Law of Property – 3rd SEM

LAW OF PROPERTY

3 rd SEMESTER

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Law of Property – 3rd SEM

LAW OF PROPERTY IMPORTANT QUESTIONS

Sl
No. SHORT QUESTIONS REP
1 IMMOVABLE PROPERTY (SECTION 3) 5
2 UN-BORN PERSON AND RIGHTS OF UNBORN PERSON (SECTIONS 13 & 14) 3
3 VESTED INTEREST (SEC. 19) 5
4 DOCTRINE OF LISPENDENCE (SEC. 52) 5
5 CONTINGENT INTEREST SECTION 21 3
6 DOCTRINE OF ELECTION (SECTION 35) 3
7 KINDS OF MORTGAGE (SECTION 58) 6
8 LEASE AND KINDS OF LEASE 4
9 LICENCE (SECTION 52, INDIAN EASEMENT ACT, 1882) 3

LONG QUESTIONS
1 DEFINE TRANSFER OF PROPERTY. TRANSFER & NON-TRANSFERABLE PROPERTIES 5
2 DOCTRINE OF PART-PERFORMANCE WITH SUITABLE ILLUSTRATIONS (SEC 53A) 3
3 RIGHTS & LIABILITIES OF SELLER & BUYER OF THE PROPERTY, BEFORE & AFTER SALE 4
4 MORTGAGE, RIGHTS & LIABILITIES OF MORTGAGEE & MORTGAGOR 5
5 DEFINE EASEMENT AND EXPLAIN DIFFERENT KINDS OF EASEMENTS & ESSENTIALS 4

CASES
1 TRANSFER TO A PERSON WHO IS IN HIS MOTHER'S WOMB (SECTION 13) 2
2 DOCTRINE OF LISPENDENCE (SEC. 52) 2
3 CONTINGENT INTEREST (SECTION 21) 2
4 PERPETUITY PERIOD (SEC 14) 3
5 OSTENSIBLE OWNER (SEC. 41) 3
6 RIGHT OF MORTGAGOR TO REDEEM (SEC 60) 3
7 GIFT TO SEVERAL PERSONS OF WHOM ONE DOES NOT ACCEPT (SEC 125) 3
8 RIGHTS & LIABILITIES OF LESSEE (SEC 108) 2
GRANT DOES NOT AMOUNT TO EASEMENT (SEC 52 OF INDIAN EASEMENTS ACT,
9 1882) 2

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OSMANIA UNIVERSITY

PAPER-II: LAW OF PROPERTY SYLLABUS

Unit-I: Meaning and concept of property — Kinds of property — Transfer of property —

Transferable and non-transferable property — who can transfer — Operation of transfer
— Mode of transfer — Conditional transfer —Void and unlawful conditions — Condition
precedent and condition subsequent — Vested and contingent interest — Transfer to
unborn persons

Unit-II: Doctrine of Election — Covenants — Transfer by ostensible owner — Doctrine of

Feeding the Grant by Estoppels — Doctrine of Lis Pendens — Fraudulent Transfer —
Doctrine of Part-performance.

Unit-III: Sale- Essential features — Mode of Sale — Rights and liabilities of parties.
Mortgage - Kinds of Mortgages - Rights and liabilities of mortgagor and mortgagee —
Marshalling and Contribution — Charges.

Unit-IV: Lease — Essential features — Kinds of leases — Rights and liabilities of lesser and
lessee — Termination of lease — forfeiture — Exchange — Gifts — Different types of gifts
— Registration of Gifts — Transfer of Actionable Claims.

Unit-V: Easements — Definition of easement — Distinction between Lease and License —

Dominant and Servant Tenements. Acquisition of property through testamentary
succession — Will — Codicil — Capacity to execute Will — Nature of bequests — Executors
of Will — Rights and Obligations of Legatees.

Suggested Readings: 1. Mulla: Transfer of Property, Butterworth’s Publications. 2. Subba

Rao GCV: Commentaries on the Transfer of Property Act. 3. Krishna Menon: Law of
Property. 4. Upadhyaya's Common Matrix of Transfer of Property. 5. Avatar Singh,
Textbook on the Transfer of Property Act, Universal Law Publishing Company.

