PROPERTY LAW CIA

PROBLEM SOLVING QUESTIONS

1. ‘A’ lets a house to ‘B’ at a rent of Rs. 1000/-. Subsequently ‘A’ sold it to ‘C’.
When rent becomes due ‘B’ pays it to ‘A’. Next day ‘C’ demands rent from ‘B’.
When can ‘C’ recover rent and when ‘C’ cannot recover rent from ‘B’? Decide.

Answer: RULE: As according to the Section 50 of the Transfer of Property Act, 1882, no
person shall be chargeable with any rents or profits of any immoveable property, which
he has in good faith paid or delivered to any person of whom he in good faith held such
property, notwithstanding it may afterwards appear that the person to whom such
payment or delivery was made had no right to receive such rents or profits.

APPLICATION: in this case, A rented his/her house to B which he/she subsequently sold
it to C. applying to the rule under Section 50, B shall not be charged with the rent to any
profit for the immoveable property. The tenant B was not aware of the fact that A did sell
the property to C and thus, he continued to pay the rent to A. B paid the rent in good faith.
It was also held in the case of Nicholls v Saunders.

CONCLUSION: C has no right to ask for the rent to B as B has already paid the rent to A
in good faith. C can claim the rent from A.

2. A’ has shares in ‘X’, a prosperous company and also shares in ‘Y’ a company
under loss. Heavy calls are expected by company ‘Y’. ‘A’ gives shares of both
companies as gift to ‘B’. ‘B’ wants to take shares in ‘X’ company only. Advise
him.

Answer: RULE: As according to the Section 127 of the transfer of Property Act, 1882,
where a gift in the form of a single transfer to the same person of several things of which
one is, and others are not, burdened by an obligation, the done can take nothing by the gift
unless he/she accepts it fully.

When the gift is in the form of tow or more than two separate and independent transfer to
the same person of several things, the done is at liberty to accept one of them & refuse the
other, although the former may be beneficial and the latter onerous. The principle of ‘qui
sentit commodum sentire debet et onus’ is applied in this case.

APPLICATION: In this case, A transferred B his shares X (in a prosperous company)

and Y (the company under loss) together in one document. Now, A gives his/her share to
B as a gift. B wanted to take shares in X company only. B has to choose to either accept
both X and Y, or reject both X and Y. According to the principle, ‘qui sentit commodum
sentire debet et onus,’ the one who receives advantage must also bear the burden.
Therefore, B cannot choose the share X only for any reason that Y shares are in the
company under loss or for any other reason. Applying the provision of Section 127 of the
Act, B has to accept fully and not partially.

CONCLUSION: B cam only accept both the shares or reject both the shares as the
transfer of both the shares, X and Y, are made by means of a single document. He cannot
accept the Shares X only.

3. ‘A’ transfer to ‘B’ an estate to which ‘C’ is entitled and as a part of the same
transaction gives ‘C’ a coal mine. ‘C’ takes the coal mine and exhausts it. Has
‘C’ confirmed the transfer of his estate to ‘B’?

Answer: RULE: The Doctrine of Election applies when a person who does not have the
right to transfer does transfer such property, and as a part of the same transaction confers
any benefit on the owner of the property, such owner has to elect whether he/she confirms
such transaction or dissent from it. The provision of Section 35 of the Transfer of
Property Act, 1882, is applicable in this case.

If the owner wishes to dissent, he/she shall relinquish the benefit so conferred, and the
benefit so relinquished shall revert to the transferor or his/her representative as if it had
not been disposed of.

APPLICATION: Here, C is the owner of the property and is the transferor who transfers
the property to B, the transferee. A gives a coal mine to C as a part of the same transfer. C
exhausts the coal mine. A person who is taking no benefit directly under a transaction but
is deriving such benefit under it indirectly need not elect. The action of the owner C, that
is, taking and exhausting the coal mine, implies that he/she has elected to confirm the
benefit. The acceptance of the benefit by the owner constitutes an election by him/her to
confirm to the transfer, if he/she is aware of his duty to elect and of those circumstances
which would influence the judgement of a reasonable man in making an election, or if
he/she waives enquiry into the circumstances. In the case of Cooper v Cooper, it was held
that there is an obligation on the owner who takes the benefit, need to give full effect to
the instrument. Also, the three conditions are fulfilling as was held in the case of
Dhanpati v Devi Prasad, (i) there must be transfer by the one who, does not have any
right, (ii) same transaction must bear benefit to the owner and the owner must elect.

C has the right to elect to either confirm the benefit or dissent from it. here, C decides to
use the coal mine. C has therefore confirmed the transfer of estate to B.

CONCLUSION: C has confirmed the transfer of the estate to B.