305992562 Transfer of Property Law Notes India

8/17/2019 305992562 Transfer of Property Law Notes India

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The condition of transfer is immoral or opposed to public policy and

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S ec ti o ns 1 , 3 , 5 , 6 , 7 , 8 , 1 0 , 1 3 , 14 , 15 ,18 , 1 9 , 2 0 , 2 1 , 2 3 , 2 5 , 26 , 2 7 , 2 8 , 2 9 , 3 1 , 3 5 , 36 , 37 , 38 ,

3 9 , 4 1 , 4 2 , 43 ,

48 , 5 3 , 53 A , 54 , 55 , 56 , 5 8 , 60 ,62 , 6 7 , 6 8 , 6 9 , 69 A , 78 , 81 , 1 00 , 1 0 5 , 1 06 , 107 , 108 , 10 9 , 1 10 ,

1 2 2 , 1 3 7 o f T h e

Tra ns fe r of Prope rty Ac t, 1882 . .

Tr a n s f e r by ac t o f pa rti es , e s t e ! a n ! c o n t in " e nt i nt e r e s t , e #ec t io n, c #o " o n, ri " ht t o

f or ec #os $r e , % ort" a " e , sa #e , c h a r" e , #ea s e a n! " ift.

P&'P(&T) * A+ 'T(S A- AS(S

h ap t e r 1 / + ha t is i% % o ab# e p r ope r t y

We know that property is the total wealth of a person. It may include land, buildings, mortgage

rights, debts owed to him, insurance money due, cheques received, cash, etc.

The Transfer of Property Act, !!", defines immovable property as that which does not

include standing timbe r, growing crops and grass. This is a very open#ended definition

though, so we must look at the definition furnished by the $eneral %lauses Act, !&', wherein

it is mentioned that immovable property includes ( a) land, b) benefits arising out of land, c)

things attached to the earth, or d) permanently fastened to anything attached to the earth.

Also, the *egistration Act defines immovable property as land, buildings, hereditary

allowances, rights to ways, lights, ferries, fisheries, or any other benefits arising out of land

and things attached to the earth, but not standing timber, growing crops or grass.

The +ale of $oods Act, which deals with the sale of movable property, says that movable

property, or goods, includes any property other than actionable claims and money. This iswhy transfer of any actionable claim is dealt with in the TPA.

%A+- Anand a Behe ra v. Sta te o f Oriss a


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The dispute was about fishing rights in the %hilka /ake, which was part of an estate owned

by the *a0ah of Parikud. 1y the rissa -states Abolition Act, the estate became vested in the

+tate of rissa.

The petitioner had obtained from the previous proprietor the right to fish in the lake, long

before the property became vested in the state. The +tate refused to recogni2e these

licenses. The petitioner claimed that the transaction was based on the sale of future goods,

and as fish was movable property, it should not be covered under the act that abolished the

estates.

There can be no doubt that the lake is immovable property. Therefore, the state, in whom the

right to the lake is vested, can bar access to the lake for anyone else. The right the petitioner

had was to catch and carry away fish from the lake. 3ow, this amounts to a benefit arising out

of land, and hence, should be covered under immovable property. Also, fish is not standing

timber, growing crop, or grass4

If it was a mere sale of goods, there should be an instrument to prove it, that is, a written and

registered receipt. The sale in this case was oral.

The case is different from Firm Chhotabhai Jethabai Patel & Co. v. The State of Madhya

Pradesh, where it was held that the right to pluck Tendu leaves from trees was not under the

purview of immovable property, as it is under the definition of a growing crop.

Also, the state was not a part of the contract between the *a0ah and the petitioner, so the statecannot be asked for the money, nor can the *a0ah be asked to compensate, as he did not breach

the contract either. The suit was dismissed.

$estion/ +hat is profit a prendre Anser/ t is a prii#e"e or ri"ht to enter anothers

#an! an! tae aay so%e a#$ab#e, nat$ra# thin". or ea%p#e, fish, oo!, honey, etc.

%A+ - S han ta ba i v . S ta te o f B o m ba y


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The petitioner5s husband was a 2amindar, who had e6ecuted an unregistered document in

favour of the petitioner giving her the right to enter upon certain areas in the 2amindari to cut

and e6tract bamboo, fuel wood and teak. nly the lease for forest woods was given to her.

Then the 7adhya Pradesh Abolition of Proprietary *ights Act was passed and it was held

that the petitioner no longer had an enforceable right against the state as far as lumbering

work was concerned, as all proprietary land became vested in the state. 8ustice 1ose said in

this case that a tree draws subsistence from the soil as long as it stands, and therefore, it is

permanently attached to the land and should be treated as immovable property. +tanding

timber must be in such a state that if cut, it can be used straightaway for building houses,

bridges, ships, etc. The rule is that if there is an intention to sever such things as timber from

the immovable property for the purpose of selling separately, then such separate items

would constitute movable property. A tree can be said to be standing timber if it can be looked

at as timber in all practical purposes, even if it is still standing. The deed for the transfer was

unregistered, and the price was *s. "9:::, so the petitioner could not e6ecute any right against

the state. Appeal dismissed.

A debt secured by mortgage of immovable property is itself immovable property.

;I< < -*- 3 %- 1- T W --3 P * P-*T= / A W I3 I 3 ; IA A3; -3 $ / A3;

Indian law classifies property into movable and immovable. 1ut -nglish law divides property into realty and personalty. *ealty was the kind of property which could be

regained by a person if he lost possession of it, through a real action. If a person lost

possession of land, he had the right to take the land back from the new possessor. In the case of

goods, if a person lost possession, he could not recover the goods, but he had the right to

recover damages. +uch action taken was personal action, and hence, goods were termed as

personalty. >owever, the Indian system is prevalent in the ?@ now, after the *eal Property

Amendment Act of &".

/ ; A3; / -A+->/ ;


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An estate is said to be freehold when it is vested in a person for a definite period, which is of

uncertain duration. ere, we know that

as long as the period of Anubhab5s life is running, 3?8+ is vested in him. >owever, we do

not know how long he will survive, so the duration is uncertain.

n the contrary, a leasehold estate is held by a person for a definite period and certain

duration. ence, it does

not apply to wills or testaments, which operate only after the death of the testator. ;edication

of property to a temple or a deity is also invalid, as these are not living persons. >owever,

sections C, D and ": make an e6ception, by allowing transfers in favour of unborn

persons, with certain restrictions. This is quoted in S ec t io n 5 of the act.

If a holder of property relinquishes his rights over it to the coparcener, or a widow gives up her

right to the reversioner Bperson in whom the property is vested once the original possessor

gives up his right to it) in order to accelerate his succession, they are not transfers, but merely

e6tinction of rights in property. Partition of property is also not a transfer, but only a change in

the mode of en0oyment of the property. Transfer of future property is invalid, that is, you

cannot transfer property that is not in e6istence.

In -ngland, after the /aw of Property Act, &" was passed, the creation and conveying of

estate tail and life estate became banned. nly estate in fee simple and estate for a term of

years were valid. In India, all D of these estates can be conveyed or created under the TPA.

-state in fee simple ( This implies absolute ownership. When a fee simple tenant dies, the

estate passes to the nearest heir.


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-state tail ( It is created on the grantor5s request when on the grantee5s death, the estate goes

to the grantee5s lineal descendants, or heirs of the body. If there are no such heirs, it reverts

back to the grantor, or if the grantor is dead, the grantor5s representatives.

/ife -state ( It arises when an estate is granted to the grantee for the period of life of the

grantee or of any other person. In the second case, it is known as per autre vie.

-state for term of years ( The property is transferred for a definite period of time.

A family arrangement of a disputed claim is also not a transfer of property. It is recognition

of pre #e6istent rights and does not convey any new or distinct title to the parties.

%A+ - aly a n i v . !ar a y a na n

>ere, a man named @arappan had two wives, 3ani and Ponni. Two of the defendants, the

plaintiff5s husband, and the deceased father of three more defendants were born of his first

wife, in addition to D daughters Ba very fertile woman indeed4), and his second wife had a son

and " daughters. The family was governed by 7itakshara law, and @arappan had e6ecuted a

registered deed for the partition of the property. @arappan had property worth !:::. >e gave

C:: to each of his male issues. C:: went to his first wife and ::: to his second wife. "::

went to his stepmother. @arappan died, and soon after this, *aman, his third son and husbandof the plaintiff, followed daddy upstairs. Widowed @alyani sued for partition and separate

possession of her EDth share in the property.

