Law 306 Min

Chanderprabhu Jain College of Higher Studies
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School of Law
An ISO 9001:2008 Certified Quality Institute
(Recognized by Govt. of NCT of Delhi, Affiliated to GGS Indraprastha University, Delhi)
Class : BBALLB
Paper Code : 306
Subject : Property Law
Unit-I: Concept of Property and General Principles Relating to Transfer of

Property
A. Concept of Property: Distinction between Movable and Immovable
Property
Property: Transfer of Property Act 1882 does not define the term ‘property’ but it
has been used in its widest and most comprehensive sense. A property is a
collection of rights.
When a property is transferred, the rights along with the property are also
transferred but it is not necessary to transfer all rights with the property, the
arrangement can be made by which some of the rights may be transferred. For
example, when gift of a house is made by the transferor to transferee, there is a
transfer of absolute right but in case of a lease agreement only partial interest i.e.
right of enjoyment of the house is transferred.
Property is divided into two broad category i.e. Movable and immovable property.
1. Immovable Property – The transfer of property Act 1882 has not defined the
term but Section 3 of the act merely lay down that "immoveable property" does not
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include standing timber, growing crops or grass. Section 3(26) of the general
clause Act 1897 defined immovable property as “it shall include land, benefits to
arise out of land and things attached to the earth, or permanently fastened to
anything to the earth.’’ According to Indian Registration Act, Immovable Property
includes land, building, hereditary allowances, right to ways, lights, ferries,
fisheries, or any other benefits to arise out of land and things attached to earth, but
not standing timber, growing crops or grass. Immovable Property means lands,
benefits arising of the lands and the things attached to the earth or permanently
fastened to anything attached to the earth. Other than the physical aspect, every
benefit arising from and every interest in the property is also included in the
definition. It excludes three things, namely, standing timber, growing crops and
grass. After analysis of the above definitions it may be concluded that the
following objects and things are included in ‘Immovable property’:
(1) Land – Land includes earth’s surface, column of space above the surface, the
ground beneath the surface, all objects which are on or under the surface in its
natural state e.g. minerals, land covered by water e.g. lakes, river and ponds, object
placed by human agency with the intention of permanent annexation e.g. buildings,
walls and fences.
(2) Benefits arising out of land – The benefits arising out of land are also known
as ‘profit a prendre’. All benefits arising out of immovable property and every
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interest in such property are also regarded as immovable property as such benefits
cannot be severed from the land e.g. hereditary allowances, rights of ways, right to
collect fish from ponds etc.
(3) Things attached to earth – Section 3 of Transfer of property Act defines the
expression “attached to earth” as including – (a) things rooted in the earth as in the
case of trees and shrubs (b) things imbedded in the earth, as in the case of wall or
buildings (c) things attached to what is so imbedded for the permanent beneficial
enjoyment of that to which it is attached. The following have been judicially
interpreted as included in immovable property:- (i) A right of way (ii) A right of
ferry (iii) Right to collect rent of immovable property (iv) A right to catch and
carry away fish (v) Hereditary rights (vi) Rights of collect lac from trees etc.
2. Movable Property – The definition of movable property is not given in transfer
of property Act 1882. According to General Clause Act, “movable property means
property of every description except immovable property”. The following are held
to be not immovable property so these properties may be considered as movable
property: (i) Right of worship (ii) A decree for sale of immovable property (iii) A
decree for arrears of rent (iv) Royalty (v) A right to recover maintenance allowance
(vi) Standing timber, growing crops and grass (vii) Machinery which is not
permanently attached to earth etc
Distinguish between Movable and Immovable Property
1. It includes land, benefits to arise out of land, and things attached to the earth
(sec. 3 of General Clauses Act).
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It includes stocks and shares, growing crops, grass, and things attached to or
forming part of the land, and which are agreed to be severed before sale, or under
the contract of sale (Sec.2 of Sale of Good Act).
2. If the thing is fixed to the land even slightly of it is caused to go deeper in the
earth by external agency, then it is deemed to be immovable property. If the thing
is resting on the land merely on its own weight, the presumption is that it is
movable property, unless contrary is proved.
3. If the propose of annexation of a thing is to confer a permanent benefit to the
land to which it is attached, then it is immovable property. If the purpose was only
to enjoy the thing itself, then it is movable property even though it is fixed in the
land.
4. Examples Benefits to arise out of land such as hereditary allowances, right of
way, ferries and fisheries, right to collect rent and profits of immovable property; a
mortgage-debt; right to cut grass of one year, a factory; etc. Examples Right of
worship; royalty; a decree of sale of immovable property; a decree for arrears of
rent; Government promissory notes; standing timber, growing corps and grass.
5. Transfer of immovable property requires registration of the document No
registration is required to transfer a movable property.
B. Definition of Transfer of Property
“Transfer of property” defined. — (Sec 5)
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
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persons, or to himself, 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.
After analyzing the language of section 5 the following point may be observed
1. Act of Conveyance- Transfer of property is an act in which the property must
be conveyed. It is not necessary that all rights or interest in property must be
conveyed to another person. The person conveying the property is entitled to the
property wanted to be conveyed and it is conveyed to that person who has no prior
title in it.
2. In present or in future – Section 5 allows that the transferor may transfer the
property either with immediate effect or to be effective from a future date. It must
be remember that whether the transfer of property will take effect from present or
from future but property must exist at the time of transfer. It means that at the time
of transfer, the property must be in existence; hence no transfer shall take effect in
case of future property.
3. Living Persons - The property must be conveyed by one living person to
another living person, it means the transfer must be ‘Inter Vivos’ transfer. In this
section “living person” includes a human being, a company or association or body
of individuals, whether incorporated or not.
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4. To himself or himself with on or more other persons – A living person

conveys property to one or more other living persons, or to himself, or to himself
and one or more other living persons.
C. Transferable and Non-Transferable Property

Ingredients of Section 6
1. Spes Successionis [sec 6(a)) – ‘Spes successionis’ means expectation of
succession. It is a possibility of getting the property in future through succession.
Section 6(a) of TP Act includes the following:
(i) The chance of an heir-apparent succeeding to an estate- The term ‘heir
apparent’ implies that a living person does not have any heir. An heir is a person
who succeeds to the property of another on the death of the later if such person
dies intestate or wills his property to him.
Intestate means if a person dies leaving behind property without a valid will.
Therefore, who will be the heir can only be determined only at the time of the
death of a person. A mere chance or possibility or expectancy of an heir
succeeding to an estate is not a transferable property. If a person transfer spes
successionis, the transfer in law is void ab-initio. It does not convey any right in
favor of the transferee, even if the transferor who transfers a chance may, in fact,
become the owner of the same property in future.
(ii) Chance of legacy – The chance of a relation obtaining a legacy is also mere
possibility and therefore cannot be transferred. This is so even if the testator has
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agreed with the relation that would give him a legacy. A will or legacy becomes
operative only after the death of the testator. If a testator has made two or more
wills, then only the last will made by him be operative. Expectancy to receive
legacy is uncertain because the legatee may or may not survive the testator and the
testator may have changed the name of legatee in his last will. That is why; the
chance of a legacy has been made non-transferable.
(iii)Any other possibility of like nature- Any other possibility is similar to spes
successionis or the chance of a relation obtaining a legacy cannot be transferred.
Any property which is merely a future uncertain possible interest should not be
made a transferable property. For example: future wages of a servant before they
are earned, possibility of winning lottery or a prize in a competition cannot be
transferred.
2. Right of Re-entry [Sec6 (b)] – A right of re-entry for a breach of a condition
subsequent cannot be transferred to any one except the owner of the property
affected thereby.
.3. Easement [Sec6 (c)] - An easement is a right to use, or restrict the use of land
of another in some way, e.g. right of way, right of light and water etc. An easement
cannot be transferred without the property which has the benefit of it. It means if
anybody wants to transfer an easement, it can be transferred only with along the
property.
4. Restricted interest [Sec6 (d)] - A person having right to a property can transfer
the same either subject to a restriction or without restriction. Where property is
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transferred subject to a restriction the transferee is supposed not to act contrary to

