R. 666 (Cal))

 It goes without saying that this section is applicable only to transfer of immovable property
and not in case of movable property.

‘Ostensible owner’

Ostensible owner is not the real owner but who can represent himself as the real owner to the 3rd
party for such dealings. He has acquired that right by the willful neglect or acquiesces by the real
owner of the property thereby making him an ostensible owner. A person who has gone abroad for
some years has given his property to his family relative for making use of it for agricultural
purpose and for all other purposes as he may deem fit. In this case the family relative is the
ostensible owner and if during that period he sells the property to a third party, then the
real owner after coming back cannot claim his property and say that the person was not authorized
to transfer his property. An alternative case can be when the property is in wife’s name but husband
used to take care of it and the other dealings related to the property. If the husband thereby sells this
property, the wife cannot claim her property back. Or as in the Mohamad Shakur v Shah Jehan63
IC 125. in which the real owners lived in a different village, and had authorized a widow to use the
property as she liked and afterwards she sold it. The real owner lost the case and the transfer was a
valid one.

Consent from the real owner:

The main purpose of this section is to protect the rights of the innocent third party who had
purchased the property, when the real owner was himself at fault by not protesting the transfer. But
a necessary requirement is that the real owner should have the capacity to give the consent and that
consent should not be obtained from any unlawful act. In the case of minors, even if the ostensible
owner claims that he has the consent of the minor, it will be held to be no

consent as minors do not have any capacity to give the required consent. And it was laid down in
the case of Satyanarayana Murthi vs. Pydayya 63 IC 125., that consent need not be taken from the
true owner and it might also be the case that the true owner had no knowledge of the transfer.

The consent in such transactions can be express or implied.

Consideration is a must if there is a transfer by ostensible owner. He cannot give away the property
as a gift. As it has also been provided in the Indian Contract Act, 1872 that

consideration is necessary component of any contract and transfer of property by an ostensible

owner is done by way of contract only. Also it has been provided in S. 4 of the Act that anything
not expressly defined in this act shall be deduced form the general definitions given under the
Indian Contract Act, 1872.

Reasonable Care

Reasonable care can be understood as the care which a reasonable and ordinary man would have
taken. He has a duty to check the title of the transferor. Like in the case of Nageshar Prasad v.
Raja Pateshri (1915) 265 , (20 Cal WN) where there was an error in the revenue records regarding
the name of the owner. The name written was of some other person and the real owner had already
made a complaint about this error. The person whose name was in the revenue records
subsequently sold it to a third person and the third person without making proper inquiries took the
property and the real owner afterwards objects to it. The court held that the third party has not
taken reasonable care which was required of him and therefore he will not be

protected by this section. The advice of solicitor will not be enough to prove that the third party has
taken reasonable care in determining the title of the property. The third party is required all the
available documents which can possibly give some more information regarding the title of the
property and these documents may include police registers, municipal registers apart from other
documents.

There is also a safeguard for the real owner. In the case of Mathura v. Ambika (1914) 993 (All) LJ,
where the real owner had sold the property to another person and got it registered before the
transfer by the ostensible owner could be registered, then it was held that the transfer by the real
owner would be held valid as he has a greater title over the property than the ostensible owner

and the rights of third person who had purchased this property from the ostensible would not be
protected under this section.

Proper Inquiry

As a person is required to make reasonable inquiries, sometimes it is difficult to make out what will
amount to proper inquiry. The courts in India have held that this being subjective, it will depend on
the facts and circumstances of each case and it can also be the case that what amounts

to proper inquiry in one case may not called proper inquiry in another case with completely
different facts. If the transfer is by Mahmomedans, it is a required of the purchaser to inquire if
there is any female heir also. In many cases it is such that only males transfer the property without
taking the consent of the females and this will not be a valid transfer because they also have a share
in the property and therefore the third person has to inquire about such things.[24] The ultimate test
that is that the “transferee should show that he acted like a reasonable man of business and with
ordinary prudence.”

Good Faith

Good faith simply means that the transferee should have honestly believed that the ostensible
owner is the true owner after all the proper inquiries conducted by him. But where after proper
inquiries the transferee has knowledge that the person selling him the property is not the real owner
but only the ostensible owner, the transferee cannot neglect true facts. This is because of the fact
that a person cannot take advantage of his own negligence and then claim protection of

this act. The rights of real owner also need to be safeguarded against such persons.

