LAW OF PROPERTY

CHAYA BV
FACULTY OF LAW
 PES
UNIVERSITY

Transfer of Property

Byact ofparties Byoperation oflaw

(succession, insolvency, execution)

Intervivos
Testamentary
(betweentwoivingperson)
(afterdeath of parties)

Transfer of immovable or Transfer ofimmovable

movable property property

Sale Mortgage Lease Exchange Gift

 History
 Before 1882 the transfers of immovable properties in India were governed by the
principles of English law and equity, the Regulations and Acts passed by the
Governor- General-in-Council.
 In that time, law was quite confusing.
 To remedy these confusions and conflicts a law commission was appointed in
England to prepare a code of substantive law of transfer of properties in India.
 A draft bill was introduced in the legislative council in 1877.
 The bill pertaining to TPA was prepared not less than 7times before the final bill
was passed and it became law on 17th Feb 1882 as the transfer of property Act
1882. The act was enforced with effect from 1st July 1882.
Object of the Act
 PREAMBLE: It is expedient to define and amend certain parts of the law relating TOP by act of
parties.
 An Act to amend the law relating to the Transfer of Property by act of parties.
 The Transfer of property Act 1882, provides a definite, clear, and uniform law for transfer of
immovable property by act of parties. i.e. transfer between living persons.
 The Act has modified and made changes in some of the rules which existed before its enactment.
The changes were made so that the laws may be made suitable to the socio-economic conditions
of India.
 The transfer property Act completed the code of law of contract. Before this Act, although there
was code [enacted law] for contracts, but there was no enacted law for transfers which used to
take place in furtherance of a contract.
 By making provisions for inter-vivos transfers, the transfer of property act has enacted a law
parallel to the already existing laws of testamentary and intestate transfers i.e. transfer of
property under wills under law of inheritance.
 Scope of the Act
1. Not Exhaustive
2. Transfers by operation of Law Excluded:[succession, court orders- ex
inheritance, insolvency, sale in execution of courts decree
3. Transfers mainly of Immovable properties
4. Muslim law
5. Saving of certain Incidents and Rights
6. Territorial Limitations
Importance of the Nature of Property
 Properties may be movable or immovable and tangible or intangible.
 T.P Act provides specific rules of procedure for transfer of these different kinds of
properties.
 Movable property may generally be transferred by delivery of possession, writing
and registration is not essential.
 Immovable properties are required to be transferred generally through written
and registered document.
 The validity of a transfer depends upon the fact whether the procedure
prescribed for that kind of property has been followed or not.
 If the procedure prescribed by the Act has not followed, then transfer is void.
 For example Under section 123 of the Act, gift of an Immovable property must
be made through registered document but the gift of movable property may be
made only by delivery of possession.
Kinds of property
1. Real property: this property admitted of specific recovery and as this was
originally allowed only where claimant had freehold interest. e.g.. land,
building or anything attached to it.
2. Personal property: it comprise of goods or things movable. In such
property in respect of which only a personal action lay was classed as
personal property.
3. Tangible property: such property can be felt or touched.
4. Intangible property: such property cannot be felt or touched.
• Tangible or intangible property may be movable or immovable.
Section 3:Immovable property

 “Immovable property" does not include standing timber, growing crops or grass.
sec. 3
 This definition is not clear and incomplete.
 [Section 4 ]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.
 The Registration Act 1908: Immovable property includes land, buildings,
hereditary allowances, right 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
or grass.
'IMMOVABLE PROPERTY
• 'IMMOVABLE PROPERTY' includes
1. Land
2. Benefits to arise out of land, and
3. Things attached to earth i.e.
 i. things embedded in earth,
 ii. things attached to what is so embedded in the earth,
 iii. things rooted in earth; except
 a) standing timber,
 b) growing crops, or
 c) growing grass.
 Land
• Land means surface of the earth. it includes everything upon the surface of land,
under the surface of land and also above the surface of land. Anything upon the
land, so long it is not removed from there shall be part of the land.
 Land includes:
 1. a determinate portion of land,
 2. possibly the column of space above the surface,
 3. the ground beneath the surface,
 4. all objects which are on or under the surface in its natural stage
 Eg: soil, mud, underground water, water collected in a pit, pond, lake, river, sub-
soil, mineral, coal, gold mines, space above land.
Benefits to arise out of land

 Benefits which a person gets from land, is also an immovable property.

 Beneficial interest in a property is called intangible property.
 A right by the exercise of which a person gets certain benefits is called
beneficial right or beneficial interest of that person.
 It is any profit or gain from land.
 Eg: right of way, right to use, lease, tenancy, right of fishery, right of ferry,
heredity office, fruits, lac etc.
Things attached to earth
• i. things embedded in earth,
• ii. things attached to what is so embedded in the earth,
• iii. things rooted in earth
 • Embedded means, a thing whose foundation is laid well below the normal
surface of the earth OR fixed firmly in a surrounding mass.
 • Eg: wall, pole, houses, building.
 • A machinery attached to a concrete base by nuts and bolts firmly, cannot
be treated as embedded in the earth. [Intention]
 • A machinery or other installations of business are fixed to the land for
commercial purpose only. They are regarded as accessory to the business
and not an annexation to the premise.
 Things attached to what is so embedded in the earth

 The permanent beneficial enjoyment the thing so attached would also

become Immovable property. Eg: door, window, shutter etc.
 For this, thing must be attached permanently and for the beneficial
enjoyment of the house or building.
 Electric bulb, window screens, other ornamental things are not
immovable property.
Things rooted in the earth

 Trees, plants, shrubs which grow on land are rooted in the earth.
 Exception to this general rule that Standing Timber, Growing Crops and
Growing Grass though rooted in the earth are movable properties.
 'Timber' means, a tree that is chiefly meant to be used either for house
building or for the burning purposes or for the furniture or the boat or
other construction. Eg: seasham, neem, babool, teak.
 Fruit bearing trees are not standing timber and hence immovable.
[shanti Bai Vs state of Bombay- intention]
 Growing crops and Grass
 Crops means, a plant grown for food or other purpose and include all
vegetables in the form of fruits, leaves, bank or roots.
 Grass is mainly grown for fodder purpose. It is movable property
Immovable property which is recognised by the court

1. • Right of way or easement.

2. • Right under lease or tenancy.
3. • Right to extract gold, silver, coal or other minerals from mines.
4. • Right of fishery,
5. • Right of ferry,
6. • Right to collect dues from fair (bazar).
7. • Right to hold exhibition or fair on one's land,
8. • Right to collect forest produce.(lac, tendu leave, gum)
9. • Mortgage debt,
10.• Office of the hereditary priest of a temple and its emoluments.
11.Equity of redemption
Movable property

 The general clauses Act 1897 defines movable property as “property of

every description except IMP”.

• According to section 2(9) of the Registration Act, 1908 movable property

includes standing timber, growing crops and grass, fruits on trees, fruit juices
in the fruits on the trees and the property of every description except IMP.
Besides well known MP such as chair, cars, tables etc.
Movable property

 A property which is not immovable is movable property. Examples: a. standing timber,

growing crops, growing grass,
• b. things placed on the land or attached to it without any intention of making them a
permanent part of the land [machinery attached to land but capable of being shifted
from that place is Movable property.
• c. Royalty or copy right,
• d. Government Promissory notes
• e. Right to worship
• f. Yajman Vritti
• g. Payments made to Pandas by the pilgrims
• h. decree for arrears of rent,
• i. right to get maintenance allowance,
Difference movable property immovable property.
Movable properties Immovable properties

1. All interest which are interests in object other All interest which are interests in land are called
than land are called movable. immovable

2. It can be easily shifted or moved without any It cannot be shifted or transported without any loss or
loss/damage damage and if transported, it will lose its original
shape, capacity, quality or quantity
3.
It is liable for Sales Tax It is liable for Stamp duty.

4. Registration is optional Registration is mandatory

5. Mere delivery with intention to transfer complete Mere delivery is not enough. Transfer must be
the transfer registered.
Instrument
• Section 3 of T.P Act define "Instrument“ as a non-testamentary instrument.
• • Instrument means a legal document.
• • Where a property is transferred through any written document, that document is called
as instrument.
• Attested •
• "attested", in relation to an instrument, 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; sec. 3
Attestation
• Attestation is an act of certifying the signature of the executant.
• Where a property is transferred through document the transferor is said to
execute the deed or [document] of transfer. Such transferor is called
executant.
• It is necessary under the law that 2 persons must affirm or become witness to
the fact that executant and nobody else, has written or signed the deed of
transfer. This act of giving evidence or becoming witness is called attestation
and when these persons have done so, the deed is said to have been
attested. The witnesses are called attesting witnesses.
•
Attestation
• Object:
Attestation of a document ensures the authenticity or truthfulness of the
execution of a document.
•Firstly, It confirms that executant and none else has executed the document
•Secondly, It confirms that executant has executed document with free
consent and there was no force, fraud, or undue influence.

• Who can attest?

• Any two person;
• Age of majority;
• Sound mind;
Attestation
 Dharmdas Mandal Vs Kashinath
 A person called to identify execution is not attesting witness.
 Registrar, sub-registrar, any officer, typist or party to contract cannot be presumed to be
attesting witness.
 A person who is not party to transaction but person interested may be attesting witness.
(relatives of party)
1. Essential for valid attestation:
• 1. The attestation must be done by two or more person.
• 2. Each attesting witness must
a) see the executant signing the instrument (document) or fixing his mark on it. OR
b) see some other person signing the instrument in presence of and under the direction
of executant OR
c) has received from the executant a personal acknowledgement of his signature or
mark or of the signature of such other person
• 3. Each attesting witness has signed the instrument in presence of the executant.
 Legal effects of attestation
 Legal effects of attestation:
1. The documents which require attestation is valid only when it is properly attested and valid and proper
attestation is proved.
2. Where attestation is mandatory, non attestation make it ineffective.
3. Attestation is not to show knowledge of content of document.
 Abinash Chandra Vs Dasarath [sign in the presence of executant]
 Lala Kundamn Lal Vs Musharafi Begum [pardanashin lady]
 Santlal Vs Kamla Prasad [mixed question of law & fact]
 Form of Attestation
 The Act does not prescribe any formality
 Signature of the attesting witness is sufficient
 Attesting witness may sign anywhere in the deed
 Where the witness are illiterate and cannot make signature they may attest the deed by putting there
thumb impression
Registration

1. "Registered" means registered in any part of the territories to which this

Act extends under the law for the time being in force regulating the
registration of documents. sec. 3
2. It is a document which is officially recorded.
3. It is under the provisions of Indian Registration Act 1908.
4. Registration is valuable evidence regarding the statements made in the
document.
5. Where ever required document must be duly attested and registered.
Procedure for registration
 The transfer which is to be made through a deed, should be written on the
stamp papers of prescribed value.

 Thereafter, the executant puts his signature and two attesting witnesses
attest the execution.

 This document which duly attested & executed is presented before sub-
registrar or registering officer having appropriate juris.

 The sub-registrar after taking the statements of the executant and identifying
witnesses and also the thumb impression of the executant on appropriate
register admits the deed for registration.
Registration
 The fee prescribed under the law is also charged. Then the document is recorded
in the prescribed register.

 After formalities, the sub-register certifies on the back of the deed that the
document has been duly registered on the date and time mentioned by him.

 After affixing the official seal, the deed is returned to parties concerned.

 It may be noted that the deed is deemed to be registered not on the date on
which it was admitted for registration. It is deemed to be duly registered on the
date and at a time which is mentioned by the sub-register under his certificate.
Registration must have been completed in all respects strictly according to
provision of the Indian Registration Act.
Actionable claim
 "Actionable claim" means a claim to any debt, other than a debt secured by
mortgage of immovable property or by hypothecation or pledge of movable
property, or to any beneficial interest in movable property not in the
possession, either actual or constructive, of the claimant, which the civil
courts recognise as affording grounds for relief, whether such debt or
beneficial interest be existent, accruing, conditional or contingent.
Actionable claim

 It is a claim affording ground for action in-law.

 It is an act or claim for which an action can be instituted in civil court for
realisation of the benefit.
 In England it is called as 'chose in action' or 'a thing in action’
 To ascertain whether it is actionable claim, there should be 'debt'. A debt is
a sum of money which is payable in future or will become payable in future
by reason of present obligation.
 A debt is a property. It is obligation to pay liquidate/certain sum of money.
Actionable claim

1. Beneficial interest in movable property is intangible movable property and

can be transferable. An actionable claim can be transferred.
 Definition of actionable claim include
 1. Unsecured money debt. And
 2. A claim to beneficial interest in movable property not in possession
of the claimant.
Actionable claim
• Unsecured money debt.
 A debt may be secured or unsecured.

 In secured debt, the creditor (who gives loan) takes security from the
debtor (who take loan) by way of mortgage or pledge or hypothecation. A
secured debt is not actionable claim.

