Unit – IV

SALE (SEC 54 & 55)

Sale – Sec 54
Overview
Sec. 54 to Sec. 57
Definition of Sale
How sale is effected
Difference between sale and contract for sale.
Difference between sale and lease, mortgage
Rights and liabilities of a buyer (Sec. 55)
Rights and liabilities of a seller
Marshalling (Sec. 56)•
Discharge of encumbrances on sale (S. 57)
Sale – Sec 54
Sale is a transfer of ownership in exchange for a
1. price paid
2. Or promised
3. Or part paid and part promised
Essential elements
 Parties – Seller and Buyer / Purchaser
 Subject matter – Property
 Consideration
 Conveyance
 Delivery of Possession
 Registration
PARTIES
There must be at least two parties in sale.
The person who transfers the property is known as transferor or seller or vendor.
The person purchasing the property is known as transferee, purchaser or vendee.
For constituting a valid sale, both the seller and purchaser must be competent on the date
of sale.
The seller must be the owner of the property which he is going to sell
In the case of Anu Dutta vs. Lolit Kalita, the court has held that any sale deed executed
by any other person then the owner is not valid.
In another case, Church of Christ Charitable Trust And Educational Charitable Trust
Vs. Ponniamman Educational Trust, the court has held that if a guardian of a minor
person sells the property without the prior permission of the court, such sale is not valid.
SUBJECT-MATTER
The Transfer of Property Act, deals with the transfer of immovable
properties only. Therefore, the transfer or ownership must be in some
immovable property only.(The Sale of Goods Act, 1930 deals with sale
of moveable properties).
Immoveable property includes land, the benefits arising out of land
and the things attached to the earth except standing timber, growing
crops and grass.
The property to be transferred must be sufficiently identified. In the
case of Ram Jiwan Rai vs. Deoki Nandan Rai, the issue before the
court of was whether the property to be transferred is sufficiently
identified or not. The court held that all the information was written
on the sale deed and the mistake in plot number should not be treated
as non identification of the property.
Price or consideration
In the case of Surinder pal vs. M/S Rainbow Promoters
Pvt Ltd, the court has held that any amount fixed by the
contract antecedent to the conveyance is the essence of a
contract of sale.
In the case of Bombay Tramways Co. vs. Bombay
Municipal Corporation, the court has held that price forms
the essence of contract for sale.
Conveyance

Mode of execution: execution of a sale deed is an important

part completion of the sale. Section 54 of the act lays down the
procedure for execution. For execution of a sale deed, three
formalities should be adhered to ;
(a) The transfer must take place with the help of a validly
executed sale deed in writing;
(b) Should be properly attested and;
(c) It should be registered
All the three above mentioned requirements are necessary only
if the value of the property so being transferred is more than
100 rupees.
Rights and liabilities of Seller – Sec 55 before completion of sale
 Disclosure of material defects (Section 55(1)(a)): A seller is bound to disclose any latent material defect in the
property or his title in his knowledge. A material defect is of such a nature that if it was known to the buyer, his
intention to enter into a sale might deviate [Flight v Booth (1834)]. It is a latent defect because it cannot be
discovered by the buyer even after ordinary care and inquiry.
 Production of title deeds for inspection (Section 55(1)(b)): A seller is bound to produce all the title documents
relating to the property at the request of the buyer for his inspection.
 Answer relevant questions regarding his title or the property (Section 55(1)(c)): The seller must answer every
relevant question put to him by the buyer relating to his title or the property. The answer must be to the best of his
information.
 Execute a proper conveyance of the property (Section 55(1)(d)): Conveyance means an act of transferring a
property. It can be done by signing or affixing a thumb impression on the sale deed by the seller. A seller is bound
to execute a proper conveyance only on the payment of the consideration by the buyer. This clause imposes
reciprocal duties on both the buyer and the seller. The clause also provides that the execution must be at a proper
time and place.
 Take reasonable care of the property and title deed (Section 55(1)(e)): The seller is bound to take care of the
property and title deed in the same manner as an owner of ordinary prudence would do. This duty is to be
exercised till the delivery of the property to the buyer.
 Pay all the charges (Section 55(1)(g)): A seller is bound to pay all the rent and public charges of the property,
with interest if any, due till the completion of the sale except if the buyer purchased the property with all the
encumbrances.
Disclosure of material defects (Section 55(1)(a)):