The defendants held that the @arappan and his sons were coparceners of the property, and thus,

@arappan had no authority to e6ecute such a deed. They also contended that the D sons were

coparceners to the property, and succession depended on survival. +ince @alyani5s husband

was dead, therefore, she could not get the property. It was ancestral property, and all D sonshad acquired interests to it by birth. Therefore, @arappan had no right to dispose of by will

ancestral property in his hand. A >indu father cannot impose such a family arrangement

without his sons5 consent after his death. The second wife5s son had already taken his share


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out and left the family. Therefore, the brothers were tenants#in#common, and the property was

allowed to be divided. EDth share was granted to the plaintiff.

S ec ti o n 6 of the act talks about what kinds of property may be transferred and what may not

be transferred. In section 9Ba), we find that the chance of an heir#apparent succeeding to an

estate, the chance of a relative obtaining a legacy on the death of his kinsman, or any other

such mere possibility, cannot be transferred. These things mentioned in clause Ba) are known

as spes su""essionis. It means a mere chance, or bare possibility. It is different from future

interest. In Indian law, the transfer of an e6pectancy or any agreement to transfer e6pectancy

are both void.

%A+- Annad a Mohan #o y v . $ou r Moha n Mulli" %

In this case, the appellant purchased from the respondents their rights e6pectant, under the will

of their uncle, upon the termination of his surviving widow5s rights. /ater, there was a

compromise between the widow and the respondents as a result of which the respondents

got certain properties. The appellants filed a suit for the recovery of the properties from the

respondents. The court held that the transfer was of a spes su""essionis, and was thus

forbidden by the TPA.

%A+ - a r pa a th a "h i v . ! a a r a thi n a th a " h i

" co#widows divided their husband5s properties into " shares and took separate possessions,

with each widow giving up her life interest under the partition deed. The respondent is the

daughter of the widow who died. The surviving widow filed a suit against the daughter for

recovery of the property in her mother5s possession, alleging that the arrangement by which

her right of survivorship was relinquished was repugnant to section 9Ba). The court said that the

interest of each widow was property, and this, along with the incidental right of survivorship

could be lawfully transferred. The section might prohibit the transfer of the bare chance of the


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surviving widow taking the entire property as the ne6t heir of the husband, but it does not

prohibit the transfer by the widow of her present interest together with the incidental right of

survivorship to the daughter. +uit dismissed. The ratio is that right of survivorship can be

transferred.

$estion/ +hat is reersion

Answer If I grant my land to Pritam for life, Pritam becomes entitled to it. n Pritam5s

death, the land would be returned to my possession, and this is called reversion. +uppose now,

that I grant a life estate to Pichu and then a fee simple Fwhich would imply absolute ownership

and reversion to Pichu5s nearest heir, say 1ulbaG, then 1ulba5s estate will be called

H*emainder5. It may either be a vested remainder, as in this case, or a contingent remainder,

say, with a condition of 1ulba.

%A+- Amri t !aray an v. $ay a Sin h

The guardian of a minor reversioner entered into a contract with the female holder of property

that the properties would be relinquished in favour of other relatives. In a suit for the

reversioner for possession of property after the female5s death, it was held that he had no right

or interest at the time when the agreement was made, because the female owner was holding

the property for life. ?ntil it vested in him on her death, he had nothing to assign or relinquish

or transfer. >e, being the reversioner, has a right only after her death, and until then it is mere

spes su""essionis.

-A+ - 7 - 3 T +

An easement is a right which the owner or possessor of certain immovable property possesses

for the proper en0oyment of the property Bthis must have a dominant heritage), like a right of

way over ad0oining property Bwhich en0oys servient heritage). +ince the right cannot subsist


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without the dominant heritage, the right of easement alone cannot be transferred. This is

outlined in clause Bc).

%lauses Bf), Bg) and Bh) are prohibited based on public policy. An office is granted to a person

on personal grounds, and he alone can discharge the duties, and hence, be entitled to the salary.

/oss of such remuneration might mean a lack of inducement to perform duties and temptation

to accept bribes.

S ec ti o n 7 of the TPA says that any person, who has the capacity to contract and is

entitled to transferable property or authori2ed to dispose of such property, can transfer such

property. In Mohari Bibi v. 'harmodas, it was held that a conveyance of land by a minor is

void, as he is not competent to contract.

S ec ti o n 8 says that a transfer of property to a transferee transfers all the interests which the

transferor can pass in the property Be.g. rents, profits, benefits arising from it, things attached to

earth, etc.), unless a different intention is e6pressly or impliedly present.

%A+ - !a tho o (a l v . 'u r a P r asa d

ne *amchandra dies, and gifts his property to his elder daughter /a6mi. n /a6mi5s death,

her husband takes

possession, claiming right as her heir. >e mortgages the property to the appellant, 3athoo /al.

7eanwhile, after

" years, the son of the other daughter B1huri) returns and claims the property, saying his aunt

/a6mi only had a limited stake in it. The court observed that unless there are e6press terms in

the deed of gift to indicate the d onor who had the absolute interest, a gift in favour of an heirwho inherits a limited interest cannot be understood as an absolute interest. %ourt held that to

convey an absolute estate to >indu female no e6press power of alienation need be given. The

words used in the gift deed were of amplitude enough to convey full ownership to /a6mi. The

appellant won the case.


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A% T I 3 A1/- % / A I 7

Actionable claim means a claim to any debt, other than debt secured by mortgageEpledge of

immovable property, or to any beneficial interest in movable property not in the possession of

the claimant, which are recogni2ed by law as affording grounds for relief.

h ap t e r 3 / : ene r a # & $ #e s r e "a r !in " T r a n s f e r o f Pr o p e rty

+ections :#! contain the first set of rules that must be observed when alienating property.

There is a principle in economics that wealth should be in free circulation so that the

greatest benefit can be derived from it, and hence these sections provide that ordinarily there

should not be any restraint on alienation.

S ec ti o n 1 0 provides that where property is transferred based on a condition or limitation

which absolutely restrains the transferee or any person claiming under him from parting

with or disposing of the interest in property, such condition or limitation is void. There are

e6ceptions in the case of a lease where the condition is for the benefit of the lessor, and when

the property is transferred to or for the benefit of a woman so that she shall not have power

during her marriage to transfer or charge the same for her beneficial interest.

In almost all property law systems, the rule is alienatio rei praefertur )uri a""res"endi, that

is, the law favours alienation of property rather than accumulation.

+ection : must be read with S ec ti o n 1 2 which says that where property is transferred

sub0ect to a condition or limitation making any interest therein, reserved or given to or for the

benefit of any person, to cease on his becoming insolvent or trying to dispose of the same, such

condition or limitation is void. 3othing in this clause applies to a condition in lease for the

lessor5s benefit.


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A condition which says that the transferee will not transfer his interest in a property for C years

or that he will not transfer it to any member of a particular family is partial restraint and is

therefore allowed. 1ut if a condition e6ists saying that the transferee is prevented from

transferring his property to anyone but the transferor or his heirs and that too only if they are

willing to buy, it constitutes absolute restraint, and is void. Assume that a situation arises

where +uman, Arghya and ;ipayan partition a 0oint property and agree that if anyone of them

does not have a baby, he should not sell his property to anyone else, but leave it for the other

two. This is a case of absolute restraint. If I sell a property to 1i0u and 1i0u independently

e6ecutes an agreement whereby he states that if he wants to sell the property he would only sell

it to me, the agreement would be valid, because I did not impose any condition against

alienation at the time of transfer. 1i0u himself added the condition.

As far as lessors are concerned, the condition is good only if it is for the benefit of the lessor,

for e6ample, if a conveyance gives the power to the lessor to re#enter Btake control of the

property once it is out of his possession) instead of merely entitling to damages.

*estraints on the power of alienation in favour of married women Bwho are not >indus,

7uslims or 1uddhists) will be valid. ?nder old -nglish law, a husband and wife were lookedat as one legal entity. All the property of the woman would become her husband5s on marriage,

and she could not dispose of it without his consent, and nor could she devise a will. The

7arried Women5s Property Act of !!" changed this. Thenceforth, the transferor has the

power to decide to what e6tent he wants to restrain the woman5s power of alienation. +uch

provision can be used to prevent a married woman from alienating her property as long as she

is under her husband5s protection.