 A debt may be existent debt (already become due and is payable) or

 accruing debt (present due but payable in future) or
 conditional or contingent debt (claim exist but payment depends
upon the fulfilment of some condition).
Actionable claim

• . Claim to beneficial interest in movable property not in the possession

 It is right of a person to take the possession of movable property from the
possession of another. Provided the claimant has beneficial interest.(right
to possess).
 Requirements for actionable claim
1. the claim is to some movable property;
2. the movable property is in possession of another person;
3. the beneficial interest or the right of possession of the claimant is
recognised by the court.
Actionable claim

• Illustration
1. • A has sold fifty bags of wheat to B. The bags of wheat are in the godown
of A. B's right to take possession of the bags of wheat from the godown of A
is his (B's) actionable claim.
2. • A has fifty bags of wheat in his godown. A has not sold these bags to B or
the contract of sale is not valid. B has no beneficial interest in those bags of
wheat. Claim of B, if made by him, is not his actionable claim.
Actionable claim
• Examples of actionable claims
1. a claim for arrears of rent
2. a claim for money under insurance policy
3. a claim for return of earnest money
4. Right to get back the purchase-money when the sale is set aside.
5. right of a partner to sue for an account of the dissolved partnership firm.
6. Muslim woman’s claim for her unpaid dower.
7. Right to claim benefit under a contract for the purchase of goods
8. Right to get the proceeds of a business.
Actionable claim
• Claims or rights which are not actionable claim
1. right to damages in tort or breach of contract. [uncertain sum of money]
2. claim for mesne profits. [ claim of produce of profit of a disputed property
by decree holder who was not in possession of the property]
3. Copy right of a book [invention is not actionable claim bcz it already vests in
the person who has it.]
4. Judgement [debt passed into judgment i.e. decree is not AC bcz no further
action is maintainable for its recovery.
5. a claim for future decree.
• [ No debt ]
Notice
• Notice
• Notice: means knowledge or information of fact.
 "a person is said to have notice" of a fact when he actually knows that fact,
or when, but for wilful abstention from an enquiry or search which he ought
to have made, or gross negligence, he would have known it.
 Actual or express notice: means direct knowledge or information about
something.
Notice
• Express Notice: Express notice is binding on a person only under certain conditions.
 Following requisites are necessary for an express notice.
 The knowledge or information must be definite. Every notice means knowledge of
fact but every knowledge is not treated as notice.
 Only the knowledge of parties interested in the transaction is actual notice
regarding that transaction. knowledge or information of any other person who is
stranger to the transaction is no notice.
 The knowledge or information must be about or related transaction in question.
Irrelevant for transaction cannot be taken to be actual notice for that transaction.
Notice
 Constructive notice: is based on equity. Where a person actually does not
know anything about a fact but the court treats that under the
circumstances he must have knowledge of that fact
 The legal presumption of constructive notice is made by the court under
the following circumstances
1.Wilful abstention from an inquiry or search
2. Gross negligence [Lloyds Bank Ltd Vs P.E. Guzder & Co.]
3. Registration as Notice
4. Actual possession as notice of title
5. Notice to Agent is Notice to principal
6. Partners
TRANSFERS OF PROPERTY BY ACT OF PARTIES

 Transfer by act of parties means a transfer between two living person.

 If transfer is made by ‘act’ of parties, the person who transfers it and the
person to whom it is transferred, both should be living persons at the date of
the transfer.
Sec. 5. Transfer of property defined
 In the following sections "transfer of property" means an act by which a living
person conveys property, in present or in future, to one or more other living
persons, or to himself and one or more other living persons; and "to transfer
property" is to perform such act.
 In this section "living person 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.
 (A) Transfer of property, whether movable or immovable
 Transfer: means a process or an act by which something is made over to
another. It defined with reference to the word 'convey’.

 It is transfer by 'act' of parties.

 It is transfer inter vivos i.e. between two living persons.

 Definition applicable to movable and immovable property.

Contents of definition
1. An act by which
2. A living person
3. Conveys property
4. In present or in future
5. To one or more other living persons, or
6. To himself and one or more other living persons;
7. To transfer property
1. An act by which
 Transfer of property is an act or process.
 Something is done by the person who wants to transfer property.
 Effect of such act is transfer of property.
2. A living person
 Parties transferring property must be living. It is inter vivos transfer.
 Transferor may human or juristic person.
 Transferor must be of age of majority, sound mind and not otherwise
disqualified.
3. Conveys property
 Conveying is doing of the act which is called as transfer.
 Conveyance means any act of the transferor by which certain new titles or
interests are created in favour of the transferee.
 Conveyance necessarily implies that the transferor has the title or interest to
be transferred.
4. In present or in future
 Transfer of property may take effect in present/immediate or at a future
date.
 Eg:
 A makes a gift of his property to B without mentioning date as to when B
shall get the property and also does not lay down any condition. This
transfer is present with immediate effect.
 A makes gift of his watch to B provided B gets first division in the next
examination. Here, although the gift has been declared today but it shall
take effect only if B gets first division. Such transfers are called conditional
transfer.
5. To one or more other living persons
 A transferor may transfer his property to any one / single person or it may be
transferred to more than one person.
 If there are more than one transferee they will get joint rights.
6. Property
 The word property has very wide meaning and includes properties of all
description.
 It means Movable properties such as cars or tables.
 It means immovable properties such as lands or houses.
7. To another living person
 Transferee need not be a competent person.
 Transferee may be minor or insane or even a child in mother’s womb i.e. [en
ventre sa mere] But it should be in existence on the date of transfer.
8. to himself
 Generally a person cannot transfer property to himself. But if he acting
under different capacity it is possible.
 Eg: a person working as chairman, agent, director, trustee may transfer
property to himself.
Certain transfers are not transfer of property within the Act

1. Family settlement
2. Compromise
3. Partition
4. Surrender [lesser interest into larger interest: tenant & Owner]
5. Release [ It is TOP. larger interest into smaller interest: addition to the
title]
6. Relinquishment [giving up one’s right or interest]
7. Charge [ charge is created on a property for securing certain payment
out of that property. eg. Maintenance.]
What property may be transferable?
 sec. 6 - Property of any kind may be transferred, 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.
dd) A right to future maintenance, in whatsoever manner arising, secured
or determined, cannot be transferred.
 e) A mere right to sue cannot be transferred.
f) A public office cannot be transferred, nor can the salary of a public
officer, whether before or after it has become payable.
g) Stipends allowed to military, naval, air-force and civil pensioners of the
government and political pensions cannot be transferred.
h) No transfer can be made (1) insofar as it is opposed to the nature of the
interest affected thereby, or (2) for an unlawful object or consideration
within the meaning of section 23 of the Indian Contract Act, 1872 (9 of
1872), or (3) to a person legally disqualified to be transferee.
i) 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,
under the management of a court of wards, to assign his interest as such
tenant, farmer or lessee.
Non-transferable under section 6
Section 6 lay down 10 kinds of specific properties or interests which cannot be transferred.
a) Spes-Successionis:
 It is the chance of an heir apparent to succeed to an estate transferable.
 Spes-Successionis means expectation of succession.
 Expectation of succession is expecting or having a chance of getting a property through
succession.
 Spes successionis is therefore not any present property. It is merely a possibility of
getting certain property in future.
 Spes successionis under this clause includes:
 a) chance of an heir-apparent succeeding to an estate,
 b) chance of a relation obtaining a legacy on the death of a kinsman or
 c) any other mere possibility of like nature
 Chance of an heir-apparent: It means apparently an heir but not legal heir. Heir-apparent is
a person who would be heir in future if he survives the propositus[ the deceased whose
property he inherits].
 Eg: Father and Son. Son is apparently heir of father.
 Father and son are entitled to inherit the property of each other. If father dies first, son will
be heir, he will inherit father’s property. If son dies first i.e. while the father is still alive, he
cannot inherit father’s property. Who would die first is not known because it is uncertain
future event. Here son is only heir apparent and cannot transfer property of father while
father is alive.
 Accordingly, during the life of father, the son cannot be called as his heir; he is simply heir-
apparent of his father.
 An heir apparent has only chance of inheriting the property subject to 2 possibilities
 [1] if survives the propositus
 [2] the propositus dies intestate i.e. without making any will
 A, a Hindu owning separate property, dies leaving a widow B and a brother C. C has only a
hare chance of succession and this chance of succession of property cannot be
transferred.
 A, expecting that C, his aunt who has no issue, would bequeath her properties worth Rs
10 Lac, transfers it to Z. The transfer is invalid.
 Rights of reversioners under old Hindu law
 Reversionary right was merely a chance of getting properties and as such it was spes-
successionis.
 Reversioner was a person who used to inherit the properties of a widow held by her for
life. Such persons were called reversioners because during the life of the widow, their
rights of inheritance were suspended but it reverted to them after widow’s death
provided they survived her.
 Chance of a legacy: It means expectancy of getting certain property under a
will. Such transfer by legacy is not valid transfer.
 A will operate only after death of the testator and not on date of its writing.
 Where a person executes any will, before the death of that testator, the
legatee has simply a chance of getting property because (a) the legatee may
not survive the testator and (2) the will in his favour might not be the last
will.
 Any other possibility of like nature: it means, any other possible interest of
property which is as uncertain as the chances of an heir-apparent or chance
of a relation of getting property under a will.
 The Object is any merely future uncertain property should not be made
transferable.
b) Mere right of re-entry
 Right of re-entry means right to resume possession.
 Where a person is entitled for right of re-entry (like a lessor or land lord in
case of breach of any condition) and can resume his possession.
 The right of re-entry is connected or accompanied with interest in a land.
Mere right or re-entry not accompanied with any other interest is not
transferable. In case of breach of any condition of lease or tenancy, lessor or
landlord can terminate agreement and transfer property to another. But
without cancelling agreement he cannot assign right to enter to another
 c)Easement apart from dominant heritage
 Easement is a right which exists for the beneficial enjoyment of a land and is
exercised upon the land of another person.
 The land for whose beneficial enjoyment right exists is called as dominant
heritage. And land upon which the rights is exercised is called as servient
heritage.
 Easement right is not personal right but attached to dominant heritage. It
cannot be separated and transferred.
d) Restricted interest
 Certain interests in a property are to be enjoyed by the owner alone and
cannot be transferred
 Beneficial interests or an interest by virtue of which a person derives certain
benefits is the property of that person. Such property [beneficial interest] is
owned by that person but cannot transfer.
 Example : a teacher right to teach.,
 If A gave his land to B for performing marriage of B's daughter for some days.
B after performing marriage gave land to C. Such transfer is invalid.
dd)Right to future maintenance
 The right to maintenance is purely a personal right and can neither be
transferred nor be attached in execution of decree. Maintenance can be
granted through personal contract or by court order.
 Right to receive maintenance is personal right and for his/her own benefits.
Such right is non transferable.
e) Mere right to sue
 Right to sue for a certain sum of money is actionable claim. Actionable claim
is a claim for a certain amount of money and can be transferred.
 But right to sue for uncertain or indefinite sum of money is not transferable.
 Eg: A publishes defamatory statement against B. Under the law of tort B has
a right to claim damages from A. B think that he must sue A claiming Rs 1
Lac. But instead of filing suit he assign this right to C. This assignment of right
to sue from B to C is invalid
f) Public office and Salary of public office
 There is prohibition on transfer of Public office and Salary of public office.
 This is to ensure the dignity to the office held by a person appointed for
qualities personal to him and getting salary for due discharge of his public
duties.
g) Pension and stipends
 Stipends allowed to military, naval, air force and civil pensioners of the
Government and the political pensions cannot be transferred.
 Pensions, stipends etc of the government servants or the political pensions
[to the freedom fighters] are given to the person concerned only because of
his past services or personal merits, therefore, these interests are personal to
the recipient.
h) Transfer opposed to nature of interest etc.
 This clause does not deal with any 'kind' of non transferable interest. Under
this clause there is prohibition in the transfer of property under certain
situation.
 There is prohibition under the following situations
 i: Where transfer is opposed to the nature of interest created thereby.
 There are certain properties which by their very nature can neither be owned
not transferred. Like air, light, space, sea. Such property is known as res-
communis i.e. property of the whole community of the world.
ii- Transfer where its object or consideration is unlawful-
 Any transfer is unlawful where it object of consideration is unlawful as per the
section 23 of the Indian Contract Act 1872.
 A transfer is unlawful if---
 a. its is forbidden by law, [ex opium]
 b. it is of such nature that if permitted it would defeat the provision of
any law or,
 c. it is fraudulent or,
 d. it involves injury to a person or property of the others or,
 e. it is immoral or opposed to public policy.
 iii- Transfer made to a disqualified transferee-
 For a valid transfer the transferee must be legally qualified.
 A legally disqualified transferee make transfer invalid.
 Eg. insolvent, trustee, transfer to presiding officer or court officer, advocate
during litigation, etc.
 Thus a debt secured by mortgage, the judges or the officers of the court are
not legally disqualified transferees.
 if untransferable right of occupancy
 Certain rights of occupancy are made inalienable.
 for example occupancy of a tenant.
Section 7 Person competent to transfer:
Every person competent to contract and entitled to transferable property, or
authorized to dispose of transferable property not his own, is competent to
transfer such property either wholly or in part and either absolutely or
conditionally, in the circumstances, to the extent and in the manner, allowed
and prescribed by any law for the time being force.
Essentials of a valid Transfer

1. The property must be transferable property

2. Transferor must be competent
3. The transferor must also have right to transfer the property being
transferred.
4. Transferee must also be competent i.e he should be living person.
5. Necessary formalities prescribed by law for the transfer must also be
completed.
COMPETENCY OF THE TRANSFEROR
[i] A person who is competent to contract is competent transfer of property.
1. Age of majority
2. Soundness of mind
3. Not otherwise disqualified

[ii]Entitled to Transfer
1. Authority of transfer
8. Operation of transfer
Unless a different intention is expressed or necessarily implied, a transfer of property passes
forthwith to the transferee all the interest which the transferor is then capable of passing in
the property and in the legal incidents thereof.
Such incidents include, when the property is land, the easements annexed thereto, the rents
and profits thereof accruing after the transfer, and all things attached to the earth;
and, where the property is machinery attached to the earth, the movable parts thereof;
and, where the property is a house, the easements annexed thereto, the rent thereof
accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things
provided for permanent use therewith;
and, where the property is a debtor other actionable claim, the securities therefor (except
where they are also for other debts or claims not transferred to the transferee), but not
arrears of interest accrued before the transfer;
and, where the property is money or other property yielding income, the interest or income
thereof accruing after the transfer takes effect.
9. Oral transfer
A transfer of property may be made without writing in every case in which a
writing is not expressly required by law.