 The duty of the seller ceases if the buyer knows about such defects or using reasonable
prudence can discover as held in the case of Godrej manufacturing Co. Ltd Vs. state of
Maharashtra.
 In the case of Lalubhai Rupchand vs. Mohanlal Sarkarchand the court has held that if
the seller fails to perform his duty of disclosing material facts, the buyer has a right to
refuse to complete sale.
 In Hiralal vs. Mulchand the court has held that there is no duty to disclose such defects of
which the buyer has actual or constructive notice
 In Ratanlal vs. Nandbhai, the primary duty of the seller is to convey a good title to the
buyer and therefore, he is required to disclose a defect in title if any.
To take care of property
 In Royal Bristol permanent Building Society vs. Bomash, the court has held that the
seller must keep the property in reasonable repair and protect it from injury by trespassers.
 The court in the case of Hombay vs. Matcham, held that the duty to protect extends not
only to property but title deed as well.
Rights and liabilities – Sec 55 before completion of sale
Rights of a seller
 Right to take rents and profits (Section 55(4)(a)): A seller is entitled to collect rents and profits from the property until the
ownership is transferred to the buyer. If the buyer takes the possession of the property before the completion of the sale, he will
be entitled to take rents and profits, has to pay interest on the unpaid purchase money as held in the case of Moung shwe Goh
vs. Maung Inn.
Liabilities of a buyer
 Disclosure of all the facts known to the buyer that materially increase the value of the property (Section 55(5)(a)): The
buyer is under obligation to confide to the seller any fact to which he has reason to believe is not known to the seller relating to
the increase in the property’s value. If he fails to do so, it will be considered fraud, and the seller can avoid the sale if it is
proven.
 In the English case of Summers v. Griffiths (1866), an old lady contracted to sell a property at a much lower price, believing
that her rights in the property were not absolute. The buyer was aware that the lady’s interest in the property was perfect and
absolute, but he did not disclose it to the lady. He was held liable for fraud, and the sale was set aside.
 Pay the price in accordance with the contract (Section 55(5)(b)): The buyer must pay the purchase money at the time of
completion of the sale to the seller or any person as directed by the seller. If there are any encumbrances existing on the property
at the time of sale, the buyer is free to deduce such amount from the consideration he has to pay. It is in correspondence with the
duty of the seller to execute a proper conveyance.
Right of a buyer
 Refund of money paid on proper denial to accept delivery (Section 55(6)(b)): The buyer is entitled to receive the amount of
any purchase money with interest properly paid by him to the seller in anticipation of delivery. The buyer is also entitled to get a
refund of any earnest money paid by him or the cost awarded to him in a suit to compel the specific performance of a contract or
to obtain a decree for its rescission.
Liabilities and rights of the seller and the buyer after completion of the sale

Liabilities of a seller
To give possession (Section 55(1)(f)): The seller is bound to put the buyer or person as directed by the buyer in
possession of the property on being so required. This clause uses the words- “…such possession of the property as
its nature admits.” It refers to the nature of possession. For instance, in the case of tangible immoveable property,
physical control is to be given over property. In the case of intangible immoveable property, the possession is
symbolic.
Implied liability (Section 55(2)) – The seller must undertake impliedly that he holds the perfect title to the
property and is transferring the same free from any encumbrance. The rights or interest created by the sale
shall vest with the transferee and may be enforced by every person in whom that right or interest is for the whole
or any part thereof from time to time is vested.
To deliver title deeds on receipt of price (Section 55(3)): The seller is bound to hand over all the documents
relating to the title of the property to the buyer on payment of the whole of the purchase money.
Proviso (a) to Section 55(3) states that if a seller retains any part of the property comprised in the documents, he is
entitled to keep the documents as well.
Proviso (b) also imposes the same duty on the buyer of the greatest value when the property is sold to different
buyers. However, in both cases, such a person must furnish such documents and their true copies to other buyers
at their request. They are also under an obligation to keep the documents safe unless prevented from doing so by
fire or other inevitable accidents
Liabilities and rights of the seller and the buyer after completion of the sale

