ASSIGNMENT- PROPERTY LAW

SUBJECT CODE: LLB-306

TOPIC: ABSOLUTE & PARTIAL RESTRAINT

DEPARTMENT OF LAW

TRINITY INSTITUTE OF PROFESSIONAL STUDIES

SUBMITTED TO: SUBMITTED BY:

Ms. Yashika Sharma MEHAK SHARMA

Assistant Professor, TIPS BALLB 2020-25

Semester - 6

Roll No.: 02920603820

INTRODUCTION

Transfer of property is a Concurrent Subject both Central and State government can take
legislative action in respect of the transfer of property except that relating to agriculture land
which is a state subject. The objective of the Transfer of Property Act, 1882 is to provide
uniform rules for the transfer of property.

Section 5 of the Transfer of Property Act, states that Transfer of property means an act by which
living person conveys property in present, or in future to one or more other living persons. The
term 'Living persons' also includes company, association or body of individuals whether
incorporated or not.

The parties involved in Transfer of property are Transferor and Transferee. The law relating
Transfer of property is the important branch of civil law. The Transfer of Property Act,1882
majorly deals with the immovable property and is applicable to those transfer which takes
between living parties, the Act would not be applicable if the property is transferred or disposed
of through will same would be applicable under Indian Succession Act, 1925.

Section 7 of the Transfer of Property Act categorizes persons competent to transfer as-

 Every person is competent to contract under the Indian Contract Act, 1872 and entitled to
the transferable property.
 A person who is authorised to dispose of transferable property that he does not have the
ownership to.

This property can be transferred wholly or partly, absolutely or conditionally, with regard to the
extent of the law and circumstances. The property, as stated above may be conveyed to any
living person including a company, association or a body of individuals whether incorporated or
not. Under Section 13, even an unborn child can be the transferee of the property.

RESTRAIN ON ALIENATION
Alienation means transferring of property. This transfer of property can be through gifts, sales
and mortgages. Under Hindu Law, no person of the Joint Hindu family, not even the Karta, has
the full power to alienate the joint family property or his own interest in the joint family property
without the consent of all coparceners. In the case of separate property, a Hindu can alienate that
property whether it comes under Dayabhaga or Mitakshara school. This power is absolute.

Section 10 of Transfer of Property Act, 1882

Where property is transferred subject to the condition or a limitation absolutely restraining the
transferee or any person claiming under him from parting with or disposing of his interest in the
property, the condition or the limitation is void, except in the case of lease where the condition is
for the benefit of the lessor or those claiming under him:

Provided that property may be transferred to or for the benefit of a women (not being a Hindu,
Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or
charge the same or her beneficial interest therein

This is commonly known as the ‘rule against alienability’. The Transfer of Property Act is
based on the principle that there can be a free transfer of property and has been specifically made
with regard to free transfer. If conditions restraining transfer are imposed, then the free transfer
would be restricted and there would be no use for the Transfer of Property Act.

However, only conditions mandating ‘absolute restriction’ are void. There are conditions which
call for partial restraint to be observed with regard to the transfer of property. If we are to
determine whether a condition is absolute or partial, then one must look at the substance of the
condition, and not merely the words. Therefore, restraints can be classified into two categories.

Restrain on alienation is said to be absolute when it totally takes away the right of disposal.
Section 10 of the Act says that when any condition or limitation imposed which absolutely
restrains the transferee from disposing of his interest then such restriction will be treated as void
and will not have any effect.

However, the transfer will be treated as valid. Section 10 relieves the transferee of an immovable
property from any such absolute restrain placed on his right to deal with the property in his as
owner. Section 10 applies to a case when any property is transferred with any such condition or
limitation which restricts transferee from disposing of his interest for making such a condition
invalid the restrain must be absolute restrain.

TYPES OF RESTRAINTS

Absolute Restraints

 An absolute restraint is such a restraint which completely takes away the right of the
transferee to alienate or dispose of the property. The transferee can now no longer
transfer his interest in the property to another person and he has no freedom to do
what he wants with the property in his capacity as the owner of the property.

 Section 10 stipulates that any condition imposed on the transferee which would
amount to an absolute restraint on the right of the transferee to dispose of his interest
in the property shall be void. The property must be transferred to the transferee
subject to the condition.

 In Rosher v. Rosher (1884) 26 Ch D 801, A made a gift of a house to B, and gave a

condition that if B decides to sell the house during the lifetime of A’s wife, she should
have the option of purchasing it for Rs 10000, while the market value of the house
was set at Rs 10,00,000. This condition was held to be an absolute restraint and was
declared void.