the restriction. Thus, if property is transferred to the transferee with a restriction
that it is to be enjoyed him personally, he shall have no right to transfer such a
property and if he transfers the property in violation of the restriction,the transfer
shall be void under this clause. Under this clause, a trustee cannot alienate his
office because his office is based on personal confidence.
5. Maintenance [Sec6 (dd)] - “A right to future maintenance, in whatsoever
manner arising secured or determined, cannot be transferred”. A right to receive
maintenance is a personal right, although any particular property or the income
thereof may be charged with it. The right of maintenance is a personal right and it
is not transferable. But this right can be transfer in case of any arrears of
maintenance but as to future maintenance it is not valid.
6. Mere right to sue [Sec6 (e)] - A mere right to sue cannot be transferred. To sue
means to make a legal claim or to take legal proceedings against any person.
Claims for damages for breach of contract or for tort, for suing an agent for
accounts are all mere rights to sue and cannot be transferred. But if right to sue has
merged in a decree, the right can be transferable.
7. Public Office [Sec6 (f)] – A public office cannot be transferred, nor can the
salary of a public officer, whether before or after it has become payable. The
prohibition on transfer of public office and on transfer of the salary of a public
officer is imposed on ground of public policy. A person is chosen to hold a public
office for qualities personal to him and if he were allowed to transfer it, there is
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likelihood that the public duties may not be duly discharged and as well salary is
given to him for purpose of upholding its dignity and proper performance of its
duties, it cannot be transferable.
8. Pensions [Sec6 (g)] – Under this clause, stipend allowed to military and civil
pensioners of Government and political pensions cannot be transferred. Here
pension means a stipend granted not in respect of any right of office but on account
of past services of particulars merit.
9. Nature of Interest [Sec6 (h)] – This clause deals with three classes of cases:
(i) Opposed to the nature of business – there are things which from their very
nature are not transferable. It includes, res communes, i.e. things of which no one
in particular is the owner or also known as res nullius i.e. thing without an owner)
such as air, water of rivers etc. These things from their very nature are not
transferable. Similarly, res extra commericum (i.e. things which cannot be the
subject of commerce) e.g. property dedicated to a idol cannot be transferred.
(ii) Unlawful object or consideration – A property otherwise transferable become
non transferable when the object or the consideration of the transfer is unlawful.
Thus a house given on rent for the purpose of gambling or prostitution being
immoral or opposed the public policy is invalid.
(iii)A person legally disqualified to be a transferee – A transfer cannot be made in
favor of a person who is disqualified to be transferee. U/S 36 of Transfer of
property act, a judge, a legal practitioner or an officer connected with courts of
justice are disqualified for purchasing any actionable claims.
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10. Untransferable Interest [Sec6 (i)] – The general rule is that leasehold are
transferable but this clause makes an exception to this rule and declares certain
interest untransferable. 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 cannot assign or transfer their interest in the holding.
D. Rule against Perpetuity
Rule against perpetuity (Section 14) — No transfer of property can operate to
create an interest which is to take effect after the life-time 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.
Analysis of Section 14
1. The vesting of property absolutely cannot be postponed beyond the life-time of
any one or more persons living at the date of transfer, i.e. there must be no internal
between the termination of the precedent interest of a living person and the vesting
of the interest in the unborn person.
2. The unborn person takes a vested interest at birth, immediately on the
termination of prior interest, however the vesting of interest in favor of him may be
postponed until he attains full age i.e. the age of majority. Sec 14 allows the
delaying of the vesting during the minority period of a person who is not born at
the date of the transfer.
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3. Perpetuity Period – It is maximum period during which the property may be

rendered inalienable. The extent of perpetuity period is the life of any person who
is alive at the movement when the deed which creates the interest begins to
operate, plus period of 18 years from the time when such designated person dies.
4. While examining the transfer of property under sec 14, the court looks at the
possible events according to the terms of the deed, and not the actual events on the
date of transfer.
Exceptions to the rule against perpetuity
1. Vested interests are not affected by the rule, for when an interest has once
existed, it cannot be bad for remoteness.
2. Gifts to charities do not fall within the rule, thus, in case of a transfer for the
benefit of the public in advancement of religion, knowledge, health, commerce
etc., the rule does not apply. Perpetuity is not repugnant in cases of religious or
charitable endowments.
3. Property settled upon individuals for memorable public services may be
exempted from the operation of this rule.
4. The rule against perpetuity applies when interest in property is created and has
no application to personal contracts. A contract for sale of property does not of
itself create any interest in such property. Thus, a contract to pay money to a
person, his heirs or legal representatives upon a future contingency, which may
happen beyond the period prescribed would be perfectly valid.
5. The rule also does not apply to contracts for perpetual renewal of leases.
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6. The rule also does not apply where only a charge is created, which does not
amount to a transfer of any interest e.g. when property is made merely security for
payment of money.
7. A covenant of redemption in a mortgage does not offend the rule
E. Vested and Contingent interest
Vested interest: A vested interest is created in favour of a person – without
specifying the time when it is to take effect, or specifying that it is to take effect
forthwith, or on the happening of a certain event. It is ownership. It does not
depend upon the fulfilment of any condition. It creates an immediate right, though
the enjoyment may be postponed to a future date. Thus, owner’s title is already
perfect. It is not defeated by death of transferee before he obtains possession. It is
both transferable as well as heritable. If the transferee of a vested interest dies
before actual enjoyment, it passes on to his heirs.
Example: A makes a gift to B of Rs. 100 to be paid to him on the death of C. B
gets a vested interest, as the event, namely, C’s death is certain
Contingent interest: A contingent interest is created in favour of a person – to
take effect only on the happening or not happening of a specified uncertain event,
which may or may not happen. It is only a chance of becoming an owner.
However, it is different from spes successions. It is solely dependent upon the
fulfilment of the condition (after which it becomes vested interest), so that if the
condition is not fulfiled, the interest may fall through. Thus, the owner’s title is as
yet imperfect, but is capable of becoming perfect. Whether it passes on the death of
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the transferee or not depends on the nature of the contingency. It is transferable.

Whether it is heritable or not depends on the nature of the contingency. If the
transferee dies before obtaining possession, the contingent interest fails, and does
not pass on to his heirs.
Example: An estate is transferred to A if he shall pay Rs. 500 to B. A’s interest is
contingent until he paid Rs. 500 to B.
Vested interest Contingent interest.
Definition
Section 19 defines Vested interest Section 21 defines Contingent interest
Where, on a transfer of property, an Where, on a transfer of property, an
interest therein is created in favour of a interest therein is created in favour of a
person without specifying the time person to take effect only on the
when it is to take effect, or in terms happening of a specified uncertain
specifying that it is to take effect event, or if a specified uncertain event
forthwith or on the happening of an shall not happen, such person thereby
event which must happen, such interest acquires a contingent interest in the
is vested, unless a contrary intention property. Such interest becomes a
appears from the terms of the transfer. vested interest, in the former case, on
the happening of the event, in the latter,
when the happening of the event
becomes impossible.
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Fulfillment of conditions
Vested interest does not depend upon Contingent interest is solely depend
fulfillment of any condition. It creates upon the fulfillment of any condition. If
an immediate right though the the condition is not fulfilled the interest
enjoyment is postponed to a future date. fails
Effects of transferee's death

Vested interest is not defeated by the Contingent interest is defeated by the
death of transferee before he obtains death of transferee before he obtains
possession. possession.
Whether transferable and heritable ?

It is both Transferable and heritable. It is Transferable but whether it is
If the transferee of the vested interest heritable , depends upon nature of
dies before actual possession or condition.
enjoyment it passes to his heirs. It passes not on heir on the death of the
transferee received to transfer.
Present right of enjoyment.
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There is present, immediate right even There is no present right of enjoyment,

when its enjoyment is postponed. there is mere a promise for giving such a
right.
F. Rule of Election
The Doctrine Of Election u/s 35 of The Transfer of Property Act, 1882
The Doctrine of Election is one of the most important areas of the law relating to
transfer of property. Section 35 of the Transfer of Property Act deals with this
doctrine. The primary element in the doctrine of election is the presence of choice.
The foundation of Election is that a person taking the benefit of an instrument must
also bear the burden.
Generally, Election means choosing between two inconsistent or alternative rights.
Under any instrument if two rights are conferred on a person in such a manner that
one right is in lieu of the other, he is bound to elect only one of them. In
Beepathummav/s Kadambolithaya, SC held that- A person cannot take a benefit
under and against the same instrument. This means he cannot approbate and
reprobate at the same time.Example-Abu Bakar offer 1,00,000 to Joy in lieu of
transfer his house, So, Joy can elect only one, either he can retain the money and
transfer his house or deny the money, he cannot enjoy the both.
Election is an obligation, to choose between two rights in a case where there is a
clear intention of the grantor that the grantee should not enjoy both. The
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foundation of the doctrine of election is that the person taking a benefit under an
instrument must also bear the burden.
The doctrine of election may be stated in the classic words of Maitland as follows-
‘He who accepts a benefit under a deed or will or other instrument, must-
a. Adopt the whole contents of that instrument,
b. Conform to all its provisions and
c. Renounce all rights that are inconsistent with it'.
The doctrine of election is based on the principle of equity that one cannot take
what is beneficial to him and disapprove that which is against him under the same
instrument. He cannot approbate and reprobate at the same time. In simple words,
where a person takes some benefit under a deed or instrument, he must also bear its
burden.
Section 35 of the Transfer of Property Act embodied the doctrine of
election.According to section35:
Where a person ---
i) Professes to transfer property which he has no right to transfer, and
ii) as part of the same transaction, confers any benefit on the owner of the property,
such owner must elect either to confirm the transfer or to dissent from it.
If he dissents from it----
a) he must relinquish the benefit so conferred, and
b) the benefit so relinquished reverts to the transferor or his representative as if it
had not been disposed of.
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However, when such benefit reverts back to the transferor, it is subject to the
charge of making good to the disappointed transferee the amount or value of the
property attempted to be transferred in two cases, namely ---
i) where the transfer is gratuitous, and the transferor has, before election, died or
otherwise become incapable of making a fresh transfer; and
ii) where the transfer is for consideration.
A. Essential ingredients for the Doctrine of Election
Those are the essential ingredients for this doctrine:
1) The transferor must not be owner of the property which he transfers.
2) The transferor must at the same time grant some property, in the same
instrument, out of his own, to the owner of property.
3) The two transfers i.e. transfer of the property of owner to the transferee and
conferment
of benefit on the owner of property must be made in the same transaction. Question
of electiondoes not arise if the two transfers are made by virtue of two separate
instruments.
4) The owner must have proprietary interest in the property, a creditor is not put to
election as he has only a personal right to be paid by the debtor.
5) The owner taking no benefit under a transaction directly, but diverting a benefit
under it indirectly, is not put to election.
6) Question of election does not arise when benefit is given to a person in a
different capacity.
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B. The conditions necessary for the Application of the doctrine of election:

* When a person professes to transfer a property not his own
Professes means to purports or make contract, for a property which is not his own
but he can make contract for the same.
* Part of the same transition
This Doctrine is only applicable when transfer and benefit form part of the same
transaction.
* Benefit directly confer to the owner of the property
The Doctrine is only applicable when the real owners of the property directly
accept the benefit. But if the owner taking no benefit under a transaction directly,
diverting a benefit under it indirectly, is not put to election.
*Doctrine of election section 35 first part always applicable for transferor:
Whether transferor believe him as a real owner or not of transfer property the first
part of this section always applicable for him.
C. Application of Doctrine of Election:
 Indian Law:
The principle underlying this section has always been applied to Hindus. In the
case of Rungamma v. Atchamma, the Privy Council referred to the rule that a party
shall not at the same time affirm and disaffirm the same transaction- affirm it as far
as it is for his benefit and disaffirm it as far as it is to his prejudice.
 MuslimLaw:
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In the case of Sadik Hussain v. Hashim Ali, the Privy Council applied this doctrine
to Muslims also.
 English Law:
Under English Law, a transferee by electing against the transfer does not lose his
benefit but he becomes bound to make compensation out of it to the disappointed
person.
2. Exception to the Rule of Election under Section 35:
Section 35 provides that,
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 inlieu of that property, if such owner claims the property, he mustrelinquish the
particular benefit. But he is not bound to relinquish any other benefit conferred
upon him by the same transaction.
* Real owner is not bound to confer any other benefit of a particular
transaction:
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
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the particular benefit, but he is not bound to relinquish any other benefit conferred
upon him by the same transaction.
* If real owner accepts the benefit before confirm election and waives enquiry
into the circumstances:
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.
* Two years Enjoyment:
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 according to Indian succession
act 1925 section 188[1] it was presumed that he approved the transfer and need not
apply the doctrine of election.
* Impossible for real owner to back the previous position:
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 ifsuch act had not been done.
* Warning the real owner after certain period:
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
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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.
* Suspension of election:
In case of disability by reason of infancy,lunacy, and so forth, the election shall be
postponed until the disability ceases, or until the election is made by some
competent authority.
Unit-II: General Principles Governing Transfer of Immovable Property
A. Transfer by Ostensible Owner
Introduction
The Transfer of Property Act, 1882, was passed with the purpose of making
transfer of property easier and makes it accessible to the population at large. This
Act lays down certain general principles as to transfer of property which has to be
followed. Transfer of a property by and ostensible owner is such a concept which
was incorporated to protect the rights of innocent third parties vis-à-vis the
property owners. This principle was first used in the much celebrated case
of Ramcoomar Koondoo v. John and Maria McQueen by the Judicial Committee.
Ramcoomar Koondoo v. John and Maria McQueen case
In this case, the plaintiff who had inherited a property by way of a will came to
know that someone else had already purchased this property in her name and
subsequently sold this property to a third person, by making him believe that he
had good title over that property. The whole transaction was a ‘benami’ transaction
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but was not known to anyone except the person who sold the property. The
plaintiff sued the third party for recovery of the possession of the land but the
committee held that:
“ It is a principle of natural equity, which must be universally applicable, that
where one man allows another to hold himself out as the owner of an estate, and a
third person purchases it for value from the apparent owner in the belief that he is
the real owner, the man who so allows the other to hold himself our shall not be
permitted to recover upon his secret title, unless he can overthrow that of the
purchaser by showing, either that he had direct notice, or something which
amounts to constructive notice, of the real title, or that there existed circumstances
which ought to have put him upon an inquiry that, if prosecuted would have led to
discovery of it.”
It was there by held that the plaintiff cannot take back the property form the third
party and that the transfer was a legitimate transfer in the eyes of the law. This
wordings used in this case can be seen in the S. 41 of the Act which deals with
Ostensible owner.
S. 41 of the Act.
Section 41 of the Act deals with ostensible owner and it has been defined as:
“Transfer by Ostensible Owner: Where, with the consent, express or implies, of the
persons interested in immovable property, a person is the ostensible owner of such
property and transfer the same for consideration, the transfer shall not be voidable
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on the grounds that the transferor was not authorized to make it: provided that the
transferee, after taking reasonable care to ascertain that the transferor had power to
make the transfer, has acted in good faith.”
The section lays down certain requirements to avail the benefit of this section.
They are:
 The primary condition is that the person who is transferring the property
should be ostensible owner.
 There should be consent form the real owner, which can be implied or express
form.
 The ostensible owner should get some consideration in return of the property.
 Reasonable care has to be taken by the transferee about the authority of
transferor to the property and the transferee had acted in good faith.
It goes without saying that this section is applicable only to transfer of immovable
property and not in case of movable property.
‘Ostensible owner’
Ostensible owner is not the real owner but who can represent himself as the real
owner to the third party for such dealings. He has acquired that right by the willful
neglect or acquiesces by the real owner of the property thereby making him an
ostensible owner. A person who has gone abroad for some years has given his
property to his family relative for making use of it for agricultural purpose and for
all other purposes as he may deem fit. In this case the family relative is the
ostensible owner and if during that period he sells the property to a third party,
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then the real owner after coming back cannot claim his property and say that the
person was not authorized to transfer his property. An alternative case can be when
the property is in wife’s name but husband used to take care of it and the other
dealings related to the property. If the husband thereby sells this property, the wife
cannot claim her property back or as in the Mohamad Shakur v Shah Jehan, in
which the real owners lived in a different village, and had authorized a widow to
use the property as she liked and afterwards she sold it. The real owner lost the
case and the transfer was a valid one.
Consent from the real owner
The main purpose of this section is to protect the rights of the innocent third party
who had purchased the property, when the real owner was himself at fault by not
protesting the transfer. But a necessary requirement is that the real owner should
have the capacity to give the consent and that consent should not be obtained from
any unlawful act. In the case of minors, even if the ostensible owner claims that he
has the consent of the minor, it will be held to be no consent as minors do not have
any capacity to give the required consent. And it was laid down in the case
of Satyanarayana Murthi vs. Pydayya, that consent need not be taken from the true
owner and it might also be the case that the true owner had no knowledge of the
transfer.
The consent in such transactions can be express or implied.
Implied Consent
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Implied consent can be made out from the conduct of the real owner. It is not
required that the real owner has to give express consent or give his consent in
writing. Therefore, where another person is dealing with the property of the real
owner, as if the property was his own, and the real owner knows about it, then it
will said to be implied consent on the part of the real owner. In the case
of Shamsher Chand v Bakshi Meher Chand, it was held that if a party is not aware
of his rights or is silent about them, then in such case it cannot be said that the real
owner had consented to the transfer of the property. It is required that a person who
is not aware of his rights could never have consented to that and such a transaction
will not be valid. It is not stated in the section that the real owner must have
actually consented to the transfer, because if that was the case, then the real owner
could never have made any objection to such transfer. It is just that the real owner
is unaware of this transaction or is negligent. Silence may amount to consent if the
silence on the part of real owner leads the third party to believe that the ostensible
owner is the real owner of the property. But in the case of Gurucharan Singh v.
Punjab State Electricity Board Patiala , where the land in contention was
transferred to someone else and such person had perfected his right to the property
by paying the money. The new owner which is the real owner had not taken the
possession of the land and the previous owner after having waited for 12 years,
sold the land to third party. The real owner then comes forward and claim his right
over the land and the court said that the real owner was a minor at the time of
transfer of land and therefore could not take the possession of the land and
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therefore it would not amount to silence on the part of the real owner as he could
never have consented to the transfer. Therefore the subsequent transfer was held to
be invalid.
Consideration
Consideration is a must if there is a transfer by ostensible owner. He cannot give
away the property as a gift. As it has also been provided in the Indian Contract Act,
1872 that consideration is necessary component of any contract and transfer of
property by an ostensible owner is done by way of contract only. Also it has been
provided in S. 4 of the Act that anything not expressly defined in this act shall be
deduced form the general definitions given under the Indian Contract Act, 1872.
Reasonable Care
Reasonable care can be understood as the care which a reasonable and ordinary
man would have taken. He has a duty to check the title of the transferor. Like in the
case of Nageshar Prasad v. Raja Pateshri where there was an error in the revenue
records regarding the name of the owner. The name written was of some other
person and the real owner had already made a complaint about this error. The
person whose name was in the revenue records subsequently sold it to a third
person and the third person without making proper inquiries took the property and
the real owner afterwards objects to it. The court held that the third party has not
taken reasonable care which was required of him and therefore he will not be
protected by this section. The advice of solicitor will not be enough to prove that
the third party has taken reasonable care in determining the title of the
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property. The third party is required all the available documents which can
possibly give some more information regarding the title of the property and these
documents may include police registers, municipal registers apart from other
documents.
There is also a safeguard for the real owner. In the case of Mathura v. Ambika,
where the real owner had sold the property to another person and got it registered
before the transfer by the ostensible owner could be registered, then it was held
that the transfer by the real owner would be held valid as he has a greater title over
the property than the ostensible owner and the rights of third person who had
purchased this property from the ostensible would not be protected under this
section.
Good faith simply means that the transferee should have honestly believed that the
ostensible owner is the true owner after all the proper inquiries conducted by
him. But where after proper
B. Rule of Feeding Grant by Estoppel
Section 43. Transfer by unauthorized person who subsequently acquires
interest in the property transferred
Where a person fraudulently or erroneously represents that he is authorized to
transfer certain immovable property and professes to transfer such property for
consideration, such transfer shall, at the option of the transferee, operate on any
interest which the transferor may acquire in such property at any time during which
the contract of transfer subsists.
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Nothing in this section shall impair the right of transferees in good faith for
consideration without notice of the existence of the said option.
Illustration
A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z,
representing that A is authorized to transfer the same. Of these fields Z does not
belong to A, it having been retained by B on the partition; but on B's dying A as
heir obtains Z. C, not having rescinded the contract of sale, may require A to
deliver Z to him.
Section 43 clearly applies whenever a person transfers property to which he has no

