Class – BA.LLB.

VII Sem Subject – Property Law

UNIT I: INTRODUCTION
Concept and meaning of property,
Various definitions given under Transfer of Property Act, 1872
Kinds of property-
movable and immovable property
tangible and intangible property
Intellectual property-copyright, patents and designs, trademarks

INTRODUCTION
By its very existence, society mandates interaction, exchange or transfer. A property, movable or
immovable, is transferred from one person to another under various situations and circumstances and for
different values. The transfer may be a gift, an inheritance or an asset acquired by paying full value. Also,
there are different laws/legislations governing the transfer of property, movable and immovable under
different circumstances.
When a movable property is transferred inter-vivos (i.e. between two living persons), Sales of
Goods Act, 1930 comes into play. When an immovable property is transferred from living person to
living person(s), the Transfer of Property Act, 1882 comes into play. In case, the property is transferred
from a dead person to a living person(s) i.e. by operation of law, the law applied will be the Law of
succession. Should a person die without leaving a will (intestate), the law of intestate succession is
applicable and in cases where a person dies leaving a will, the law of testamentary succession is
applicable.
Transfer of property Act, 1882 is one of the most important branches of the law of property. It was
enacted in the year 1882 and contains 137 sections and is divided into 8 chapters. The Act came into
force with effect from 1st July, 1882. It mainly deals with the transfer of immovable property and also
movable property between two living persons i.e. transfer inter vivos. The Act does not apply to transfer
by operation of law (E.g.: Succession, Court Sales, insolvency etc.)

SCHEME OF THE ACT

The Act can be broadly studied into three main groups.

PROVISIONS SECTIONS
Preliminary aspects relating to transfer of property Sections 1 to 4
Chapter-I
General principles of transfer of property Sections 5 to 53-A
Chapter-II
Specific transfer (Eg: Sale, Mortgage, Lease, Exchange, Sections 54 to
Gift and actionable claim) 137 Chapters III to
VIII

Transfer of Property: Transfer of Property may be explained under the following categories:
1. Transfer of movable and immovable property.
2. Transfer inter vivos i.e. between two living persons and transfer from one dead persons to one
or more living persons ; and
3. Voluntary transfer and involuntary transfers.
The Transfer of Property Act mainly deals with the transfer of immovable property. As stated above,
some of the Sections also deal with movable property.
 Sections 5 to 37 of Chapter-II are applicable where the property is immovable or movable,
 Chapters III to V containing Sections 54 to 117 deal with immovable properties only.
 Chapters VI to VIII containing Sections 118 to 137 are applicable to both immovable and
movable properties.
With regard to the second category mentioned above, the Act deals with first part i.e. transfer inter vivos,
while the transfers from dead person to living person/persons are governed by the Indian Succession
Act (Law of Inheritance). With regard to the third category, the Act deals with voluntary transfers, while
the Insolvency Act and Civil Procedure Code deal with the involuntary transfers.

BACKGROUND
In India, the personal laws governed the transfer of property assisted by orders of Courts under
Civil Procedure Code before the Transfer of Property Act, 1882 came into existence. Transfer of movable
goods was regulated to an extent by the Indian Contract Act, 1872. For transfer of immovable property,
the Anglo-Indian courts often resorted to principles of Justice, Equity and Good Conscience as it prevailed
in England at the time. This rarely helped owing to the vast differences in customs and society of the two
countries. Of course the rapidly growing commerce and infrastructure in the late nineteenth century lead
to more conflicts even in business. Thus, an immediate need was felt for a clear and pragmatic law
regarding property and transfers suited to India and its peculiar problems as well as to take care of the
potential economic problems. The task of drafting such legislation fell upon the First Law Commission
and was later referred to the Second Law Commission. A Bill, finally presented to the Legislative Council,
became a law on the 17th of February 1882 and came into force from 1st July of the same year.
 OBJECTIVES
The Transfer of Property Act, 1882 (hereinafter referred to as the ‘TP Act, 1882’) was intended to define
and amend the existing laws and not to introduce any new principle. It applies only to voluntary
transfers. The following may be enumerated as the objectives of the Act:
a) As per the preamble of the Act, the TP Act, 1882 is to amend or regulate the law relating to
transfer of property by the acts of the parties.
b) The Act provides a clear, systematic and uniform law for the transfer of immovable property.
c) The Act completes the Code of Contract since it is an enacted law for transfers that take place in
furtherance of a contract.
d) With provision for inter-vivos transfers, the TP Act, 1882 provides a law parallel to the existing
laws of testamentary and intestate transfers.
e) The Act is not exhaustive and provides scope to apply the principles of Justice, Equity and Good
Conscience if a particular case is not governed by any provision of law.

SCOPE
Since the T P Act, 1882 is not a complete code of transfer of property; we can say its scope is limited. The
Act does not apply to all the transfers taking place in India.
a) Limitation on Transfer: The Act applies to transfer by the act of parties and not by application of
law. Thus, its operations are limited to transfers by act of parties only except in a few cases saved
by Section 2 of the Act.
b) Not Exhaustive: There are various kinds of property and various modes of transfer of property.
The Act does not incorporate rules for all modes of transfer in existence. The Act does not even
claim to be a complete code as apparent from omission of the term ‘consolidate’ from its
Preamble.
c) Transfer of Immovable Property: The Act mainly deals with transfer of immovable properties
only.
d) Exemption of Muslim Law: In case of a conflict between the TP Act, 1882 and rules of Muslim
Law, the latter will prevail. Section 2 of the Act does not affect inconsistent rules of Muslim Law.
Thus, a settlement made in perpetuity for the benefit of descendants of the settler is a valid wakf
(charitable gift) wherein there is an ultimate gift in favour of a charity.
e) Exemption of Rights and Incidents: Certain incidents of a contract or the essential nature of
property are exemption from the operation of the Act by Section 2. The Act also saves certain
property rights. For example, the right to partition of immovable property is an incident of
property but this right is not affected by the provisions of the TP Act, 1882.

TERRITORIAL LIMITATION

A territorial law is a lex loci i.e. law of a particular place and applies to all persons inhabiting the territory
irrespective of their personal status. It is different from personal law that generally follows the person.
The TP Act, 1882 is a territorial law and its operation extends to the whole of India except for Punjab. It
was not enforced throughout the country in one go. It was made applicable to different parts of the
country on different occasions. When the Act was first enforced (1 st July 1882), it extended to the whole of
‘British India’ except Bombay and Punjab. The Act was extended to the territories of Bombay from
1st January 1893. In Punjab, the transfer of immovable property by the act of parties is governed by the
rules of Justice, Equity and Good Conscience.
Transfer of property is a ‘Concurrent Subject’ (Entry 6 of List III (Concurrent List) of Seventh
Schedule to Constitution). Both Central and State Government can take legislative action in respect of
transfer of property except that relating to agricultural land which is a state subject.
 TRANSFER OF PROPERTY

Definition:
1) According to Section 5 of the Act, ‘Transfer of Property’ means an act by which a living person
conveys property, in present or future, to one or more living persons, or to himself or to himself and one
or more other living persons.
2) The property may be movable or immovable, present or future and the transfer can be made orally,
unless transfer in writing is specifically required under any law.
3) Any person competent to contract and entitled to transferable property, or authorized to dispose of
transferable property on his own, can transfer such property whether in part or whole, absolutely or
conditionally.
4) The word “Property” has not been defined in TP Act when we examine the Act, we realize that the word
has been used in the widest and most generic sense. Property denotes every kind of interest or right that
has an economic content.