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SHORT ANSWERS
1. Immovable Property.
Answer:
Definitions: Section 3 of the Transfer of Property Act, 1882, has not defined this term. It
only says that ‘immovable property’ does not include standing timber, growing crops or
grass.
As the definitions given by the Act is neither comprehensive nor exhaustive and only
excludes certain things, it becomes necessary to explore other Acts which have defined
the term ‘Immovable property”
The Registration Act, 1908 defines ‘immovable property’ as follows-
‘Immovable property shall include land, buildings, hereditary allowances, rights to ways,
lights, ferries, fisheries or any other benefit to arise out of land or things attached to the
earth or permanently fastened to anything which is attached to the earth but not standing
timber, growing crops or grass’.
Similarly, Section 3(25) of the General Clauses Act, 1897 defines the term ‘Immovable
Property’ as follows-
‘Immovable property shall include land, benefit to arise out of land and things attached
to the earth or permanently fastened to anything attached to the earth’
This definition is not exhaustive but only illustrative as to what physical objects or
things are included under the term ‘Immovable Property’.
- Land
- Benefits arising out of the land.
- Things attached to the earth.
List of immovable property:
A. Land,
B. Buildings, houses,
C. Actionable claims,
D. Factories,
E. Vested interest,
F. Contingent Interest.

2. Define Un-born person and describe the rights of an unborn person.

Answer: The Transfer of Property Act, 1882 deals only with the transfers of property
between living persons (inter vivos). An unborn person means a person not in existence
even in the mother’s womb. A child in the mother’s womb is considered to be a
competent transferee. Therefore, the property can be transferred to a child in the
mother’s womb because the child exists at that time but not to an unborn person who
does not even exist in mother’s womb. Every transfer of property involves transfer of
interest. As soon as the property is transferred, the transferor is divested of that interest
and the interest is vested in the transferee. For vesting of interest, therefore, it is
necessary that the transferee must be in existence. Otherwise, the interest will remain in
abeyance till the transferee comes into existence. This is against the very concept of an
interest.

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Section 13 provides that the property cannot be transferred directly to an unborn

person but it can be transferred for the benefit of an unborn person. For transfer of
property for the benefit of unborn person two conditions are required to be fulfilled-
a. Prior life interest must be created in favour of a person in existence at the date of
transfer, and
b. Absolute interest must be transferred in favour of an unborn person.
Section 14:
a. There should be a transfer of property.
b. The transfer is to create an interest in the favour of an unborn person.
c. Interest so created should take effect after the life-time of one or more persons
living at the date of such transfer and during the minority of the unborn person.
d. The unborn person should be in existence at the expiration of the interest of the
living person.
The unborn person is the one in whose favour the interest is created. This vesting of
interest in favour of the ultimate beneficiary is preceded by life interest of one or more
living persons. Life interest is always a limited interest. It is necessary that the ultimate
beneficiary must come into existence before the death of the last preceding living person.
The vesting of interest in favour of ultimate beneficiary may be postponed only to the life
or lives of living persons and minority of ultimate beneficiary but not beyond that.
Right of Unborn Child under the Hindu Succession Act
Section 20 of the Hindu Succession Act, 1956, deals with the rights of an unborn child
that is in the womb of the mother. The property rights of an unborn child are governed by
the fact that if the child who was in the womb at the time of the death of the person who
desires to transfer the property and who is subsequently born alive shall have the same
right to inherit as if he or she had been born before the death of the property owner, and
the inheritance shall be deemed to vest in such a case with effect from the date of the
death of the intestate.
According to Section 20, an unborn child who has come into existence will inherit only if—
(i) The child was conceived at the time of death of the property owner, and
(ii) The child is born alive
The child will inherit in the same manner as if he were born before the death of the
property owner if the above conditions are met. Any child, male or female, who is in
mother's womb at the time of the death of the property owner, is considered to come
into existence in the eyes of law.
Right of Unborn Child under Muslim Law
There are no rights to the unborn child under the Muslim Personal Law and a gift to an
unborn person is void except in case of Wakf.

3. Vested Interest (Section 19).

Answer: Meaning of Vested interest:
The Transfer of Property Act deals with two kinds of interest vested interest
and contingent interest. Vested interest is to be distinguished from contingent interest.
When an interest is vested, the transfer is complete but when the interest is contingent,