Section 13 of the act provides that when an interest Bthe interest must, of course, be sub0ect to

a prior interest, as you cannot directly transfer to a person unborn) is created for the benefit of

a person not yet born on the date of the transfer, the interest will not take effect unless it


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e6tends to the entire remaining interest of the transferor in the property. -6ample ( say 8ohnny

transfers a property to Pony, and after 8ohnny5s death to the eldest son of Pony and after his

death to the youngest son, the interest created for the eldest son is void, because the remainder

does not go to him but the younger son is also included.

%hildren in the womb and children adopted by a lady after her husband5s death are deemed to

be in e6istence for this purpose.

Again, this section e6hibits that law favours free circulation of property. This section

foils the 'e 'onis Conditionalibus statute. This is also known as the rule against ;ouble

Possibility. The court foils the attempt of owners to create a series of future interests.

;ifference between -nglish and Indian law ( the rule of double possibility is more stringent in

Indian law. +ay a property is vested in for life, to =, an unborn child on 5s death, and to

J on =5s death. In -nglis h law, the interest created for J is void, as it requires double

possibility ( ) birth of = before 5s death, and ") death of = before J.

In Indian law, interests in favour of both = and J are void, as the remainder does not go to =

on 5s death, but there is a chance of it vesting in J as well.

?nder this section, C conditions must be complied with for the interest to be valid ( )

interest of the unborn person must be preceded by a prior interest in favour of a living person,

") the unborn person must be in e6istence when the prior interest comes to an end, and C) the

interest must be the whole of the remaining interest of the transferor, a life interest will not do,

must be an absolute interest.

%A+ - $ anend r a m o hu n T a o re v . Ju ttend r a m ohu n T ao r e

This was an !'" case, and the law now stands changed. The defendants were trustees under

the will of one Prosonocoomar Tagore, and the plaintiff was his son. The defendants were

tenants for life. Prosonocoomar died in !9!, and his will provided nothing for his heirless son.

This is probably because his son had converted to %hristianity. All of the testator5s property


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was stipulated to go to the D trustees. 7uch of the property was granted to 8uttendramohun for

his life, and after his life, to his eldest son who would be born during the testator5s life, and

thereafter to the sons of the eldest son. The plaintiff contended that the will was void save as

far as 8uttendramohun5s life interest was concerned, and thereafter, he himself should

receive the property. >e also said that it was an ancestral estate, which the testator had no

right to dispose of this way. The >igh %ourt had dismissed the plaint. Sreemutty Soor)emoney

v. 'enobundoo Mulli"% is referred to. -nglish law says that a person must be in e6istence

to take under a will.

%ourt held that 8uttendromohun had a life interest, after which, the will fails, and the

property passes to the plaintiff as the testator5s heir#at#law.

Section 14 enshrines the rule against perpetuity. It says that the property cannot be

transferred if it is to take effect after the lifetime of one or more persons living at the date of

transfer, and the minority of some person who shall be in e6istence at the e6piration of the

period, to whom the interest is to belong on attainme nt of adulthood. %onfusedK 7e tooL

/et5s e6emplify.

+uppose a grant is made to A for life and the remainder goes to A5s eldest son C years after A5s

death. >ere, the beneficiary must be a minor at the time of A5s death. >owever, his en0oymentof the property can be delayed till he is a ma0or. In -nglish law, however, an absolute period

of " years is permitted after the death of the person concerned who had the prior interest. +o,

the second beneficiary may be ma0or on the date of the first one5s death. Read Sarathi for

more illustrations on this, page 57.

%A+- $anes h Sona r v . Pu rnend u !a ra ya n Sinh a

The plaintiff#respondent5s father had granted a registered lease in favour of the defendant#

appellant for the purpose of a homestead. ne of the conditions of the lease was that the lessor

would have the right of re#entry upon the land at anytime and at such time the lessee would


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have to vacate the property, being entitled to the money value of any constructions he may

have made. The instrument said that the defendant and his heirs would en0oy the property until

the plaintiff wanted it back for creation of a hat . The appellants5 counsel contended that the

agreement to the option given to the lessor to determine the lease and take possession of the

leasehold land was a covenant between the parties and offended the rule against perpetuities.

>owever, it was held in #ama #ao v. Thimmappa that a clause entitling a lessor to

terminate the lease at anytime which is described as permanent and which is to be

en0oyed from generation to generation does not offend the rule against perpetuities. In

this case, it was merely a personal covenant and not one which created an interest in land, and

therefore, no offence to the rule. It was also contended that the covenant was for

relinquishment by the lessee to the lessor, and not the lessor5s heirs. This contention was

baseless, as the deed stated otherwise. +o, the appeal was dismissed.

ha pter 7 / (; $i ta b#e &$# es +he n Prope rty &i" hts on f#ic t

%A+- Ma" *uee n v . #am"o oma r oond oo

The case dealt with the doctrine of holding out as enunciated in section D. The respondent5s

father, *amdhone, had purchased a property from one 1unnoo 1ibi. The @oondoos had

since that time possessed the property.

1unnoo 1ibi was the mistress of one Ale6ander 7ac;onald, and the appellant in this case

is the husband of Ale6ander5s daughter 7aria. It appears that the purchase of property by

1unnoo 1ibi was a benamitransaction, and that Ale6ander was the real purchaser, having

simply used 1unnoo5s name in the transaction. The appellant5s claimed that their father

had purchased the property with a bona fide belief that 1unnoo was the real owner. Theycontended that they had not only paid full value at the time of the transaction, but also o

ccupied the property for more than C: years. The >igh %ourt held that *amdhone should

have made an enquiry as to 1unnoo 1ibi5s status. >owever, the Privy %ouncil held that an

enquiry would have revealed that 7ac;onald was in possession, and he had sufficiently


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improved the property by building a bungalow on it. 1unnoo 1ibi5s statement in the

instrument also said that the transfer was with the support of her family, and thus, it would

have been prudent for *amdhone to have looked at whether she was entitled to transfer the

property or not. Thus, the appeal was allowed.

%A+ - !a ub a i A mm a l v . S h a m a # a o

The properties in dispute belonged to one 7unuswami who died leaving behind a widow and

three sons. In &&, the widow filed a suit in forma pauperis for maintenance and marriage

e6penses of her daughters. The suit was decreed in &". In &":, the properties were sold to

the appellant5s predecessor. In e6ecution of the maintenance decree which also created a

charge on the suit properties, the decree#holder purchased the properties in &"!. The

widow5s side contended that the sale of &": was attacked by the doctrine of lis pendens

and the purchaser contended that the sale of &"! was null and void. It was held that the sale

of &": was pendente lite and that the sale of &"! to the widow was valid.

%A+- Abdu l Sha %oo r v . Ar )i Pap a #a o

A sale deed was e6ecuted in &D& with respect to a part of the assets of the vendors. A

creditor Bdefendant) of the vendors filed for recovery of his debt and attached that property. A

purchaser Bplaintiff) filed a suit to have the summary order set aside. The creditor contended

that the sale was made to the purchaser with the intention of defrauding the creditors. The

%ourt held that the fact that all the vendor5s property had not been sold would not repel the

application of section CB), unless there was proof that there was other property left

sufficient in value to pay off the creditor. Thus, the decision was reached that it was not a bona

fide purchase, and it was made with the intention of putting the property out of the creditor5s

reach.

h apt e r 9 / -o c trine o f P a rt P e rfor% a n c e


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The doctrine is enshrined in Section 53A which basically states that even if there is no

formal instrument of transfer, if the transferee has paid consideration and there is an agreement

to transfer between the parties the transfer is valid because it has been partly performed, and

the defendant cannot be evicted.

%A+- Mane%la l Mansu %hb ha i v . +ormu s) i Ja ms hed )i

There was a lease agreement between the two parties through a series of correspondences. The

defendant was put in possession of the property. *ent was also collected for several years.

>owever, there was no formal lease deed ever e6ecuted. When the plaintiff tried to e0ect the

defendant on the grounds that he was trespassing, it was held that section CA aimed at

defending a person who has no registered title deed I maintaining his property if he could

produce a signed contract and some action on his part in part performance of the contract. The

building of a factory on the land, in this case, was construed by the court as part performance.

h apt e r 10 / S a #e of % % o a b # e Pro pe r ty

There is a difference between Hcontract for sale5 and Hcontract of sale5.