Modes of Transfer
1. Delivery Possession
2. registration
10. Condition restraining alienation
Where property is transferred subject to a condition or limitation
absolutely restraining the transferee or any person claiming under him
from parting with or disposing of his interest in the property, the condition
or limitation is void, except in the case of a 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.
 Condition restraining alienation
 Conditional transfers: Every owner of property who is competent to transfer,
has freedom of transferring his properties either unconditionally or subject
to certain conditions.
 In a transfer of property where a condition is laid down by the transferor the
transfer is a conditional transfer. conditions are limitations which limit or
otherwise affect the transfer.
 condition may be
 [1] condition precedent or
 [2] condition subsequent.
 Condition precedent is that condition which is prior to the transfer of
property and whether the transfer would take place or not is itself dependant
on that condition.
 Condition subsequent is a condition which is required to be fulfilled after
the transfer of property as already taken place.
 That is to say a condition subsequent affects the interest of the transferee
after the transfer. section 10,11,12 and 17 of the acts deals with the
condition subsequent.
 Accordingly, section 10 provides that if a transfer is made subject to a
condition by which the transferee [who now becomes owner] is absolutely
restrained from disposing of or parting with his interest in the property with
this interest in the condition is void.
 Absolute restraint
 section 10 declares a condition to be void which it absolutely restrains
alienation. Restraint of alienation is absolute if it totally takes away or curtails
the right of disposal.
 The restraint may be absolute as a restriction on the power of alienation in
point of time or as to the particular or specified person only or of any other
form. partial restraint are not prohibited
 Illustration
 A sells his house to B with the condition that B cannot transfer this house to
anyone except C. The condition is void because C may be chosen as a person
who may never purchase the property.

 Partial restraint
 section 10 is silent about the situation where the restraint is partial. Where
the restraint does not take away the power of alienation of the transferee
substantially but only limits it to some extent, the restraint is partial. A
partial restraint is valid and enforceable.
 In Muhammad Raza Vs Abbas Banda Bibi, the condition restricted the
transferee from transferring the property to strangers i.e., outside the family
of the transferor, the privy council held that the condition was merely partial
restraint which was valid and enforceable.
 Exceptions
1. Leases
2. Married Women
3. Idol
11. Restriction repugnant to interest created

Where, on a transfer of property, an interest therein is created absolutely in

favor 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.

Where any such direction has been made in respect of one piece of immovable
property for the purpose of securing the beneficial enjoyment of another piece
of such property, nothing in this section shall be deemed to affect any right
which the transferor may have to enforce such direction or any remedy which he
may have in respect of a breach thereof.
Restraint on mode of enjoyment
 Section 11, provides that in the transfer of absolute interest of property, if
the transferor imposes any condition restraining the mode of its enjoyment,
the condition is void and the transferee is not bound by such condition.

Transfer of Absolute Interest

 Section 11 is applicable only where an absolute interest or ownership has
been transferred. Where ownership is transferred, the transferee gets
ownership right which includes the right of enjoyment of the property as he
likes. Sale, exchange or a gift is a transfer of ownership or absolute interest.
 A condition or direction in a sale, exchange or a gift that the transferee can
or cannot use or enjoy the property in a particular manner is repugnant to
the ownership rights and is, therefore, void.
 Illustrations
 A sell his agricultural lands to B with a condition that B can cultivate only wheat but
cannot grow the crops of Paddy. The condition is void and B is free to grow the crops of
Paddy.
 A sells house to B directing B that he cannot reside in it but can use it only as a godown or
shop. The condition being void, B is entitled to use the house as his residence.
 A makes a gift of his house to B with a condition, That B shall not receive any income from
this house for a period of 20 years. The condition is void as being repugnance to the right
of enjoyment.

 This section is not applicable where the transfer is merely of partial interest in the
property. In the transfer of partial or limited interest there is no transfer of ownership.
 For example, lease is a transfer of merely a partial interest in which the lessee gets only
the right of enjoyment of the property not its ownership. Condition imposed by a lessor
restraining the mode of enjoyment of the property is valid and the lessee is bound by it.
 Exceptions
 The second paragraph of this section is an exception to the rule. It provides
that condition or a direction restraining the mode of enjoyment may be
made by the transferor provided it is for the beneficial enjoyment of
transferor’s own adjoining property.
 Thus, if a person owns two properties say a house in which is residing and
an adjacent land he can impose a condition on the purchaser that he would
not obstruct the air or light from the windows of his house which open on
the side of the land sold. This condition, though curtails the right of
enjoyment of the purchaser, is a valid condition because it is meant for the
beneficial enjoyment of the transferor’s own property.
 This exception is based on the rule laid down in the Talk v/s Moxhay where
such conditions were described as a restrictive covenants and regarded as a
part of the property for the beneficial enjoyment of which they are imposed
on the transferee.
Difference between section 10 and section 11
Under section 10 and 11 both, the condition subsequent curtailing the rights of
a transferee are declared void. But the provisions of these two sections may be
distinguished as under
1. section 10 is applicable to the transfers of absolute interest as well as limited
partial interest whereas section 11 is applied to transfers of only Absolute
interest in [ownership].
2. Section 10 refers to a restraint on alienation i.e., under section 10 the
condition is that transferee cannot transfer the property. In section 11 the
restraint is on the mode of enjoyment i.e., under section 11, the condition is
that transferee cannot have the free enjoyment of the property.
 13. Transfer for benefit of unborn person

 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.
 Transfer to Unborn Person
 An unborn person means a person who is not in existence even in the
mother's womb. so property can be transferred to a person who is in the
mother's womb, but property cannot be transferred to a person who is not
even in the mother's womb because such person is called as unborn person.
 Legally speaking every transfer of property involves transfer of interests.
When a property is transferred, the transferor divests all his interest and
vests it immediately in the transferee.
 So if a property is transferred directly to a person who is not in existence,
the interest so transferred shall be divested or be away from the transferor
but it would have to remain in abeyance [void] and wait for the transferee
to come into existence, to whom it would vests.
 Transfer For Benefit of Unborn person

 Property cannot be transferred directly to an unborn person but it can be

transferredfor the benefit of an unborn person.
 Section 13 provides that property can be transferred for the benefit of an
unborn person subject to following conditions:

1. Transfer for the unborn must be preceded by a life interest in favour

of a person in existence at the date of the transfer, and
2. Only absolute interest may be transferred in favour of the unborn.
 Prior Life-Interest.
 The transfer for the benefit of an unborn must be preceded by a life interest in favour a
living person in existence at the date of the transfer.
 Where a person intends to transfer certain properties for the benefit of an unborn person,
such unborn is the ultimate beneficiary.
 But since such unborn is not in existence at the date of the transfer, property cannot be
given to him directly. There must be prior life interest in favour of living person so that
such living person holds the property during his life and till that unborn would come into
existence. After the termination of this life interest. The interest should pass on to the
unborn person, who by that time comes into existence.
 e.g., A transfers his house to X for life and thereafter to U.B who is an unborn son of A. The
transfer of house in favour of U.B is valid. Here since U.B is not in existence at the date of
the transfer, A could not transfer the house directly to him. So, A had to make a direct
transfer of life interest in favour of X who is a living person at the date of the transfer. After
the death of X the interest of the house shall pass on to U.B who is the ultimate
ii. Only Absolute Interest may be Given:

 Only absolute interest in the property may be transferred in favour of an unborn person.
Limited or life interest cannot be transferred to an unborn person. Transfer of property
for life of an unborn person is void and cannot take effect.
 When a property is transferred in favour of an unborn, the transferor first gives a life
interest to an existing person. After transferring this, he retains with him the ‘remaining
interest’ of the property. This remaining interest with transferor must be given to the
unborn so that after the termination of prior life interest, the unborn gets the whole i.e.,
absolute interest in the property.
Girjesh Dutt Vs Data Din:

 A made a gift of her properties to her nephew’s daughter ‘B’ for life and then
absolutely to B’s male descendants, if she should have any. But, in the
absence of any male child of B, to B’s daughter without power of alienation
and if B has no descendants male or female then to her A’s nephew. ‘B’ died
issueless.
 The court held that gift for life to ‘B’ was valid as ‘B’ was a living person at
the date of the transfer. But gift in favour of B’s daughter was void under
section 13 of the transfer of property Act because it was gift of only limited
interest [gift without power of alienation]; she had not been given absolute
interest. Further, since this prior transfer was invalid, the subsequent
transfer depending on it [i.e. to A’s nephew] also failed.
 Conclusion
 The meaning of transfer of property is not exhaustive according to Transfer
of Property so we have to depend upon on the General Clause Act for the
better understanding of the meaning we have to adopt both the definition
of Transfer of Property Act and General clause Act.
 Direct transfer to unborn person is void. So in order protect unborn
interest indirect transfer is valid and it should be an absolute transfer of
interest.
RULE AGAINST PERPETUITY [section 14]:

No transfer of property can operate to create an interest which is to take effect

after the lifetime of one or more persons living at the date of such transfer, and
the minority of some person who shall be in existence at the expiration of that
period, and to whom, if he attains full age, the interest created is to belong.
 Introduction:
Section 10, of transfer of property Act makes provision that a condition
restraining the transferee’s power of alienation is void. A disposition which
tends to create future remote interest has been prohibited under section 14 of
the T.P act which incorporates the ‘Rule against Perpetuity’. However a better
name for the may be the rule against remoteness of vesting.
 Meaning:
 Perpetuity means indefinite period.
 Rule against perpetuity is the rule which is against a transfer making the
property inalienable for an indefinite period or forever.
 Where a property is transferred in such a way that if becomes non-
transferable in future for an indefinite period, the property is tied up
forever. This disposition would be a transfer in perpetuity.
 In any disposition, perpetuity may arise in two ways:
(a) by taking away from the transferee his power of alienation and,
(b) by creating future remote interest.
 Object of Rule against Perpetuity:
 The object of the rule against perpetuity is to ensure free and active circulation of property
both for purpose of trade and commerce as well as for the betterment of property itself.
 Frequent distribution of property is in the interest of the society and also necessary for its
more beneficial enjoyment.
 A transfer which renders property inalienable for an indefinite period of time is detrimental
to the interest of its owners who are unable to dispose it of even in urgent need or for any
higher value. It is also loss to the society because when property is tied up from one
generation to another in one family, the society as such would be deprived of any benefit
out of it. Free and frequent disposal ensures wholesome circulation of property in society.
Rule against perpetuity is also based on broad principles of public policy.
 Rule against perpetuity under section 14 of T.P Act:
Section 14 of the T.P Act provides that in a transfer of property, vesting of interest
cannot be postponed beyond the life of last preceding interest in the living person or
persons and the minority of the ultimate beneficiary.

The essentials of the rule against perpetuity as given in this section are as follows:

1. There is transfer of property

2. The transfer is for the ultimate benefit of an unborn person who is given absolute
interest
3. The vesting of interest in favour of ultimate beneficiary is preceded by life or limited
interest of living person or persons.
4. The ultimate beneficiary must come into existence before the death of the last
preceding living person.
5.Vesting of interest in favour of ultimate beneficiary may be postponed only up to the
life or lives of living persons plus minority of ultimate beneficiary; but not beyond that.
 Maximum remoteness of vesting:
 Under section 14 the maximum permissible remoteness of vesting is the
life of the last preceding interest plus minority of the ultimate beneficiary.
 Accordingly, property may be transferred to A for life and then to B for life
and then to UB (Ultimate Beneficiary) when he attains the age of majority.
A and B holds property for their lives one after the other after the death of
B although it should vest in the UB immediately but, under this section the
property may be allowed to vest in the UB when he attains the age of
majority.
Ultimate beneficiary in mother’s womb:
 Where the ultimate beneficiary is in the mother’s womb i.e. it is a ‘child en
venture sa mere’, which means the child in the mother’s womb the latest
period up to which vesting may be postponed, (after the preceding interest)
is the minority plus the period during which the child remains in mother’s
womb.
 It may be noted that minority is counted form the date of worldly birth
whereas for purposes of being a transferee, a child in mother’s womb is a
competent person.