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the transfer depends upon a condition precedent. When the condition is fulfilled the
transfer takes effect and that the interest becomes vested.
Definition of Vested Interest
Section 19 of the Transfer of Property Act defines vested interest as follows...
"Where, on a transfer of property, an interest therein is created in favour of a person
without specifying the time when it is to take effect, or in terms specifying that it is to
take effect forthwith or on the happening of an event which must happen, such interest is
vested, unless a contrary intention appears from the terms of the transfer."
A vested interest is not defeated by the death of the transferee before he obtains
possession.
Explanation:
An intention that an interest shall not be vested is not to be inferred merely from a
provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the
same property is given or reserved to some other person, or whereby income arising from
the property is directed to be accumulated until the time of enjoyment arrives, or from a
provision that if a particular event shall happen the interest shall pass to another person.
Illustration
A Hindu widow adopted son but there is an agreement which postpones the son’s
estate during the lifetime of widow. Here an interest created in favour of adopted son is
vested right, which does not depend upon condition precedent, for example…
Performance of any act, it has to take effect on happening of the event which is certain i.e.
the death of widow.
The adopted son has Present proprietary right in the estate. The right of possession and
enjoyment being deferred and therefore he can transfer the property even during the
widow’s lifetime. Similarly, a Transfer of Property in favour of a person simply creates
vested interest with an immediate right to the possession and enjoyment of the property.
Such vested interest is not defeated by the death of the transferee even before getting
possession of the property.
Illustration
A transfers property to B in trust for C and direct B to give possession of the property to C
when C attains the age of 25 years. In this problem, the enjoyment in the property is
postponed but this does not prevent the interest vesting immediately.
Therefore C has vested interest and entitled to possession of the property at the age of
18.
When an unborn person acquires vested interest on transfer for his benefit - Section 20
Where, on a transfer of property, an interest therein is created for the benefit of a person
not then living, he acquires upon his birth, unless a contrary intention appears from the
terms of the transfer, a vested interest, although he may not be entitled to the enjoyment
thereof immediately on his birth.
Characteristics of vested interest
1) Vested interest does not depend upon the fulfilment of a condition. It creates present
and immediate right though the enjoyment may be postponed to future date.
2) A vested interest is not defeated by the death of transferee before obtaining
possession; it will pass on to His heirs.

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3) Vested interest is Transferable and heritable.

Case Law
Sundar Bibi vs. Rajendra Narayan AIR1925 All.389.
In this case the Allahabad High Court held that in a vested interest the title passes
absolutely from the transferor to the transferee at the date of the transfer, though the
enjoyment may be postponed.
Rajesh Kanta Roy vs. Shrimati Sunita Debi AIR1957, S.C.255 -
One Ramani Kanta Roy executed a registered trust deed in respect of his properties. The
eldest son Rajesh was appointed the sole Trustee to hold the properties under the trust
subject to certain power and obligation. After his death his two sons Rajesh and
Ramendra got interest in the property. There was a clause in the trust deed that both of
them was to get interest in the properties allotted to each other happening of the two
events -
1) Discharge of all the debts specified in the schedule and death of the settler himself.
2) The trust was to come to an end on the death of settler and the sons were to get
properties allotted to them thereafter.
Issue before the court was whether the interest created by the trust was vested
or contingent?

The Supreme Court held that the interest taken by the two brothers under the trust deed
was vested and not contingent because it was certain event
Vested interest does not depend upon fulfilment of a condition and takes effect from the
date of the transfer. In vested interest there is present, immediate right even if the
enjoyment is postponed. A vested interest is heritable and transferable. A contingent
interest depends solely upon the fulfilment of the condition. In contingent interest there
is no present right, there is a promise to give right upon the fulfilment of a condition.
A contingent Interest is inalienable and not transferable and not heritable.

4. Doctrine of Lis pendens (Section 52).

Answer:
The meaning of lis pendens is - ‘a pending legal action’, wherein Lis means the ‘suit’ and
Pendens means ‘continuing or pending’. The doctrine has been derived from a Latin
maxim “Ut pendent nihil innovetur” which means that during litigation nothing should be
changed.
The principle embodying the said doctrine is that the subject matter of a suit should not
be transferred to a third party during the pendency of the suit. In case of transfer of such
immovable property, the transferee becomes bound by the result of the suit.
The doctrine of Lis Pendens essentially aims at (i) avoiding endless litigation, (ii) protecting
either party to the litigation against the act of the other, (iii) avoiding abuse of legal
process.
Lis Pendens is captured under Section 52 of the Transfer of Property Act, 1882. The
Section essentially prohibits alienation of immovable property when a dispute relating to
the same is pending in a competent court of law. It is based on the principle that the
person purchasing an immovable property from the judgment debtor during the pendency