A Hcontract for sale5 is an agreement between the parties as to the various terms and conditions

based on which the property will be sold. It does not create any interests in the property per se.

A Hcontract of sale5 creates an interest in the property concerned. It is basically the formal

legal instrument or conveyance which evidences the sale of the property.


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S ' A S+ (& S

P # ea se s $pp # e %e n t t h is r e a! i n " % a te r i a # ith t e t b oo s

Q1.. Name three immovable properties other than house and landed property.

Ans 1: The law of transfer of property , as contained in the Transfer of Property Act, !!" ,

does not contain an e6haustive definition of immovable property. Immovable property has been

defined to be one which does not include standing timber, growing crops or grass.

1y any generic legal sense immovable property not only means tangible immovable

property like land, building and structure standing on land etc, it also includes some intangible

rights like,

a) the equity of redemption, b) right to collect rents of immovable property, c) right of ferry,

d) a right of way,

e) a right of fishery,

f) a debt secured by mortgage of immovable property, g) a right to gra2e cattle or mow

grass,

h) the interest of a mortgagee in immovable property.


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Q. !hat do you understand by transfer of property"

Ans : +ection of the T.P Act specifies that the e6pression 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, or to himself and one or more other living personsM and Nto

transfer propertyO is to perform such act. It also specifies that Nliving personsO includes a

company or association or body of individuals whether incorporated or not. >owever, nothing

shall affect any law relating to transfer of property to or by companies, association or bodies of

individuals..

Q#. Spe$ify five things %hi$h may not be transferred.

Ans #: +ection 9 of the T.P Act provides that

a) the chance of an heir apparent succeeding to an estate, the chance of a relation

obtaining a legacy on the death of kinsman, or any other mere possibility, of a like

nature, cannot be transferred,

b) a mere right of re#entry for breach of a condition subsequent cannot be transferred to

anyone e6cept the owner of the property affected thereby

c) an easement cannot be transferred apart from the dominant heritage

d) an interest in property restricted in its en0oyment to the owner personally cannot betransferred by him

e) a mere right to sue cannot be transferred

f) a public office cannot be transferred, nor can the salary of a public officer,

g) stipends allowed to military, naval, air force and civil pensioners of the government

and political pensions cannot be transferred.

Q&. !hen does a transfer of property operate"

Ans &: +ection ! of the T.P. Act provides that unless a different intention is e6pressed or

necessarily implied, a transfer of property passes forth%ith to the transferee all the interest

which the transferor, then $apable of passing in the property, and legal incident thereof.


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Q5. 'a( )o% $an a sale of immovable property be made"

'b( )o% $an a mortgage of an immovable property be effe$ted" '$( )o% $an a lease of

immovable property be made"

'd( )o% $an a gift be effe$ted".

Ans 5: Ba) As per +ection D of the T.P. Act a sale of any tangible immovable property of the

value of one hundred rupees and upwards, can be made only by a registered instrument.

If the value of the property is less than one hundred rupees, such transfer may be

made either by a registered instrument or by deliver of the property.

Ans 5'b( As per provision of +ection & of the T.P. Act where the principal money secured

is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of title deeds

can be effected only by a registered instrument signed by the mortgagor and attested by at

least t%o %itnesses.

Ans 5'$( +ection :' of the T.P. Act provides that a lease of a immovable property from year

to year, or for any term e6ceeding one year, or reserving a yearly rent, can be made only by aregistered instrument .

All other leases of immovable property may be made either by a registered instrument

or by oral agreement a$$ompanied by delivery of possession.

+uch registered instruments shall be e*e$uted by both the lessor and the lessee.

Ans 5'd( +ection "C of the T.P. Act provides that for the purpose of making a gift of

immovable property, the transfer must be effected by a registered instrument signed by or

on behalf of the donor, and attested by at least t%o %itnesses.

A gift of movable property may be effected either by a registered instrument

signed as aforesaid, or by delivery.


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Q+. A gifts his house to -, his soninla% %ith a $ondition that he $annot sell it to

anybody. /s the transfer valid in la%" /f so, %hy" /f not, %hy" Spe$ify the reason for your

ans%er.

Ans +: +ec : of the T.P Act provides that where property is transferred sub0ect 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 $ondition or limitation isvoid Be6cept in case of a lease, where the condition is for the benefit of the lessor).

In the instant case A makes a gift of his house property to his son in law 7, sub0ect

to a condition restraining 7 from alienating the said property absolutely. The transfer stands

but the condition is void. This signifies that once the transfer takes effect 7 is not bound by the

condition.

Q7. A sells his flat to 0, his brother at a $on$essional pri$e on $ondition that he $annot

lease out the property and indu$t a tenant therein. *plain the validity of the transfer, %ith

reason.

Ans 7: +ection of the TP Act provides that where, on a transfer of property an interest

therein is created absolutely in favour of any person, but the terms of transfer direct that such

interest shall be applied or en0oyed by him in a particular manner, he shall be entitled to receive

and dispose of such interest as if there was no such condition.

In the instant case when A sells his flat to 1 at a concessional price, signifying that thetransfer, notwithstanding that it was at a concessional price, was intended to be absolute in

nature. In that case the transferee 1 is entitled to receive the property as if there was no such

condition..

Q2. A, %ho is to marry 0, transfers his property in favour of 0, his intended %ife for life

and after her death, to S1, the eldest son of the intended marriage for life and then to S, the

se$ond son. !as the transfer valid" Spe$ify the reason for your ans%er.

Ans 2: +ection C of the T.P. Act provides that where, on a transfer of property, an interest

therein is created for the benefit of a person not in e6istence at the date of the transfer,

sub0ect to a prior interest created by the same transfer, the interest created for the benefit of


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such person shall not take effect, unless it e*tends to the %hole of the remaining

interest of the transferor in the property.

In the instant case the transfer in favour of +, after the life time of 1, shall not take

effect because of the fact that the said transfer in favour of + was limited for his life and

does not e6tend to the whole of the remaining interest of A in the property. The transfer is valid

up to the life time of 1 and the transfer made in favour of + fails and as the transfer in favourof + fails, the transfer in favour of S, being dependant on the transfer in favour of +, also

fails.

Q3. A transfer his house property to S1, his unborn son, absolutely. 4omment %ith

reasons on the legality of the transfer.

Ans 3: As per provisions of +ection C of the T.P.Act no interest in favour of an unborn person

for his benefit can be created e6cept through a prior interest created by the same transfer in

favour of a person living on the date of transfer. Accordingly any transfer directly in favour of

an unborn person is void in law. It also offends the provisions of +ection of the T.P.Act,

which indicates that atransfer of property signifies a transfer of property between two living

persons.

Q1. A transfers his house property to 0 for life, then to 4 for life and then to 46s son,

unborn on the date %hen A made the transfer, absolutely. 4omment %ith reasons on the

legality of the transfer.Ans 1: As per provisions of +ection C and D of the T.P. Act aninterest in favour of an unborn person for his through some prior interest created by the same

transfer in favour of some person or persons living on the date of transfer. Another requirement

of +ection C is that such interest created in favour of an unborn person must e*tend to the

%hole of the remaining interest of the transferor. This in other words means that the

transferor cannot keep anything reserve for himself and the transfer must be absolute.

In the instant case a prior interest is created in favour of 1, a person living on the date

of transfer and thereafter to %5s son, unborn on the date of transfer. The transfer in favour of the

unborn person is absolute and hence in consonance with the requirement of law. BThe only

thing is that the unborn son must come into e6istence before e6piration of the prior interest,.

i.e. before the death of 1.)


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Q11. n 15.7.132 A transferred his house property to 0 for life and then to 4, %ho %as

not born on the date of transfer, absolutely. 0 died on .1.132. 4, ho%ever, %as born on

5.1.132.

8o %hat e*tent the transfer of on 15.7.132 by A ta9es effe$t". Spe$ify the reasons

for your ans%er.

Ans 11: As per provisions of sections C and D of the T.P. Act a transfer in favor of an unborn

person for his benefit can be made, provided the transfer initially must be in favor of a

living person and that the transfer in favor of the unborn person must be absolute and that he

must come into e6istence before e6piration of the prior interest and further that the interest

created in favor of an unborn person shall not e6tend beyond his minority.