Burden of Proof

The burden of proof is on the transferee to prove that the transferor was actually the ostensible
owner and had the consent to sell the property. Also he has to prove that he actually acted in good
faith and had taken all reasonable care that was required from him while taking the property. This is
because he has to prove that he was not at fault while taking the property and to shift the burden on
the real owner. Alternatively, to shift his burden, he can also prove that the transferor did not allow
the transferee to know the real facts and tried everything to suppress the facts.

Conclusion
Section 41 of the Act has done a fair job in protecting the interest of the innocent third party.
Though this section may seem to be a bit biased towards the third party but this is mainly if the real
owner is himself at some fault. No one can simply say that he has now acquired the property and he
cannot be evicted now. The third party has to take a lot of care while purchasing the property and
these necessary requirements has been put by law itself to check the misuse of this

section by ostensible owner and the third party. This, in a way protects the interest of the real owner
also.

# DOCTRINE OF LIS-PENDENDS (section 52)

Lis pendens is a Latin word that means “pending litigation”.
It is based on a legal maxim “pendente lite nihil innoveture” which means nothing new should
be introduced during pendency of a litigation.
•The doctrine of lis pendens is enshrined under Section 52 of the Transfer of Property Act, 1882
(TOPA), in India.
This section deals with the effect of transfer of property pending a suit or proceeding.
•It is based on equity and public policy.

Objects
• Avoid endless litigation.
 To protect one of the parties to the litigation against the act of the
order.
 To avoid abuse of legal process.
 The purpose of the doctrine is to protect either party to the suit against the act of another, to
avoid misuse of legal process and to restrict endless litigation.

Essentials of Doctrine of Lis Pendens

• The basis of the doctrine is necessity, so it is immaterial as to whether the transferee had any
notice of suit pending in the court or not.
 The transferee is bound by the order of the court even if he had no actual or constructive
notice of the pending suit
 The pendency of the suit starts from the date on which the plaint is filed in the court and
ends on the date on which the final decree is passed by the court, as mentioned in the
explanation to section 52.
8

 It is observed 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 a stranger i.e. the person who is not a party to litigation.
There must be a pendency of a suit or proceeding.
• The suit/proceeding must be pending in a court which has the
jurisdiction to try it.
• A right to immovable property is either directly or indirectly
involved in the suit/proceeding.
 The immovable property in dispute is transferred/dealt with by any party to the suit.
 Such transfer/dealing affects the rights of the other party(s) involved in the suit/proceeding.

Applicability of Doctrine of Lis Pendens

• The Apex court in the case of Amit Kumar Shaw Vs. Farida Khatoon, (2005) 11 SCC 403 stated
the required elements for the applicability of rule of lis pendens under section 52.
They are as follows:
 The suit must be in proceeding.
 The instituted suit should be filed under court with competent
jurisdiction.
 The right of title of an immovable property is directly and
specifically in question.
~The suit directly affects the rights of the other party.
 The property which is in question is being transferred by
either party.
•  The suit must not be collusive in nature.
•  The court has explained the difference between collusive and fraudulent proceeding. It
was held in the case of Awadesh Pradesh V. Belarani that, "the rule of lis pendens does not
apply to the collusive suit or a suit in which a decree is obtained by a fraud or collusion".

Non- Applicability of Doctrine of Lis Pendens

 Sale made by mortgager in exercise of his power conferred under the deed.
 In case where only transferor is only affected.
 In cases where proceedings are collusive in nature.
 When the property is not described correctly and makes it unidentifiable.
 When the right to the said property is not directly in question and alienation is permitable.