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of the suit has no independent right to property to resist, obstruct or object execution of a
decree.
APPLICATION OF SECTION 52 OF TRANSFER OF PROPERTY ACT – CONDITIONS TO BE
SATISFIED: the following conditions must be fulfilled for applicability of this section -
1. There must be a pending suit or proceeding,
2. The suit or proceeding must be pending in a court of competent jurisdiction;
3. The suit or proceeding must not be a collusive one;
4. A right to immovable property must be directly and specifically in question in that
suit or proceeding,
5. The disputed property must be transferred or otherwise dealt with by any party to
the suit.
6. The alienation must affect the rights of any other party to the dispute.
7. Any transfer of such immovable property or any dealing with such property during
the pendency of the suit is prohibited except under the authority of court,
8. if such transfer or otherwise dealing with the property by any party to the suit or
proceeding affects the right of any other party to the suit or proceeding under any
order or decree which may be passed in the said suit or proceeding.
Non – Applicability of Doctrine of Lis Pendens
Lis Pendens is not applicable in every case. There are certain instances wherein this
doctrine does not apply:
1. When transfer is made with the permission of the court, the principle of lis
pendens is not applicable. The court may permit such a transfer subject to such
terms as it may impose.
2. Sale by agreement-holder: the agreement holder transferred the property to a
third party. A suit for specific performance was filed against him. During this suit,
the third party made a further sale. The court said that it was not invalid.
3. A sale made by the mortgagee in the exercise of the power as conferred by the
mortgage deed.
4. In matters of review;
5. In cases where the transferor is the only party affected;
6. In cases of friendly suits;
7. In cases where the proceedings are collusive;
8. In case of suits involving pending transfers by a person who is not a party to the
suit;
9. In cases where the property has not been properly described in the plaint;
10. In cases where the subject matter of rights concerned in the suit and that which
are alienated by transfer are different.

5. Contingent Interest (Section 21).

Answer:

Meaning of Contingent Interest -

The Transfer of Property Act deals with two kinds of interest vested interest and
contingent interest. Vested interest is to be distinguished from contingent interest. When

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an interest is vested, the transfer is complete but when the interest is contingent,
the transfer depends upon a condition precedent. When the condition is fulfilled the
transfer takes effect and that the interest becomes vested.
Definition of Contingent Interest - Section. 21 defines Contingent interest as follows -

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

to take effect only on the happening of a specified uncertain event, or if a specified
uncertain event shall not happen, such person thereby acquires a contingent interest in
the property. Such interest becomes a vested interest, in the former case, on the
happening of the event, in the latter, when the happening of the event becomes
impossible.
Exception:
Where, under a transfer of property, a person becomes entitled to an interest therein
upon attaining a particular age, and the transferor also gives to him absolutely the income
to arise from such interest before he reaches that age, or directs the income or so much
thereof as may be necessary to be applied for his benefit, such interest is not contingent.
Illustration: 'X' bequeathed his property i.e. estate to 'Y' until he shall marry to 'Z'. 'Y's
interest in that bequeath is contingent because it depends upon a condition precedent i.e.
a marriage of 'Y' with 'Z'. Y has no proprietary interest in the estate and cannot alienate
it.
But as soon as 'Y' marries with 'Z' his contingent interest becomes vested interest.
Transfer to members of a class who attain a particular age
Section.22 provides..
Where, on a transfer of property, an interest therein is created in favour of such members
only of a class as shall attain a particular age, such interest does not vest in any member of
the class who has not attained that age.
Section.23 - Transfer contingent on happening of specified uncertain event -
Where, on a transfer of property, an interest therein is to accrue to a specified
person if a specified uncertain event shall happen, and no time is mentioned for the
occurrence of that event, the interest fails unless such event happens before, or at the
same time as, the intermediate or precedent interest ceases to exist.
Section.24 - Transfer to such of certain persons as survive at some period not specified
Where, on a transfer of property, an interest therein is to accrue to such of certain
persons as shall be surviving at some period, but the exact period is not specified, the
interest shall go to such of them as shall be alive when the intermediate or precedent
interest ceases to exist, unless a contrary intention appears from the terms of the
transfer.
Illustration: A transfers property to B for life, and after his death to C and D, equally to be
divided between them, or to the survivor of them. C dies during the lifetime of B. D
survives B. At B's death the property passes to D.
Characteristics of contingent interest
A) A contingent interest is solely depending upon the fulfilment of a condition.
B) If the transferee dies before obtaining possession the contingent interest fails and
property revert to the transferor.
C) Contingent interest is transferable,