Ultimate beneficiary in mother’s womb:
 In India, the maximum possible remoteness of vesting would, therefore be
as under,
 Maximum permissible remoteness of vesting=life of the preceding interest
+ period of gestation of ultimate beneficiary + minority of the ultimate
beneficiary.
 Thus, the maximum limit fixed for postponing the vesting of interest is the
life or lives in existence at the date of transfer plus the minority of ultimate
beneficiary with the addition of the period of gestation provided gestation
actually exists i.e. the ultimate beneficiary is actually in mother’s womb at
the death of the last person.
  Contingent Interest:
 Under section 14, vesting of interest in favour of the ultimate beneficiary
may be postponed up to his minority.
 In other words, the property does not vest in him until he attains the age of
majority. What then is the nature of his interest during his minority?
Between the period when last person dies and the majority of the ultimate
beneficiary, the ultimate beneficiary has a contingent interest which
becomes vested upon his attaining majority.
 Where the UB is already born at the death of the last person but does not
survive to attain majority e.g., dies at the age of fifteen years, the interest
does not vest in him and therefore it reverts back to the transferor or his
legal heirs if the transferor is dead by that time.
Exceptions to Rule against Perpetuity:-
The rule against perpetuity is not applicable in the following cases:-
1. Transfer for the benefit of public:- Where the property is transferred for the benefit of
public in the advancement of religion, knowledge, commerce, health safety or any other
object beneficial to mankind, the transfer is not void under the rule against perpetuity.
2. Personal agreement:- Personal agreements which do not create any interest in
property are exempted from the rule against perpetuity. Rule against perpetuity is
applicable only to a transfer of property. If there is no transfer of property i.e. no transfer
of interest, the rule cannot be applied. Contracts are personal agreements even though
the contracts relate to rights and obligations in some property.
 E.g. it cannot apply to a covenant of pre-emption[first option to buy is a contractual right
to acquire certain property newly coming into existence before it can be offered to any
other person or entity]. Similarly, where the shebaits of a temple, under personal
agreement, appointed Pujari out of particularly family to perform religious services in the
temple, the agreement was valid because the court held that being personal agreement,
it was not hit by rule against perpetuity.
17. Direction for accumulation. -
(1) Where the terms of a transfer of property direct that the income arising from the property shall be
accumulated either wholly or in part during a period longer than
(a) the life of the transferor, or
(b) a period of eighteen years from the date of transfer,
such direction shall, save as hereinafter provided, be void to the extent to which the period during which
the accumulation is directed exceeds the longer of the aforesaid periods, and at the end of such last-
mentioned period the property and the income thereof shall be disposed of as if the period during which
the accumulation has been directed to be made had elapsed.
(2) This section shall not affect any direction for accumulation for the purpose of
(i) the payment of the debts of the transferor or any other person taking any interest under the
transferor; or
(ii) the provision of portions for children or remoter issue of the transferor or of any person taking
any interest under the transfer; or
(iii) the preservation or maintenance of the property transferred, and such direction may be made
accordingly.
RULE AGAINST ACCUMULATION

ACCUMMULATION= PROFITS OR INCOME ARISING OUT OF THE PROPERTY,

it can be whole or in part

Section 11 says conditions which restrains the enjoyment of property

which is absolutely transferred is void, Section 17 is the exception of this
rule , the application of S11 applies only absolute transferred, but section
17 applies all kinds of transferred.

It means S17 postpone the beneficial enjoyment of a property, such

postponement is discouraged by law just as postponement of vesting of
interest has been that discouraged under the rule against perpetuities .
Under section 17 direction for the accumulation of income is allowed but
not beyond a certain period.

The maximum permissible time /period up to which income of the property

may be accumulated is:
1. Life of the transferor or,
2. A period of 18 years, whichever is a longer period
So a direction of postponement of beneficiary enjoyment or in other word
which makes accumulation of income beyond this period of maximum
permissible limit is void.
Illustration
A transfer his properties to B for life with a direction that the income of the
said properties shall accumulated during A’s life and shall be given also to C.
The direction for the accumulation of income is valid , upto life of ‘A’

A transfers 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).
 Exception
1. Payment of Debts- the period of accumulation can exceed in case of payment
of bebts. 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 Rs one Lac 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 of Property- for the maintenance of property/ preservation of
property, it is allowed.
 VESTED INTEREST
AND
CONTINGENT INTEREST
 19. Vested interest. - 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 appears from the terms of the
transfer.
 A vested interest is not defeated by the death of the transferee before he obtains
possession.
 Explanation. An intention that an interest shall not be vested is not to be inferred merely
from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest
in the same property 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.
Vested interest [SECTION 19]
A transfer of property, involves transfer of interests. Interest may be either
absolute or partial.
Interest may be either be vested or contingent.
 where the interest transferred is vested, the transferee gets that interest
immediately.
 In other words, as soon as the transfer is complete, the interest accrues to the
transferee with the immediate effect and the transferee’s title is complete.
where the interest is contingent, the transferee gets the interest only upon the
happening of an uncertain future event specified in the transfer. In a transfer
of property if the interest is transferred is contingent the title of the transferee
is not complete unless the specified event happens.
 section 19 defines vested interest and section 21 defines contingent interest.
 The interest created in favour of the transferee is set to be vested where
a) no time has been specified as to when it is to take effect, or
b) it is specified that it shall take effect immediately or
c) it is to take effect upon the happening of an event which must happen

 when a property is transferred, the transferor simply effects it according to

the procedure prescribed for the same. He may not mention the date as to
when the interest shall pass on to transferee. In such cases, the intention of
the transferor is that the transferee shall get the interest forth with. Such
intention is presumed by law if the transferor does not specify as to when
the interest shall accrue to the transferee.

 on the other hand, in order to be more specific, the transferor may express
his intention that interest shall accrue to the transferee with immediate
effect. In both cases the interest transferred is a vested interest. where the
transferor provides that transfer shall take effect upon the happening of an
event of ‘must’ nature which is bound to occur in the future, the interest of
the transferee is vested interest.
 Illustration
 A makes a gift his house to B. He simply executes the gift deed but does not
specify any date on which the ownership is to be transferred. The interest of
B is a vested interest.
 A makes it gift of Rs. 10,000/- to B on the death of C . B has vested interest in
Rs. 10,000/- even before C dies. But the money shall be paid to B only upon
C’s death. If B dies before the death of C the money should be paid to B’s
Legal heirs.
Explanation to section 19 makes it clear that vested interest is not affected by
the fact that the right of enjoyment has been postponed. The vested interest
remains unaffected also when the title is to pass on to another person on the
happening of a particular event in future. The explanation provides that in the
following Situations, although it may appear that the transferee has no vested
interest, nevertheless the interest is vested:

1. postponement of enjoyment.
2. prior interest
3. Direction for accumulation of income
4. Conditional limitation
Nature of vested interest
1. Present fixed right: - Vested interest is a present fixed right to property. In a
transfer of property where a vested interest is created in favour of the
transferee, the transferee gets the present fixed right to property.

2. Transferable and heritable interest: vested interest is transferable and

heritable. Being a present fixed right and also since the title of the transferee is
complete, a vested interest is divisible and transferable interest.

A vested interest is a heritable interest. where a person [transferee] dies

having vested interest in property his interest vest in his legal heirs whether or
not yet he has obtained the possession.
 21. Contingent interest. - 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.
 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.
 Contingent interest [SECTION 21]
 Contingency means uncertain future event. In a transfer of property where
the vesting of interest depends on any contingency i.e., uncertain future
event, the interest is contingent.
 In a transfer of property where the vesting of estate is dependent upon an
event that may or may not happen the interest is contingent.
 A contingent interest is an interest which is created to take effect only when
[1] some specified uncertain future event happens or
[2] specified uncertain even does not happen.
 For example, where A makes a gift to B provided X survives the age of 20
years, the interest of B is contingent. Similarly, where A makes a gift to B
provided X does not survive [that is dies before] the age of 20 years, here
too the interest of B is contingent. In both the examples, the vesting of
interest in favour of B depends on an event which is uncertain.
Nature of contingent interest

1. Future possible interest

2. Not heritable
3. Transferable interest [only when he gets ownership]
4. Sale of inchoate contingent interest prior to vesting
Distinction between the vested and contingent interest
1. When accrues?
on the transfer of property, a vested interest accrues immediately to the transferee. A
contingent interest does not accrue to the transferee until the specified uncertain event
happens or does not happen.
2. Nature of title—
A vested interest confers complete and perfect title. In contingent interest the title is
dependent on uncertain future event which may or may not occur; the title is therefore
imperfect. vested interest is owned absolutely, whereas contingent interest is owned
conditionally.
3. Transferee’s right in property—
In a vested interest the transferee has present fixed right in property. In contingent
interest the transferee as merely future possible right in the property. A vested interest
confers present right to property even if the enjoyment is postponed or suspended
whereas in a contingent interest all the rights of the property, including the enjoyment or
dependent on an event which may or may not occur.
4. Transferability—
vested and contingent interest both are transferable. But, in a vested interest the
transferee gets complete title whereas, in contingent interest the transferee takes an
interest which may be defeated by non-fulfilment of condition precedent or non-
happening of the event.

5. Attachment and sale in execution of decree—

A vested interest is capable of being attached or sold in execution of a decree whereas, a
contingent interest cannot be sold in execution of any decree. A merely contingent or
possible interest is not liable to attachment and sale in execution of a decree.

6. Heritability –
A vested interest is a property of the transferee; therefore, it may be inherited by his heirs
even though he could not obtain the possession at the time of his death. A contingent
interest confers No title; therefore, it is not heritable.
.
25. Conditional transfer. - An interest created on a transfer of property and dependent upon
a condition fails if the fulfilment of the condition 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.
Illustrations
(a) A lets a farm to B on condition that he shall walk a hundred miles in an hour. The lease is
void.
(b) A gives Rs. 500 to B on condition that he shall marry A’s daughter C. At the date of the
transfer, C was dead. The transfer is void.
(c) A transfers Rs. 500 to B on condition that she shall murder C. The transfer is void.
(d) A transfers Rs. 500 to his niece C, if she will desert her husband. The transfer is void.
 Section 25 conditional transfers
 Property may be transferred either absolutely or conditionally. Where
properties transferred absolutely, it is unconditional transfer and transferee
gets the interest without any subjection or limitation.

 on the other hand when the property is transferred conditionally, the transfer
is subject to certain conditions or limitations and the legal effect of the
transfer may vary according to the nature of the condition attached to it. A
transfer of property with certain condition is called conditional transfer.

 conditions are of three kinds:

 condition precedent
 condition subsequent
 collateral conditions.
VOID CONDITION PRECEDENT
Section 25 deals with the condition precedent. under this section, a condition
precedent is void if its performance is either impossible or unlawful and where
a condition precedent is void the transfer of property too void; it fails. In the
following cases the conditions are void and the transfer fails [if it does not take
effect] because the conditions cannot be fulfilled.
1. Impossible to perform
2. Unlawful
a) Forbidden by law
b) Defeats the provision of law
c) Fraudulent
d) Involves any injury to the person or a property
e) Opposed to public policy.
 26. Fulfilment of condition precedent. - Where the terms of a
transfer of property impose a condition to be fulfilled before a person
can take an interest in the property, the condition shall be deemed to
have been fulfilled if it has been substantially complied with.
 Illustrations
 (a) A transfers Rs. 5,000 to B on condition that he shall marry with
the consent of C, D and E. E dies. B marries with the consent
of C and D. B is deemed to have fulfilled the condition.
 (b) A transfers Rs. 5,000 to B on condition that he shall marry with
the consent of C, D and E. B marries without the consent of C,
D and E, but obtains their consent after the marriage. B has not
fulfilled the condition.
27. Conditional transfer to one person coupled with transfer to another on failure of prior
disposition. - 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.
But, where the intention of the parties to the transaction is that the ulterior disposition shall take effect
only in the event of the prior disposition failing in a particular manner, the ulterior disposition shall not
take effect unless the prior disposition fails in that manner.
Illustrations
(a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within three months
after As death, and, if he should neglect to do so, to C. B dies in As life-time. The disposition in
favour of C takes effect.
(b) A transfers property to his wife; but, in case she should die in his life-time, transfer to B that which
he had transferred to her. A and his wife perish together, under circumstances which make it
impossible to prove that she died before him. The disposition in favour of B does not take effect.
 28. Ulterior transfer conditional on happening or not happening of
specified event. - 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 shall happen such interest shall pass to another
person, or that in case a specified uncertain event shall not happen such
interest shall pass to another person. In each case the dispositions are
subject to the rules contained in sections 10, 12, 21, 22, 23, 24, 25 and 27.
 29. Fulfilment of condition subsequent. - An ulterior disposition of the kind
contemplated by the last preceding section cannot, take effect unless the
condition is strictly fulfilled.
 Illustration
 A transfers Rs. 500 to B, to be paid to him on his attaining his majority or
marrying, with a proviso that, if B dies as minor or marries without consent of
C, the said Rs. 500 shall go to D. B marries when only 17 years of age,
without Cs consent. The transfer to D takes effect.
DOCTRINE OF ELECTION
[SECTION 35]
 Doctrine of election
 The Doctrine is founded upon the principle of Equity and so it applies to all
person irrespective of their personal laws.
 This principle was not familiar to English law but was common to all laws
which were founded on the rules of justice.
 Section 35: incorporates the Doctrine of election
 Election means choosing between two inconsistent or alternative rights.
Under any instrument if two rights are conferred on a person in such manner
that one right is lieu of the other, he is bound to elect only one of them.
 The foundation of election is that a person taking the benefit of an
instrument must also bear the burden.
 In Beepathumma V/s Kadambolithaya
 Sc held that a person cannot take under and against the same instrument.
 A offer Rs 100 to B in lieu of transfer his house, B can elect only one, either he can retain
the money and transfer his house or deny the money, he cannot enjoy the both.
 This doctrine is based on equitable principle under which a person may not be allowed to
approve that of an instrument which is beneficial to him and disapprove its that part which
goes against him. Means no one can approbate and reprobate at the same time. In other
words where a person takes some benefit under a deed or instrument he must also bear
it's burden.
 In Cooper V/s Cooper
 Held that the Doctrine of Election, applies on every instrument and every type of property
movable and immovable.
 Definition:
 35. Election when necessary.—Where a person professes to transfer property which he
has no right to transfer, and as part of the same transaction confers any benefit on the
owner of the property, such owner must elect either to confirm such transfer or to dissent
from it; and in the latter case he shall relinquish the benefit so conferred, and the benefit
so relinquished shall revert to the transferor or his representative as if it had not been
disposed of,
 subject nevertheless,
 where the transfer is gratuitous, and the transferor has, before the election, died or
otherwise become incapable of making a fresh transfer,
 and in all cases where the transfer is for consideration,
 to the charge of making good to the disappointed transferee the amount or value of the
property attempted to be transferred to him.
  Illustrations
 The farm of Sultanpur is the property of C and worth Rs. 800. A by an instrument of gift
professes to transfer it to B, giving by the same instrument Rs. 1,000 to C. C elects to retain
the farm. He forfeits the gift of Rs. 1,000.
 In the same case, A dies before the election. His representative must out of the Rs. 1,000
pay Rs. 800 to B.
 The rule in the first paragraph of this section applies whether the transferor does or does
not believe that which he professes to transfer to be his own.
 A person taking no benefit directly under a transaction, but deriving a benefit under it
indirectly, need not elect.
 A person who in his one capacity takes a benefit under the transaction may in another
dissent therefrom.
 Exception to the last preceding four rules.—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.
 Acceptance of the benefit by the person on whom it is conferred constitutes an election by
him to confirm the transfer, if he is aware of his duty to elect and of those circumstances
which would influence the judgment of a reasonable man in making an election, or if he
waives enquiry into the circumstances.
 Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if
the person on whom the benefit has been conferred has enjoyed it for two years without
doing any act to express dissent.
 Such knowledge or waiver may be inferred from any act of his which renders it impossible
to place the persons interested in the property professed to be transferred in the same
condition as if such act had not been done.
  Illustration
 A transfers to B an estate to which C is entitled, and as part of the same
transaction gives C a coal-mine. C takes possession of the mine and exhausts
it. He has thereby confirmed the transfer of the estate to B.
 If he does not within one year after the date of the transfer signify to the
transferor or his representatives his intention to confirm or to dissent from
the transfer, the transferor or his representative may, upon the expiration of
that period, require him to make his election; and, if he does not comply
with such requisition within a reasonable time after he has received it, he
shall be deemed to have elected to confirm the transfer.
 In case of disability, the election shall be postponed until the disability
ceases, or until the election is made by some competent authority.
When question of election arises
A case of election arises only when the transferee takes a benefit directly under
a transaction. When the transferee derives any benefit indirectly, no question
of election arises, as he, in that case, cannot be said to take under the deed;
Valliammai v. Nagappa, AIR 1967 SC 1153.
Application of Election:
 Where a person professes to transfer a property not his own
 In lieu of the property the transferor confers certain benefits to the owner of
the property.
 Transfer of benefit and confer of benefit to be part of the same property.
 When a person profess to transfer property not his own
 person professes to transfer the property of another person.
 Professes means to purports or make contract, for property which is not his own but he can
make contract for the same.
 A may profess to transfer a property to B, which is owned by C, and also confers a benefit
Rs 1000 to C. Here A is not transferring the C's property to B but simply profess or contract
a property which he does not own .
 Knowledge of the fact that transferor has no authority to transfer the property is
immaterial for applicability of the rule of election.
 Benefit conferred on the owner of the property
 Doctrine says transferor must confer the benefit on the owner of the property. The word
ownership is a wide connotation, it include a person having vested interest, or contingent
interest and also a person who has ever reversionary or remote interest in the property.
 Part of the same transaction
 This Doctrine only applicable when transfer and benefit a part form the same
transaction. Means the benefit and transfer are interdependent and
inseparable they form part of the same transaction.
 Muhammad Afsal Vs Gulam kasim: Govt while transferring the chiefship to
Nawab eldest son, granted cash allowance to the 2nd son. Nawab during his
life time had already given 2 villages to the 2nd son for maintenance.
 The privy council held that since the 2 grants cash by govt and the villages by
nawab himself in his life came to 2nd son from different sources. They are not
part of the same transaction. The 2nd son not put to election.
 Owners Duty
 Owner is under duty bound to either accept or reject the offer benefits. If a
property is professed to be transferred and in the same transaction some
benefit is given to the owner of property then such owner is under a duty to
elect.
 By his election he may either accept the instrument with its all contents or
reject it altogether. He has no option to accept only the beneficial part of
instrument. Where he elects to accept the instrument, he is entitled to get
the benefit, but he bound to transfer his property. If he elects to reject the
instrument he cannot claim benefit, but he may retain his property.
 However, the duty to elect arises only when the person acts in one and the
same capacity. That is to say, he is the person who gets benefit and also owns
the property.
 Mode of Election
 It can be express or implied, owner can express his intention in clear and specific word,
once the election has done it is final and conclusive.
 Election is implied when the owner of property having aware of his duty to elect and
accept the benefits.
 (1)When owner has enjoyed the benefit for two years without doing any act of refusal or
dissent of the transaction.
 (2) when the owner of the property exhausts or consume the benefits.
 Requisition to Elect
 This is the special procedure for expediting election after the expiry of one year, if the
owner of property does not elect, neither confirm nor dissents the transfer, the transferee
may require him to make such election. And, if he does not elect, within a reasonable time
after such requisition, he is deemed to have elected in favour of the transfer.
 Suspension of Election:
 The election may suspend till the time there are any legal disability. where at
the time of transfer, the elector is legally disabled, the election is postponed
until such disability ceases or until the election is made on his behalf by a
competent authority. eg guardian. Legal disability may be minority or lunacy
of the elector.
 Election against transfer If there is dissent from the professed transferred,
the transferor forfeits his benefit confer to owner.
 Difference Between English and Indian Law
 Under English law, where the election is against the instrument, the benefit does not
revert to the transferor. The owner of property while rejecting the transfer may insist
upon taking also benefit conferred on him. He is therefore, called refractory donee or
rebullians donee. But such refractory donee takes the benefit subject to a charge
compensate the disappointed transferee the transferor or his representatives are not liable
to compensate him.
 Illustration: the owner of property C while electing against the transfer, would take also the
benefit of Rs 1000/-. But C would be liable to give Rs 800/- to B, the disappointed
transferee. A or his representatives are not liable to compensate B.
 The thin line between English and Indian law is the residues(balance)
 A professes to gift a house worth of Rs 800 to B which belongs to C, and he offers benefits
to C Rs1000, before election C dies. According to Indian law the residue (Rs 200) would go
to A(transferor), while in English law goes to C, as a compensation.
 DOCTRINE OF
APPORTIONMENT
  DOCTRINE OF APPORTIONMENT
 Apportionment means division. S 36 deals with apportionment of periodical payments as
between the transferor and the transferee and sec 37 deals with apportionment of an
obligation in the event of the division of the property to which it relates. Thus, sec 36
deals with apportionment by time and s.37 deals with apportionment by estate.
 Apportionment means distribution of a common fund between two or more claimants. In
a transfer of property, the transferee gets the property with all its incidental benefits,
produce or income.
 where the property yields some periodical income, there must be specific mention of
what portion of its income remains with transferor and what goes to transferee and from
which particular date. In the absence of any specific mention by a contract to the
contrary or local custom, the distribution or apportionment of the periodical income
between transferor and transferee is governed by rules of
 (1) Apportionment of time
 (2) Apportionment by estate.
 Section 36 provides Apportionment of periodical payments on
determination of interest of person entitled-
 In the absence of a contract or local usage to the contrary, all 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.
 Section 36 provides that in a transfer of property all rents, annuities,
dividends and other periodical payments in the nature of income shall be
deemed to accrue from day to day and be apportionable accordingly. Thus,
as between transferor and transferee, the periodical income which the
property yield, is to be distributed between transferor and transferee at fixed
date on the basis of its accrual on each date.
 For instance, A's house is on rent of Rs.300/- payable at the end of each
month. A sells his house to B on 15th April. Thus B became owner of the
house with effect from April15. A the seller is entitled to get Rs 140/- as rent
for 14 days and B the purchaser shall get Rs.160/- as rent for 16dys out of
Rs.300/- which is rent for the whole month.
 Section 37. Apportionment of benefit of obligation on severance-
When, in consequence of 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 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 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 reasonable
notice of the severance.
 Nothing in this section applies to leases for agricultural purposes unless and until the state
government, by notification in the official Gazette, so direct.
 Section 37. Apportionment of benefit of obligation on severance-
Illustrations
(a) A sells to B, C and D a house situated in a village and leased to E at an annual
rent of Rs. 30,000 and delivery of one fat sheep, B having provided half the
purchase-money and C and D one quarter each. E, having notice of this, must
pay Rs. 15,000 to B, Rs. 7,500 to C, and Rs. 7,500 to D and must deliver the
sheep according to the joint direction of B, C and D.
•

• Section 37 provides that where an estate is transferred in such a manner that after the
transfer, it is to be divided in several shares then, the obligation of the benefit of property
must be performed in favour of each sharer(Owner) in proportion to the value of each
shares.
• For ex, A sells his house to B and C. Both B and C contribute to the price of the house
in 1/3 and 2/3 shares. The house is on monthly rent of Rs.300/-. The tenant is under an
obligation to pay, as rent, Rs 100/- to B and Rs.200/- to C.
Conditions:
i. The person under obligation to pay the benefit in proportion to respective shares must have
reasonable notice of the fact that on transfer the estate was divided into several specific
shares.
ii. The obligation must be capable of being performed in parts in favour of each owner.
iii.The severance must not substantially increase the burden of obligation.
Exceptions
The rule of apportionment by estate does not apply in the following cases:-
1. Transfer by operation of law- Transfer by operation of law or involuntary
transfer e.g. succession are exempted from this rule. Thus after the death of a
creditor his legal heirs are jointly entitled to enforce the claim which such
creditor, had he been alive, could have enforced singly.
2. Agricultural tenancies- The rule is not applicable to agricultural tenancies
because on transfer, the division of obligation to pay to several owners may
cause much inconvenience and harassment, to agriculturists.
IMPROVEMENTS MADE BY BONAFIDE HOLDERS
UNDER DEFECTIVE TITLES
51. Improvements made by bona fide holders under defective titles. -
When the transferee of immovable property makes any improvement on the
property, believing in good faith that he is absolutely entitled thereto, and he
subsequently evicted therefrom by any person having a better title, the
transferee has a right to require the person causing the eviction either to have
the value of the improvement estimated and paid or secured to the transferee,
or to sell interest in the property to the transferee at the then market value
thereof, irrespective of the value of such improvement.
 The amount to be paid or secured in respect of such improvement shall be
the estimated value thereof at the time of the eviction.
 When, under the circumstances aforesaid, the transferee has planted or
sown on the property crops which are growing when he is evicted therefrom,
he is entitled to such crops and to free ingress and egress to gather and carry
them.
 Section 51 is based on the principle of equity that “one who seeks equity
must do equity.” This section gives relief to a transferee who makes
improvements in good faith on the land held by him and is being evicted
subsequently by a person having a better title.
 If a person purchases a land, from an ostensible owner [benamidar] believing
that the vendor is the real owner and in a good faith also constructs a building
on the land then, it is obvious the real owner may ask the purchaser to vacate
the land on the ground of his better title.

But, since the conduct of the real owner, who now claims better title in land,
is itself unjust and inequitous because he had allowed the vendor to sell the
land and had also allowed the purchaser to make the improvements on the land,
equity may not help him in a setting his title.

If he seeks equity’s help in claiming his better title in the land and thereby
evicting the purchaser, equity would require him to compensate the purchaser
for the improvements made by him.
 Thus, if it is just and equitable that a person having a better title is entitled to
have a position of property, it is also just and equitable that bona fide a
transferee be compensated for his bonafide investments in making
improvements and who is now being evicted without any fault on his part.

 The person having better title and claiming their transferee’s eviction cannot
be allowed to be benefited at the cost of the transferee.

 Accordingly, a transferee who after having made improvements in good faith,

is subsequently evicted by a person having better title, he has rights either to
have the value of the improvements or to the purchase the property on which
improvements have been made .
 Essential conditions of section 51

1. The person who is being evicted is a transferee, and

2. Such a transferee had made improvements believing in a good faith that
he was absolutely entitled to do so.
 Transferee of immovable property-
 The equity enacted in this section gives relief to the transferee of an
immovable property who believes himself to be absolutely entitled to make
improvements. The scope of this section is limited in the sense that it
applies only to the transfers or the absolute interest example sale, gift, or
exchange.
 Following cases, the transferee cannot be given the benefit of this section
 Lessee: A Lessee cannot be regarded as a ‘transferee’ under this section and
as such he cannot claim compensation for any improvement made by him.