Some Example (Illustration)

• A rented his property to B so there is a pending suit between a landlord (A) and a tenant (B)
regarding payment of rent, then A transfers his property during that time to another person C, the
transfer shall not be affected in any manner by the doctrine of Lis Pendens because the suit was not
regarding the title or interest of an immovable property, it was regarding the payment of rents.
Judicial Pronouncement /Judicial Preceedents On Doctrine Of Lis Pendens:
In the case of Hardev Singh vs. Gurmail Singh, (2007) 2 SCC 404 (Civil Appeal No. 6222 of
2000), the Hon’ble Apex court held that Section 52 of the Act does not declare a pendente lite
transfer by a party to the suit as invalid, void or unlawful but only make the pendente lite purchaser
to be bounded by the pending litigation decision.
In the case of Gouri Datt Maharaj V. Sheikh Sukur Mohammed (1948) 50 BOMLR 657 the
Hon’ble High court of Bombay held that Section 52 is to maintain the status quo, unaffected by act
of any party to the pending litigation.

# PART PERFORMANCE (SECTION-53A)

Meaning of the doctrine of part performance

The doctrine of part performance in India is recognized under Section 53A of the Transfer of
Property Act, 1882. The doctrine simply means that where two people enter into an agreement and
one of the parties acts in consonance with the agreement, it creates equity, presuming that the other
party will also perform its obligations. So, if the other party later denies or acts fraudulently by
refusing to fulfil his duties as mentioned in the agreement, the doctrine of part performance is
applied to safeguard the interest of the party who performed acts in furtherance of the agreement.
Thus, the doctrine is embodied to protect the interests of transferees who take possession of the
property but are not able to obtain the title after paying the consideration in part or whole and where
the transferor later denies such an agreement or sues him for the possession. This doctrine prevents
such instances and provides justice to genuine and innocent transferees.

Illustration: X enters into a contract with Y regarding the transfer of a flat on payment of
consideration. The contract also provided that on partial payment of consideration, Y could take
possession, and so he did. Later, X denies transferring the title to the property, stating that he does
not want to sell the flat. The doctrine of part performance will be applied here to protect the interest
of Y, either by asking X to repay the consideration paid or by performing the contract and
transferring the title of the property to Y.

Objective of the doctrine of part performance

Based on the maxim that one who seeks equity must do it, the doctrine has the following objectives:

•It ensures that both parties to a contract, i.e., the transferor and transferee, perform their
parts and fulfill their obligations as mentioned in the contract.
•It preserves and protects the rights of the transferee towards ownership of the property.
•It prevents fraudulent acts by transferors who try to take advantage of innocent
transferees.
•By virtue of this doctrine, the transferor or any other person under his name is barred
from enforcing any right on the said property against the transferee except those
mentioned in the contract.
Section 53A of the Transfer of Property Act of 1882 incorporates the doctrine of part
performance. According to this doctrine, if a person makes an agreement with another and lets the
other person act in furtherance of the contract, he has created equity that cannot be resisted. Since
the person in the contract played his part, the absence of a formality like registration does not affect
the performance of the contract. As a result, neither the transferor nor anyone under him may sue
the transferee.

As a result of the doctrine, the transferor or any person claiming under him cannot enforce any right
in respect of property upon the transferor or the person claiming under him except to assert the right
expressly granted by the contract about the property of which they have taken or continued
possession.
However, it is to be noted that the contract should not be unsigned or unstamped. Since the contract
is signed by both parties and the transferee has acted his part, the transferor is bound to perform his
part; otherwise, he needs to pay compensation for the breach.
Please read the examples below to understand more.

Section 53A of the Transfer of Property Act

According to section 53A of TPA, when a person contracts with another person to transfer
immovable property, the contract must be signed by the parties or someone on behalf of the parties
so that the transfer can be ascertained with reasonable certainty. And when the transferee has taken
possession of the property as part performance of the contract or has done some other activities as
part performance of the contract and is willing to perform his part of the contract (e.g., paying the
amount for the property), the transferor cannot go back on his words or perform breach of the
contract, even when the transfer has not been completed in the prescribed manner by the law (i.e.,
registration of the property).
Nevertheless, nothing in this section shall affect a transferee for consideration who is unaware of
the contract or part performance.