Right of a seller
Charges upon the property for the unpaid price (Section 55(4)(b)): Where the ownership has been
transferred to the buyer before payment of the whole consideration amount, the seller becomes entitled
to a charge upon the property which is in the hands of the buyer or any transferee without
consideration or any transferee with notice of non-payment. The charge will be for the amount of the
purchase money or the part remaining unpaid or for the interest on such amount or part from the date
on which possession has been delivered.
Liabilities of a buyer
To bear loss to the property (Section 55(5)(c)): After the completion of the sale, the ownership is
completely transferred to the buyer. From that date, if any damage, destruction or decrease in value
occurs in the property, the buyer will be bound to bear such losses.
To pay the outgoings. (Section 55(5)(d)): The buyer is liable to pay all the public charges or rent
accruing after the completion of the sale or as agreed by the terms settled in the sale deed.
Rights of a buyer
Benefit of the increment. (Section 55(6)(a)): Any benefit arising from improvement or increase in value
of the property or the rents and profits after completion of the sale shall vest with the buyer.
Sellers duties before the completion of sale – Sec 55
 To disclose material defects in the title of the property – Sec 55 1 ( c)
Latent and patent defect
Latent defect is one which cannot be discovered by a man exercising ordinary
prudence and care
 Eg : Underground drainage system
 Production of title deeds – Sec 55 (1) (b)
Contd….
 Answer relevant questions Sec 55 (1) (c)
 Duty to execute conveyance – Sec 55 (1) (d)
 Care of property and title deeds - Sec 55 (1) (e)
 Payment of outgoings – Sec 55(1) (g)
Seller's Rights before completion of sale
 Entitled for rents, profits and other beneficial interests - Sec 55(4) (a)
Contd….
Seller's duties after the completion of sale
 To give possession to the buyer – Sec 55 (1) (f)
 To Covenant for Title – Sec 55 (2)
 To deliver title deeds – Sec 55 (3)
 Seller's rights after completion of Sale
 Seller’s lien or Charge over the Property – Sec 55 (4) (b)
Contd….
 Buyer's duty before the completion of sale
 To disclose the facts which materially increases the value – Sec 55 (5) (a)
 To Pay the Price – Sec 55 (5) (b)
 Buyer’s right before completion of Sale
 Buyer’s Charge – Sec 55 (6) (b)
 Buyer’s duty after sale
 To bear the loss of the Property – Sec 55 (5) (c )
 To pay the outgoings. – Sec 55 (5) (d)
 Sale and Contract for Sale

In the contract of sale, the exchange of In the Contract for Sale the parties agree
goods takes place immediately. to exchange the goods for a price
depending on the fulfillment of certain
conditions at a future specified date.
The nature of the agreement to sell is
The nature in the sale is absolute.
conditional.
It is an executed contract. It is an executor contract.
Transfer of risk doesn’t take place, until
Transfer of risk takes place immediately.
and unless the goods are transferred.
The right to sell remains with the buyer The right to sell remains with the seller.
The seller has the right to resell the same
The seller has no right to resell.
goods if the conditions are not fulfilled.
 LEASE
(Sec 105 - 117)
Meaning – Sec 105
Chapter V of this act deals with leases of immovable property consisting of 14
section from section 105 to section 117.
A lease of immovable property is a transfer of right of possession to enjoy such
property from transfer to transferee for a stipulated period of time in return of a price
paid by the transferee.
Essential elements of Lease
 Parties : Lessor & Lessee
 Subject matter : Property
 Term : Duration of Lease-certain time/in perpetuity
 Consideration-premium (lump sum payment)/rent (periodical payment for lease)
Duration of Lease – 106
In place of the old Section 106 the new section is inserted through 2003 Amendment.
when a lease for agricultural or manufacturing purpose is deemed to be of year to
year then it will attract a six month notice that the lease will end on the expiry of 1
year from date of the commencement of lease.
when a lease for any other purpose is deemed to be of the month to month , then it
will attract a 15 day notice that the lease will end on the expiry of one month from the
commencement of lease.
Other Purpose : Residential Purpose , Running Hotels or Shops
Procedure
Notice to be served by the lessor or the lessee for termination of lease in writing
signed by the person giving it.
Notice must be clear, and should indicate the intention to terminate lease after the
expiration of period.
The notice may be sent by Post to the party intended to terminate or can be given
personally.
Where the tenancy is joint, a notice to any one of the tenants is sufficient and good
for eviction.
Cond…
 Tenancy at Will
 It is a tenancy where no fixed period has been specified as its duration but
it may be terminated at any time at the will of the lessor or the lessee or both.
 Tenancy at Sufferance

Where the tenant continues to hold the possession of the property even
after the expiry of the notice to quit.
How lease is made – Sec 107 (Modes of Creation of Lease)
 Registered Deed
 Leases from Year to Year
 Leases for a term exceeding a year
 Permanent Lease