TP Act primarily governs the transfer of immovable properties. Movable properties are governed by Sale of
Goods Act, 1930. Hence, there is a need to understand what is movable and what is immovable property
and the ways to distinguish them.
Property broadly classified into–
1. Movable property
2. Immovable property

The Term "Immovable Property" occurs in various Central Acts. However none of those Acts conclusively
define this term. The most important act which deals with immovable property is the Transfer of Property
Act (T.P.Act). Even in the TP Act this term is defined in exclusive terminology. TP Act does not actually
define immovable property. The definition fails to indicate as to what is “included” as immovable property.

 According to Section 3 Para 2 of TP Act, "Immovable Property" does not include standing timber,
growing crops or grass. Thus, the term is defined in the Act by excluding certain things. The
expression ‘standing timber’ means trees fit for use for building and repairing houses. Growing crops
includes all vegetable growths, which have no existence apart from their produce such as pan leaves,
sugarcane etc. Similarly, grass can only be used as fodder and is a movable property.

 As per Section 3(26) of the General Clauses Act 1897, "immovable property" "shall include land,
benefits to arise out of land and things attached to the earth, or permanently fastened to
anything attached to the earth". This definition of immovable property has reference only to
the physical objects and does not furnish an exhaustive test of what is, and what is not,
immovable property; The term immovable property includes three tings namely-
 Land;
 Benefits arising out of land; and
 Things attached to earth.
Here, land does not include only the upper surface of the earth but is extensive enough to cover things
below it, for instance minerals, wells, tube-wells, rivers, ponds etc. Further, benefits arising out of land
means other ancillary rights well connected to land such as right to receive future rent, revenue form
agriculture, right to collect lac, leaves or other things from forest trees etc.

 Section 2(6) of The Registration Act, 1908 defines "Immovable Property" as under:
o "Immovable Property includes land, building, hereditary allowances, rights to ways,
lights, ferries, fisheries or any other benefit to arise out of land, and things attached to
the earth or permanently fastened to anything which is attached to the earth but not
standing timber, growing crops nor grass".
The definition of the term "Immovable Property" under the Registration Act, 1908 is comprehensive. The
above definition implies that building is included in the definition of immovable property.

Thus, in essence land includes–

1. Earth’s surface
2. Earth’s surface covered by waterColumn of space above the surface: Objects placed by human
agency with the intention of permanent annexation (Eg: buildings, fences, walls)
3. Ground beneath the surface: In its natural state (Eg: Minerals)

Relevant Cases:
 Ananda Behera v. State of Orissa (AIR 1956 SC 17) – Right to catch fish from Chilka lake over a
number of years, was held to be an equivalent of a benefit to arise out of land
 Shanta Bai v. State of Bombay (AIR 1959 SC 532) – Right to enter land, cut and carry away wood
over a period of twelve years was held to be immovable property. The right to collect lac from trees
is also immovable property.

"attached to the earth" means-

(a) rooted in the earth, as in the case of trees and shrubs (subject to the exception of standing timber,
growing crops and grass);
(b) imbedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so embedded for the permanent beneficial enjoyment of that to which it is
attached (eg: doors, windows, ceiling fans etc. But ornamental and decorative fittings festivities,
electric appliances are not considered in this definition since these are not permanent but only
transitory and occasional and secondly they are not in any sense beneficial to the wall or doors.
Therefore, these are not immovable property)

TEST How to determine whether any movable property attached to the earth has become immovable
property?There are two well established tests in English law–
1. Degree/mode of annexation: This was the rule laid down in Holland v. Hoggson. If the movable
property is resting on the land merely on its own weight, the presumption is that it is movable
property, unless contrary is proved. Eg- A brick resting on the land. If it is fixed to the land even
slightly or it is caused to go deeper in the earth by external agency, then it is deemed to the
immovable property, unless contrary is proved. Eg- A machine fixed to the land by using screws
(like in industries)
2. Object/purpose of annexation: Whether the purpose was to enjoy the chattel (movable property)?
Some crushed stones are deposited on a land, so that it can be transported elsewhere in a few days.
Here, the intention/object is not to keep the stones permanently. They are to be enjoyed
independently of the land on which they are deposited. Or to permanently benefit the immovable
property? Some blocks of stones are placed one above the other without using cement, but in a
manner that it stays strong and acts as a wall and prevents cattles entering the land. Here, the
intention is to make a wall out of the stones. It becomes a part of the property. It benefits the
property by protecting to the property.

Some leading cases-

Shanta Bai v. State of Bombay (AIR 1958 SC 532)
State of Orissa v. Titaghur Paper Mills Co. Ltd. (AIR 1985 SC 1291)
Ananda Behera v. State of Orissa
Firm Chhotabai Jethabai Patel & Co. v. State of MP

In a nut-shell, the negative definition of TP Act and the positive definition of the General Clauses Act if
taken together gives the correct idea of immovable property.
ATTESTED
As defined under Sec. 3 of TP Act, “in relation to an instrument, attested means and shall be
deemed always to have meant attested by two or more witnesses each of whom has seen the
executant sign or affix his mark to the instrument, or has seen some other person sign the
instrument in the presence and by the direction of the executant, or has received from the executant
a personal acknowledgement of his signature or mark, or of the signature of such other person, and
each of whom has signed the instrument in the presence of the executant; but it shall not be
necessary that more than one of such witnesses shall have been present at the same time, and no
particular form of attestation shall be necessary.”
The expression “attestation” means “to sign and witness the fact of execution of a document by
the executants.” “Attest” means to testify a fact, to bear witness to a fact. Attestation in relation to a
document signifies the fact of authentication of the signature of the executants of that document by the
attestator by putting down his own signature on the document in testimony of the fact of its execution.
Attestation is an important formality in execution of transfer. All transfers do not require
attestation. Attestation is valid and complete, when two or more witnesses sign the instrument. The
object of attestation is to ensure that there is no fraud or vitiating circumstances in the execution of a
document.

NOTICE
The last paragraph of the Sec 3 states under what circumstances a person is said to have notice of a fact.
Notice literally means knowledge as to existence of certain facts. He may himself have actual notice or he
may have constructive notice which may be imputed to him when information of the fact has been
obtained by his agent in the course of business transacted by the agent for him.
(a) Express or actual notice: An express or actual notice of fact is a notice whereby a person acquires
actual knowledge of the fact. It must be definite information given in the course of negotiations by a
person interested in the property.
(b) Constructive Notice: It is a notice which treats a person who ought to have known a fact, as if he
actually knows it. It is a presumed or an implied notice. In other words, a person has constructive notice
of all facts of which he would have acquired actual notice had he made those enquiries which he ought
reasonably to have made. The legal presumption of constructive notice applies in following cases:
 Wilful abstention from an enquiry or search- If a person being aware of the fact did not make an
enquiry which he ought to have made, then, he is deemed to have notice of that fact.
 Gross negligence
 Registration as notice- Constructive notices is applicable in cases where documents are required
to be registered. One can identify the title of a person in property by observing the documents.
Registration of a document under the Registration Act is a constructive notice of its contents as it
is a public document accessible to the public at large on certain compliances. Where a document
need not be compulsorily registered, its registration does not amount to constructive notice.
 Actual possession as notice- Any person acquiring any immovable property shall be deemed to
have notice of title if any, of any person who is in actual possession thereof.
 Notice to agent- The general rule is that notice to the agent is the notice to the principal on the
basis of the vicarious liability. This rule is subject to certain limitations like the notice should have
been received by the agent-
 During the tenure of the agency;
 In his capacity as an agent;
 In the course of the agency business; and
 In the manner material to the agency business.
Exception- Fraudulent concealment of fact by agent does not amount to notice to the principal.
 State of property amounts to notice- Sometimes the situation and conditions of a property
speaks louder than the man. This is based on the legal maxim “res ipsa loquitor” that is things
speaks for itself.
 UNIT II: LAW RELATING TO TRANSFER OF PROPERTY
UNDER TRANSFER OF PROPERTY ACT, 1882