 Mortgagee: A mortgagee is also not a person who could believe that he is

absolutely entitled to the property mortgaged to him. As such, section 51
cannot give relief to mortgagee who makes improvements on the mortgage-
property.

 Trespasser: A trespasser can never be regarded as a transferee; therefore, he

cannot claim the compensation for any improvement made on the property
held by illegally.
 Good Faith:

 section 51 incorporates a principle of equity. Equity cannot help a person

whose own conduct is unjust. Therefore, this section does not apply where
the transferee’s own conduct was malafide. It is necessary that the
transferee had made improvements believing in good faith that he was
entitled to make such improvements.

 In Sayed Ali Moosa Raza v/s Razia Begum,

HC held that the defendant had made constructions in good faith in a bonafide
belief of valid title of land. Therefore, the ingredients of Section 51 are
attracted and the defendant has right to require the plaintiff to elect to have
value of construction or sell his interest in land to defendant. The onus of
proving good faith lies on the transferee.
 Improvements: Improvements must be such which increases the value of
the property permanently. Expenditures incurred by the transferee for
manuring the field so as to have a good harvest is not improvement.

 Similarly, spending money on levelling the ground is also not improvement

on the land. Repair of the house is not regarded as any improvement of the
purchaser. where the purchaser has put a new staircase in an old house, it
was held that it was not an improvement within the meaning of this section.

 For ex, constructing buildings on the land is an improvement on the land and
the purchaser of the land, on being evicted, may claim compensation under
this section.
Nature of relief of the transferee
where the bona fide transferee makes improvement in good faith on the
property from which is evicted, the transferee may get anyone of the following
reliefs.
1. He may claim compensation for his improvement or
2. He may require the evictor to sell the property to him

 The option is with the person who effects the transferee. Transferee has to
select anyone of the reliefs given to him by the evictor. Transferee cannot
compel the evictor to give any particular relief to him.
 Normally the person having the better title would give the cost of
improvement. But, if he is too poor to give the cost or it is otherwise not
beneficial to him, he would sell his own interest in the property of the
transferee.
 Valuation of compensation where the transferee selects to have
compensation for the improvements, he can claim the market value of the
improvements made by him. The evictor cannot insist the transferee to
accept only the actual money expended by him on making the improvements
years ago.
 However, the market value of the improvements to which the transferee is
entitled, is determined and awarded by the court. But, the transferee
claiming compensation must provide evidence for the money spent by him so
as to enable the court to estimate the value of compensation.
 Since the court has to determine the saleable value of the improvements it is
necessary that court should know the extent of expenditure over the
improvement.
 Under this section, the value of compensation to be awarded to the transferee
is as on the date of eviction rather than on the date when option was made or
on which the transferee selects his relief.
DOCTRINE OF LISPENDENS
 DOCTRINE OF LISPENDENS
Section. 52 Transfer of Property Act, provides doctrine of Lis pendens .
It is a Latin term it means transfer during pending litigation. This doctrine puts
restriction on the Transfer of Property during the pendency of the suit in a
court competent to try it.
 DOCTRINE OF LISPENDENS