In the instant case the transfer in favor of %, the unborn person was absolute, but he was

born only after the death of 1. In that view the transfer in favor of % fails and % cannot claim

any benefit therefrom.

>owever there are certain 0udicial decisions wherein it has been held that a

person in mother5s womb is deemed to be in e6istence. In that view the transfer in favor

of % takes effect.

Q1. A transfers his house property to 0 for life and after his death to 4. o 0 and 4

a$;uire any 9ind of interest in the property on the date of the transfer"

Ans 1: +ection & of the T.P. Act provides that where, on a transfer of property, interesttherein is created in favor of a person without specifying the time when it is to take effect, or in

terms specifying that it is to take effect forthwith, on the happening of an event which must

happen, such interest is vested unless a contrary intention appears from the terms of the

transfer. It also provides that a vested interest is not defeated by the death of the transferee

before he obtains possession.

, n the instant case when A makes the transfer, both 1 and % acquire a vested interest in

the concerned property. While 1 acquires a vested interest with immediate possession, % also

acquires a vested interest in the property, but to possess only after the death of 1. BIf % dies

before taking possession of the property, or before the death of 1, because of the fact that %


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has already acquired a vested interest in the concerned property, his heirs will step into the

picture in the event of %5s dying before taking possession or 15s death).

Q1#. n 15.3.1332 A transferred , a plot of land to 0 %ith a dire$tion that %ill be

handed over to 0 on his attaining ma. oes N

a$;uire any interest in on 1.7.133"

Ans 1&: +ection & of the T.P. Act specifies what is a vested interest. B-6plain what is vested

interest.)In the instant case, on .'.&&: an amount of money was transferred in favor of 3,

which was to be paid at the death of P. ;eath of P was an event of a certain nature.

Accordingly, on such transfer 3 acquires a vested interest in the property, only the en0oyment

is postponed till the death of P.

Q15. n .3.133+ A e*e$uted a deed of gift %ith a dire$tion that the in$ome arising from

the property %ill be given to A for life and after his death the $orpus %ill be divided and

given to 0 4 and . o 0 4 and a$;uire any interest in on .3.133+"

Ans 15: +ection & of the T.P. Act specifies what is a vested interest. B-6plain what is vested

interest.)


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In the instant case on the date of transfer on "".&.&&9 1, %, ; acquire vested interest in

the property , which will be given to them only after the death of A.

Q1+. A gave property to !, his %ife for life and on !6s death one share to 0, %ho is A6s

brother and the other to S1 and S, t%o son6s of A. 0 and S1 died during the life time of

the %ido%. !hat happens to the share transferred to 0 and S1"

Ans 1+: +ection & of the T.P. Act specifies what is a vested interest. B-6plain what is vested

interest.)

In the instant case the transfer in favor of 1, + and +" were to take effect on the

death of W. It signifies that 1, + and +" acquired a vested interest in the property on the date

of transfer. +ince 1 and + died during the lifetime of W, the interest transferred in favor of

1 and + will be inherited by their legal heirs respectively Bas because 1 and + acquired a

vested interest in the property on such transfer).

Q17. n 15.1.1322 A transfers his property to S, his son for life and then to ?S1, his

grandson, absolutely. ?S1 %as not born on 15.1.1322. !hen shall ?S1 a$;uire any interest

in the property and if so, %hat 9ind of interest"

Ans 17: +ection & of the T.P. Act specifies what is a vested interest. B-6plain what is vested

interest.)

If a transfer is made in favor of an unborn person for his benefit and thereby if the said

unborn person acquires a vested interest in the concerned property, the said unborn person acquires an interest in the said property only %hen he is born or comes into e6istence.

Q12. A transfer his property to 0 for life, then to her '06s( adopted son@ if she dies %ithout

adopting anybody, then to 4. id 4 a$;uire any interest in on the date of the transfer"

Ans 12: +ection " of the T.P. Act specifies what is a contingent interest. B-6plain what is

contingent interest.)


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In the instant case % Hs acquisition of interest in on the date of transfer was dependent

on one event, that is, 15s dying without adopting a son. Accordingly, % acquired only a

contingent interest in BIf the contingency happened, that is, if 1 died without leaving an

adopted son, only then % would have got the property).

Q13. , an estate is transferred to A for life and after A6s death to 0, if 0 shall then be

living@ but if he dies before A then to 4. o 0 and 4 a$;uire any 9ind of interest in the

estate" State the reason for your ans%er.

Ans 13: +ection " of the T.P. Act specifies what is contingent interest. . B-6plain

what is contingent interest.)

In the instant case the transfer to 1 is dependent on the fact of 15s surviving A. The

transfer in favour of % is dependent on 15s dying before A. nly in that event % can acquire an

interest in the concerned estate. Accordingly, both 1 and % acquire a contingent interest in

the property on the date of transfer. Bit becomes vested in case of 1 if he survives A and in case

of %, if 1 dies before A)

Q. A transfers his elhi farm house to 0, if 0 shall $onvey his odhpur farm house to 4.

oes 0 a$;uire any 9ind of interest in the elhi farm house"

Ans : B-6plain what is contingent interest).


25/96


voi

In the instant case 1 is acquisition of interest in ;elhi


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forbidden by law, or is of such nature that, if permitted, it would defeat the provision of any

law or is fraudulent or involves or implies in0ury to the person or property of another, or the

%ourts regards it as immoral or opposed to public policy.

In the instant case the fulfillment of the condition, on which the transfer was

dependent, was impossible and hence the transfer was void.

Q&. A transfers Rs.5,.= to 0 on $ondition that he shall murder 4. 4omment on the

legality of the transfer.

Ans &: B-6plain the provisions of +ec "# %onditional Transfer).

he condition of the transfer is illegal and forbidden by law and hence the transfer is

void.

Q5. A transfer Rs.#,5.= to 0, his nie$e, if 0 desserts her husband. 4omment on the

legality of the transfer.


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Ans 5: B-6plain the provisions of +ec "# %onditional Transfer).


28/96

Q+. A transfers his property to 0 for life and then to 4, if 4 gets married. 0 died in 1332

and 4 gets married in 5 and $laims the property. 4omment on the legality or other%ise

of his $laim.

Ans.+: +ec."C of the T.PAct provides that where, on a transfer of property, an interest therein

is to accrue to a specified person if a specified uncertain event shall happen, and no time ismentioned for the occurrence of the event, the interest fails, unless su$h events happens

before, or at the same time, as the immediate or precedent interest ceases to e6ist.

In the instant case the transfer to % will not take effect unless he is married either in

the lifetime of 1 or at the same time as 1 dies.

Q7. A transfer Rs.1, ,= to 0 on $ondition that 0 shall marry %ith the $onsent of 4

and . dies. 0 marries %ith the $onsent of 4 and . id 0 fulfill the $ondition" State the

reason for your ans%er.

Ans.7: +ection "9 of the T.P. Act provides that where the terms of a transfer of the property

impose a condition to be fulfilled before a person can take interest in the property, $ondition

shall be deemed to have been fulfilled if it has been s u bsta n tia l ly $ o m p li e d % i th .


29/96

In the instant case as - dies and 1 marries with the consent of the other two persons

namely % and ;, it shall be deemed to be a substantial compliance of the condition and 1

shall be deemed to have fulfilled the condition.

Q2. A transfer Rs.1, ,= to 0 on $ondition that 0 shall marry %ith the $onsent of 4 and . 0 marries %ithout the $onsent, but obtains the $onsent after the marriage. id

0 fulfill the $ondition" State the reason for your ans%er.

Ans 2: /aw requires substantial $omplian$e of a $ondition pre$edent for a transfer. 1ut in

the instant case 1 married without consent of %, ;, and -, but obtains their consent after

marriage. +o 1


30/96

did not comply with the condition of taking consent of C, D, and E before his

created with the condition superadded that it shall cease to exist in case aspecified uncertain event

subsequent ratification by them %ill not mean substantial $omplian$e of the condition by 1. In

that view 1 has not fulfilled the condition.

Q3. A transfers Rs.1,,= to 0 on $ondition that 0 shall e*e$ute a $ertain lease %ithin

three months after A6s death and if 0 should negle$t to do so, to 4. 0 dies in A6s lifetime.

oes the disposition in favour of 4 ta9e effe$t"

Ans 3: +ection "' of the T.P. Act provides that where, on a transfer of property an interest

therein is created in favour of one person, and by the same transaction an ulterior disposition of

the same interest is made in favour of another, if the prior disposition under the transfer shall

fail, the ulterior disposition shall take effect upon the failure of the prior disposition, although

the failure may not have occurred in the manner contemplated by the transferor.