title, on a representation that he has a present and transferable interest therein, and
acting on that representation, the transferee takes a transfer for consideration.
When these conditions are satisfied, the section enacts that, if the transferor,
subsequently acquires the property, the transferee becomes entitled to it if the
transfer has not in meantime been thrown up or cancelled and is persisting. There
is an exception in favour of transferees of consideration in good faith and without
notice of the right under the prior transfer.
Section 43 embodies a rule of estoppel and enacts that a person who makes a
representation, shall not be heard to allege the contrary as against a person who
acts on the representation. It is immaterial whether the transferor who acts bona
fide or fraudulent in making the representation. It is only material to find out
whether, in fact, the transferee has been misled. It matters not whether the
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transferor acted fraudulently or innocently in making the representation and the

transferee has acted on it. Where the transferee knew as a fact that the transferor
did not possess the title which he represents he has, then he cannot be said to have
acted on it when taking a transfer, and Section 43 would not then apply and the
transfer will fail under Section 6(a). But where transferee does act on the
representation, he will have the benefit of the equitable doctrine embodied in
Section 43, however fraudulent the act of the transferor might have been.
A plea of estoppel cannot be raised against a minor who had transferred property
on representation that he was of age, and Section 43 does not apply to such
transfers.
The principle of the section is based partly on the English doctrine of estoppel by
deed and partly on the equitable doctrine that a man who has promised more than,
he can perform must make good his promise when he acquires the power of
performance.
Essentials.--
To attract the application of the section, three conditions are necessary:
(i) a fraudulent or erroneous representation that the transferor had authority to
transfertheproperty,
(ii)thetransferisforconsideration,
(iii) the transferor subsequently acquires the interest which he had professed to
transfer.
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If a Hindu dies leaving behind two widows, they succeed as joint tenants with a
right of survivorship. They were entitled to obtain partition of the separate portions
of property so that each may enjoy her equal share of the income accruing there
from. Each can deal as she pleases with her own life interest but she cannot
alienate any part of the corpus of the estate by gift or will so as to prejudice the
right of survivorship or a future reversioner. If they act together, they can burden
the reversion with any debts owing to legal necessity but one of them acting
without the authority of the other cannot prejudice the right of survivorship by
alienating any part of the estate. The mere fact of partition between the two while it
gives each a right to fruits of separate estate to her, it does not imply a right to
prejudice the claim of survivorship to enjoy full fruits of the property during her
lifetime.
In order that Section 43 can apply, it is necessary that there should be
misrepresentation,fraudulent or erroneous, about the right to transfer the property.
The word “represents” in the section clearly shows that the person in whose favour
the enquiry is allowed to operate must have acted on the representation. In other
words, the transferee must have been misled into the impression that the transferor
had power to transfer.
Transfer for consideration.
The doctrine of 'feeding the estoppel by grant' is applicable only to the transfers of
properties for value. This section is not applicable where the transfer is gratuitous,
i.e., without consideration. Thus, where the property has been transferred by way
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of gift, the provisions of this section cannot apply because a gift, the provisions of
this section cannot apply because a gift of property in which the donor has no
present fixed right at the date of transfer, is void.
Transfer forbidden by law.
The section will not apply if the transfer is invalid as being forbidden by law or
contrary to public policy. In such a case the principle of this section cannot be
invoked to compel a person to transfer the property. A mortgage made by a
disqualified person does not therefore become valid on that person ceasing to be
disqualified. Similarly, the interest of a Hindu reversioner is spessuccessionis or a
mere chance of succession under Section 6(a) and this chance of succession is
inalienable. If therefore, the reversioner transfers such interest and afterwards
acquires the property, this section will not operate so as to compe; such heir to
transfer the property. But a Full Bench of the Madras High Court InJuma Masjid v.
KodimaniandraDeviah, has held that even in case of spessuccessionis, the
transferor is precluded from questioning the validity of the transfer if he later on
acquires interest in the property. It is submitted that a distinction should be drawn
between (1) a transfer which is professedly one of a mere right or a mere chance of
succession, and (2) a transfer of a specific property which the transferor
erroneously represents that he is authorized to transfer. Transfer of the former class
would fall within the purview of Section 6(a) while those of the latter class would
come under this section.
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Transfer of spes successionis.

When a person transfers property representing that he has a present interest therein
whereas he has, in fact, only a spes successionis, the transferee is entitled to the
benefit of Section 43 if he has taken the transfer on the faith of that representation
and for consideration. To hold that the transfers by the persons have only a spes
successionis at the date of the transfer, are not within the protection afforded by
Section 43, would destroy its utility to a large extent.
The option of the transferee.According to the present section the option of the
transfer can only be exercised in the respect of an interest acquired by the
transferee whilst the contract of transfer still subsists. If the purchaser has
repudiated that transaction had recovered his purchase money, or if the transaction
were one of mortgage and the mortgage money has been repaid, then the relation
of the transferor and transferee has ceased to exist, and no claim in respect of the
property can be made by the latter.
The right of the second transferee.

The second paragraph of the section protects the rights of the second transferee in
good faith and for consideration who has no notice of the option in favour of the
first transferee. For instance A, a Hindu, who has been separated from his father, B
sells to C three fields X,Y and Z representating that he is authorized to transfer the
same. Of these fields, Z does not belong to A, it having been retained by B on the
partition, but on B's dying A as heir obtains Z. Before C calls upon A to deliver Z
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to him, A again sells Z secretly to E who has no notice of the previous sale to C
nor of the option of C. C sues A and E for recovery of Z. This suit is liable to be
dismissed for the reasons mentioned above. In this illustration E has paid
consideration. Secondly, he has acted honestly. Thirdly, E has no notice of the
existence of the option of C Fourthly, E purchased the property before C has
exercised the option for these reasons E acquires a good title to Z and cannot be
ousted by C.
C. Rule of Lis pendens
Doctrine of lis pendens
Section 52 talks about doctrine of lis pendens. Lis means litigation and pendens
means pending. So lis pendens would mean pending litigation. It is based upon
maxim which says that during pendency of litigation ,nothing new should be
introduced. Under this doctrine the principle is that during perfect of suit regarding
title of property, any new interest in respect of the property should not be created.
Creation of new title or interest is known as transfer of property. Therefore, in
essence the doctrine of lis pendens prohibits the transfer of property pending
litigation. The basis of lis pendens is ‘necessary’ rather than actual or constructive
notice. It may be said that this doctrine is based upon notice because a pending suit
is regarded as constructive notice of the fact of disputed title of the property under
litigation. For administration of justice it is necessary that while a suit is pending in
the court of law regarding title of property, the litigants should not be allowed to
take decision themselves and transfer the disputed property. In the case of
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Rajendra Singh vs Santa singh it was held that the doctrine of lis pendens is
intended to strike at attempts by parties to a suit to curtail the jurisdiction of the
court by private dealings which may remove the subject matter of litigation from
the power of the court to decide a pending suit and frustrate its decree.
In case of Sanjay verma vs Manik roy it was held that the mere pendency of a
suit does not prevent one of the parties from dealing with the property which is the
subject matter of the dispute. The section only postulates a condition that any
alienation would in no manner affect the rights of the party in whose favour a
decree may be passed.
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Provisions of section 52 are as follows:

• During the pendency of a suit or proceeding,
• Property cannot be transferred or otherwise dealt with, and
• If so transferred , the transferre is bound by the decision of the court whether or
not he had notice of the suit or proceeding.
Essential conditions for application of section 52 are as follows:
• There is a pendency of a suit or a proceeding .
• The suit or proceeding must be pending in a court of competent jurisdiction
• A right to immovable property is directly and specifically involved in the suit.
• The suit or proceeding must not be collusive.
• The property in dispute must be transferred or otherwise dealt by any party to
suit.
• The transfer must affect the rights of other party to litigation.
Where the above mentioned conditions are fulfilled, the transferre is bound by the
decision of the court. If the decision of the court is in favour of the transferor, the
transferre has rights in the property transferred to him. If the decision goes against
the transferor, the transferre cannot get any interest in the property.
Pendency of suit or proceeding
The section applies only where a property is transferred during pendency of
litigation. Pendency of a suit is that period during which the case remains before a
court of law for its final disposal. If a case instituted in court the first step is
presentation of the paint, and the last step is passing of a decree. When the court
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gives decision by passing a decree the case is terminated. So the pendency of a suit
begins from the date on which the paint is presented and terminates on the date
when final decree is passed. Nc Bhartia vs Gandevi peoples Co- operative Bank
it was held that attachment of judgement debtor property was passed during
execution proceedings. Subsequently , the relatives of the debtor objected the
attachment and claimed a share in the property. They also sold the property and
this sale feed was executed during pendency of execution proceedings . It was held
that sale deed was hit by the doctrine of lis pendens in section 52.
Pendency of court of competent jurisdiction
The suit or the 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 the doctrine of lis pendens would not apply.
Right to immovable property should be involved
It says that for the applicability of the section right to immovable property must be
directly and specifically be in question . The litigation should be regarding title or
interest of the immovable property otherwise doctrine would have no application.
For example where a suit is pending between land Lord and tenant regarding
payments of rents and landlord transfers the property then doctrine of lis pendens
would not apply because the litigation is regarding payment of rents and not with
interest of property.
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Suit must not be collusive