Ingredients of Section 53A of TPA

The Bombay High Court, in the case of Kamalabai Laxman Pathak vs Onkar Parsharam Patil
(1994), has emphasised the ingredients of section 53A of TPA that are as follows:
•There must be a contract for the transfer of immovable property.
•The contract must be written.
•The contract must be valid.
•The contract must be signed.
•The transfer must be for consideration.
•The transferee takes possession in furtherance of the contract.
•The transferee must do some act in furtherance of the contract.
•The transferee is willing to perform his part of the contract.
Examples of Part Performance

Example 1: A and B entered into a contract for the transfer of land. The contract was in writing,
signed by both parties and attested except for registration. Based on such a contract, B takes
possession of the land. Now, A sold the same land to C. Now C having the legal title of the land,
attempts to eject B. Here, although the law does not recognise any legal title of B on the said
property. Nonetheless, the equity of part performance may help him (B) from being dispossessed.
Example 2: P contracts to sell her house to Q for Rs. 120000. Q paid Rs. 70000 to P. Q took
possession and promised to pay the balance at the registration. After a few weeks, P sold the same
house to R for Rs. 150000 using a registered sale deed. R, thus, asked Q to vacate the house. Q,
therefore, can claim the benefit of section 53A of TPA.
Related: What Is the Difference Between Possession and Ownership?

Case Laws on Part Performance

Here are two important Indian cases.

Nathulal vs Phoolchand AIR 1969 SC
The court held that taking possession is not the only method of part performance. As long as the
transferee is already in possession of the property, after the contract of transfer, he must perform
some further action in part performance of the contract.

Sardar Govindrao Mahadik vs Devi Sahai Govind AIR 1981

According to the court, section 53A is based on equity. Equity says that one who is sick of equity
must do equity. Therefore, a person claiming possession of land under section 53A must conduct
himself in an equitable and just manner.

Conclusion

The doctrine of part performance applies to the written and valid contract and does not apply to oral
or void agreements. Transfers must be in writing and signed by the transferor. The transferee has
taken possession of the immovable property as a part performance of a contract and must be ready
and willing to perform his part of the promise.
Thus, the doctrine of part performance is an equitable right. It is incorporated to prevent fraud by
any person in the contract merely on account of non-registration of the document.

# FRAUDULENT TRANSFER (SECTION 53)

Meaning of Fraudulent Transfer
The concept of "fraudulent transfer of property" refers to an illegal transfer of property with the
intent to defraud or delay creditors. In the instance of fraudulent property transfer, the debtor
intentionally deprives the creditor of his lawful and just entitlements. Most fraudulent transfers
occur in the context of a debtor-creditor relationship. Section 53 of the Transfer of Property Act of
1882 recognises the regulations governing fraudulent property transfers.
A constructive fraudulent transfer is the other form of fraudulent transfer. This is relocation when a
person does not obtain "rationally equivalent value" in exchange and runs away with insufficient
property to pay bills as they come due.

Essential Elements of Fraudulent Transfer

The following are the essentials of a fraudulent transfer under the Transfer of Property Act −
•The transferor makes the property transfer.
•It should be immovable property.
•The transfer is done without consideration.
•The transfer is done with the goal of defrauding a subsequent transferee and defeating or
delaying his creditors.
•Such a transfer may be voidable at the option of the subsequent transferee.
Exceptions
The following are the exceptions to fraudulent transfers under the Transfer of Property Act −
•Acted in good faith, and
•The transfer was for consideration.

Objective of Fraudulent Transfer

Section 53 of the Act is applied when an immovable property is fraudulently transferred by a
transferor with the unjustified intention of defrauding the creditors' interests in such a way that they
are defeated or delayed. The legislature created this legislation in order to protect creditors' financial
right to acquire their lent amount.

Burden of Proof
The burden of proving that a transfer is fraudulent falls on the creditors under Section 53 of the
TPA, 1882, as they are attacking the debtor with this section. Once the creditor establishes that the
transfer was made fraudulently in order to defeat or delay his claims, the burden shifts to the
transferee to prove that he acted in good faith, is a bona fide purchaser for value, and was not a
party to the fraud. As a result, the transferee can use this section as a shield to defend himself, and
the creditor can use it to attack the debtor.

Scopes of Fraudulent Transfer

Major scopes of fraudulent transfer are −
•Section 53 of the Act only applies to immovable property and does not apply to moveable
property.
•A creditor files a suit to take advantage of the provision not in an individual capacity but in
a representative one that includes subsequent creditors.
•This section doesn't really declare a transaction void from the start, but it can be considered
voidable at the option of the creditor who has been defrauded and defeated in his financial
interests.