In the instant case the ulterior disposition in favour of % was dependant on or

conditional on 15s e6ecuting a lease within three months after A5s death, and in case 1 should

neglect to do so, the transfer in favour of % shall take effect. 1 died during the lifetime of A. As

the period of disposition failed, the ulterior disposition in favour of % takes effect.


31/96

did not comply with the condition of taking consent of C, D, and E before his

created with the condition superadded that it shall cease to exist in case aspecified uncertain event

Q#. A transfers a farm to 0 %ith the $ondition that he shall go to ngland %ithin three

years from the date of transfer, failing %hi$h, the money shall go to 4. 0 did not go to

ngland %ithin three years form the date of transfer. oes the transfer in favour of 4 ta9e

effe$t" Spe$ify the reason for your ans%er.

Ans #: +ection C of the T.P. Act provides that on a transfer of property an interest therein

may be


32/96

n the instant case on transfer of the farm to !, a condition was

go to -ngland within three years from the date of the transfer and on failure of which condition

the interest of 1 in the transfer shall cease to have effect. As 1 did not go to -ngland within the

specified time, the interest in his favour ceases to take effect.

Q#1. A transfers Rs.5, ,= to 0 to be paid to him on his attaining ma


33/96

n the instant case on transfer of the farm to !, a condition was

4. 4omment %ith reason on the legality or other%ise of the transfer.

Ans #: +ection C: of the T.P. Act provides that if the ulterior disposition is not valid, the

prior disposition is not affe$ted by it.

In the instant case the ulterior disposition being illegal and invalid, 1 is entitled to the

farm during her life as if no condition had been inserted.


34/96

Q##. A transfers , a farm to 0 for her life, %ith a proviso that in $ase he $uts do%n a

$ertain %ood, the transfer shall $ease to have any effe$t. 0 $uts do%n the %ood. !hat

happens to the said transfer"

Ans ##: +ection C of the T.P. Act provides that a condition that transfer shall cease to have

effect in case specified uncertain events happens or does not happen.

In the instant case as 1 cuts down the wood, his interest in the farm ceases.

Q#&. A transfers , a farm to 0, %ith a $ondition superadded that if 0 shall not go the

ngland %ithin three years from the date of transfer, his interest in the farm shall $ease. 0

does not go the ngland %ithin the spe$ified time. !hat, if, happens to the said transfer"

Ans #&: >ere also on 15s failure to fulfill the condition super added to the transfer,

namely, 15s

inability to go to -ngland within three years from the date of transfer, his interest in the farm

ceases.


35/96

Q#5. A gifted , a house property to 0, his daughter, %ith a $ondition super added that if she

died $hildless, the property should revest in the grantor. 0 dies $hildless. !hat

happens to the said property" Spe$ify the reason for your ans%er.

Ans #5: In the instant case the transfer of the house property in favour of 1 contained a

condition that the property shall re#vest in the guarantor in the event of 15s dying childless. 1

having died childless the property transferred in favour of 1 shall re#vest in the grantor.

Q#+. A made a gift of her house to 0 %ith a $ondition that 0 should pay up the debt of A and

shall also maintain A as long as she lived. 0 failed to $omply the t%o $onditions. !hat

happens to the said property" Spe$ify the reason for your ans%er.


36/96

Ans #+: In this case also 1 having failed to fulfill the two conditions, namely, paying up the

debt of A and also maintaining A as long as she lived, the donor can be held to be entitled to

cancel the gift, and get the property back.

Q#7. 8he odhpur farm is the property of 4 and %orth Rs. 2,,=. A by a instrument

of gift professes to transfer the farm to 0, giving by the same instrument rupees one $rore

to 4. /f 4 ele$ts to retain the farm, %hat happens to the gift of rupees one $rore"

Ans #7: +ection C of the T.P. Act provides that when a person professes to transfer a property,

which he has no right to transfer, and as part of the same transa$tion $onfers any benefit on

the o%ner of the property, such o%ner must ele$t either to $ o n fi r m such transfer or to

dis s e n t from it M and in the latter case he shall relinquish the benefits so conferred, which shall

revert to the transferor as if it had not been disposed off.


37/96

It also provides where the transfer is gratuitous and the transferor has, before the

election, died and in all cases where the transfer is for consideration, the disappointed

transferee shall be paid the value of the property attempted to be transferred to him.

If % elects to retain the farm he forfeits the gift of rupees one crore.

Q#2. /n ;uestion no #7, %hat happens if A dies before ele$tion"

Ans #2: If A dies before the election by %, A5s representative must pay *s. !:,::,:::E# to 1from out of said rupees one crore.


38/96

Q#3. /n ;uestion no #+, %hat happens if 4 does not spe$ify anything in this regard %ithin

five years of the transfer"

Ans #3: +ection C of the T.P. Act provides that if % does not within one year after the date

of the transfer signify to the transferor BA) or his representatives his B1) intention to confirm

or to dissent from the transfer, the transferor or his representatives may, upon e6piration of that

period, require him to make his electionM and, if he does not comply with such requisition

within a reasonable time, he shall be deemed to have ele$ted to confirm the transfer.

Q&. A transfers the odhpur farm, the property of 4, to 0 and as a part of the same

transa$tion gives 4 a $oalmine. 4 did not spe$ify anything about ele$tion, but ta9es

possession of the mine and e*hausts it. !hat happens to the transfer" Spe$ify the reason

for your ans%er.

Ans &: +ection C of the T.P. Act provides that when an election is necessary, the person

whose duty is to elect shall specify his decision in this regard either e6pressly or by

implication.

In the instant case as % takes possession of the mine and e6hausts it, by implication he

has thereby conformed the transfer of the estate to 1.


39/96

Q&1. A obtained a property from 0 by %ay of e*$hange. At the time of e*$hange 0 had

only a half share, although he professed to transfer the %hole. 0 subse;uently pur$hased the

remaining half. !hat happens to the e*$hange deal" Spe$ify the reason for your ans%er.

Ans &1: +ection DC of the T.P. Act provides that where a person fraudulently or erroneously

represents that he is authori2ed to transfer such property for consideration, such transfer shall,

at the option of the transferee, operate on any interest which the transferor may acquire in

such property at any time during which the contract of transfer subsists.

In the instant case at the time of e6change 1 had only a half share, although he

professed to transfer the whole. There is nothing to indicate that by the time 1 purchased the

remaining half share, A had repudiated and impeached the contract. Accordingly, as per

provisions of the said section DC, as the contract of transfer subsisted A was entitled to it and

may require 1 to deliver the other half share subsequently acquired by 1.


40/96

Q&. A, 0, and 4 o%ned a $ompany in e;ual shares. 4 had been ill for sometime past and

not attending the offi$e of the $ompany. A and 0 leased the %hole property to , as if 4

had no interest at all. 4 died and gave his share to A and 0. !hat legal right $an invo9e

in su$h a situation"

Ans &: In the instant case as per provisions of section DC of the T.P. Act, the contract of

transfer having not been called in question and repudiated, ; was entitled to the share of %and may require A and 1 to convey the said share of % to him B;).

Q. A mortgages a half share in the family property to 0, in %hi$h he has only a third

share. Bater on, on the death of his father A be$ame o%ner of a half share. 8his fa$t had

been 9no%n to 0 before the transa$tion. /s 0 entitled to enfor$e his mortgage against the

half share" Spe$ify the reason for your ans%er.

Ans : The right conferred to a transferee under section DC of the T.P. Act is not available to a

transferee who had knowledge that at the time of transfer his transferor had not possessed the

right, title, interest and share in the property he was professing to transfer.

In the instant case 1 having known that at the time of transfer A had only one third

share, he B1) is not entitled to enforce a mortgage in respect of half share of the concerned

property, but to the e6tent of one third share, only.