 General principles of transfer of property whether movable or immoveable (Sec. 5 to 37)

 What may be transferred
 Competence, operation, conditions restraining alienation and repugnant to interest
 Other Conditions– determinable on insolvency transfer to unborn person, Rule against
perpetuity, accumulation, transfer for benefit of public in perpetuity.
 Conditional transfers – Condition precedent and subsequent, Vested and Continget interest
 Void condition,
 Doctrine of Election (Sec. 35)
 Doctrine of apportionment (Sec. 36,37)

The Transfer of Property Act, 1882 mainly deals with transfer of immovable property between two living
persons, i.e. transfer inter vivos. The property which is dealt by and large under this. Act is
immovable property. It doesn’t mean that movable property is not a subject matter of this Act. The
general principles of Transfer of property Act i.e., Sections 5 to 37 of the Act is equally applicable for both
movable and immovable properties.
How transfers of property can become valid?
 Transfer should be between living persons. However, under Section 13 of this Act, property can
be transferred to an unborn person.
 Both the parties i.e. transferor and transferee should be competent to contract.
 The property must be conveyed. The property must be in existence and rights may be transferred
either in present or in future.
 The object and consideration must be lawful.
 If the Act requires any particular mode, then the transfer must be made in that manner. (For
example- Writing, attestation, stamping, registration etc.)
In a nutshell, the Act covers the following heads:
1. Transfer of property: Definition (Section 5).
2. What property may be transferred and what property cannot be transferred (Section 6).
3. Competency of persons to transfer a property and incidents of a valid transfer (Section 7 & 8);
and
4. Mode of transfer generally: Oral Transfers (Section 9) except the conditions where TP Act
requires a particular mode i.e. writing, attestation, registration etc.
TRANSFER OF PROPERTY

The expression Transfer of Property means 'passing of a right in the property from one person to
another. In some cases, there may be passing of entire bundle of rights from transferor to transferee, but
in some other cases, there may be transfer of only some of such rights i.e. partial interest. In other words,
the transfer of property under the T.P. Act may be the transfer of absolute interest in the property (E.g.
Sale, Gift etc.) or the transfer of limited interest in the property (E.g. Mortgage, Lese etc.)
Transfer of Property means an act by which one living person conveys property in present or in
future to-
(a) one or more other living persons : or
(b) to himself; or
(c) to himself and one or more other living persons and to transfer property to perform such act.

In this section 'living persons' includes a company or association or body of individuals, whether
incorporated or not, but nothing herein contained shall affect any law for the time being in force relating
to transfer of property to or by companies, associations or bodies of individuals.
The second paragraph has been added by the (Amending) Act of 1929, in order to make it clear
that the words 'living person' embraced Companies and Societies, and that the general provisions of this
Act as to transfers do not affect the special provisions of the Indian Companies Act.
 By observing the above definition, we many analyse it as follows-
 Transfer of Property is an act. Every act leads to some consequence. Here transfer also leads to a
consequence i.e. conveyance of rights in the property from one person to another.
 The consequence of the act may be in present or in future.
 Although the transfer of Property may be in present or in future but the property should be in
existence at the date of transfer and so there is no transfer of future property.
 The conveyance must be from one living to another living. So it is not applicable to conveyance
from one dead to another living person (Except Secs. 13 to 16 and 22).

WHETHER THE FOLLOWING ARE TRANSFER OR NOT ACCORDING TO THE TP

ACT?
Partition: Partition is not a transfer because there is no new right obtained by one co-sharer on partition.
Since, it does not devolve any new right on the co-sharer except separation of a right, which is already
vested in him. It is an adjustment in the existing right and does not create any new right and so it is not a
transfer according to TP Act.

Charge: Charge on property is not a transfer within the meaning of Section 5 of the TP Act, as there is no
transfer of interest made in favour of charge holder except the right to payment out of the property
subject to charge.
Relinquishment: A relinquishment by a reversioner of his reversionary interest does not amount to
transfer because it connotes the extinction of right and there is nothing left to transfer.
Easement: Creation of an easement is not a transfer.
Surrender of lease: Surrender of a lease is not a transfer. In surrender, lessees interest falls into the
lessor's greater interest and so no new right is transferred in this process.

WHAT PROPERTY MAY BE TRANSFERRED & WHAT PROPERTY CANNOT BE

TRANSFERRED
(Section 6)

Section 6 of the Transfer of property Act lays down that property of any kind may be transferred except as
provided under Law for the time being in force. The words 'property of any kind' indicates that transferability is
the general rule and the right to property includes the right to transfer the property to another person.
Property of any kind excludes from its purview the future property. A transfer of future property can
only operate as a contract, which may be specifically performed when the property comes into existence.
Section 6 Clause (a) to (i) of the TP Act lay down that “Property of any kind may transfer, except as
otherwise provided by this Act or by any other law for the time being in force
(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a
legacy on the death of a 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
except 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 enjoyment to the owner personally cannot be
transferred by him.
(e) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be
transferred.
(f) A mere right to sue cannot be transferred.
(g) A public office cannot be transferred, nor can the salary of a public officer, whether before or
after it has become payable.
(h) Stipends allowed to military, naval , air force and civil pensioners of the Government and
political pensions cannot be transferred.
 (i) No transfer can be made in so far as it is opposed to the nature of the interest affected thereby;
or for an unlawful object or consideration within the meaning of Section 23 of the Indian
Contract Act, 1872, to a person legally disqualified to be transferee.
(j) Nothing in this section shall be deemed to authorize a tenant having an untransferable right of
occupancy, the farmer of an estate in respect of which default has been made in paying revenue,
or the lessee of an estate is under the management of a Court of Ward, to assign his interest as
such tenant, farmer or lessee.”

What property may be transferred?

Right to property includes the right to transfer property or interest, absolute or limited in the
property. Property of any kind may be transferred except those enshrined in Clause (a) to (j) of Section 6
of the Transfer of Property Act and any other law for the time being in force may declare such property as
not transferable.
What property cannot be transferred?
Section 6 of the Transfer of Property Act provides for the general rules that all kinds of property is
alienable/transferable. However, certain exceptions are provided under Clauses (a) to (i).
1. Spes Successionis [Section 6(a)]: The expression 'Spes Successionis' means mere chance or
hope of succession. The right of a person to inherit to another in future is a mere chance, which
may or may not happen and hence, it cannot be transferred. In other words, mere hope to get the
property of another cannot be transferred. In India, spes successionis is a nullity (null and void).