 Transfer of Property pending suit relating thereto - Section.52- During the pendency in
any Court having authority within the limits of excluding the state of Jammu and Kashmir, or
established beyond such limits, by the central government of any suit or proceeding which is
not Collusive and in which any right to immovable property is directly and specifically in
question, the property cannot be transferred or otherwise dealt with by any party to the suit or
proceeding so as to affect the right of any other party thereto under any decree which maybe
made therein , except under the authority of the court and on such terms as it may impose.
Explanation -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.
 The Object of this Doctrine -
I. avoid endless litigation.
II. To protect one of the parties to the litigation against the act of the order .
III. to avoid abuse of legal process
 Meaning
 The law incorporated in Section 52 is based on the doctrine of Lis pendens, based upon the
English common law. 'Lis' means litigation' and 'pendens' means pending. so , Lis pendens
would mean 'pending litigation'. The doctrine of Lis pendens is expressed in the well-known
maxim 'pendente lite nihil innovature', it means during pendency of litigation, nothing new
should be introduced.
 Under this doctrine, the principle is that during pendency of any suit regarding title of a
property, any new interest in respect of that property should not be created. Creation of new
title or interest is known as a transfer of property. Therefore, in essence, the doctrine of Lis
pendens prohibits the transfer of property pending litigation.
 Basis of Lis pendens-
 The basis of doctrine of Lis pendens is necessary rather than actual or
constructive notice, it may be said that this doctrine is based on notice
because a pending suit is regarded as a constructive notice of the fact the
disputed title of the property under litigation. Therefore any person dealing of
that property must be bound by the decision of the court.
 For the administration of justice, it is necessary that while any suit is pending
in a court of law regarding title of the property, the litigant should not be
allowed to take decision themselves and transfer the disputed property.
 So, the doctrine of Lis pendens is based on necessary and is matter of public
policy, because it prevents the parties from disposing a disputed property in
such a manner as to interfere court's proceeding.
 The principle is explained in Bellamy Vs Sabine, Where Turner L.S said, it
that doctrine rests upon this foundation that, it would plainly be impossible
that any action or suit could be brought to a successful termination if
alienations pendente lite were to allowed prevail. The plaintiff would be liable
in every case to be defeated by the defendants, alienating before the judgment
or decree and would be driven to commence his proceeding de novo subject
again to the same course of the proceedings."
 The doctrine is based upon expediency and it is immaterial whether the
transferee pendente lite had or had not notice of the suit. This doctrine had
been fully expounded by the privy council in Faiyaz Hussain Khan Vs Prag
Narain, where their lordship quote with approval the observations of Lord
Justice Turner in Bellamy's case.
 Essential conditions for Lis pendens.
1. There is a pendency of a suit or proceeding.
2. The suit or proceeding must be pending in a court of competent
jurisdiction.
3. The suit must be relating to the right in a specific immovable property.
4. The suit or proceeding must not be collusive.
5. The property in dispute must be transferred or otherwise dealt with by
any party to suit.
6. The transfer must affect the rights of the other party to litigation.
 when the above mentioned conditions are fulfilled, the transferee is bound by
the decision of the court. If the decision of court is in favour of the transferor,
the transferee has right transferred on him, but if the decision of the court goes
against the transferor, the transferee will not get any interest on that property.
1. Pendency of suit
 where a property is transferred during pendency of litigation. Pendency of a suit is that
period during which case remains before a court of law for its final disposal. The
pendency of a suit begins from the date on which the plaint is presented and terminates on
the date when the final decree is passed.
 In Nagubai Ammal Vs B. Shama Rao., where a plaint is presented with insufficient court
fee and is therefore returned by the court to the plaintiff, presents it again by affixing proper
court fee, the pendency would begin from the date when it was presented second time with
proper court fee.
 where an application is presented before a court asking permission to sue in forma pauperis,
the pendency starts from the date on which the application has been presented provided it is
accepted by the court.
 In Supreme General Films Exchange Ltd. Vs Sri Nath Singhji Deo, a theatre
(plaza Talkies) was attached in execution of a decree against its owner. During
attachment, the owner leased the theatre to M/s Supreme General Films
Exchange Ltd. It was held by the Supreme Court that the lease was hit by the
doctrine of lis pendens.
 Any transfer made outside the period of litigation will not be affected by Lis
pendens.
 Proceedings : The doctrine of lispendens applies to transfers during pendency
of suit or proceeding. "proceeding' means a judicial activity whether civil or
criminal.
 Accordingly, for the purposes of this section there is no difference between a
suit and proceeding. This section has been applied to transfers made during
revenue proceedings.
 A claim made under O.XXI, R.58 of the CPC is a proceeding under this
section.
 Pendency in court of Competent Jurisdiction:
 The suit or proceeding during which the property is transferred, must be
pending before a court of competent jurisdiction. Where a suit is pending
before a court which has no proper jurisdiction to entertain it, the lispendens
cannot apply.
 For filing a suit, the Cpc has prescribed jurisdictions of the courts on the
ground of territory or on the basis of valuation of the subject- matter of
dispute. The jurisdiction of the court is, therefore, territorial or pecuniary or
otherwise as given in this code. Thus, a suit respecting any immovable
property should be filed only in the court within whose jurisdiction the
property situates. If the disputed property is situated outside the territorial
limits of the Court, it has no competency to try any suit involving the property.
 Right to immovable property must be involved-
 The doctrine applies in the case of immovable properties only and not where the subject
matter is movable property. The litigation must involve direct and specific right in the
immovable property, such as a dispute with respect to title possession or a right of
alienation etc. For ex, where a suit is pending between landlord and tenant regarding
payment of rents and during litigation the landlord transfers the property, the transfer is not
affected by lispendens because the litigation is not with regard to any interest in the
property but involves payments of rents.
 The doctrine applies to the sale, specific performance of contract, partition, mortgage suit,
easements, the charge created by Hindu widow on the Hindu Joint Family Property etc. and
is not applicable to the suits related to debts, rents, recovery of movables, or suit for an
account etc..
 Right in movables- The doctrine of Lis pendens does not apply where the suit
involves right in movable properties. Standing timber is a movable property,
therefore, this section cannot apply where the issue before the court is rights in
respect of standing timber.
 The suit must not be collusive- Lis pendens is inapplicable if the suit is
collusive in nature. A suit is collusive if it is instituted with a mala fide
intention. Mala fide intention behind instituting a suit is inferred for the fact
that parties to the suit know their respective rights in the property and there is
no actual dispute. such suit is, therefore, fictitious and the very purpose of
filing the suit is to get judicial decision for some evil design e.g. defrauding a
third party.
 Illustration: A is owner of a house which is in possession of B. A & B secretly agree that
B shall declare himself as owner of the house whereupon A shall file a suit against B. It is
further agreed between them that during litigation B would sell the house and the price shall
be divided equally between them. Both are sure that since the court shall determine the
ownership on merit A would retain the house and the sale by B shall be declared void and
the purchaser can never get the house. With such fraudulent intention A files suit against B
objecting B’s claim of ownership. During pendency of suit B sells the property to C. After
sometime the court gives its judgement in favour of A and it is held that B has no right of
ownership in the house which B had sold to C. Since the suit between A and B was
collusive, C is not bound by the decision of the court. Accordingly, the transfer in his C’s
favour would not be invalidated.
 Property is transferred or otherwise dealt with-
 During pendency of suit, the property must be transferred or otherwise dealt
with by any of the parties to suit. The term transfer includes absolute transfer
as well as the partial transfer. The doctrine applies to the sale, exchange, a
grant under the lease, mortgage etc. The transfer here means the transfer
covered by Transfer of Property Act 1882. 'Otherwise dealt with" includes
the cases which are not covered by the TP Act 1882. e.g. Surrender, release or
partition.
 Illustration: partition of the Joint Hindu Family property does not amount to
a transfer, but is covered under the expression 'otherwise dealt with'. Hence, a
partition of the property which is a subject matter of the suit, affected during
the pendency of the suit would be subject to the rule of Lis pendens.
 Involuntary transfers- Transfer of property may either be by act of parties or by operation
of law. Transfers by operation of law are known as involuntary transfers e.g. Court sale or
transfer made by order of the court. Section 52 is applicable to both the kinds of transfers
pendente lite.
 Transfers with permission of court- when a transfer is made during pendency of suit with
the permission of court, the principle of Lis-pendens is not applicable.[exception]
 Transfer by any party to suit-
 The parties to the suit include the ones who file the plaint or petition i.e. the plaintiffs and
the ones against whom the relief is prayed for i.e. the defendants, or their representatives on
their demise. The transfer made by a person before he is made a party to the suit is not
affected by the doctrine of Lis pendens.
 Transfer of property by a person whose title is not in any way connected with disputed
property is not affected by Lis pendens.
 Illustration: A is the owner of the property X, which is managed by B with
the permission of A. B sells the property to C. A files a suit against B
reclaiming the possession of the property X and C is not made the party to
the suit. Mean while, C sells the property to Y. As C is not the party to the
suit, the transfer made by him will not be affected by the doctrine of Lis
pendens.
 Bala Rama Bhadra Vs Daula, the doctrine of lispendens was not applied
where the transfer was made pending the suit by a person who was not party
at the time of transfer was made pending the suit by a person who was not
party at the time of transfer but, was subsequently made a party as a
representative of the original defendant.
 Transfer affects right of any other party-
 The last condition for the applicability of section 52 is that the transfer
during pendency must affect the rights of any other party to suit. The
principle of Lis pendens is intended to safeguard the parties to litigation
against transfers by their opponents. so, the words 'any other party' here does
not mean stranger to suit. It means any other party between whom and the
party who transfers, there is an issue for decision which might be prejudiced
by alienation. Any other party here means the opposite party whose interest
may be affected by transfer pendente lite.
 Illustration: A, the landlord filed a plaint against B , that he hasn't paid the rent
for two months. Mean while, A transfers the property which is the subject
matter of the suit, to C. It does not fall under section 52 as it does not affect
the rights of another party.
 Effect of the principle of Lis pendens-
 When the condition necessary for the applicability of this section are fulfilled the result is
that transferee is bound by the decision of the Court. For example, in a suit between A
and B respecting title of a house if B transfers the house to C during pendency and the
judgment is subsequently in favour of B then C would be entitled to the house. But if the
decree is passed against B, then it is binding not only on B but also on C with the result that
C cannot get the house. Under this section C cannot take the plea that he had no notice of
pending litigation. It may be noted that normally decree of a court binds only parties to the
suit. But under the Principle of Lis pendens, a person who purchases during pendency of
the suit is also bound by the decree made against that party from whom he had purchased.
 The effect of Lis pendens is therefore, that it does not prevent the vesting of title in the
transferee but only makes it subject to the right of the parties as decided in the suit.
Doctrine of Fraudulent
Transfer
  DOCTRINE OF FRAUDULENT TRANSFER
 This section recognizes the need to protect the interest of the creditors. The rule of equity,
justice, and good conscience has been incorporated in this section. It prevents a person
from defeating the legitimate claims of his creditors.
 Every owner of property has right to transfer his property as he likes. But, the transfer must
be made with a bonafide intention. Where the transfer is made with fraudulent intention e.g.
defeating the interest of creditor or interest of any subsequent transferee. Where the transfer
is made with fraudulent intention, the object of the transfer would be bad in the eyes of
equity and justice though it is valid in law.
 Since fraudulent transfers are otherwise valid in law, they are not void. But because they
are made with malafide intention, equity would render it voidable by the person who was so
defrauded.
 53. Fraudulent transfer. - (1) Every transfer of immovable property made with intent to
defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so
defeated or delayed.
 Nothing in this sub-section shall impair the rights of a transferee in good faith and for
consideration.
 Nothing in this sub-section shall affect any law for the time being in force relating to
insolvency.
 A suit instituted by a creditor (which term include a decree-holder whether he has or has not
applied for execution of his decree) to avoid a transfer on the ground that it has been made
with intent to defeat or delay the creditors of the transferor shall be instituted on behalf of, or
for the benefit of, all the creditors.
 (2) Every transfer of immovable property made without consideration with intent to defraud
a subsequent transferee shall be voidable at the option of such transferee.
 For the purposes of this sub-section, no transfer made without consideration shall be deemed
to have been made with intent to defraud by reason only that a subsequent transfer for
 Meaning :
 A transfer made with intent to delay or defeat the creditors of the transferor is called
"fraudulent transfer". The expression 'fraudulent transfer' denotes 'dishonest transfer' or
transfer with intent to defeat the interest of the transferee/ creditor. Where a person transfer
the property so that his creditors shall not have anything out of the property, the transfer is
called a fraudulent transfer.
 The principle of equity has been incorporated in Section 53 of the TP Act. Law relating
to fraudulent transfers as given in this section has two parts:
 (1) The first part provides that a transfer with an intent to delay or defeat the creditor of the
transferor shall be voidable by such creditor.
 (2) The second part of this section provides that gratuitous transfer with intent to defraud a
subsequent transferee is voidable at the option of such transferee.
Section 53(1) Fraudulent Transfers- section 53(1) provides that-
1. Transfer of an immovable property,
2. Made with intent to defeat or delay the creditors of the transferor,
3. Shall be voidable at the option of the creditor so defeated or delayed.
But the provisions of this sub-section shall not affect
(a) the rights of a subsequent transferee in good faith, for consideration, and
(b) any law for the time being in force relating to insolvency.
Nature of Fraudulent Transfers-
The essential conditions for the Fraudulent transfer are:
1. There is Transfer of an immovable property,
2. The transfer is fraudulent i.e. Made with intent to defeat or delay the creditors of the
transferor.
Transfer of Immovable property- To apply this section it should fulfill the
conditions specified under the TP Act. There must be valid transfer of
immovable property, it should be valid and enforceable so that, property vests in
the transferee.
Section 53(1) does not apply to the transfer which is void in itself. This
section makes a valid transfer voidable at the option of creditor after the property
had already vested in transferee. A suit under this section must accept the
validity of the transfer first and then proceed to get invalidated if it is proved to
be fraudulent.
This section is applicable only where the transaction is a transfer of property
within the meaning of Section 5 of the Act. This section is not applicable to
Relinquishment, surrender, Partition, family settlement and Dissolution of
partnership etc.
Sham transfer: sham transfer means fictitious transfer. A transfer is fictitious
when the transferor does not intend that property should really vest in the
transferee. Such transfers are therefore unreal or colourable transfers and never
meant to operate between parties. Ex Benami transactions.
Sham transfers e.g. a benami transfer is not 'transfer' as contemplated by
section 53. Thus, fictitious or benami transfers are outside the scope of this
section. Section 53 safeguards the interest of a creditor in case of only real
transfer which is made with a fraudulent intention.
Jangali Tewari Vs Babban Tewari, Sham transfer is actually not a real transfer at
all; the intention of the real owner is not necessarily fraudulent. Therefore, such
fictitious or sham transfers do not require to be avoided because the real title
already vests in the transferor.
Movable property: This section is not applicable to movable property.
Fraudulent transfer to defeat or delay creditor: The transfer is made with the
sole object of defeating or delaying the interest of the creditors rather than to
give the property to transferee honestly.
Intent to defeat or delay:
A transfer made with an intent of either defeating or delaying the interest of
creditor is a fraudulent transfer. The only interest of the creditor in the debtor's
property is that he can recover his money from that property in case the debtor
fails to repay it personally. So, where a debtor transfers his property before
creditor makes any attempt to realise his debt from that property, it would no
longer be debtor's property. In this manner the interest of the creditor would be
defeated.
Fraudulent intention must be proved by direct or circumstantial evidence and
every case must be examined in the light of surrounding circumstances.
However, following circumstances may give a strong presumption that the
transfer was fraudulent:
1. The transfer was made secretly and in haste.
2. The transfer was made soon after the decree was passed against the judgment
debtor.
3. The transferor who was indebted alienated substantially the whole property e.g.
gift of all the properties before the attachment.
4. The consideration was very small amount in comparison of the real value of
the property transferred.
5. There is evidence that there was no actual payment of consideration as shown
in the sale-deed.
preference to one creditor:
If there are several creditors, transfer in favour of one creditor does not
amount to an intention to defeat or delay the remaining creditors. A debtor is
entitled to pay his debts in any order of preference.
In Mina Kumari Vs Bijoy Singh, A, who has taken loan from B, C, and D,
transfers certain properties to B in satisfaction of the loan taken from him (B).
This transfer is not necessarily with intent to defeat or delay the interest of
remaining creditors C and D. It has been held by the privy council that in case
there are two or more creditors, "a debtor, for all that is contained in section 53 of
the Transfer of property Act may pay his debts in any order be pleases and prefer
any creditor he chooses".
 Transfer is voidable at the instance of creditors-
 When a transfer proved to have been made with intent to defeat or delay creditors is
voidable by creditors, section 53 does not as such make fraudulent transfer void. It remains
a perfectly valid transfer until the creditors exercise their right to avoid transfer.
 Since the right to avoid the transfer is optional, a creditor may or may not exercise his
right under this section. Where creditors do not prefer to avoid the transfer, the transfer
shall continue to be a valid transfer under which the property has already vested in the
transferee. Moreover, under this section only creditors are entitled to avoid fraudulent
transfer, Transferor or transferee or any other person has no such right.
 Representative suit-
 section 53(1) provides that a suit instituted by a creditor under this section must be
instituted on behalf of, or for the benefit of, all the creditors.
 Exceptions to Fraudulent transfer:
 Section 53(1) recognizes two exceptions
 1. A transferee in good faith for consideration and
 2. Any law relating to insolvency for the time being in force.
 A transferee in good faith for consideration:
 A transferee who takes property in good-faith for consideration is protected. Where a transferee has
purchased the property in good faith from a debtor the creditors cannot avoid the sale under section 53(1).
 Daya Ram Vs Nadir Chand, where a transferee had no knowledge i.e. no actual or constructive notice of the
fraudulent intention of the transferor(Debtor), the creditors cannot avoid the transfer under this sub-section
even if they prove fraudulent intent of the debtor.
 The interest of transferee in good faith has been protected only where he has paid consideration.
consideration means it should be in pecuniary form as defined under the contract act but should not be in the
form of gift.
 Dower-debt has been regarded as a valid consideration, therefore, transfer of properties by a Muslim
husband to his wife in lieu of unpaid dower is a good consideration under this section and cannot be avoided
by the husband's creditors if made in good-faith.
Rights created under insolvency laws-
 Section 53 does not affect the rights created under the law of insolvency.
Thus, rights of a transferee created under any provision of insolvency law are
not affected even if the transferor's intent was to defeat or delay the interest of
creditors.
 The object of insolvency laws is to distribute the insolvent's properties in
equal proportion among his creditors without giving any preference to anyone.
If one creditor is given any preference, it may be fraudulent under the law of
insolvency. Whereas, such preference has not been regarded as fraud under
section 53. Therefore, there are inconsistencies in the laws of insolvency and
section 53.
 Gratuitous transfer to defraud subsequent transferee: Section 53 (2)
 Section 53(2) enacts that gratuitous transfer of an immovable property with intent to
defraud a subsequent transferee shall be voidable at the option of subsequent transferee.
 Where an immovable property is first transferred to a person without consideration and
the same property is again transferred to another person. Under this sub-section, the
subsequent transferee may avoid the first transfer if he could prove that the former
gratuitous transfer was fictitious or sham transfer and was made with a view to defraud him
(subsequent transferee).
 For instance, A makes a gift of his house to B in January, 1990. In February, 1990, A
sells the same house to C. Here B and C are the two claimants of the same property. The
general rule is that first transferee has preference over second and C should not get the
house. But, under this section it is provided that if first transfer is proved to be fraudulent,
the subsequent transfer shall prevail and the first would be voidable by the subsequent
transfer shall prevail and the first would be voidable by the subsequent transferee.
DOCTRINE OF PART
PERFORMANCE
 Doctrine of Part Performance 53A
 The Doctrine of Part Performance, based on principle of equity, developed in
England and was subsequently added to the Transfer of Property Act, 1882
via the Amendment Act of 1929.
 In law of contracts (for e.g., a contract for sale), no rights pass to another till
the sale is complete. But if a person after entering into a contract performs his
part or does any act in furtherance of the contract, he is entitled to
reimbursement or performance in case the other party drags it.
Section 53A of the Transfer of Property Act, 1882
Part Performance – Where any person contracts to transfer for
consideration any immoveable property 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 has, in part performance of the contract, taken
possession of the property or any part thereof, or 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 the transferee has performed or is 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, 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 of which the transferee has
taken or continued in possession, other than a right expressly provided by the
terms of the contract.
 Provided that nothing in this section shall affect the rights of a transferee for
consideration who has no notice of the contract or the part performance
thereof.
 Doctrine of Part- Performance: Doctrine of Part- Performance is an
equitable doctrine. It is also known as "equity of part-performance." Under this
doctrine, if a person has taken possession of an immovable property on the
basis of contract of sale and has either performed or, is willing to perform his
part of contract then, he would not be ejected from the property on the ground
that the sale was unregistered and legal title had not been transferred to him.
 For example, there is a contract of sale of a piece of land between A and B.
The contract is in writing, stamped, attested and duly executed but not
registered by A who is seller. B, who is the purchaser, has performed or is
willing to perform his part of contract i.e. has paid the price or is willing to pay
the same. On the basis of such contract B takes possession of land. Now, A
sells the land to C through a registered deed. C having legal title of the land,
attempts to eject B. At this stage, since B has no legal title, law may not
protect his possession but, equity shall help him from being dispossessed.
 Doctrine of Part- Performance
 The doctrine of part performance is, therefore, based on maxim : Equity looks
on that as done which ought to have been done. That is to say, equity treats
the subject matter of a contract as to its effects in the same manner as if the act
contemplated in the contract had been fully executed, from the moment the
agreement has been made, though all the legal formalities (e.g. of registration)
of contract have not been yet completed.
 Part-performance in India Before 1929
 Before 1929, the application of English equity of part-performance was neither certain nor
uniform. In some cases it was applied whereas in other cases it was not applied.
 In Mohammad Musa Vs Aghore Kumar Ganguli, the Privy Council held that equity of
part-performance could be applied to Indian cases just as it was being applied in England.
In this case, there was compromise deed which was in writing but not registered. Under this
deed there was division of certain lands between the parties who had taken the possession
over their respective parts of the land on the basis of the compromise deed. The parties
continued possession over their lands for many years. After about 40 years, the heirs of the
parties repudiated the compromise deed on the ground that it was not registered.
 The Privy council applied the doctrine of English equity of part-performance as stated in
Maddison Vs Alderson and held although the razinamma was unregistered but since it was
in writing, it was a valid document and could not be repudiated.
 Doctrine of part performance under section 53A of T.P Act:
 Doctrine of Part- Performance is now enacted law; it is not an application of English equity
in India. The law contained in Section 53-A of the Act is almost same as it was laid down
by the privy council Mohammad Musa's case which had applied the English equity of part-
performance with certain restrictions.
 The law incorporated in section 53-A is more limited than English equity in two respects.
 Firstly, in England the equity protects the interest of also such defendant who has taken
possession on the basis of oral agreement, whereas, under section 53-A the agreement must
be written.
 Secondly, in England the equity gives also a right of action against the evictor but section
53-A gives no such right
 Thus, the rule of part performance which is administered in England as equity is now a
statutory law in India but with suitable changes. Accordingly, it has rightly been said that
section 53-A is a partial importation into India of the English equitable doctrine of part-
performance.
Section 53-A provides that
1. where a person contracts to transfer an immovable property for consideration, and
2. Acting furtherance of this contract, the transferee has taken possession over
a part or whole of property, and
 Such transferee has either performed his part of contract or is willing to perform it. then
although the contract is unregistered or the transfer is not made as prescribed by law, the
transferor or any other person cannot dispossess the transferee.