 In Kannamal v. Rajeshwari, AIR 2004 NOC 8 (Mad), a life estate was to be created
in favour of ‘M’, but the transferor gave an absolute restriction along with the
property transfer to M, whilst divesting himself of all his interests in the property.
This restraint was held to be void as there was an absolute transfer.

 In Mohd Raza v. Abbas BandiBibi,(1932) 59 IA 236, a condition imposing restriction

for a particular time or transfer to a specific person has been held to be void.

Partial Restraints
  A partial restraint is a condition which partially takes away the right of the transferee to
dispose of his interest in the property. Here, the right is not taken away substantially.
Section 10 does not explicitly talk about partial restraints. A condition imposing partial
restriction is valid.
 In Mata Prasad v. Nageshwar Sahai (1927) 47 All 484, there was a dispute regarding
succession between nephew and widow. A compromise was formed that the widow had
possession of the property while the title for the same was given to the nephew with the
condition that he was restricted from alienating the property during the widow’s lifetime.
It was held that the compromise and the condition were valid and prudent in the present
case.

EXCEPTIONS TO RESTRAINT

 Lease
A lease is a transfer of property wherein the lessee only has the right of enjoyment of the
property, while the ownership right is still with the lessor. Conditions imposing
restrictions are valid in the case of a lease, where the condition is for the benefit of the
lessor or those claiming under him. In Raja JagatRanvir v. Bagriden, AIR 1973 All 1, a
condition in the lease that the lessee shall not sublet or assign was held to be valid.
 Married Woman
When the property is to be transferred to a married woman, who is not a Hindu,
Mohammedan or Buddhist, then the condition restricting alienation can be valid.

REPUGNANT CONDITIONS

 Section 11 of the Transfer of Property Act contains conditions which are inconsistent
with the nature of the interest transferred are repugnant conditions. These conditions
come with the transfer when the transfer confers to the transferee, absolute interests in the
property. Any condition with a transfer of absolute interests in the property will be void.
  When a property is transferred absolutely, it must be transferred along with all its legal
incidents. In Manjusha Devi v. Sunil Chandra, AIR 1972 Cal 310, the parties entered into
a sale for a piece of land. In the sale deed, it was mentioned that the buyer could only use
the land for setting up a factory for jute textile manufacturing. It was held that this
condition was invalid as the absolute interests in the land had been transferred to the
buyer and he could use it as he pleased.

o Section 10 specifies that in a transfer with condition that absolutely restrains the
alienation of the property by the transferee, the condition will be deemed to be
void.

o Section 11 specifies that in a transfer where absolute rights in the property have
also been alienated to the transferee, and where a condition is imposed that the
transferee cannot, in spite of having the absolute right in the property, do an act
for his enjoyment of the property, such condition will be deemed to be void.

o Thus, the differences in these sections are that in Section 10 the condition is
deemed void due to absolute retainment and in Section 11, the condition is
deemed void due to the transfer being of absolute nature.

CONDITION OF INSOLVENCY

 Section 12 provides that when the transferee becomes insolvent, and if he has some
interest in the property that was transferred to him by the transferor, the transferee still
would not lose his interest in the property. Hence, any condition stating that transferee
shall lose the interest in the transferred property on insolvency and this interest shall
be reverted back to the transferor shall be void.

 However, this section does not apply to a condition on a lease for the benefit of the
lessor or those claiming benefit under him. However, in Smith v. Gronow (1891) 2
QB 394, if lessee assigns the lease and then is rendered insolvent, then this condition
will not apply.
CONCLUSION
The Transfer of Property Act, 1882 has been made for the regulation of the free transfer of
property in India. This transfer can be in the present or the future and must be between living
persons. This article also explores what can be transferred under this Act, and who are the ones
competent to transfer. The concept of alienation was also explored. Earlier, under the classical
law, the father or the Karta had the right to alienate the joint family property without the consent
of the coparceners, but now conditions have been introduced to regulate this.

Section 10, 11 and 12 contain certain conditions under which restraining of alienation of the
property by the transferee is void. It also has exceptions where these conditions may be valid.
Primarily, under Section 10, conditions of restraint can be classified into two categories: absolute
and partial. Whether a condition is absolute or partial is determined by the substance of that
condition, not merely the words. This article explored other conditions such as positive and
negative and insolvency, along with their exceptions.

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