2. Mere right of re-entry: Sec 6(b) provides that a mere right of re-entry for breach of a condition
subsequent cannot be transferred to other except the owner of the property affected thereby. This
right of re-entry is usually inserted in leases empowering the lessor to re-enter upon the demised
premises if the rent is in arrear for a certain period or if there is a breach of covenants in the lease.
Example: A grants a lease of a plot of land to B with a condition that if B shall build upon it, he
would re-enter. A transfers to C his right of re-centering in case of breach of the covenant not to
build. The transfer is invalid for two reasons, one, the right is a personal license and not
transferable, second, the transferee could only use it for the purposes of a suit to enforce the right
without acquiring any right in the property. But if A transfers the whole of his interest in the
property, i.e., ownership along with the right of re-entry to C, the transfer shall be valid being a
legal incident of the property.
3. Easements: An easement is a right to use, or restrict the use of land of another in some way.
Easement means right over the property of another. Examples of easements are rights of way,
rights of light and rights of water. An easement involves the existence of a dominant heritage and
a servient heritage. That is, there must be two parcels of land, one (the dominant heritage) to
which the benefit of the easement attaches, and another (the servient heritage) which bears the
burden of the easement. But technically an easement cannot exist in gross (independently of the
ownership of land but only as appurtenant) attached to a dominant heritage. It follows therefore
that an easement cannot be transferred without the property which has the benefit of it i.e. the
dominant heritage.
Example: A, the owner of a house X, has a right of way over an adjoining plot of land belonging to
B. A transfers his right of way to C. The transfer is a transfer of easement and therefore invalid.
But if A transfers the house itself, the easement passes on to C on such transfer.
4. Personally restricted interests: This clause states, a person cannot transfer an interest restricted
in its enjoyment of him. A transfer of such interest would defeat the object of the restriction. As an
example, if a house is lent to a man for his personal use, he cannot transfer his right of enjoyment
to another. Under this clause, the following kinds of interest have been held not to be
transferable-
(a) A religious office
(b) Emoluments attached to priestly office. Where, however, the right to receive offerings
made at a temple is independent of an obligation to perform services involving a
qualification of a personal nature, the right is transferable.
 (c) A right of pre-emption
(d) Service tenures
5. Right to future maintenance [Sec.6 (dd)]: A right to future maintenance is solely for the personal
benefit of the person to whom it is granted and, therefore, cannot be transferred. Before the
insertion of this Sub-section in 1929, there was a conflict of opinion whether the right to future
maintenance when it was fixed by a decree was transferable or not. It was held in Madras that it
was, and in Calcutta that it was not. The amendment supersedes the Madras decision. The result is
that the assignment of a decree for maintenance is valid if the maintenance has already become
due but as to future maintenance it is not valid. Arrears of maintenance, therefore, can be
assigned.
6. Mere right to sue: A mere right to sue, as for instance, in respect of damages for breach of
contract, or for tort, cannot be transferred. The object of the prohibition is to prevent gambling in
litigation. Moreover, a right to sue is personal to the party aggrieved. For instance, past mesne
profits, damages for a breach of a contract, for suing an agent for accounts and for pre-emption
are all mere right to sue and thus cannot be transferred.
Example: A contracts to buy goods from B. On due date A fails to take delivery and B sells the
goods in the market at a loss of Rs.10000. B transfers the right to recover the damages to C. The
transfer is invalid.

7. Public office: According this section, a public office cannot be transferred. The prohibition is
based on the grounds of public policy. A public office is held for qualities personal to the
incumbent, and obviously it would be against public interest to permit alienations of public
officer.
The salary of a public officer is not transferable, although, under Section 60, C.P.C, it is attachable
with certain limits. As stated by Page Wood, V. C. in Corporation of Liverpool v. Wright:
"Where the law assigns fees to an office, it is for the purpose of upholding the dignity and
performing properly the duties of that office, and the policy of the law will not allow the officer to
bargain away those fees to the appointer or anyone else."
If the office is not public, it would be transferable even though the discharge of its duties
should be indirectly beneficial to the public.
8. Pensions: Under this clause, stipends allowed to military and civil pensioners of Government and
political pensions cannot be transferred. The term 'pension' means a periodical allowance or
stipend granted not in respect of any right of office but on account of past services of particular
merits or as compensation to dethroned princes, their families and dependants. Accordingly, a
reward is not a pension. Section 60 of the Civil Procedure Code also exempts a pension from
attachment in execution of a decree against the pension holder.
9. Nature of interest: This sub-section forbids transfer (1) in so far as such transfer would be
opposed to the interests affected thereby, (2) for unlawful object or consideration, and (3) to a
person legally disqualified to be a transferee.
Section 136 of the Transfer of property Act forbids a Judge, a legal practioner or an officer
connected with any Court of Justice from purchasing an actionable claim.
10. Untransferable interest: The last sub-section of Section 6 is identical with the proviso in Sub-
section (i) of Section 108 of this Act and was inserted by the Amendment Act, 1885 to obviate any
doubt which might arise owing to the fact that section does not primarily apply to leases for
agricultural purposes.
In general lease-holds are transferable but this sub-section makes an exception of this
rule and declares certain interest immutable. Thus, under this rule, a tenant having an
untransferable right of occupancy cannot alienate or assign his interests in the occupancy.
Similarly, a farmer of an estate, in respect of which default has been made in paying revenue,
cannot assign his interest in the holding. The same remarks apply to a lessee of an estate under
 the management of a Court of Wards.

PERSONS COMPETENT TO TRANSFER PROPERTY

Section 7 of the TP Act lays down as to who are competent to transfer. This section is silent about the
persons in favour of whom transfer can be made. Section 7 says that every person –
(a) competent to contract under section 11 of the Indian Contract Act and
(b) entitled to transferable property, or
(c) authorized to dispose of transferable property which is not his own,
is competent to transfer such property, either wholly or partly, and either absolutely or
conditionally.
According to Section 11 of the Indian Contract Act, 1872, a person is competent to contract if he is –of the age
of majority, of sound mind and is not otherwise disqualified from contracting by any law. A person who is
competent to contract is competent to transfer a property.
So, minority and insanity are legal inabilities. That apart, a judgment debtor, whose property is sold in
execution of a decree, is legally disqualified to transfer the property sold in execution of a decree.
Similarly, where a person’s properties are under management of Court of Wards, he is legally disqualified
to transfer any interest in his property or create a charge over it.
Section 7 meant to say that the Karta of a Hindu Joint family, a guardian, an executor or
administrator, a trustee, a person holding power of attorney to transfer and so on are the persons
authorized to dispose of transferable property which is not his own. But there is nothing in the TP Act to
nullify a transfer in favour of a minor or a lunatic. A minor or a lunatic can be a mortgagee provided there
is no covenant for him to perform. A minor or a lunatic may be a purchaser provided the sale does not
impose any obligation upon him. Or a minor or a lunatic may be done of a gift provided the gift is not
onerous.
Section 6 of the TP Act lays down three types of persons who can not assign their interest. Thus,
 A tenant having an untransferable right of occupancy cannot assign his interest as such tenant.
 The farmer of an estate in respect of which default has been made in paying revenue, cannot
assign his interest as such farmer.
 The lessee of an estate under the management of a Court of Wards can not assign his interest
as such lessee.
ESSENTIALS OF A VALID TRANSFER OF PROPERTY
Following are the eight essentials of a valid transfer of property:
1. The transfer must be between two or more living persons. So the transferor and transferee can
not be exactly identical.
2. The property transferred must be transferable.
3. The transfer must not be according to Section 6-
 opposed to the nature of the interest affected thereby, or
 for an unlawful object or consideration, or
 to a person legally disqualified to be a transferee.
4. The transferor must be according to Section 7-
 competent to tranafer ,
 entitled to the transferable property and
 authorised to dispose of transferable property which is not his own.
5. Under Section 9, the transfer must be made in the mode prescribed by the Act. All necessary
formalities like attestation, registration etc. must be complied with.
6. According to Section 13, if, on a transfer, an interest is created in favour of an unborn person,
subject to a prior interest created by the same transfer, it must exhaust the whole of the
remaining interest of the transferor.
7. Under Section 14 the transfer must not offend the rule against perpetuity.
8. According to Section 25, when the transfer is conditional, the condition must be not be illegal,
impossible, immoral or opposed to the public policy.