It says that for the doctrine of lis pendens the suit must not be collusive because if
the suit is collusive it would be instituted with malaise intention.
Property is transferred or otherwise dealt with During pendency of the suit the
property must be transferred or otherwise dealt with by any of the parties to suit.
Transfer includes sale ,exchange lease and mortgage. The expression otherwise
dealt with mean those transactions in which although there is transfer of some
interest in the property but they do not apply within meaning of tranfer of property
defined under section 5. Rajendra Singh vs Santa Singh it was held that illegal
possesion or continuance of wrongful possession of the disputed party does not
amount to otherwise dealt with and therefore it will not attract section 52
Transfer affect rights of other party
The last condition held that transfer during pendency must affect the rights of any
party to suit. The principle of lis pendens is to safeguard the parties to litigation
against their transfers by opponents.
Exceptions
There are some exceptions in which doctrine of lis pendens
• In case of malaise intention this doctrine will not apply.
• Where the transfer is made during pendency of suit with the permission of court
the principle of lis pendens will not apply. The concluding part of this section
exempts transfers.
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• This doctrine does not apply where suit involves right in movable properties ,
standing timber is a movable property so it shall not apply in the section.
• Pendency of court is necessary for application of doctrine .
D.Section 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 includes 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 consideration was made.
D. Rule of Art Performance
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DOCTRINE OF PART PERFORMANCE

The doctrine of part performance was inserted in the Transfer of Property Act,
1882, by Act 20 of 1929. This is an equitable doctrine, based on the principle that,
equity treats the subject-matter of a contract as to its effects in the same manner as
if the act is contemplated in the contract has been fully executed, from the moment
the agreement has been made, though all formalities of the contract have not been
yet completed.
SECTION 53A: Part performance
“Where any person contract to transfer for consideration any immovable 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 at in furtherance of the
contract, and the transfer has performed or is willing to perform his part of the
contract, then notwithstanding that the contract, though requires being registered,
has not been registered, or, 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 person 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: .
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Provided that nothing in this section shall affect the rights of a transferee for
consideration who has no notice of the contract or of the part performance
thereof.”
Following conditions should be complied under Section 53A:
1. There should be a contract for consideration in writing and same should be
signed by the transferor;
2. The contract should be for transfer of immovable property and from therein the
term necessary to constitute transfer should be certainly ascertained;
3. The transferred should has taken possession of the property and has done
something for furtherance of the contract;
4. The transferee should be ready and willing to perform his part of the contract;
In this case even without execution of sale deed, the transferee acquires the right in
the property and the transferor cannot claim any right in respect of property under
consideration other than the rights expressly provided in the terms of contract.
ILLUSTRATION:
FACTS: A, a lessor, leases a part of his property to B, the lessee for an amount
specifically mentioned in written in the terms of the contracts. As per the contract
to transfer, the lease amount for the property was to be paid in two installments.
The lessee pays half of the amount as first installation as consideration to the lesser
and promised to pay rest of the amount as second installation in the subsequent
months to come after when the transferee gets the possession of the property. The
lesser, later on in not receiving the whole amount in the next month negotiated to
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sell the property to a third party, C who already knew of the transaction previously
taken between A and B. B, at the time of the sale of the property had the
possession over the property. A and C subsequently filed a suit against B for
eviction of the property.
ISSUE: Can B take the plea of part performance in this case?
JUDGMENT: A can invoke right of part performance as he has done some act in
furtherance of the contract to obtain the leased property. Though the act was done
prior to the possession over the property, but since, the act was duly done in
furtherance of the contract and forms a part of the contract of lease as the money
paid was pursuant to the contract made between the parties and subsequent thereto,
B got the possession over the property. Since, an independent act than mere
possession of the property is required to be made and that the act should be in
furtherance of the contract. The acts of part performance, if they preceded the
contract, could not be evidence of part performance, unless performance is a
condition precedent without the fulfillment of which the promise could not be a
binding contract.
Since, the act done by B preceded the contract, but was done as a condition
precedent to the contract, thus, making the contract binding. Thus, the transferee in
this case has a right to possess the property and the transferor in such a case cannot
hamper the right of the transferee.
And the right of the lesser to sell the property to C or in fact any other right which
the lesser held before leasing out the property is barred as per the statutory
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provision. It is the statutory right of the lessee to defend his possession over the
property.
E. Actionable Claim
The term actionable claim is that every kind of claim in a movable property which
would be enforced through the courts. But such a wide meaning created confusion.
For example, under this meaning all debts whether secured or unsecured were
actionable claims whereas a debt secured by mortgage of immovable property is,
strictly speaking, an ‘interest in land’. Similarly, under this meaning any claim of
money whether the amount was fixed amount or uncertain, was an actionable
claim. Because of such confusions there used to be conflicting decisions and the
law was neither clear nor uniform.
Actionable claim is a claim to any debt, other than a debt secured by mortgage of
immovable property or by hypothecation or pledge of moveable property, or to any
beneficial interest in moveable property not in possession either actual or
constructive, of the claimant, which the civil courts recognize as affording grounds
of relief whether such debt or beneficial interest be existent, accruing or
conditional or contingent.
As Per Section 3 of the Transfer of Property Act, 1882
Actionable Claim is a claim to any debt, other than a debt secured by mortgage of
immovable property or by hypothecation or pledge of moveable property, or to any
beneficial interest in moveable property not in possession either actual or
constructive, of the claimant, which the civil courts recognize as affording grounds
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of relief whether such debt or beneficial interest be existent, accruing or

conditional or contingent”. “A person is said to have notice” of a fact when he
actually knows that fact, or when, but for willful abstention from an enquiry or
search which he ought to have made, or gross negligence, he would have known it.
Transfer of actionable claim (Section 130)—
(1) The transfer of an actionable claim 1[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 instruments, and thereupon all the rights and remedies of the
transferor, whether by way of damages or otherwise, shall vest in the transferee,
whether such notice of the transfer as is hereinafter provided be given or not:
Provided that every dealing with the debt or other actionable claim by the debtor or
other person from or against whom the transferor would, but for such instrument of
transfer as aforesaid, have been entitled to recover or enforce such debt or other
actionable claim, shall (save where the debtor or other person is a party to the
transfer or has received express notice thereof as herein after provided) be valid as
against such transfer.
(2) The transferee of an actionable claim may, upon the execution of such
instrument of transfer as aforesaid, sue or institute proceedings for the same in his
own name without obtaining the transferor’s consent to such suit or proceeding and
without making him a party thereto.
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Exception.—Nothing in this section applies to the transfer of a marine or fire

policy of insurance or affects the provisions of section 38 of the Insurance Act,
1938 (4 of 1938)].
Illustrations
(i)A owes money to B, who transfers the debt to C. B then demands the debt from
A, who, not having received notice of the transfer, as prescribed in section 131,
pays B. The payment is valid, and C cannot sue A for the debt.
(ii) A effects a policy on his own life with an Insurance Company and assigns it to
a Bank for securing the payment of an existing or future debt. If A dies, the Bank is
entitled to receive the amount of the policy and to sue on it without the
concurrence of A’s executor, subject to the proviso in sub-section (1) of section
130 and to provisions of section 132.
Instances of Actionable Claim
(i) Unsecured debt.
(ii) Right to claim benefit of a contract for the purchase of goods; beneficial
interest under a subsisting contract in an actionable claim (Jaffar Mehr Ali v
Budge Jute Mills (1907) 34 Cal 289).
(iii) Arrears of rent [Daya Debi v Chapala Devi (1959) 63 CWN 976].
(iv) Maintenance allowance payable in future.
(v) Annuities under a deed of wakf (Mt. Bibi v kAbdul Aziz AIR 1936 Pat
527).
(vi) Amount standing to the credit of the member of a provident fund.
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(vii) A share is partnership; interest of the partner in a dissolved partnership