41/96

Q.&& n the death of C, his house and other properties %ere inherited by his t%o sons A

and 0. !hile A had all through been out of /ndia, 0 %as in effe$tive $ontrol of the house

and representing the same to be his property, transferred the same to 4 in 133+ for

$onsideration. 4 having dis$overed that at the time of sale 0 had only a half share

repudiated the deal by instituting a suit against 0 for appropriate relief in 1332, by $alling in

;uestion the %hole transa$tion. /n 1333, A gifted his half share to 0. 4an 4 no%

re;uire 0 to transfer the other half share 'gifted by A to 0( in favour of 4"

Ans &&: The right conferred by section DC of the T.P. Act to a transferee is available only if the$ontra$t of transfer subsists.

In the instant case % having discovered that at the time of sale 1 had only half share in

the property, % repudiated the deal and instituted a suit against 1 impeaching the transaction,

and seeking appropriate relief in &&!. 1 acquired the other half share from A by gift in &&&,

only after the transaction has been called in question and impeached In that view it cannot be

said that when 1 acquired the other half share from A, the contract of transfer in question was

subsisting. Accordingly, in such circumstances % cannot require 1 to transfer the other half

share Bgifted by A to 1) in favor of %.


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Q&5. A representing that he had the authority to transfer an immovable property , %hi$h

he, in fa$t, did not have, and transferred the same by %ay of mortgage to one 0.

Subse;uently a a$;uired a transferable interest in , %hi$h he subse;uently thereto

transferred to another person 4, %ho had absolutely no noti$e of the previous transa$tion.

oes 4 get any legal prote$tion in respe$t of his transa$tion"

Ans &5: The right conferred by section DC of the T.P. Act on a transferee shall not impair the

right of the transferees in good faith for consideration without notice of the previous

transaction.

In the instant case % having no notice of the previous transaction, the transferee B%) in

good faith for consideration without notice gets the protection of law and the transfer in favor

of % shall remain unaffected and valid.

Q&+. A o%ns three properties namely ,D,E. )e mortgages them to 0. Bater on A

mortgages property to 4 free from en$umbran$e. !hat legal right 4 may invo9e in this

situation"

Ans &+: As per provisions of section ! of the T.P. Act, if the owner of two or more

properties mortgages them to one person and then mortgages one or more of the properties to

another person, the subsequent mortgagee is, in the absence of a contract to the contrary,

entitled to have the prior mortgage debt satisfied out of the property or properties not

mortgaged to him, so far as it covers the mortgage debt.


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In the instant case if properties , =, J are mortgaged to 1 and again property is

mortgaged to %, % may require and ask 1, under this rule of marshalling of securities, to

reali2e his mortgage due as far as possible from out of the property = and J and leave free

for reali2ation of his dues.

Q&7. A desires to transfer by %ay of gift his Ban$er $ar to his elder son 0, and his

4hevrolet $ar to his younger son 4. )o% $an A la%fully ma9e the transfer"

Ans &7: +ection "C of the T.P Act provides that for the purpose of making a gift of

immoveable property, the transfer must be effected by a registered instrument signed by or on

behalf of the donor, and attested by at least two witnesses.


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The section further provides that for the purpose of making a gift of movable

property, the transfer may be effected either by a registered instrument signed as aforesaid or

by delivery.

The section also provides that such delivery may be made in the same way as goods

sold may be delivered.

In the instant case both the cars being movable properties, the said cars may be gifted

by the father to his sons either by a registered instrument or by delivery.

Q&2. /n order to bear the medi$al treatment of his son, A has to sell his land at Fanpur by

%hi$h he $an fet$h a sum around Rs.75,= . )o% $an he la%fully ma9e the transfer of his

Fanpur land in favour of 0, %ho is %illing to pur$hase the same"

Ans &2: +ection D of the T.P. Act provides that sale of any tangible immovable property of

value of one hundred rupees and upwards can be made only by a registered instrument .

Accordingly, in the instant case A can sell his land at @anpur fetching a sum around *s.

',::: by e*e$ution and registration of a sale deed in favor of 1 Bsuch a document, unlike a

deed of mortgage or a deed of gift or a will, does not require attestation by witnesses).

Q&3. A intends to sell his >atna house to 0 at a $onsideration of Rs.2 Ba9hs and on

15.1. both A and 0 entered into an agreement to transfer the property by A to 0 in the


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follo%ing terms. n 15.1. 0 paid to A a sum of Rs.2 la9hs by %ay of earnest money

and as per terms of the agreement promised to pay Rs.5 la9hs first by the end of November

and so on and the last installment of Rs.5 la9hs by the end of Cebruary, #. n

su$h payment by 0, A shall e*e$ute and register an appropriate sale deed in favour of 0 by

15th

of -ar$h #. oes the agreement for sale dated 15.1. re;uire registration"

Spe$ify the reason for your ans%er

Ans &3: An agreement for sale is substantially different from a deed of sale. A deed of sale

involves transfer of right, title, interest in the property from the transferor Bseller) to the

transferee Bbuyer). +ection D of the T.P. Act provides that sale of a tangible immoveable

property of rupees hundred or upwards can be effected only by a registered instrument.


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The Indian *egistration Act &:!, provides for the law relating to registration of

documents. +ection ' of the *egistration Act provides that any non testamentary instrument

which purports or operates to $reate, de$lare, assign, limit or e*tinguish any right, title,

interest of the value of one hundred rupees and upwards, to or in any immovable property is

$ompulsorily registrable. +ection D' of the *egistration Act provides that in the absence of

registration of a document, which is required by law to be registered, the title in the propertydoes not pass from the transferor to the transferee.

In a deed of sale, by its e6ecution Bon receipt of consideration), the right, title, interest

in the property has to shift from transferor to the transferee and hence is also required to be

registered compulsorily under the provisions of section ' of the *egistration Act.

In an agreement to sale, unlike a sale deed, the parties to the document do not in fact

transfer any right, title, interest in the property from each other. They only agree to transfer

the property by appropriate do$ument 'Sale deed(. >ence in an agreement to sale, Bby

virtue of that document) no right, title, interest in any immovable property is either created, or

e6tinguished or transferred. Accordingly, a document professing to be an agreement to sale

is not re;uired to be registered .

Q5. /n Q&3 does 0 a$;uire any interest in the subatna house on 15.1." )o%

early and in %hat manner $an 0 a$;uire any interest in the said house"

Ans 5: In the conte6t of the facts 1, the intending purchaser does not acquire any interest in

the sub0ect Patna house on the date of e6ecution of the deed of agreement to sale, i.e. on .


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Ans 51: A sale deed involves creation of right, title, interest in favor of the transferee and

e6tinction of such right of the transferor and as such is re;uired to be $ompulsorily registered

in accordance with the provisions of section 'B)Bb) of the Indian *egistration Act &:!.

ence the sale deed dated .:C."::C is required under law to be registered.

Q5. /n %hat manner is a transa$tion of mortgage effe$ted"

Ans 5: +ection & of the T.P. Act provides that where the principal money secured is one

hundred rupees or upwards, a mortgage other than a mortgage by deposit of title#deeds can be


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effected only by a registered instrument signed by the mortgagor and attested by at least two

witnesses.

In other cases a mortgage may be effected either by a registered instrument signed and

attested as aforesaid, or Be6cept in the case of simple mortgage) by delivery of the property.

Q5#. !hat is a right of redemption" *plain %ith illustration. !hen is su$h right

available " !hen is su$h right e*tinguished"

Ans 5#: A right of redemption is an invaluable right belonging to the mortgagor to redeem

or get ba$9 his property mortgaged . +ection 9: of the T.P. Act provides that at any time after

the principal


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money has become due, the mortgagor has a right, on payment, of the mortgage money, to

require the mortgagee Ba) to deliver to the mortgagor the mortgaged deed and all do$uments

relating to the mortgaged property which are in possession of the mortgagee, Bb) where the

mortgagee is in possession of the mortgaged property to deliver possession thereof to the

mortgagor and Bc) at the cost of the mortgagor retransfer the mortgaged property to him and

Bwhere the mortgage has been effected by a registered instrument) to have registered ana$9no%ledgement in %riting that any right in derogation of his interest transferred to the

mortgagee has been e6tinguished. This right is called the right to redeem, and a suit to enforce

it, is called a suit for redemption.

When a mortgagor makes payment of the mortgage money inclusive of

interest on e6piration of the stipulated period of loan, a mortgagor can legitimately e6ercise his

right of redemption of the mortgaged property.

+uch right of redemption is not lost merely on default in making payment by the

mortgagor. The mortgagor in e6ercise of this right can redeem his property until such right has

not been e6tinguished by act of the parties or by a decree of a court.