CONDITION RESTRAINING ALIENATION AND CONDITION RESTRAINING ENJOYMENT

CONDITION RESTRAINING ALIENATION IS VOID (Sec. 10)

Transfer of property from one person to another includes the right to own, right to enjoy and the
right to dispose/alienate without any restraint or restriction/condition. During transfer beneficial
ownership is passed from one to the other. Power of alienation is a legal incident of property.
Ownership can not be thought of without the right to transfer. So any restriction on such right of
alienation is repugnant to and not allowed by the law. If the transferor imposes any condition or clog
on the transferee not to transfer further, such condition is called “Rule against alienability” and is void
under Sec. 10 of TP Act and the transferee can simply deny or ignore such condition. Simply put, as per
Sec. 10, if the condition or limitation absolutely restrains the transferee from alienating his interest in
the property, the condition or limitation is void but the transfer remains valid as if there was no
condition at all.
Restraint on alienation may be of two types-
 absolute restraint and
 partial restraint.
When a property is transferred absolutely restraining the transferee or any person claiming under him
from parting with or disposing of his interest to the property, the condition is void except in certain
circumstances i.e. such absolute restraint is permissible with respect to a lease, where such a condition
is for the benefit of the lessor or those claiming under him and secondly a transfer to, or for the
benefit of, a woman not being a Hindu, Muhammadan or Buddhist, which provides that she would not
have the power, during her marriage, to transfer or charge the same or her beneficial interest therein.
But when the restraint is partial, the condition is not void.

RESTRICTION RESTRAINING ENJOYMENT OR

REPUGNANT TO THE INTEREST CREATED BY TRANSFER IS VOID (Sec. 11)

The right of free enjoyment of property is an incident of absolute ownership. When by way of
transfer an absolute ownership is created in favour of the purchaser, restrictions on free enjoyment of
the property are repugnant to the interest created thereby. In the eye of law those restrictions on free
enjoyment are therefore void.

The above principle has been embodied in section 11 of the Transfer of property Act. Sec. 11 of
the TP Act lays down that where on a transfer of property, an interest is created therein absolutely in
favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed
by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there
were no such direction. Therefore, the transfer should create an absolute interest in the property. If
the transfer does not create any absolute interest in the property in favour of the transferee, Sec.
11 does not come to play. If absolute interest is created, the transfer shall remain valid as if there is no
such direction.

For example, A assigns a life-interest in a farm to B for her maintenance. The deed contains a
direction that B shall not cut down the trees. Here the direction is valid as there is no absolute transfer
in favour of B. But if A makes an absolute gift of a house to B, with a direction that B shall reside in it,
here the gift being absolute, the direction is void and B may or may not live in the house.
There is an exception to this general rule. The exception is based on the principle emerged in the
decision of the leading case Tulk v. Moxhay. According to Sec. 11 of the TP Act, where the transferor
gives a direction to the transferee to the effect that for the beneficial enjoyment by the transferor of
another property, the transferee is to enjoy the transferred property in a particular manner, such a
direction is valid and enforceable.
For example, if A makes an absolute gift of a house to B, and directs that B shall not raise it higher
so as to obstruct the passage of light and air to the A’s adjoining house, the restraint on enjoyment will
be valid .
TRANSFER FOR THE BENEFIT OF UNBORN PERSON (Sec. 13 & 14)

The Transfer of Property Act, 1882 deals mainly with the transfer of immovable properties between
two living persons i.e. transfers inter vivos. According to Sec. 5 of the TP Act, the general rule is that
property can be transferred in favour of living person. Therefore, a transfer can not be made directly
in favour of an unborn person. Here, the term “living person” includes juristic person such as company,
registered firm etc. Under the English law as well as Indian law a child in mother’s womb is considered
to be in existence. But a child who is not in mother’s womb is not considered to be in existence. But
Sec. 13, 14 and 18 of the TP Act deal with the law with respect to the transfers for the benefit of an
unborn person.
Section 13 embodied the rule against double possibilities what is known in England as the rule in
Whitby v. Mitchell. Section 14 of the Transfer of Property Act controls section 13.
Section 13 lays down that where on a transfer of property, an interest therein is created for the
benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the
same transfer, the interest created for the benefit of such person shall not take effect, unless it extends
to the whole of the remaining interest of the transferor in the property.
Section 13 has further illustrated the matter in the like manner.
Where 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.
Such an interest may be created for the benefit of an unborn person if the following conditions
are fulfilled-
1) No direct transfer.
2) Interest of the unborn person must be preceded by a prior interest.
3) The unborn person must come into existence before the prior interest comes to an end i.e.
before the death of the last life estate holder and he must have the interest at the latest when
he attains majority.
4) The whole of the remaining interest of the transferor in the property must be comprised in the
interest created for the benefit of such unborn person.
Therefore, the effect of section 13 is that there cannot be a direct transfer to a person who is not in
existence, or unborn person, on the date of the transfer. It is for this reason that the said section uses
the expression ‘for the benefit of’ and not ‘transfer to an unborn person.’

RULE AGAINST PERPETUITY (Sec. 14) AND ITS EXCEPTIONS

The dictionary meaning of the word ‘perpetuity’ is ‘continuing forever’. Here under Sec. 14 the term
“perpetuity” refers to tying up of property for an indefinite period or forever. According to Jarman,
perpetuity, in the primary sense of the word, is a disposition which makes property inalienable for an
indefinite period. If properties are blocked forever from being alienated, the commerce would be
obstructed, capital investment of the country would be withdrawn from trade and every branch of
industry would be diminished. Certainly, it would obstruct the national prosperity. There are some
persons who wish to retain their properties in their own family from generations to generations
perpetually. But it is the policy of the law to prevent creation of perpetuities.
To protect this situation Sec. 14 of the Transfer of Property Act has embodied the rule against
perpetuity. The rule is founded on the general principle that the transfer shall be void which tend to
create in perpetuity or place property forever out of the reach of exercise of the power of alienation.
Section 14 lays down that “no transfer of property can operate to create an interest which is to
take effect after the lifetime of one or more persons living at the date of such transfer, and the
minority of some person who shall be in existence at the expiration of that period, and to whom,
the interest created is to belong if he attains the age of majority.”
Let us suppose, that A transfers a piece of land to his friend B for life, and afterwards to his friend C for
life, then to his friend D for life, and then to the son that may be born to B, for his son’s life, then to the
son that may be born to C for his life, and then ultimately to the son that may be born to D for ever. In
case of such disposition of the land, B can not alienate the property, because he has only a life interest
therein. For the same reason, neither C nor D, nor the sons of B and C can alienate the property. When
the property finally vests in D’s son, only he will be entitled to alienate the property. This would be
certainly a restraint on the free alienation of the piece of land for a considerable long period. Section
14 prevents this and lays down that one can tie up property and stop it’s free alienation only for one
generation, because all friends of A, now living must die within that time, as they are all candles lighted
together. Again, as for instance, if a transfer is made by A in favour of B for his life, afterwards in favour
of C, D and E, successively for their lives, who are all living persons, the transfer is valid because all the
persons benefited are in existence at the date of transfer.
According to the English law, the vesting of property can be postponed for any number of lives in
being and an additional term of 21 years afterwards, & for as many months in addition as are equal to
the ordinary period of gestation, should gestation exist. The additional term of 21 years is irrespective
of the fact whether such person is a minor or not. But according to the Indian law, the vesting can be
delayed beyond the lifetime of persons in being for the period only of the minority of some person
born in their lifetime, & the addition of an absolute period of 21 years has not been adopted by Sec. 14.
The following are the exceptions to the rule against perpetuity-
1. The rule has no application where land is purchased or property is held by a corporation. This
rule is does not apply when the transfer creates only a personal obligation and does not affect
the interest in the property.
2. Gifts to charities such as transfer for the benefit of public, for the advancement of religion,
knowledge, health, commerce, safety, or any other object beneficial to the mankind do not fall
within this rule.
3. A covenant of redemption in a mortgage is not affected by this rule.
4. A covenant for pre-emption in respect of land unrestricted in point of time is not affected by
this rule.
5. Where only a charge is created on any property and such a charge does not amount to transfer
of any interest, that charge does not fall within this rule.
6. The contract for perpetual renewal of a lease does not come within the purview of this rule.
7. Provision for the payment of the debts of the transferor.