 Under this section the transferee can only defend his possession. He can neither claim title
of the property nor take any action that property in his possession should not be transferred
to any other person.
Essential conditions for Application section 53-A
I. There is a contract for the transfer of an immovable property.
II.The transferee takes possession of the property under this contract.
III.The transferee has either performed his part of contract or is willing to perform
the same.
1. contract for the transfer of an immovable property
The first condition is that there must be contract and the contract must be transfer of
immovable property for value.
Written contract-
There must be a written contract for transfer of an immovable property signed by or on behalf
of the transferor. Section 53-A is not applicable if the contract for transfer is oral. In Kalawati
Tripathi Vs Damayanti devi, where a tenant wanted to defend his possession on the ground
that there was an oral agreement of sale with his landlord, the court held that plea of part
performance is not available to him because written contract is must for the applicability of
section 53-A.
In S. Veerabadra Naiker Vs Sambanda Naiker, the party claiming protection under section
53-A, could neither produce any written agreement nor any evidence of his possession over the
suit property. The document could not prove that he was ever ready and willing to perform his
part of the contract. The Madras High court held that he was not entitled to protection under
section 53-A against third party purchaser of the suit property.
 Agreement to sell- An agreement to sell does not by itself create any right, interest or title
to property. Such rights are created only by a sale deed. Accordingly the court held that an
agreement to sell is not required to be registered. It is admissible in evidence in a suit for
specific performance.
 Transfer for consideration-
 The written contract must be for the transfer of an immovable for consideration. It is
necessary that the transfer of property has been referred to in contract. The terms necessary
to constitute the transfer are ascertainable with reasonable certainty; it must clearly show
that there is a transfer of property under the contract.
 The transfer must be for consideration, section 53-A is applicable where the contract is
for sale or for lease. The section is applicable also to usufructury mortgages or mortgages
with possession. But , this section does not apply where the transfer is without
consideration. Therefore, it is inapplicable to gifts.
 Movable property-
 This section does not apply to an agreement for the transfer of movable
properties even though supported with consideration. No defence of part-
performance is available in respect of possession of movables.
 Valid contract-
 Section 53-A is applicable only when the contract for the transfer is valid
in all respects. It must be an agreement enforceable at law under the Indian
Contract Act,1872. It should fulfill the requirements has prescribed under the
T.P Act. Ex writing, sign, attestation, duly stamped and registration.
 Possession in Furtherance of contract-
 The second essential requirement is that the transferee has taken possession or continues
possession in part-performance of the contract or has done some act in furtherance of the
contract.
 In A.M.A Sultan vs Seydu Zohra Beevi, It is necessary that the transferee has taken
possession of the immovable property on the basis of the contract or incomplete deed of
transfer. Where the plaintiff has entrusted his property to the defendant for management by
executing the power of Attorney and it could not be proved that defendant obtains
possession and in furtherance of contract of sale, it was held that the defendant could not
claim benefit of Section 53-A.
 In Durga Prasad Vs Kanhiya Lal, held that the transferee need not be in possession of the
whole property mentioned in the contract of sale. If the transferee take possession or
continues his possession even on part of that property, it is sufficient to give him the benefit
of this section.
 Some act in furtherance of contract-
 Taking possession is not only method of part-performance of Contract. If
the transferee is already in possession of the property then, after the contract of
transfer, he has to do some 'further act' in part-performance of that contract.
 In order to attract the provisions 53-A, if the defendant has been in
possession of property, he must have done something more in pursuance of the
contract.
 For example, where transferee was already in possession of the property,
payment of an increased rent under the terms of new agreement or, part-
payment of the price where property is agreed to be sold to a mortgagee in
possession, is further act in part-performance of the agreement.
 Transferee is willing to perform his part of Contract-
 Section 53-A is based on the principles of equity. Equity says that one
who seeks equity must do equity'. Therefore, where a person claims protection
of his possession over a land under section 53-A, his own conduct must be
equitable and just. It is essential condition for the applicability of this section
that the transferee must be willing to perform his part of contract.
 Equity of part-performance which is incorporated in this section cannot
favour a transferee who is not ready and willing to do what is required from
him. Accordingly, a vendee who has taken a possession of the property, cannot
protect his possession under this section if he is not willing to pay the price
agreed upon.
 Difference between English and Indian Law-
 Section 53-A incorporates the provision of English equitable doctrine part-performance.
But this section is not total importation of English law. Indian Law of part-performance
may be distinguished from the English law as under.
 1. Under English law, the doctrine of part-performance is applicable to written as well as
oral agreements whereas section 53-A is applicable only where the agreement of transfer is
written.
 2. In England, the equity of part-performance is active as well as passive. That is to say,
under English law, the transferee is entitled to defend his possession and is also entitled to
enforce his right in an independent suit e.g. a suit for specific performance or, for an
injunction to restrain disposition. In India, section 53-A does not give any right of action
to the transferee. Part-performance is only passive here.

TRANSFER BY OSTENSIBLE OWNER/DOCTRINE OF
HOLDING OUT
 Ostensible owner

The law relating to transfer by an ostensible owner as given in section 41 of the

Act is now subject to the provisions of Benami Transactions ( prohibition of
Right to Recover property) Act, 1988.
Ostensible owner is a person who has all the indicta of ownership without
being the real owner. An ostensible owner has all the indications of ownership
and looks like owner of a property but is not its real owner. thus, a person may
have possession and enjoyment of the property and may also have entered his
name in the official records but even then he may not be the real owner of the
property.
According to sec 2(a) "benami transaction" means any transaction in which
property is transferred to one person for a consideration paid provided by
another person.
 The Act provides that where a property is transferred benami, (i.e., in the
name of the other ), the person, in whose name the property is held, shall
become the real owner.
 Section 4(1) of the Benami Transaction Act, 1988 lays down that
 " No suit, claim or action to enforce any right in respect of any property
held benami against the person in whose name the property is held or against
any other person shall lie by or on behalf of a person claiming to be the real
owner of such property".
Further, Section 4(2) of the Act provides that:-
 " No defence based on any right in respect of any property held benami
whether against person in whose name the property is held or against any
other person, shall be allowed in any suit, claim or action by or on behalf of a
person claiming to be the real owner of such property."
 Exceptions
 Section 4(3) provides exceptions for the above rule:
 " where the person in whose name the property is held is coparcener
in a Hindu undivided Family and the property is held for the benefit of the
coparcener in the family, or
 " where the person in whose name the property is held is a trustee or other
person standing in a fiduciary capacity, and the property is held for the
benefit of another person for whom he is a trustee or towards whom he
stands in such capacity".
 It may be stated that now an ostensible owner (benamidar) has
become the real owner except in case of coparcener in a Hindu undivided
Family, or a trustee, standing in a fiduciary capacity.
 Punishment
 After prohibiting benami transactions, if they do the benami transaction
then section 3(3) of the Act provides that a person who enters into such
transaction is punishable with imprisonment for a term which may extend to
3 years or with fine or with both.
 But there is no prohibition and no punishment if the property is
purchased in the name of wife or unmarried daughter for the
benefit[Sec.3(2)]
Nature and scope of the Act:
Supreme court has summarized the nature and scope of this Act as under:
1. The Benami Transaction Act, 1988 is not of retrospective operation. It cannot be made
applicable to suits or proceedings which already started before commencement of this Act
and in such cases benamidar cannot be treated a real owner.
2. This Act is not declaratory in nature. Rather, it is prohibitory in nature and prohibits benami
transactions which are entered into after commencement of this Act i.e., 5th Sept, 1988
3. Subject to certain exceptions, all the benami transactions entered into after
commencement of this Act have been made punishable. Section 3(3) of this Act now
creates a new offence of entering into such benami transactions.
4. In respect of benami transaction entered into after commencement of this Act, no person
is now allowed to take plea under Section 41 of the T.P.Act that the property stands only in
the name of benamidar and that he is the real owner. Such plea or defence by a real owner
is now not acceptable by the courts.
 OSTENSIBLE OWNER
 Ostensible owner is a person who has all the indicta of ownership without
being the real owner. An ostensible owner has all the indications of
ownership and looks like owner of a property but is not its real owner.
without being actual owner, such person has apparently all the
characteristics of a real owner.
 Ostensible owner - a person is not the real owner of the property, while he
appeared to be the real one it may be found that although his name appears
in the record and he also possesses the property but he never intended to
own it. It is difficult to ascertain who is the real owner and who is ostensible
owner as the ostensible owner possess all the characteristic of real owner,
the main difference is the Intention to hold the property or purchase the
property is not there.


where a person purchases property in the name of another person it is called a

benami transaction. The person in whose name the property is purchased is
called benamidar, A benamidar is an ostensible owner.
 A person does not become ostensible owner if the real owner has entrusted
him with temporary control over the property only for some specific purpose
or where he holds a property as a professed agent or as guardian of minor's
property or in any other capacity of fiduciary character. A manager cannot be
treated as ostensible owner even though his name is entered in the Municipal
records as a real owner.
 Test of ostensible owner
 In UOI V/s Mokesh Builders & Finance SC explain the Ostensible owner- the real test is
as to what is the source of the purchase money, the motive behind giving the benami color,
possession of the property and as to who is enjoying the benefits of the property.
 whether the person is a real owner or ostensible owner the test as an been laid in
Jayadayal poddar Vs Bibi Hazara,
 Sc laid down the parameters to ascertain the Ostensible owner.
 Source of purchase money, who paid the price.
 -Nature of possession after purchase.
 Motive of giving benami colour to the transaction. why the property purchased in the name
of another person.
 Relationship between the parties, they are related to each other or they are stranger.
 conduct of parties in dealing with the property.
 custody of the title deed.
 Transfer by Ostensible owner-
 Section 41 provides that where an immovable property is transferred by an
ostensible owner with express or implied consent of the real owner, the
transfer cannot be denied by the real owner provided the transferee in good
faith has exercised reasonable care in finding out the transferor's power to
make the transfer and transfer is for consideration.
 Sec 41 of the TPA provides an equitable remedy to a bonafide purchaser
for value without notice. Validating the transfer made by an ostensible
owner is also an exception to the general rule that no person can confer a
better title to another, than he himself has.
 Essential conditions of section 41-
1. There is transfer of an immovable property by ostensible owner with express
or implied consent of the real owner
2. The transfer is for consideration
3. the transferee has acted in good-faith and
4. the transferee has exercised reasonable care in finding out the transferor's
power to make the transfer.
 Express or implied consent of the real owner
 The transfer of property must be made by an ostensible owner with
express or implied consent of the real owner. It should be free consent.
 where a benamidar obtains the consent of the real owner by fraud, force
coercion, the consent is not free and this section cannot apply.
 Anoda Mohant Vs Nilphamari- Held that since A himself has entered B’s
name in the revenue record and since A allowed her to deal with the
property, there was implied consent of A to hold out B as an ostensible
owner authorizing to transfer the property. So the mortgage could not be
avoided and the mortgagee was protected under this section.
 Ramcoomar Koondoo Vs Macqueen- Alexander purchased property in
the name of Bunoo bibee[mistress]-Two children-BB sold property to
Ramdonne father of Ramkumar- Held valid implied consent was there.
 The transfer is for consideration
 section 41 is applicable only where the transfer by an ostensible owner is with
consideration. It does not apply to gifts or gratuitous transfers.
 The transferee acted in good-faith
 It is necessary that transferee acts in good faith i.e. he has purchased the property in
the honest belief that transferor had power to transfer the property. Good faith
means bonafide intention.
 where person purchases property with full knowledge that the transferor is merely
an apparent owner his intention is not bonafide and there is no good faith on his part.
principles of equity, on which this section is based, protects the interest only of a
bonafide purchaser. He who seeks equity must do equity. Thus, this section can
protect the interest of only such purchaser whose own conduct is equitable and just.
In the absence of good faith, the court may presume collusion between ostensible
owner and the purchaser.
 Reasonable Care
 The transferee must also have exercised reasonable care in ascertaining the
title and authority of the transferor. Reasonable care means that care which a
man of ordinary prudence should take while making inquiries regarding the
title of an immovable property.
 The enquiry made by the purchaser must be diligent and not superficial or
casual.
Conclusion
Before the Benami Transaction Act the benami transaction was held valid and
accepted and it was dealt by sec 41 of Transfer of property Act 1882 after the separate
enactment called as Benami Transaction (prohibition ) act any such benami transfer is not
valid and benami cannot defend in the court and it also punishable in nature, so these
type of transaction is not valid in the eyes of laws.