(Mulchand v Shamdas AIR 1941 Sindh 73).
(viii) A claim for return of earnest money.
(ix) Right of vendor to recover money left with vendee.
(x) Money due under an insurance policy (official Assignee v Hukum Chand
AIR 1941 Mad 147).
(xi) Fixed deposit in a bank [Anantaraman v Official Liquidator (1940) Mad.
157]
(xii) Hire-purchase agreement [Krishnamurthi v Kamalakshi (Kant 233).
Instances of Non-actionable Claim
(i)A debt is an actionable claim, but a debt which has passed into a decree is not an
actionable claim; as here the action has already been taken while an actionable
claim means something which can be enjoyed only after taking action
(ii)The right to recover damages for breach of contract is not an actionable claim.
Because after a breach of contract, nothing is left but a right to sue for damages
which is not a beneficial interest in the contract (but a mere right to sue for non-
performance of the contract)
(iii)Secured debt (e.g. debt secured by a mortgage).
(iv)A claim to mense profits (unascertained sum).
(v)A copyright [3.9 Essential of a valid Transfer of Actionable Claims
Essential of a valid Transfer of Actionable Claims
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(i)Mode – Sec. 130, T.P. Act, prescribes the mode of assigning or alienation an
actionable claim.
The assignment may be by way of sale, mortgage, gift or exchange. The transfer
must be effected by an instrument in writing signed by the transferor or his fully
authorized agent. An endorsement on the back of a document comprising the
actionable claim in enough.
(ii)Effect – The assignment takes effect from the date of the execution of the
writing and its effect is to vest all the rights a remedies of the transferor in the
transferee [sec.130 (1)]. The transferee may sue for the actionable claim in his own
names without obtaining transferor’s consent without making him a party to the
suit (Cl. 2). After the assignment, the transferee is the only person who is entitled
to recover the claim. The assignment has also the effort of subjecting the transferee
to all the liabilities and equities to which the transferor was subject in thereof at the
date of the transfer (Sec.132). For instance, a debtor has a right to set off any
counter claim against the transferee which he could have done against the
transferor.
(iii)Notice – Although a notice of transfer to the debtor is not necessary to perfect
the title to the transferee, but until the debtor receives notice of the transfer in
accordance with law, his dealings with the original creditor will be protected. The
transferee, therefore, in his own interest, must give notice of the transfer to the
debtor as early as possible. Once he does this the debtor becomes liable to pay the
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debt to him alone. However, in respect of transfer of ‘arrears of rent’, such notice
will not be necessary.
Sec.131 lays down that every notice of transfer of an actionable claim shall be in
writing signed by the transferor (or his agent) or in case the transferor refuses to
sign, by the transferee or his agent, and shall state the name and address of the
transfer.
Unit – III: Specific Transfers – I
A. Mortgage: Definitions and Kinds, Rights and Liabilities of Mortgagor and
Mortgagee
Definition of Mortgage- Section 58 of Transfer of property Act 1882 ‘A mortgage
is the transfer of an interest in specific immoveable property for the purpose of
securing any of the following:
1.The payment of money advanced or to be advanced by way of loan,
2.An existing or future debt, or
3.The performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal
money and interest of which payment is secured for the time being are called the
mortgage-money, and the instrument (if any) by which the transfer is effected is
called a mortgage-deed. In a mortgage, out of the bundle of rights which constitute
ownership, some are transferred to the mortgagee and the other rights remain
vested in the mortgagor
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ELEMENTS:
1. Specify immovable property : A mortgage is that the immovable property must
be distinctly specified.
2.Consideration : The consideration of a mortgage may be either :-i).The
performance of a contract giving rise to a pecuniary liability,
ii) money advanced or to be advanced by way of loan, or
iii) an existing or future debt.
3.Transfer of an interest : According to the definition given above the third
requisite of mortgage is that there should be a "transfer of an interest" of an
immovable property for the purpose of securing the payment of money advanced
by way of loan or for the purpose of securing the performance. The words "transfer
of interest" signify that the interest which passes to the mortgage is not ownership
or dominion, which notwithstanding the mortgage, resides in the mortgagor. This
right is only an accessory right which is intended merely to secure the due payment
of the debt. In mortgage, there is a transfer of a partial interest.
4. Parties: The person who transfers an interest in the property is called the
mortgagor, the person to whom the interest is transferred is called the mortgagee.
The mortgagor must be competent to transfer. Thus a minor cannot be a mortgagor
but a minor can be a mortgagee.
Rights of the Mortgagor
1. The Right of Redemption : The mortgagor is supposed to be the natural owner
of the property and hence it is accepted that his interests in the property are
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always supposed to be natural. His rights are supposed to be statutory and legal
for which legal remedies are available for him to establish his rights at the end.
At any time after the principal money has become due, the mortagor has a right, on
payment or tender, at a proper time and place, of the mortgage money to require
the mortgagee (i)to deliver to the mortgagor the mortagage deed and all documents
relating to the mortgaged property which are in the possession or power of the
mortagagee.
(ii)Where the mortgagee, is in possession of the mortgaged property, to deliver
possession thereof to the mortgagor.
2.Re-transfer Case : He being, the natural owner of the property has the inherent
right to re-transfer his property to anybody else irrespective of the person in whose
favour he has firstly transferred the property for the sake of money.
In other words, at the cost of the mortgagor either to re-transfer the mortgaged
property to him or to such third person as he may direct, or to execute and (where
the mortgage has been effected by a registered instrument) to have registered an
acknowledgment in writing that any right in derogation of his interest to the
mortgage has been extinguished.
3.Right to Grant Lease : It should also be not treated that after mortgaging the
property the mortgagor is not free to lease the property to any of the lease. We
have noted that mortgage implied the temporary charge over the immovable
property belonging to the mortgagor till the money taken is repaid to the
mortgagor. It is, therefore, the inherent right of the mortgager to make the lease of
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the property whenever he desires for any purpose. Each such lease is supposed to
be binding on the mortgagee.
4.Right of Inspection of the property : Since the mortgager is the natural owner of
the property it is supposed to be his inherent right to inspect the property at any
time and as and when he desires. It is his right to ascertain whether the property
mortgaged is maintained properly or not and hence this right has been conferred on
by the law itself. He can also ask for the documents of the property and is also
eligible to get the copies of the documents.
5.Right of Reasonable Wastages : The right of reasonable wastages is also
guaranteed by the law but it is to be noted that such of the wastages are minimum
and reasonable and does not affect the property in any way or does not cause any
destruction or the injury to the property of a permanent nature.
6.Right of Accession : It should not be supposed that on transfer, due to mortgage,
the right of the mortgagor extinguished with regards to the property so mortgage
KINDS OF MORTGAGE
Simple Mortgage
Where, without delivering possession of the mortgaged property, the mortgagor
binds himself personally to pay the mortgage-money, and agrees, expressly or
impliedly that in the event of his failing to pay according to his contract, the
mortgagee shall have a right to cause the mortgaged property to be sold and the
proceeds of sale to be applied, so far as may be necessary, in payment of the
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mortgage-money, the transaction is called a simple mortgage and the mortgagee a

simple mortgagee.
Mortgage by Conditional Sale
Where, the mortgagor ostensibly sells the mortgaged property-
 On condition that on default of payment of the mortgage-money on a certain
date the sale shall become absolute, or;
 On condition that on such payment being made the sale shall become void,
or ;
 On condition that on such payment being made the buyer shall transfer the
property to the seller,
 The transaction is called a mortgage by conditional sale and the mortgagee a
mortgagee by conditional sale:
PROVIDED that no such transaction shall be deemed to be a mortgage, unless the
condition is embodied in the document, which effects or purports to effect the sale.
Usufructuary Mortgage
Where the mortgagor delivers possession, or expressly or by implication binds
himself to deliver possession of the mortgaged property to the mortgagee and
authorizes him to retain such possession until payment of the mortgage money, and
to receive the rents and profits accruing from the property or any part of such rents
and profits and to appropriate the same in lieu of interest or partly in payment of
the mortgage money, partly in lieu of interest and partly in payment of the
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mortgage money, the transaction is called a usufructuary mortgage and the

mortgagee a usufructuary mortgagee.
English Mortgage
Where the mortgagor binds himself to repay the mortgage money on a certain date,
and transfers the mortgaged property absolutely to the mortgagee, but subject to a
proviso that he will re-transfer it to the mortgagor upon payment of the mortgage
money as agreed, the transaction is called an English mortgage.
Anomalous Mortgage
A mortgage which is not a simple mortgage, a mortgage by conditional sale,
anusufructuary mortgage, an English mortgage or a mortgage by deposit of title
deeds within the meaning of section 58 is called an anomalous mortgage
B. Charge
Charges (Section 100)—
Where immoveable property of one person is by act of parties or operation of law
made security for the payment of money to another, and the transaction does not
amount to a mortgage, the latter person is said to have a charge on the property;
and all the provisions herein before contained which apply to a simple mortgage
shall, so far as may be, apply to such charge.
Nothing in this section applies to the charge of a trustee on the trust-property for
expenses properly incurred in the execution of his trust, and, save as otherwise
expressly provided by any law for the time being in force, no charge shall be
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enforced against any property in the hands of a person to whom such property has
been transferred for consideration and without notice of the charge.
How a charge can be created
A charge can be created by Act of parties as well as by operation of law Charge by
Operation of Law Charges by operation of law are based upon the consideration of
duty of implied intention on the part of the owner of the property to make it
answerable for a specific claim. A charge created by a decree of a competent court
is created by operation of law. Instances of charges created by operation of law:
(a) A Hindu widow’s charge on the family property for her maintenance, if created
by a decree (sec. 39).
(b) A vendor’s charge for unpaid purchase-money [sec. 55(4)]; or the charge of
buyer for advances made by him [sec. 55(6)].
(c) A party entitled to claim contribution under sec.82 also acquires a charge in
respect thereof.
(d) Arrears of government revenue such as municipal taxes are a paramount charge
on the land.
(e) A compromise decree creates a charge on an immovable property
Distinction between Mortgage and Charge are as follows: -
Basis Mortgage Charge
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Meaning Mortgage implies the Charge refers to the

transfer of ownership security for securing the
interest in a particular debt, by way of pledge,
immovable asset. hypothecation and
mortgage.
Creation Mortgage is the result of Charge is created either by
the act of parties. the operation of law or by
the act of the parties
concerned.
Unit – IV: Specific Transfer – II