RULE AGAINST ACCUMULATION OR DIRECTION FOR ACCUMULATION (SEC. 17)

The term “accumulation” literally means ‘increase of principal by re-investment of interest.’ Sec. 11
says that condition which restrains the enjoyment of property which is absolutely transferred is void.
A direction for accumulation of income is a particular mode of restraining the enjoyment of property.
But, as contrary to Sec. 10, Sec. 17 provides an exception and permits a direction for accumulation of
income to operate in certain cases. The maximum permissible time period upto which income of the
property may be accumulated is:

(a) Life of the transferor or,

(b) A period of 18 years from the date of the transfer, whichever is a longer period.

So a direction of postponement of beneficial enjoyment or in other word which makes accumulation of

income beyond this period of maximum permissible limit is void.

Illustration: A transfers his properties to B for life with a direction that the income of the said
properties shall be accumulated during A’s life and shall be given also to C. The direction for
the accumulation of income is valid, upto life of B. A transfer a property to B for life and thereafter to
B’s such son who first attains the age of 25 years with a direction for accumulation of income till B’s
first son attains 25 years. The direction of the accumulation of such income is void, reason it is beyond
the permissible limit (life or 18 years). A transfers property to B in 1960 with a direction for the
accumulation of its benefits upto 1990. A dies in 1985 thus the transferor lives for 25 years which is
more than 18 years. The direction for accumulation is valid upto 1985 (for 25 years) because it is the
longer period.

Sec.17 is subject to the following 3 exceptions-

1. Payment of Debts- The period of accumulation can be exceeded in case of payment of debts. For
example– A makes a gift of his house to B with a direction that from the rents of the house B shall
pay Rs 500 per months towards the satisfaction of a debt of Rupees 10,000/- incurred by A. The
direction of the accumulation of income is valid even it continues after the life of A or expiry of
period of 18 years.
2. Raising portions- Portion ordinarily means a part or share which points to the arising of
something out of something less for the benefit of some children or class of children.
3. Preservation and maintenance of the property- For the maintenance of property/preservation of
property, it is allowed.

VESTED AND CONTINGENT INTEREST [Sec. 19-24]

Vested interest is defined by Sec. 19 of the TP Act. When a person has fixed right of present or future
possession of property he is said to have Vested Interest in the property. Sec. 19 says that “where, on
a transfer of property, an interest therein is created in favour of a person without specifying the
time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the
happening of an event which must happen, such interest is vested, unless a contrary intention is
given or reserved to some other person, or whereby income arising from the property is directed to be
accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall
happen the interest shall pass to another person.
The main characteristics of vested interest are as follows-
1. Vested interest does not depend upon the fulfilment of any condition. It creates an immediate
and present right though the enjoyment may be postponed to a future date.
2. Vested interest is not defeated by the death of the transferee before obtaining possession. If
the transferee dies, his vested interest passes on his heirs.
3. Vested interest is heritable and transferable also.

As for an instance, if X executes a deed of gift in favour of Z and directs that Z shall not take over
possession of the gifted property till the death of X and his wife Y. Here, Z acquires a vested interest in
the property but the enjoyment of the property by Z is postponed. And if Z dies before taking over
possession of the property, his vested interest will not be defeated but his heirs will inherit to his
vested interest.

CONTINGENT INTEREST
Contingent interest is defined by Sec. 21 of the TP Act. Sec. 21 provides that where, on a transfer
of property, an interest therein is created in favour of a person to take effect only on the happening of
a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby
acquires a contingent interest in the property. Such interest becomes a vested interest, in the former
case, on the happening of the event, in the latter, when the happening of the event becomes
impossible.
But there is one exception. Where, under a transfer of property, a person becomes entitled to
an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the
income to arise from such interest before he reaches that age, or directs the income or so much thereof
as may be necessary to be applied for his benefit, such interest is not contingent.
The following are the main characteristics of a contingent interest-
1) When the transferee dies before obtaining possession, the contingent interest fails, and the
property reverts to the transferor.
2) Contingent interest is depended entirely upon the fulfilment of a condition. Therefore, in the
event of non-fulfilment of the condition, the contingent interest fails.
3) Contingent interest is transferable. But the question whether it is heritable or not depends on
the nature of the contingency.
As for example of contingent interest, if a sum of money is bequeathed to A, in case he shall attain the
age of 18 or when he shall attain the age of 18. A’s interest in the legacy is contingent until the
condition is fulfilled by his attaining that age.

DIFFERENCE BETWEEN THE VESTED AND CONTINGENT INTEREST

VESTED INTEREST CONTINGENT INTEREST

Vested interest is created without specifying Contingent interest is created to take effect on
the time when it is to take effect. the happening of a specified uncertain event.
In case of vested interest, it is to take effect In case of contingent interest, the specified
forthwith or on the happening of an event event may or may not happen. If the specified
which must happen. event does not happen, the contingent interest
fails.
Vested interest is not depended upon the Contingent interest is entirely depended upon
fulfilment of any condition. It creates an the fulfilment of the condition. So, if the
immediate right in favour of the transferee condition, which may or may not happen, is not
though the enjoyment of the property by the fulfilled, the interest is lost.
transferee is postponed.
Vested interest is not defeated by death of Contingent interest is also transferable but
transferee before he obtains possession. whether the contingent interest is heritable or
Vested interest is heritable and transferable. not is depended on the nature of the contingency.
In case of a vested interest, if the transferee, In case of contingent interest, if the transferee,
in whose favour the interest is created, dies in whose favour the interest is created dies
before taking possession of the property the before obtaining possession, the contingent
interest passes on his heirs. interest fails and does not pass on his heirs.
In case of vested interest a right with respect But in case of contingent interest there is a
to the property is created immediately mere promise to give such right of enjoyment
though the enjoyment is postponed. with respect to the property if the condition is
fulfilled.
WHEN CONTINGENT INTEREST BECOMES VESTED??
When a property is transferred subject to a condition precedent, i.e. on the happening of a
specified uncertain event, the transfer creates a contingent interest in favour of the transferee with
respect to the property transferred. When the specified uncertain event happens the contingent
interest of the transferee becomes vested interest. In such event, or on the death of the transferee
before he obtains possession, the vested interest of the deceased transferee, with respect to the
property transferred, passes on his heirs.