 Registration is Optional
 Leases for month to month
 Less than a year
 Rights and liabilities of the lessor and lessee
 Contract-
 Local Custom or Usage
 Sec 108 of TP Act-receive rent
Contd….
 Liabilities of the Lessor
Duties to disclose the latent defect in the Property – Sec 108 (a)
Duty to transfer Possession – Sec 108 (b).
Duty for a quite enjoyment of the property by lessee.- Sec 108 (c )
 Rights
Right to accessions
Right to Collect Rent
 Rights of Lessee (Sec 108 (d) – (J))
Right to enjoy the accessions to the leased Property – Sec 108 (d)
Right to avoid lease on destruction of the Property - Sec 108 (e)
Right to deduct cost of Repair - Sec 108 (f)
Right to deduct outgoings - Sec 108 (g)
Right to remove fixtures – Sec 108 (h)
Right to remove crops - Sec 108 (i)
Right to assign interest - Sec 108 (j)
Liabilities of Lessee – Sec 108 (k) – (q)
Duty to disclose the facts which increases the value Sec - 108 (k)
Duty to pay rent - Sec 108 (l)
Duty to maintain the Property - Sec 108 (m)
Duty to give lessor on any encroachment to the property - Sec 108 (n)
Duty to use the property in the reasonable way - Sec 108 (o)
Duty not to erect permanent structure without the consent of the lessor- Sec 108 (p)
Duty to retransfer the possession after the termination of lease - Sec 108 (q)
 Rights of Lessor's Transferee – Sec 109

This section speaks about the rights of the lessor’s interest in the property .
When the lessor transfers his interest the transferee too will be entitled to all the
rights and liabilities in the property.
 Exclusion of the day on which the term commences – Sec 110
Where the time limited by a lease of immoveable property is expressed as
commencing from a particular day, in computing that time such day shall be
excluded. Where no day of commencement is named, the time so limited begins from
the making of the lease.
 Eg : Where the tenancy for the term of 4 Years is expressed to comence from 1 June
2020, it must be deemed to have been commenced from 2 June 2020 and ended on
midnight of 1 June 2021.
Determination of Lease – Sec 111
Lapse of time
Specified event
Termination of lessor's interest
Merger
Express Surrender
Implied Surrender
Forfeiture
Holding Over – Sec 116
Holding over' means retaining possession.
Tenancy at Sufferrence and Holding Over
 The lessee remains in possession after the determination of the lease granted to the
lessee.
 The lessor or his legal representative either accepts rent from the lessee or
underlessee, or assents to his continuing in possession
 In such cases, the lease is renewed from year to year, or from month to month,
according to the purpose for which the property is leased.
 Exemption of leases for agricultural purpose – sec 117
None of the provisions of this Chapter apply to leases for agricultural purposes,
except in so far as the State Government 1[***] may by notification published in the
Official Gazette declare all or any of such provisions to be so applicable 2[in the case
of all or any of such leases], together with, or subject to, those of the local law, if any,
for the time being in force. Such notification shall not take effect until the expiry of
six months from the date of its publication.
EXCHANGE
(SEC 118- 121)
Exchange – Sec 118
When two persons mutually transfer the ownership of one thing for the ownership of
another, neither thing or both things being money only, the transaction is called an
“exchange”.
 Transfer of Ownership
 Properties need not be immovable.
 Exchange includes Barter
 Mode of Transfer
 Right of party deprived of thing in Exhange – Sec 119
He may claim return of the property transferred to other party provided the property
is still in the possession of the party or
Claim compensation
 Rights and liabilities of the parties in Exchange – Sec 120
Each party has the rights and is subject to the liabilities of a seller as to that which he
gives, and has the rights and is subject to the liabilities of a buyer as to that which he
takes.
Exchange of Money – Sec 121
on an exchange of money, each party thereby warrants the genuineness of the money
given by him.
GIFT
(Sec 122 - 129)
 Gift – Sec 122
Gift” is the transfer of certain existing moveable or immoveable property made
voluntarily and without consideration, by one person, called the donor, to another,
called the donee, and accepted by or on behalf of the donee.
Essentials
Transfer of ownership
Existing property
Transfer without consideration
Voluntary transfer with free consent
Acceptance of the gift (During the life time of the Donor)
Transfer of ownership
 K Balakrishna v. K kalam AIR 2004 SC 1257 donor can transfer ownership in the property and at the same time
reserve its possession and enjoyment during his life time.
Existing property
 It may be corporeal or incorporeal property example land, building, or goodwill, copyright, patent..
 T.V subbamma v. T Rattamma it was held that gift by a coparcener of his undivided share in coparcenary
property without the consent of all the others is void and unenforceable.
 Gara surppadu v. Panchanki Ranin Naidu the property was in existence but not in possession of the donor as
it was in the safe custody of a third person. The gift was held to be valid.
Without consideration
Ram Kishore and another v. Shankar Lal. Widow gifted the property with a condition that done should pay certain
amount per month towards her maintenance. It was a sale but not gift.
Voluntary transfer
Competency of donor
Acceptance by donee
Modes of making a gift
Section 123 of the Transfer of Property Act deals with the formalities
necessary for the completion of a gift. The gift is enforceable by law only
when these formalities are observed. This Section lays down two modes for
effecting a gift depending upon the nature of the property. For the gift of
immovable property, registration is necessary. In case the property is movable,
it may be transferred by the delivery of possession.
Gift of existing and future property
Section 124 of the Transfer of Property Act renders the gift of future property
void. If a gift is made which consists of both present as well as future property,
i.e., one of the properties is in existence at the time of making the gift and the
other is not, the whole gift is not considered void. Only the part relating to the
future property is considered void.
Section 125 gift to several person whom one does not
accept
Section 125 of the Act says that in case a property is gifted to more than one
donee, one of whom does not accept it, the gift, to the extent of the interest
which he would have taken becomes void. Such interest reverts to the
transferor and does not go to the other donee.
Section 126 suspension or Revocation of a Gift
Revocation by mutual agreement
Where the donor and the donee mutually agree that the gift shall be suspended or revoked upon the happening of an event not dependent on
the will of the donor, it is called a gift subject to a condition laid down by mutual agreement. It must consist of the following essentials:
 The condition must be expressly laid down
 The condition must be a part of the same transaction, it may be laid down either in the gift-deed itself or in a separate document being a
part of the same transaction.
 The condition upon which a gift is to be revoked must not depend solely on the will of the donor.
 Such condition must be valid under the provisions of law given for conditional transfers. For eg. a condition totally prohibiting the
alienation of a property is void under Section 10 of the Transfer of Property Act.
 The condition must be mutually agreed upon by the donor and the donee.
 Gift revocable at the will of the donor is void even if such condition is mutually agreed upon.