A. Sale and Gift
Sale is an agreement by which one of the contracting parties, called the seller,
gives a thing and passes the title to it, in exchange for a certain price in current
money, to the other party, who is called the buyer or purchaser, who, on his part,
agrees to pay such price.
This contract differs from a barter or exchange in this, that in the latter the price or
consideration, instead of being paid in money, is paid in goods or merchandise,
susceptible of a valuation. It differs from accord and satisfaction, because in that
contract, the thing is given for the purpose of quieting a claim, and not for a price.
An onerous gift, when the burden it imposes is the payment of a sum of money, is,
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when accepted, in the nature of a sale. When partition is made between two or
more joint owners of a chattel, it would seem, the contract is in the nature of a
barter.
In other words, under a contract of sale, a seller (or vendor) in the capacity of the
owner, or part-owner of the goods, transfers or agrees to transfer the ownership in
goods to the buyer (or purchaser) for an agreed upon value in money (or money
equivalent), called the price, paid or the promise to pay same.
A contract of sale may be absolute or conditional depending upon the desire of
contracting parties.
ESSENTIALS
1. Two Parties
Another essential element of a contract of sale is that there must be two parties to
the contract of sale viz., seller and buyer.
In a contract of sale, the ownership of goods has to pass from one person to
another. Hence the seller and the buyer must be different persons because one
person cannot be both the buyer and the seller.
But there are certain exceptions to this – where a person’s goods are sold under an
execution of decree he may purchase his own goods.
For e.g., A and B were partners. After some years, the firm was dissolved. On the
dissolution, some goods were divided among all the partners. Such a distribution of
goods among the partners was not a sale.
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2. Goods
There must be some goods as a subject-matter. Goods must be one which is
defined as goods in Sec. 2(7) of the Sale of Goods Act. As per the definition given
in Sec. 2(7) of the Act, goods means every kind of movable property and it
includes
(a) stock and share,
(b) growing crops, grass,
(c) The things attached to or forming a part of the land which can be severed
from the land.
For e.g., A agreed to sell to B, wheat crops which is grown in his
field. A and Barged that B may cut the crop and take it away upon the payment of
the price. As the growing crop is included in the term “goods”, this is a valid
contract of sale.
3. Transfer of Ownership
In a contract of sale, ownership over goods has to be transferred to the buyer by the
seller or there should be an agreement to transfer the ownership by the seller to the
buyer.
The property in the goods means “all ownership rights” of the goods. In a contract
of sale, all the ownership rights of the goods must be transferred by the seller to the
buyer. However, the physical delivery of the goods is not required.
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(d) Price
Another essential element of a contract of sale is that there must be some price for
the goods. That means, the goods must be sold for some price. According to Sec.
2(10) of the Sale of Goods Act, the term price means “the money consideration for
a sale of goods“.
Thus the price is the consideration for contract of sale which should be in terms of
money. If the ownership of the goods is transferred for any consideration other
than the money, that will not be a sale but an exchange. However, consideration
can be paid partly in money and partly in goods.
(e) All essentials of a valid contract
A contract of sale is a special type of contract, therefore, to be valid, it must have
all the essential elements of a valid contract, viz., free consent, consideration,
competency of contracting parties, lawful object, legal formalities to be completed,
etc. A contract of sale will be invalid if important elements are missing. For
instance, if A agreed to sell his car to B because B forced him to do so by means of
undue influence, this contract of sale is not valid since there is no free consent on
the part of the transferor.
(f) Includes both a ‘Sale’ and ‘An Agreement to Sell’
The ‘contract of sale’ is a generic term and includes both sale and an agreement to
sell. The sale is an executed or absolute contract whereas ‘an agreement to sell’ is
an executory contract and implies a conditional sale.
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A contract of sale can be made merely by an offer, to buy or sell goods for a price,
followed by acceptance of such an offer. Interestingly, neither the payment of price
nor the delivery of goods is essential at the time of making the contract of sale
unless otherwise agreed.
In the absence of a contract to the contrary, the seller of immovable property
respectively is subject to the liabilities, and have the rights, mentioned in the rules
next following the property sold.
The liabilities of seller of immovable property under Transfer of Property Act
are as follows:
(A)Before completion.
(i) Section 55(i)(a)- To disclose material defects in the property or in the
seller’s title therein.
Means that, to disclose to the buyer any material defect in the property or in the
seller’s title thereto of which the seller is, and which the buyer could not with
ordinary care discover;
(ii) Section 55(i)(b)- To produce title deeds in seller’s possession or power for
inspection. Means that, to produce to the buyer on his request for
examination all documents of title relating to the property which are in the
seller’s possession or power.
(iii) Section 55(i)(c)- To answer questions as to property or tittle thereto.
Means that, to answer to the best of his information all relevant questions put to
him by the buyer in request to the property or the title thereto;
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(iv) Section 55(i)(d)- To execute conveyance on payment or tender of price and

tender of conveyance.
Means that, on payment or tender of the amount due in respect of the price, to
execute a proper conveyance of the property when the buyer tenders it to him for
execution at a proper time and place;
(v)Section 55(i)(e)- To take care of the property.
Means that, between the date of the contract of sale and the delivery of the
property, to take as much care of the property and all documents of title relating
thereto which are in his possession as an owner of ordinary prudence would take of
such property and documents;
(v) Section 55(i)(g)- To pay outgoings, such as public charges, rents, interests
on encumbrances.
Means that, to pay all public charges and rent accrued due in respect of the
property up to the date of the sale, the interest on all encumbrances on such
property due on such date, and, except where the property is sold subject to
encumbrances, to discharge all encumbrances on the property then existing;
(A) After Completion.
(i) Section 55(i)(f)- To give possession on being so required.
Means that, to give, on being so required, the buyer or such person as he directs,
such possession of the property as its nature admits;
(ii) Section 55(2)- Implied covenant for title.
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(iii) Section 55(3)- To deliver title deeds in his possession or power on

receipt of full purchase money.
The rights of seller of immovable property under Transfer of Property Act are as
follows:
(A) Before completion.
(i) Section 55(4)(a)- To take rents and profits of the property.
Means that, to the rents and profits of the property till the ownership thereof passes
to the buyer;
(B) After completion.
(i) Section 55(4)(b)- Charge for purchase money not paid.
Means that, where the ownership of the property has passed to the buyer before
payment of the whole of the purchase-money, to a charge upon the property in the
hands of the buyer, any transferee without consideration or any transferee with
notice of the non-payment, for the amount of the purchase-money, or any part
thereof remaining unpaid, and for interest on such amount or part from the date on
which possession has been delivered.
“Gift” (Section 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.
Acceptance when to be made. — Such acceptance must be made during the
lifetime of the donor and while he is still capable of giving.
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If the donee dies before acceptance, the gift is void.

Transfer how effected (Section 123)— For the purpose of making a gift of
immovable property, the transfer must be effected by a registered instrument
signed by or on behalf of the donor, and attested by at least two witnesses.
For the purpose of making a gift of moveable property, the transfer may be
effected either by a registered instrument signed as aforesaid or by delivery. Such
delivery may be made in the same way as goods sold may be delivered.
Section 124 Gift of existing and future property.— A gift comprising both
existing and future property is void as to the latter.
Section 125 Gift to several of whom one does not accept.— A gift of a thing to
two or more donees, of whom one does not accept it, is void as to the interest
which he would have taken had he accepted.
Section 126 When gift may be suspended or revoked.— The donor and donee
may agree that on the happening of any specified event which does not depend on
the will of the donor a gift shall be suspended or revoked; but a gift which the
parties agree shall be revocable wholly or in part, at the mere will of the donor, is
void wholly or in part, as the case may be. A gift may also be revoked in any of the
cases (save want or failure of consideration) in which, if it were a contract, it might
be rescinded. Save as aforesaid, a gift cannot be revoked. Nothing contained in this
section shall be deemed to affect the rights of transferees for consideration without
notice.
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Illustrations
(a) A gives a field to B, reserving to himself, with B’s assent, the right to take back
the field incase B and his descendants die before A. B dies without descendants in
A’s lifetime. A may take back the field.
(b) A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to
take back at pleasure Rs. 10,000 out of the lakh. The gift holds goods as to Rs.
90,000, but is void as to Rs. 10,000, which continue to belong to A.
Section 127 Onerous gifts.— Where a gift is in the form of a single transfer to the
same person of several things of which one is, and the others are not burdened by
an obligation, the donee can take nothing by the gift unless he accepts it fully.
Where a gift is in the form of two or more separate and independent transfers to the
same person of several things, the doneee is at liberty to accept one of them and
refuse the others, although the former may be beneficial and the latter onerous.
Onerous gift to disqualified person.—A donee not competent to contract and
accepting property burdened by any obligation is not bound by his acceptance. But
if, after becoming competent to contract and being aware of the obligation, he
retains the property given, he becomes so bound.
Illustrations
(a) A has shares in X, a prosperous joint stock company, and also shares in
Y, a joint stock company in difficulties. Heavy calls are expected in respect
of the shares in Y. A gives B all his shares in joint stock companies. B
refuses to accept the shares in Y. He cannot take the shares in X.
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(b) A, having a lease for a term of years of a house at a rent which he and his
representatives are bound to pay during the term, and which is more than the house
can be let for, gives to B the lease, and also, as a separate and independent
transaction, a sum of money. B refuses to accept the lease. He does not by this
refusal forfeit the money.
B. Lease
It has been defined in section 105 of the Transfer Of Property Act, 1882.
A lease of immoveable property is a transfer of a right to enjoy such property,
made for a certain time, express or implied, or in perpetuity, in consideration of a
price paid or promised, or of money, a share of crops, service or any other thing of
value, to be rendered periodically or on specified occasions to the transferor by the
transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined—The transferor is called the lessor, the
transferee is called the lessee, the price is called the premium, and the money,
share, service or other thing to be so rendered is called the rent.
HOW LEASE MADE
 A lease of immovable property from year to year, or for any term exceeding
one-year or reserving a yearly rent, can be made only by a registered
instrument. All other leases of immovable property may be made either by a
registered instrument or by oral agreement accompanied by delivery of
possession.
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 Where a lease of immovable property is made by a registered instrument,