CONDITIONAL TRANSFERS-
CONDITION PRECEDENT AND CONDITION SUBSEQUENT

Sections 25 to 34 of TP Act lay down the provisions relating to conditional transfers. As per Sec. 25,
where the interest created on a transfer of property is dependent upon a condition the fulfillment of
which is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would defeat the
provisions of any law, or is fraudulent, or involves or implies injury to the person or property of
another, or the court regards it as immoral or opposed to public policy, such transfer is declared void.
Conditional transfers may take place in two ways-
1. Condition precedent
2. Condition subsequent
According to Sec. 26, ‘condition precedent’ means where the terms of a transfer of property impose a
condition which must be fulfilled before a person can take an interest in the property, that condition is
called a condition precedent. The transferee’s interest in the property is only contingent until the
condition is fulfilled. Sec. 25 to 27 deals with condition precedent. Substantial compliance of a
condition precedent is deemed sufficient.
Let us suppose that A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D
and E. But E dies and B marries with the consent of C and D. B is deemed to have fulfilled the condition.
This condition is called a condition precedent.
‘Condition subsequent’ is defined by Sec. 28 of the Transfer of Property Act. It is a condition
which destroys or divests upon the happening of an event. According to Sec. 28, on a transfer of
property, an interest therein may be created to accrue to any person, with the condition superadded
that in case a specified uncertain event happens or does not happen, such interest is to pass to another
person. Such a condition is called a condition subsequent. A condition subsequent divests an estate
from one person and vests it in another person. This may be explained by an example.
Let us suppose that a sum of money is transferred to A, to be paid to him at the age of 18; if he
shall die before he attains that age, to B. A takes a vested interest in the transfer subject to be divested
and to go to B in case A shall die under 18.

CONDITION PRECEDENT CONDITION SUBSEQUENT

In condition precedent, the estate is not A condition subsequent is one by the
vested in the grantee until the condition is happening of which an existing estate will
performed/fulfilled. be defeated.
Vesting of estate is postponed till the Vesting is immediately completed and not
condition is performed. postponed.
Once the interest is vested it can never be Though the interest is vested it is liable to
divested on the ground of non-fulfilment of be divested on the ground of non-fulfilment
the condition. of condition.
Acquisition of an estate is affected in the Retention of the estate is affected in the
condition precedent. condition subsequent.
In case of condition precedent, the transfer In case of condition subsequent, the
is void if the condition is i) impossible in transfer is valid if the condition is i)
performance, ii) immoral and iii) opposed impossible of performance, ii) immoral and
to the public policy. iii) opposed to the public policy, only the
condition will be ignored .
In condition precedent the condition must In condition subsequent the condition’s
be valid in the eye of law. invalidity will be ignored.
The condition precedent may be The condition subsequent must be strictly
subsequently complied with. The doctrine complied with. The doctrine of Cypress
of Cypress applies. does not apply.
<

DOCTRINE OF ELECTION

The principle of the doctrine of election was explained in the leading case of Cooper v. Cooper. Sec. 35
of the TP Act embodied the doctrine of election. The doctrine of election is based on the principle of
equity.
According to the section 35 where a person-
a) professes to transfer property which he has no right to transfer, and
b) as part of the same transaction, confers any benefit on the owner of the property,
c) such owner must elect either to confirm the transfer or to dissent from it.
If he dissents from it-
(a) he must relinquish the benefit so conferred; and
(b) the benefit so relinquished reverts to the transferor or his representative as if it had not been
disposed of.
However, when such benefit reverts back to the transferor, it is subject to the charge of making good to
the disappointed transferee the amount or value of the property attempted to be transferred in two
cases, namely-
i) where the transfer is gratuitous, and the transferor has, before election, died or otherwise
become incapable of making a fresh transfer; and
ii) where the transfer is for consideration.
The doctrine of election may be illustrated by the following example. Let us suppose that one farm of
Sultanpur is the property of C and worth 800/- . A, professes to transfer that farm of Sultanpur upon
which he has no right to transfer. And by an instrument of gift, professes to transfer it to B, giving by
the same instrument 1000/- to C. C, the owner of the farm of Sultanpur, is to elect either to confirm the
transfer or to dissent from it. Here, C elects to retain the farm or dissents from the transfer. C, then
forfeits the gift of 1000/- . In the same case, A dies before the election. The representatives of A must,
out of the 1000/- pay 800/- to B to make good to the disappointed transferee the amount or value of
the property attempted to be transferred.

The conditions necessary for application of this doctrine are as follows-

a) The transferor must not be owner of the property which he transfers.
b) The transferor must transfer the property of another owner to a third person. The transferor
must at the same time grant some property, in the same instrument, out of his own, to the
owner of property.
c) The two transfers i.e., transfer of the property of owner to the transferee and conferment of
benefit on the owner of property must be made in the same transaction. Question of election
does not arise if the two transfers are made by virtue of two separate instruments.
d) The owner must have proprietary interest in the property; a creditor is not put to election as
he has only a personal right to be paid by the debtor.
e) The owner taking no benefit under a transaction directly, but diverting a benefit under it
indirectly, is not put to election.
f) Question of election does not arise when benefit is given to a person in a different capacity.

There is difference between English and Indian law regarding the doctrine of election.
1. English law applies the principle of compensation while the Indian law adopts the rule of
forfeiture.
2. English law does not specify any time within which election is to be made. Indian law specified
one year time within which owner of the property is to elect whether he confirms the transfer
or dissents from it. If the owner does not comply with such requisition, he is to be deemed to
have elected to confirm the transfer.
There is one exception to the doctrine of election. 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 exception may be explained by an example. Let us suppose that X transfers to Y the
property A, in lieu of Y’s property B which is given to Z. X also gives to Y the property C. If Y elects to
retain his own property, he must relinquish claim over A but not C.

APPORTIONMENT OF BENEFIT OF OBLIGATION ON SEVERANCE (Sec. 36, 37)

Sec. 36: Apportionment of periodical payments on determination of interest of person entitled

In the absence of a contract or local usage to the contrary, in rents annuities, pensions, dividends
and other periodical payments in the nature of income shall, upon the transfer of the interest of the
person entitled to receive such payments, be deemed, as between the transferor and the transferee, to
accrue due from day to day, and to be apportionable accordingly, but to be payable on the days
appointed for the payment thereof
Sec. 37: Apportionment of benefit of obligation on severance
When, in consequence of a transfer, property is divided and held in several shares, and thereupon
the benefit of any obligation relating to the property as a whole passes from one to several owners of
the property, the corresponding duty shall, in the absence of a contract, to the contrary amongst the
owners, be performed in favour of each of such owners in proportion to the value of his share in the
property, provided that the duty can be severed and that the severance does not substantially increase
the burden of the obligation; but if the duty cannot be severed, or if the severance would substantially
increase the burden of the obligation the duty shall be performed for the benefit of such one of the
several owners as they shall jointly designate for that purpose:
Provided that no person on whom the burden of the obligation lies shall be answerable for failure to
discharge it in manner provided by this section, unless and until he has had reasonable notice of the
severance.