Revocation by the rescission of the contract

 Gift is a transfer, it is thus preceded by a contract for such transfer. This contract may either be express or implied. If the preceding
contract is rescinded then there is no question of the subsequent transfer to take place. Thus, under Section 126, a gift can be revoked on
any grounds on which its contract may be rescinded. For example, Section 19 of the Indian Contract Act makes a contract voidable at the
option of the party whose consent has been obtained forcefully, by coercion, undue influence, misrepresentation, or fraud. Thus, if a gift
is not made voluntarily, i.e., the consent of the donor is obtained by fraud, misrepresentation, undue influence, or force, the gift may be
rescinded by the donor.
Onerous gift section 127
Section 127 provides that if a single gift consisting several properties, one of which
is an onerous property, is made to a person then that person does not have the liberty to
reject the onerous part and accept the other property.
This rule is based upon the principle of “qui sentit commodum sentire debet et onus”
which implies that the one who accepts the benefit of a transaction must also accept
the burden of it.
Thus, when two properties, one onerous and other prosperous, are given in gift to a
donee in the same transaction, the donee is put under the duty to elect. He may accept
the gift together with the onerous property or reject it totally. If he elects to accept the
beneficial part of the gift, he is bound to accept the other which is burdensome.
However, an essential element of this Section is a single transfer. Both the onerous and
prosperous properties must be transferred in one single transaction only then they
require the obligation to be accepted or rejected in a joint manner.
Universal Donee section 128
A universal donee is a person who gets all the properties of the donor under a
gift. Such properties include movables as well as immovable. Section 128 lays
down in this regard that the donee is liable for all the debts and liabilities of the
donor due at the time of the gift.
This section incorporates an equitable principle that one who gets certain
benefits under a transaction must also bear the burden therein. However,
the donee’s liabilities are limited to the extent of the property received by
him as a gift. If the liabilities and debts exceed the market value of the
whole property, the universal donee is not liable for the excess part of it. This
provision protects the interests of the creditor and makes sure that they are able
to chase the property of the donor if he owes them.
Exceptions section 129
 Section 129 of the Act provides the gifts which are treated as exceptions to the whole chapter of gifts under the
Act. These are:
 Donations mortis causa/Death bed gift i.e gift made by a donor when he was in critical health condition. It is also
known as resumable Gift because the person who has given the gifts at the death bed, but later recoups he can
revoke the gift.
 Muslim-gifts (Hiba)
Actionable Claim section 130-137
 Actionable claim means a debt or a claim on which action can be started in a Court of law for comfort or relief.
 The actionable claim is defined under section 3 of the Transfer of Property Act, 1882. In general terms, an actionable claim is a debt or claim for which
the person can take an action and also approach the Court for recovery his debt or claim.
 According to section 3 of the Transfer of Property Act, the actionable claim is a claim to any debt which is not secured by a mortgage, pledge, and
hypothecation.
 The transfer of actionable claim is given under chapter eight and it covers section 130 to 137.
Some examples of actionable claim, these following claims are the actionable claim-:
1. Claim for arrear rent.
2. interest of the partner in a dissolved partnership
3. money due for goods sold
4. A choice offered to repurchase the property once again.
5. A claim to rent to fall due in future
6. The right to claims maintenance.
7. Claim the benefit of the contract.
8. A claim to money due under insurance policy
The following claims are not the actionable claim-:
a. A claim which is decreed.
b. “Right to sue”, it is a right but it is not an actionable claim.
c. Debts secured by mortgage of immovable property
d. A claim to mesne profits
e. Shares in the company
f. Damage for breach of contract
contin