The Madras High Court observed in Saroj Ammal v. Sri Venkateswara Finance Corp. (AIR
1989 NOC 4 Mad) that the essential ingredient to invalidate a transfer under Section 53 of the Act
 might be inferred as a fraudulent intention to defeat or delay the creditors. The transferee must
convey the fraudulent intent in order to help the transferor carry out this intention.
Dr. Vimla vs. Delhi Administration, 1963 Supp. (1) CR 585
The Supreme Court observed in this decision that the term "fraud" has two elements: deceit and injury to the
defrauded person. The harm does not just result in economic loss. It also involves the deprivation of property or
money, as well as harm to a person's body, mind, and reputation.

# RIGHTS AND DUTIES OF SALE (SECTION 54)

INTRODUCTION: Sale is defined as the transfer of ownership of

a property in exchange for a price paid or promised or partly paid or part promised.
Sale simply means the purchase and sale of goods and services, the sale of immovable
property is provided under Section 54 of Transfer of Property Act 1882.

DEFINITION: A sale under transfer of property act is a transfer of ownership for a

money consideration.
It refers to the complete transfer of all rights in the property sold.
No rights in the property sold, are left to the transferor.

Rights and Duties of the Seller

The rights and duties of a seller, under the Act, may be summarized as below:

RIGHT DUTIES
To reserve the right of disposal of the goods until To make the arrangement for transfer of
1. 1
certain conditions are fulfilled. ( sec 25 (1) property in the goods to the buyer.
To assume that the buyer has accepted the goods ,
where the buyer
(i ) Conveys his acceptance;
To ascertain and appropriate the goods to the
2. (ii) Does an act adopting the sale; or 2.
contract of sale
(iii) Retains the goods without giving a notice of
rejection, beyond the specified date (or reasonable
time), in a sale on approval. (sec 24)
To deliver the goods only when applied for by the To pass an absolute and effective title to the
3. 3.
buyer ( sec 35) goods, to the buyer.
To make delivery of the goods in installments, when so To deliver the goods in accordance with the
4. 4.
agreed ( sec 39 (1) terms of the contract ( sec 31)
To ensure that the goods supplied conform to
To exercise lien and retain possession of the goods,
5. 5. the implied / express conditions and
until payment of the price ( sec 47 (1)
warranties.
To stop the goods in transit and resume possession of To put the goods in a deliverable state and to
6. the goods, until payment of the price ( sec 49 (2) and 6. deliver the goods as and when applied for by
50 the buyer ( sec 35)
 To deliver the goods within the time
To resell the goods under certain circumstances ( sec specified in the contract or within a
7 7
54) reasonable time and a reasonable hour. [ sec
36 (2) and (4)]
To bear all expenses of and incidental to
To withhold delivery of the goods when the property in making a delivery ( i.e. upto the stage of
8 8
the goods has not passed to the buyer (sec 46 (2) putting the goods into a deliverable sate 0
(sec 36 (5)
To sue the buyer for price when the property in the
goods has passed to the buyer or when the price is To deliver the goods in the agreed quantity.
9 9
payment on a certain day, in terms of the contract, and (Sec. 37 (1).
the buyer fails to make the payment (sec 55)
To deliver the goods in installments only
10
when so desired by the buyer. (Sec 38 (1)
To arrange for insurance of the goods while
11 they are in transmission or custody of the
carrier. (Sec. 39 (2).
To inform the buyer in time, when the goods
12 are sent by a sea route, so that he may get
the goods insured [Sec. 39 (3) ]