FEEDING THE GRANT BY ESTOPPEL (SEC. 43)

English law of estoppel is that where a grantor has purported to grant an interest in land which he did
not at the time possess but subsequently acquires, the benefit of his subsequent acquisition goes
automatically to the earlier grantee or, as it is usually expressed, feeds the estoppel.
Section 43 of the Transfer of Property Act embodied this doctrine of feeding the grant by estoppel.
Section 43 says that where a person fraudulently or erroneously represents that he is authorized to
transfer certain immovable property and professes to transfer such property for consideration, such
transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire
in such property, at any time during which the contract of transfer subsists. Section 43 further
provides that nothing in this section shall impair the right of transferees in good faith for
consideration without notice of the existence of the said option.
The following are the conditions for application of the doctrine of feeding the grant by estoppel-
1. There must have a fraudulent or erroneous representation of ownership by the transferor.
2. The transferee must have acted on the fraudulent or erroneous representation of the
transferor.
3. The transferor should not have transferable title on the property transferred.
4. The transfer should be for consideration.
5. The transferor must subsequently acquire title upon the property transferred on the basis of
fraudulent or erroneous representation of ownership.
6. The contract of transfer must be subsisting when the transferee exercises his right to recourse
the doctrine of feeding the grant be estoppel.
If these conditions are fulfilled the transferee can exercise his option only during continuance of the
contract and only in respect of the interest which the fraudulent or erroneous transferor acquires in
such property. But there are some circumstances where the doctrine of feeding the grant by
estoppel has no application. These circumstances are as follows-
1. This section is not applicable if the transfer is not for consideration.
2. This section does not apply if the transfer is invalid for being forbidden by law or contrary to
public policy.
3. This section is not applicable if the contract comes to an end before acquisition of the property
by the transferor.
4. This section has no application to Court sales.
5. The right is not available against the bonafide purchasers for value without notice.

DOCTINE OF LIS PENDENS (Sec. 52)

The doctrine of Lis pendens emerged out of the maxim “ut lite pendent nihil innoveteur” which
means that nothing new should be introduced in a pending litigation. This doctrine of Lis pendens
is embodied in section 52 of the Transfer of Property Act.
The principle of finality of litigation or the doctrine of Lis pendens will be found in the
judgment of Lord Justice Turner in the leading case of Bellamy v. Sabine.
According to Sec. 52 of TP Act, during the pendency in any Court having authority within the
limits of India established beyond such limits of the Central Government, of any suit or proceeding
which is not collusive and in which any right to any immovable property is directly and separately in
question, the property cannot be transferred or otherwise dealt with by any party to the suit or
proceeding so as to affect the rights of any other party thereto under any decree or order which may
be made therein, except under the authority of the Court and on such terms as it may impose.
It has been explained further by the Sec. 52 that for the purpose of this section, the pendency of a suit
or proceeding shall be deemed to commence from the date of the presentation of the plaint or the
institution of the proceeding in a Court of competent jurisdiction, and to continue until the suit or
proceeding has been disposed of by a final decree or order and complete satisfaction or discharge of
such decree or order has been obtained , or has become unobtainable by reason of the expiration of
any period of limitation prescribed for the execution thereof by any law for the time being in force.
In order to constitute Lis pendens, following conditions must be satisfied-
 There should be a pending suit or proceeding.
 The suit or proceeding must not be collusive one.
 The suit or proceeding must be pending in a Court of competent Jurisdiction.
 The suit or proceeding must be one in which a right to immovable property is directly and
specifically in question.
 The property directly and specifically in question must be transferred during such pendency.
 The transfer must affect the right of other party.
The effect of a transfer during pendente lite is that the transfer is not ipso facto void but is only
voidable at the option of the party whose interests are affected thereby and the parties to the
transfer are bound to abide by the decree eventually passed in the suit.
The doctrine of lis pendens may be explained by an example. Let us suppose that A mortgaged his
property to B. B filed a suit on the mortgage and obtained a decree for sale. While this decree was
being executed, A leased the property to X for ten years. During sale of the property B purchased the
property himself. As the lease to X was affected by the rule of Lis pendens B was entitled to evict X.
There is one exception to the rule of lis pendens. It is quite open to the Court to permit any
party to the suit to transfer the property on such terms which it may think fit and proper to impose.
FRAUDULENT TRANSFER OF PROPERTY ESSENTIALS (Sec. 53)
Every transfer of immovable property by way of sale made with an intention to defeat or delay the creditor of
the transferor is voidable at the option of the creditor so defeated or delayed. This is what is stated in Section 53
of TP Act. If the transferee purchased the property after proper enquiries and in good faith and belief, the
transfer is valid and he will not be liable. However, the creditor can institute a suit against the transferor. If the
transfer was made without sufficient consideration or with the intention to defeat or defraud the creditors, the
transfer is voidable at the option of the transferee also.

The following are some of the essential elements of Fraudulent Transfer:

 A transfer must be made by a debtor to a third person for consideration.
 The intention behind the transfer was to defeat or defraud the creditors.
 The transfer is voidable at the option of the creditor.
 The creditor can file suit on behalf of himself and all other creditors.
 If the property was purchased by the transferee in good faith, he will not be liable.

DOCTRINE OF PART-PERFORMANCE (Sec. 53-A)

The historical background regarding the application of the doctrine of part performance reveals that in
the case of Kurri Veerareddi v. Kurri Bapireddi, the full Bench of Madras High Court ruled in 1906
that the English doctrine of Part Performance was not applicable in India. Thereafter, in the case of
Md. Musa v. Aghore Kumar Ganguli, the Privy Council held in 1914, that the English doctrine of Part
Performance was applicable in India on the principles of Justice, equity and good conscience. Again, in
1928, in the case of Arif v. Jadunath, the Privy Council held, going back to the view of Madras High
Court, that the English doctrine of Part Performance was not applicable in India. Thereafter, in 1929,
Sec. 53-A was introduced, to incorporate the doctrine of Part Performance, by amending the TP Act.
Object of the doctrine of Part Performance is to prevent fraud.
Section 53-A of the TP Act lays down that where any person contracts to transfer-
(a) for consideration,
(b) any immovable property,
(c) by writing signed by him or on his behalf from which the terms necessary to constitute the
transfer can be ascertained with reasonable certainty,
and the transferee-
(a) has, in part performance of the contract, taken possession of the property or any part thereof,
or
(b) the transferee, being already in possession, continues in possession in part performance of the
contract and has done some act in furtherance of the contract, and
(c) the transferee has performed or willing to perform his part of the contract,

then notwithstanding that where there is an instrument of transfer, that the transfer has not been
completed in the manner prescribed therefore by the law for the time being in force,
a) the transferor or any person claiming under him shall be debarred from enforcing against the
transferee and persons claiming under him any right in respect of the property
b) of which the transferee has taken or continued in
possession, other than a right expressly provided by the terms of the
contract.
It has also been provided by Sec. 53-A, as an exception to this rule, that nothing in this section shall
affect the rights of a transferee for consideration-
(a) who has no notice of the contract or
(b) of the part performance thereof.
Basis of the doctrine of part performance are the following three maxims of equity-
 He who seeks equity must do equity.
 Equity treats that has done which ought to have been done.
 Equity looks to the intent rather than to the form.

The doctrine of part performance requires the following conditions to come into play-
 There should be a contract, to transfer any immovable property, for consideration, duly
written and signed by the transferor or on his behalf, from which the terms necessary to
constitute the transfer can be ascertained with reasonable certainty.
 The transferee must have taken possession of the property or any part thereof or if already in
possession should have continued in possession in part performance of the contract and
should have done some act in furtherance of the contract.
 The transferee must have performed or is ready and willing to perform his part of the contract.
 The rights of any other subsequent transferee for value without notice will not be affected by
this doctrine.

There is difference in between the English and Indian doctrine of part performance-
A. According to the English law, even oral agreement comes within the purview of this doctrine
on the strength of equity but it is not so in India.
B. According to the English law both the plaintiff and defendant can avail of the doctrine whereas
it is not so in India. In India this doctrine is used as a shield and not as a sword.