 Section 130. The transfer of an actionable claim whether with or without consideration shall be effected only by the execution
of an instrument in writing signed by the transferor or his duly authorized agent, shall be complete and effectual upon the
execution of such instrument, and thereupon all the rights and remedies of the transferor passes to transferee.
 In case of recovery of the any debt is transferred by the transferor, he should give notice of the same to the debtor.
 Exceptions of the Sec 130 - Sec 130 does not apply on the transfer of marine insurance.
 In the case of the Jugalkishore Saraf Vs Raw Cotton Co. Ltd, the Supreme Court held that a judgment debt or decree is not an
actionable claim for action is necessary.
 In the leading case Lachmi Koeri Vs the State of Bihar, the Court has been pointed out the transfer of arrears of rent is a type
of a transfer of actionable claim.

Section 131 of Transfer of Property Act 1882 : "Notice to be in writing, signed"

 131. Every notice of transfer of an actionable claim shall be in writing, signed by the transferor or his agent duly authorized in
this behalf, or, in case the transferor refuses to sign, by the transferee or his agent, and shall state the name and address of the
transferee.
 Section 132: Liability of transferee of actionable claim. The transferee of an actionable claim shall take it
subject to all the liabilities and equities to which the transferor was subject in respect thereof at the date of
the transfer
 (i) A transfers to C a debt due to him by B, A being then indebted to B. C sues B for the debt due by B to A. such
suit B is entitled to set off the debt due by A to him; although C was unaware of it at the date of such transfer.

 Section 133 "Warranty of solvency of debtor” Where the transferor of a debt warrants the solvency of the
debtor, the warranty, in the absence of a contract to the contrary, applies only to his solvency at the time of the
transfer, and is limited, where the transfer is made for consideration, to the amount or value of such consideration.
 In this section when a claim is transferred the transferee may run the chance or risk of
losing the debt, in this case, the debtor is insolvent. So as a precautionary measure, the
transferee should be assured that the debtor is solvent.
Section 134 provides that; where a debt is transferred for the purpose of securing an existing or future debt, the debt so
transferred, if received by the transferor or recovered by the transferee, is applicable;
1. First, in payment of the costs of such recovery;
2. Secondly, in or towards satisfaction of the amount for the time being secured by the transfer; and
3. Residue if any, belongs to the transferor or other person entitled to receive the same

Section 135 assignment of rights under policy of insurance: every assignee, by endorsement or other writing of a policy of
insurance against fire in whom the property in the subject insured. Shall be absolutely vested at the date of the assignment, shall
have transferred and vested in him all rights of suit as if the contract contained in the policy had been made with himself.

Section 136 deals with the incapacity of officers connected with the Court of justice. The following persons shall not buy or
traffic in or stipulate for or agree to receive any share or interest in the actionable claim.
(a) Legal practitioner;
(b) Judges of the Court; and
(c) The legal or officer who concerned with the justice of the Court.
 The main object of this section is to maintain the standard of justice
 Section 137. Saving of negotiable instruments, etc.—Nothing in the foregoing sections of this Chapter (section
130-136) applies to stocks, shares or debentures, or to instruments which are for the time being, by law or custom,
negotiable, or to any mercantile document of title to goods.
 Mercantile of title to goods is a document which is used in the business as proof of possession or the control of the
goods. (example bill of lading, dock warrant, warehouse keepers certificate, railway receipt,)