# MORTGAGES AND KINDS OF MORTGAGES (SECTION 58)

A mortgage is a legal transaction that involves transferring an interest in a specific immovable
property to secure the repayment of a loan, whether it is an existing debt or one that may arise in the
future. The party who transfers the property is the mortgagor, while the recipient of the property and
lender of the loan is called the mortgagee.
The amount of money borrowed, including any accrued interest, is called the mortgage money.
Property transfer is typically formalized through a document called a mortgage deed. In summary, a
mortgage is a means for individuals to obtain a loan using their property as collateral, with defined
roles and terms for the parties involved.
Types of Mortgages:
There are six kinds of mortgages which are detailed as under:
1. Simple Mortgage: It has below characteristics:-
i) That the mortgagor must have bound himself personally to repay the loan
ii) That to secure the loan he has transferred to the mortgagee the right to have the specific
immovable property sold in the event of his having failed to repay
iii) That the possession of the property is not delivered to the lender.
2. Mortgage by Conditional Sale: It’s defined as a situation, where the mortgagor ostensibly
sells the mortgaged property –
i) on the condition that on default of payment of the mortgage money (loan) on a certain date the
sale shall become absolute or
ii) on condition that on such payment being made the sale shall become void or,
iii) on the condition that in such payment being made the buyer shall transfer the property to the
seller,
PROVIDED that no such transaction shall be deemed to be a mortgage, unless the condition is
embodied in the document which affects or purports to affect the sale?
This kind of mortgage came into vogue in India during Muslim rule and was given legal recognition
in the Bengal Regulation Act, 1978.
3. Unsufructuary Mortgage: It has below characteristics:-
i) That the possession of the property is delivered to the mortgagee;
ii) That the mortgagee is to get rents and profits in lieu of the interest or principal or both;
iii) That no personal liability is incurred by the mortgagor and
iv) The mortgagee cannot foreclose or sue for sale.
v) That no time limit can be fixed expressly during which the mortgage is to subsist.
This is not prevalent in India
4. English Mortgage: It has below characteristics:-
i) That the mortgagor should bind himself to repay the mortgage money/loan on a certain day;
ii) That the mortgaged property should be transferred absolutely to the mortgagee ; and
iii) That such absolute transfer should be made subject to a proviso that the mortgagee will recover
the property to the mortgagor, upon the payment by him of the mortgage money on the appointed
day
The difference between the mortgage by conditional sale and English mortgage is that in English
mortgage, the mortgagor binds him personally to repay the money.
5. Mortgage by Deposit of Title Deeds:
In England and popularly in India, this mortgage is called the equitable mortgage. Under the
definition under Section 58 (f) of Transfer of Property Act, 1882, the essential requisites of such
mortgage are:
i) a debt should be there
ii) deposit of the title deed with the lender (most essential)
iii) said deposit is with intention that the said title deed shall be security for the debt.

Section 96 of the Transfer of Property Act, 1882 places mortgages by deposit of title deeds on the
same footings as simple mortgages. As such, the security can, like a simple mortgage can be
enforced by a suit for sale of mortgaged property, of course, by the process of the law. And this kind
of mortgage does not require registration and is at par with any other legal mortgage.
6. Anamolous Mortgage:
A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary, an
English mortgage or a mortgage by deposit of title deeds within the meaning of Section 58 of
Transfer of Property Act is an Anomalous mortgage.

# CONDITION RESTRAINING ALIENATION (SECTION 10)

Section 10 of the Transfer of Property Act,1882 lays down the condition restraining the alienation
of the property. According to this section, where the transferee is absolutely restrained from
transferring his interest in his property to another person because of a condition which came along
when the property was transferred to the transferee, then this condition will be made void but the
transfer would remain valid.
Alienation means transfer of the property. Right of disposal is one of the essential features of the
ownership rights. Section 10 incorporates that any restriction on the right of disposal would be
against the essential feature of ownership rights. Accordingly, section provides that if a transfer is
subject to a condition by which the transferee (who now becomes the owner) is absolutely
restrained from disposing of or parting with his interest in the property, the condition is void. In
such cases since the transferee becomes the owner of the property, any restriction limiting his right
of disposing the property would not be binding on him and he would be free to transfer it to
anybody by any means. However, there are exceptions to this rule which is unfolded in this article.
The owner of a property has a right to alienate the property either conditionally or unconditionally.
Section 10 is a case of condition subsequent. In a transfer of property, where a condition is laid
down by a transferor, the transfer is a "conditional transfer". Conditions are limitations which limit
or otherwise affect the transfer. Condition may be condition precedent i.e., condition prior to the
transfer of property and whether the transfer would take place or not is itself dependent on that
condition and it may be condition subsequent where the condition is to be fulfilled after the transfer
of the property. Condition subsequent affects the interest of the transferee after the transfer. Section
10 along with Section 11,12 and 17 deals with conditions subsequent. However, in this article, the
author would be critically examining the provision of section 10 of the Transfer of Property Act.