Q5&. !hat is a right of fore$losure" !hen $an this right be e*er$ised"


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Ans. 5#: +ection 9' of the TP Act provides that in the absence of a contract to the contrary, the

mortgagee has, at any time after the mortgage money has be$ome due and before a de$ree

has been made for redemption of the mortgaged property, or the mortgaged money has been

paid, a right to obtain from the $ourt a decree that the mortgagor shall be absolutely debarred

of his right to redeem the property.

A suit to obtain a de$ree that a mortgagor shall be absolutely barred of his right to

redeem the mortgaged property is called a suit for foreclosure.


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A mortgagee, other than a mortgagee by condition of sale, is not entitled to bring a

suit for foreclosure.


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mortgagee 1, can be advised to go for a suit for sale, and not for a suit for foreclosure, as

contemplated by him.

Q5+. n 15.7.1 A sold his house property to 0 on $ondition that if A fails to pay to 0

Rs.5,5,= by 15.7.&, the sale shall be absolute@ but if A pays the amount to 0 as

aforesaid, the sale shall be$ome void and that 0 shall re$onvey to A.

n 15.7.# A defaulted in ma9ing payment as aforesaid and 0 $ontemplates to

sell to realiGe the due. Advise 0.


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Ans. 5+ The transaction in question is a clear case of mortgage by conditional sale. n

default of payment of the mortgage money on e6piration of the stipulated period by the

mortgagor, the sale, as per terms of the mortgage instrument, shall be$ome absolute.

Accordingly, law does not require any further sale of the mortgaged property. In such a

situation law provides that such a mortgagee may sue for getting a de$ree of fore$losure so

that the mortgagor shall be absolutely debarred of his rights to redeem the property. This is how

the mortgagee can perfect his title in the concerned property. +o 1 shall be advised to go for a

suit for foreclosure and not for a suit for sale.

Q57. /n a usufru$tuary mortgage on default of payment of mortgage money, $an the

mortgagee sue for sale or fore$losure of the mortgaged property"

Ans. 57. In a usufructuary mortgage, the mortgagor delivers possession, or binds himself to

deliver possession of the mortgaged property to the mortgagee, and authori2es him to

retain such possession until payment of the mortgaged money, and to receive the rents and

profits accruing from the property. In case of such a mortgage the basic idea is to ad0ust the

mortgaged money from out of the profits and usufructs of the property and the mortgaged

property may be retained until the usufructs and profits of the property e6hausts the amount

due. Accordingly, in such a case the mortgagee does not possess a legal right either to go for

foreclosure or for sale.


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Q52. /n a usufru$tuary mortgage, the mortgagor failed to give possession of the mortgaged

property to the mortgagee. 4an the mortgagee institute a suit against the mortgagor"

Ans. 52 In case of usufructuary mortgage the essential requirement for the mortgagor is to

deliver possession of the mortgaged property to the mortgagee, so much so, that the usufructs

and the profits arising out of the mortgaged property shall ad0ust against the amount payable by the mortgagor to the mortgagee. The possession and the time period for which the

possession is to be en0oyed by the mortgagee are very important in a usufructuary mortgage.

A delayed delivery of possession by the mortgagor to the mortgagee, in a usufructuary

mortgage, may not be adequate to ad0ust the whole claim of mortgaged money. Accordingly,


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if the mortgagor fails to deliver the mortgage property in terms of the mortgaged instrument

the mortgagee necessarily suffers and he has a right to bring a suit against the mortgagee, for

possession of the mortgaged property. BThis is neither a suit for foreclosure, nor a suit for

sale, which such a mortgagee cannot avail of.)

Q53. )o% is a mortgage by deposit of title deed effe$ted" oes su$h mortgage

re;uire registration"

Ans. 53. +ection ! Bf) of the T.P. Act provides that where a person in any of the towns of

%alcutta, 7adras, 1ombay or such other towns as notified in this behalf, delivers to a creditor

or his agent, do$uments of title to immovable property, %ith intent to $reate a se$urity

thereon the transaction is called a mortgage by deposit of title deeds. As per provision of law,

such a mortgage can be effected in the specified area only by deposit of the documents of title

of the concerned property with the creditors. +ince the transaction takes place by mere deposit

of title deeds, no do$umentation is re;uired and accordingly, the requirement of registration is

also held to be redundant.


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Q.+ A too9 a loan from 0, by mortgaging his house property by an instrument to that

effe$t e*e$uted by 0 and attested by 4. 4omment on the legality of the transa$tion.

Ans. +. +ection & of the T.P. Act provides that a mortgage can be effected only by a

registered instrument signed by the mortgagor and attested by at #east to itness. In the

instant case attestation was done by only one witness, namely %.


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Q. +1 *plain Hon$e a mortgage, al%ays a mortgageI. lu$idate A $log on the e;uity of

redemption.

Ans. +1. A mortgage is basically a transfer of interest in specific immovable property for the

purpose of securing a loan. In a transaction of outright sale, or gift of any property, the

transferor, after a lawfully valid transaction to that effect, divests himself or is striped of any

right title interest in the concerned property and the right title interest is created in favour of the

transferee. 1ut in a mortgage, the property is held as a security for repayment of loan. +o this is basically not a outright transfer of right title interest in the concerned property, and the

borrower or the mortgagor retains his right title interest and ownership in the property, but

sub0ect to certain rights and interests transferred in favour of the lender or the mortgagee. In

such a transaction, the mortgagor possesses a valuable right of getting ba$9 the property on

redemption, that is, on paying back the amount due to the mortgagee on e6piration of the

stipulated period.

As a borrower is usually supposed to be in need to borrow money, the lender cannot be

allowed to take advantage of his financial superiority and to force the borrower to agree to such

a term, which makes redemption of the property very difficult. /aw as well as equity support

the mortgagor by ignoring such a condition and assist the mortgagor in redeeming his

property. /aw does not permit any contrivance, which shall stand as an impediment in

mortgagor5s way of redemption of the mortgaged property. +uch condition is held to be a clog

to be on equity of redemption and is treated as illegal and void in law.


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+tretching this concept to support redemption of mortgaged property from the hands of

the mortgagee, law has always supported the concept that once a transaction is held to be a

mortgage, no contrivance in its terms and conditions shall be allowed to render the transaction

to be anything other than a mortgage. >ence, the concept emerged as Jon$e a mortgage,

al%ays a mortgage6. n failure of the mortgagor to pay back the mortgage money to the

mortgagee after e6piration of the stipulated period, the mortgagor, ispo fa"to, does not loose his

right of redemption forthwith. +uch right is not e6tinguished until the court passes a decree for

foreclosure, or the mortgaged property is actually being sold away following a decree for sale.


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Q.+ /f a mortgaged property in possession of the mortgagee re$eives a $$es s i on , %ho is

entitled to

su$h a $$es s io n on redemption of the mortgage"

Ans. +. +ection 9C of the T.P. Act provides that where a mortgaged property in possession of

the mortgagee, during continuance of the mortgage, received any accession, the mortgagor

upon redemption, shall, in the absence of a contract to the contrary, be entitled as against the

mortgagee to such accession.

Q.+# /f a mortgaged property in possession of the mortgagee, is i m p r o v e d , %ho shall be

entitled to the improvement on redemption"


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Ans. +#. +ection 9C#A B) of the T.P. Act provides that where the mortgaged property in

possession of the mortgagee, has during the continuance of the mortgage, being improved,

the mortgagor, upon redemption, shall, in the absence of a contract to the contrary,

be entitled to the improvement, and the mortgagor shall not be liable to pay the cost thereof.

Q. +&. /n Q. +#, if the improvement %as effe$ted at the $ost of the mortgagee and %as

ne$essary to preserve the property, %ho shall be entitled to su$h improvement in the

mortgaged property on redemption.


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Ans. +&. +ubsection " of section 9C#A B) of the T.P. Act provides that where any such

improvement was effected which was necessary to preserve the property from destruction,

or deterioration or was made in compliance of the lawful order of any public servant, the

%ort"a"or shall, in the absence of any contract of contrary, be liable to pay proper

cost thereof in addition to the mortgaged money.

Q. +5 A borro%s money from 0 for three years by mortgaging his t%o house properties

and D to 0 on 7... 8hereafter, A again borro%s money from 4 for three yea

Documents

305992562 Transfer of Property Law Notes India