such instrument binds both lessor and the lessee
ESSENTIAL ELEMENTS OF LEASE
Parties- The parties to a lease are the lessor and the lessee. The lessor is also called
the landlord and the lessee the tenant.
Subject matter of lease- The subject matter of lease must be immovable property.
The word "immovable property" may not be only house, land but also benefits to
arise out of land, right to collect fruit of a garden, right to extract coal or minerals,
hats, rights of ferries, fisheries or market dues. The contract for right for grazing is
not lease. A mining lease is lease and not a sale of minerals.
Duration of lease- The right to enjoy the property must be transferred for a certain
time, express or implied or in perpetuity. The lease should commence either in the
present or on some date in future or on the happening of some contingency, which
is bound to happen. Though the lease can commence from a past day, but that is
for the purpose of computation of lease period, as the interest of the lessee begins
from the date of execution. No interest passes to the lessee before execution.
In India, the lease may be in perpetuity.
Consideration- The consideration for lease is either premium or rent, which is the
price paid or promised in consideration of the demise. The premium is the
consideration paid of being let in possession, such as Salami, even if it is to be paid
in installments.
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Sub-lease- A lessee can transfer the whole or any part of his interest in the
property by sub-lease. However, this right is subject to the contract to the contrary
and he can be restrained by the contract from transferring his lease by sub-letting.
The lessee can create sub-leases for different parts of the demised premises. The
sub-lessee gets the rights, subject to the covenants, terms and conditions in the
lease deed.
HOW DOES A LEASE END(Sec 111)
 By efflux of the time limited thereby,
 Where such time is limited conditionally on the happening of some event-by
the happening of such event,
 Where the interest of the lessor in the property terminates on, or his power to
dispose of the same extends only to, the happening of any event-by the
happening of such event,
 In case the interests of the lessee and the lessor in the whole of the property
become vested at the same time in one person in the same right,
 By express surrender, that is to say, in case the lessee yields up his interest
under the lease to the lessor, by mutual agreement between them
 By implied surrender
On the expiration of a notice to determine the lease, or to quit, or of intention to
quit, the property leased, duly given by one party to the other.
LICENSE
It has been defined in section 52 of the Indian Easement Act 1882.
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Where one person grants to another, or to a definite number of other persons, a

right to do, or continue to do, in or upon the immovable property of the grantor,
something which would, in the absence of such right, be unlawful, and such right
does not amount to an easement or an interest in the property, the right is called a
license.
In particular, a license may be issued by authorities, to allow an activity that would
otherwise be forbidden. It may require paying a fee or proving a capability. The
requirement may also serve to keep the authorities informed on a type of activity,
and to give them the opportunity to set conditions and limitations
A licensor may grant a license under intellectual property laws to authorize a use
(such as copying software or using a (patented) invention) to a licensee, sparing the
licensee from a claim of infringement brought by the licensor. A license under
intellectual property commonly has several components beyond the grant itself,
including a term, territory, renewal provisions, and other limitations deemed
vital to the licensor.
DIFFERENCE BETWEEN LEASE AND LICENSE
LEASE LICENSE
Transfer of an interest mere permission to do something
without any transfer of interest
Both transferable and heritable neither transferable nor heritable
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Comes to an end only in accordance Can be withdrawn at anytime at the

with the terms and conditions pleasure of the grantor
stipulated in the contract
Entitled to any improvement or Not so entitled
accession made to the property
Unaffected by the transfer of the Comes to an end if the property is sold
property by sale in favour of third party to a third party
and continues
Lessee has the right to protect the Licensee cannot defend his possession
possession in his own right in his own name as he does not have
any propriety right in the property
Does not come to an end either by Come to an end with the death of either
death of the grantor or the grantee grantor or the grantee
CASE LAWS
Associated Hotels of India Ltd. vs. R.N. Kapoor, [1960] 1 SCR 368 (Supreme
Court, 1959)
 A lease is a transfer of an interest in land. The interest transferred is called the
leasehold interest. The Lesser parts with his right to enjoy the property during
the term of the lease and the lessee gets that right to the exclusion of the
Lesser.
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 In case of license, the legal possession continues to be with the owner of the
property, but the licensee is permitted to make use of the premises for a
particular purpose. But for the permission his occupation would be
unlawful. It does not create in his favour any estate or interest in the property.
Mrs. M.N. Clubwala v. Fida Hussain Saheb, [1964] 6 SCR 642 (Supreme
Court, 1964)
 Whether an agreement creates between the parties the relationship of landlord
and tenant or merely that of licensor and licensee the decisive consideration is
 the intention of the parties. This intention has to be ascertained on a
consideration of all the relevant provisions in the agreement.
Chandu Lal vs. Municipal Corporation of Delhi, AIR 1978 Delhi 174 (Delhi
High Court, 1978)
 The intention of the parties is the real test for ascertaining the character of a
document.
 If a document gives only a right to use the property in a particular way but its
possession and control remains with the owner thereof, it will be a license. In
such a case the legal possession remains with the owner of the property, the
licensee being permitted to make use of the property for a particular purpose.
 Exclusive possession does not militate against the concept of a license, if the
circumstances negative any intention to create a tenancy.
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 A license only makes an action lawful which without it would be unlawful,

but does not transfer any interest in favor of the licensee in respect of the
property.
 In the case of a license there is something less than a right to enjoy the
property in the licensee, while on the other hand, in the case of a lease, there
is a transfer of a right to enjoy the property.
 A bare licensee having no interest in the property cannot maintain an action
for its possession.
Rajbir Kaur and Anr. vs. S. Chokesiri and Co. AIR 1988 SC 1845
 The question whether a transaction is a lease or license “turns on the operative
intention of the parties and there is no single, simple litmus test to distinguish
one from the other.”
 The grant only for the right to use the premises without being entitled to the
exclusive possession thereof operates merely as a license.
 Exclusive possession itself is not decisive in favor of a lease and against a
mere license, for, even the grant of exclusive possession might turn out to be
only a license and not a lease where the grantor himself has no power to grant
the lease.
Municipal Corporation of Delhi vs. Pradip Oil Corporation and Anr., 100
(2002) DLT 442 (Delhi High Court, 2002)
 A mere license does not create interest in the property to which it
relates. Lease on the other hand, would amount to transfer of property.
69
&
School of Law
 License may be personal or contractual.

 A licensee without the grant creates a right in the licensor to enter into a land
and enjoy it.
 By reason of a license, no estate or interest in the property is created.
 A license, inter alia, (a) is not assignable; (b) does not entitle the licensee to
sue the stranger in his own name; (c) it is revocable and (d) it is determined
when the grantor makes subsequent assignment.
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Chanderprabhu Jain College of Higher Studies

Unit-I: Concept of Property and General Principles Relating to Transfer of

4. To himself or himself with on or more other persons – A living person

C. Transferable and Non-Transferable Property

transferred subject to a restriction the transferee is supposed not to act contrary to

3. Perpetuity Period – It is maximum period during which the property may be

the transferee or not depends on the nature of the contingency. It is transferable.

Effects of transferee's death

Whether transferable and heritable ?

There is present, immediate right even There is no present right of enjoyment,

B. The conditions necessary for the Application of the doctrine of election:

Section 43 clearly applies whenever a person transfers property to which he has no

transferor acted fraudulently or innocently in making the representation and the

Transfer of spes successionis.

The right of the second transferee.

Provisions of section 52 are as follows:

Suit must not be collusive

DOCTRINE OF PART PERFORMANCE

of relief whether such debt or beneficial interest be existent, accruing or

Exception.—Nothing in this section applies to the transfer of a marine or fire

(vii) A share is partnership; interest of the partner in a dissolved partnership

mortgage-money, the transaction is called a simple mortgage and the mortgagee a

mortgage money, the transaction is called a usufructuary mortgage and the

Basis Mortgage Charge

Meaning Mortgage implies the Charge refers to the

Unit – IV: Specific Transfer – II

(iv) Section 55(i)(d)- To execute conveyance on payment or tender of price and

(iii) Section 55(3)- To deliver title deeds in his possession or power on

If the donee dies before acceptance, the gift is void.

 Where a lease of immovable property is made by a registered instrument,

Where one person grants to another, or to a definite number of other persons, a

DIFFERENCE BETWEEN LEASE AND LICENSE

Comes to an end only in accordance Can be withdrawn at anytime at the

 A license only makes an action lawful which without it would be unlawful,

 License may be personal or contractual.

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