Absolute Restraint:
Section 10 declares a condition void if it absolutely restrains alienation. The restriction on
alienation is absolute if it totally removes or limits the right to disposal. Section 10 relieves a
transferee of immovable property from an absolute restriction on his right to deal with the property
as an owner. This provision applies when property is transferred subject to a condition or limitation
that prevents the transferee from disposing of his interest in the property. The restraint must be an
absolute restraint in order to render such a condition invalid.
The restraint may be absolute as a limitation on the power of alienation in time or as to a specific or
specified person only, or it may take any other form. The contents of the deed will inform you if the
restraint in question is absolute or partial.
In the case of a will, if an absolute right is vested in a defendant, an adopted son, in respect of
properties left to him by a "will". It was decided that no further restrictions, as per Sections 10 and
11, could be placed restraining alienation of the property or imposing a restriction repugnant to the
interest created in the property.
Illustrations:
•A sells his house to B with a condition that B cannot transfer the house to anyone except C.
This condition is void because C may never choose to purchase the property.
•A husband settles his properties on his wives with a condition that they cannot transfer the
property without his consent. This condition is void as it completely takes away the wives’
power to alienate the property.
•In the case of a will where an absolute right is vested in an adopted son concerning
properties bequeathed to him, no further restrictions can be imposed under Section 10 and
11. This includes restraints on alienation or creating restrictions conflicting with the interest
created in the property. The legatee receives the property as if the will contained no such
condition, in accordance with Section 138 of the Succession Act.
Partial Restraint;
The section only provided for absolute restraints. It is silent on the partial restraints. The restraint is
partial if it does not substantially limit the transferee's capacity for alienation but simply limits it to
some extent. A partial restraint is enforceable and legal. According to George Jessel, "The test is
whether the condition substantially limits the power of alienation; it is a question of substance, not
form. You may restrict alienation in a variety of ways, like prohibiting it for a specified group of
people or restricting it to a particular period of time ".

Renand v. Tourangeaon held that a condition requiring the transferee not to transfer the property
for twenty years is an absolute restriction and hence void. If the condition was that the transferee
not transfer the property for three years, it would be a partial restraint and hence valid.
In the case of Muhammad Raza v. Abhas Bandi Bibi, where the condition restricted the transferee
from transferring the property to strangers, i.e., those not connected to the transferor, the Privy
Council ruled that the condition was just a partial restraint that was valid and enforceable. Similarly,
when a condition in the sale deed said that the property should not be transferred outside the
vendor's family, but the transferee sold it to the vendor's first cousin, the Bombay High Court
decided that the condition was a partial constraint and valid. The first cousin belonged to the
vendor's stock, according to the court.

Exceptions
Section 10 makes two exceptions to the general rule that conditions prohibiting alienation are null
and void. The first is for a lease, while the second is for a property transferred to a married woman.
Lease
A lease is a limited interest transfer in which the lessor (transferor) retains ownership and only
transfers the right to enjoyment to the lessee (transferee). A lessor may impose the condition that the
lessee not assign or sublease his interest in the property to any other person. A condition of this type
will be valid. There is a restriction on the lessee's (transferee's) ability to alienate; such a condition
is valid, and he cannot transfer his interest without the lessor's consent.
A condition in the ease that the lessee not sublet or assign his interest to anybody during the lease
term is valid. A condition in the lease deed allowing the lessee to surrender the lease if the lessor has
to sell the property13 is valid. If the lessor does not expressly state that breach of this condition
would result in the lease being terminated, then the lessor's remedy for breach of such restraint is
not a suit for ejectment. The lessor may only suit the lessee for an injunction and damages for
breach of the condition.
Married Women
When a property is transferred to a married woman who is not a Hindu, Muslim, or Buddhist, the
transferor has the legal right to impose a condition restraining alienation. Section 10 does not relate
to such a condition. The Married Women's Right to Property Act of 1874 has similar laws that apply
to married women who are not Hindu, Muslim, or Buddhist. Personal laws of Hindus, Muslims, and
Buddhists already provide for the validity of restraints on the alienation of these communities'
married women. So, the two main requirements are that the lady be married and that she not be
Hindu, Mohammedan, or Buddhist.