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D) It is not heritable,
E) Death is not an uncertain events but survival at the death of another is an uncertain
event.
CASE LAW -
1) Sundar Bibi vs. Rajendra Narayan AIR1925 All.389.
In this case the Allahabad High Court held that in a vested interest the title passes
absolutely from the transferor to the transferee at the date of the transfer, though the
enjoyment may be postponed.
2) Rajesh Kanta Roy vs. Shrimati Sunita Debi AIR1957, S.C.255 -
One Ramani Kanta Roy executed a registered trust deed in respect of his properties. The
eldest son Rajesh was appointed the sole Trustee to hold the properties under the trust
subject to certain power and obligation. After his death his two sons Rajesh and
Ramendra got interest in the property. There was a clause in the trust deed that both of
them was to get interest in the properties allotted to each other happening of the two
events -
1) Discharge of all the debts specified in the schedule and death of the settler himself.
2) The trust was to come to an end on the death of the settler and the sons were to get
properties allotted to them thereafter.
Issue before the court was whether the interest created by the trust was vested or
contingent?
A Supreme Court held that the interest taken by the two brothers under the trust deed
was vested and not contingent because it was certain event.
A contingent interest depends solely upon the fulfilment of the condition. In contingent
interest there is no present right, there is a promise to give right upon the fulfilment of a
condition. A contingent Interest is inalienable and not transferable.

6. Doctrine of Election (Section 35).

Answer: Section 35: election is the obligation imposed upon a party by courts of equity to
choose between two inconsistent or alternative rights or claims in case where there is
clear intention….. That he should not enjoy both. That he who accepts a benefit under a
deed or will must adopt the whole contents of the instrument.
Election means choosing between two alternative rights or inconsistent rights. If an
instrument confers two rights on a person in such a manner that one right is in lieu of the
other, that person can choose or elect only one of them. A person cannot take under and
against the same instrument.
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.
One 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. The
doctrine of election may be summarized as below:
“He who accepts a benefit under a deed or will, must adopt the whole contents of the
instrument, conforming to all its provisions and renouncing every right inconsistent with
it.”
The rule given in section 35 can be analysed as follows –

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a. Where a person professes to transfer property which he has no right to transfer,

and
b. As a part of the same transaction confers any benefit on the owner of the
property,
c. Such owner must elect either to, -
(i). confirm such transfer, or
(ii). To dissent from it.
d. If he dissents from it, he shall relinquish the benefit so conferred,
e. The benefit so relinquished shall revert to the transferor or his representative as if
it has not been disposed of.
Illustration 1: The farm of Sultanpur is the property of C and worth Rs.800. A by an
instrument of gift professes to transfer it to b, giving by the same instrument Rs. 1000 to
C. C elects to retain the farm. He forfeits the gift of Rs. 1000.
Illustration 2: A transfers to B an estate to which C is entitled and as part of the same
transaction gives C a coal-mine. C takes possession of the mine and exhausts it. He has
thereby confirmed the transfer of the estate to B.

7. Kinds of Mortgages (Section 58).

Answer: Definition of Mortgage as per Section 58(a) of the Transfer of Property Act, 1882, ‘A
mortgage is the transfer of an interest in specific immovable property for the purpose of
securing the payment of money advanced or to be advanced by way of loan, an existing or
future debt, or 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.’
There are 6 kinds of mortgages.
1) Simple mortgage

2) Mortgage by conditional sale

3) Usufractuary mortgage

4) English mortgage

5) Mortgage by deposit of title-deeds

6) Anomalous mortgage.

A) Simple mortgage Section 58(b): 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.
B) Mortgage by conditional sale Section 58(c): 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.
Provided that no such transaction shall be deemed to be a mortgage, unless the condition
is embodied in the document this effects or purports to affect the sale.
C) Usufructuary Mortgage Section 58(d)
Where the mortgagor delivers possession or expressly or by implication binds himself to
deliver possession of the mortgaged property to the mortgagee, and authorises 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 in payment of the mortgage-money, or partly in
lieu of interest or partly in payment of the mortgage-money, the transaction is called a
usufructuary mortgage and the mortgagee a usufructuary mortgagee.
D) English Mortgage Section 58(e)
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.
E) Mortgage by deposit of title-deeds Section 58(f) -
Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and
Bombay, and in any other town which the State Government concerned may, by
notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent
documents of title to immovable property, with intent to create a security thereon, the
transaction is called a mortgage by deposit of title-deeds.
F) Anomalous mortgage Section 58(g) -
A mortgage which is not a simple mortgage, a mortgage by conditional sale, a
usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds
within the meaning of this section is called an anomalous mortgage.
It does not fit in above five mortgages, but is a combination of two or more of above
mentioned types of mortgages.

8. Lease and kinds of lease.

Answer:
Meaning: A lease is an implied or written agreement specifying the conditions under
which a lessor accepts to let out a property to be used by a lessee. The agreement
promises the lessee use of the property for an agreed length of time while the owner is
assured consistent payment over the agreed period. Both parties are bound by the terms
of the contract, and there is a consequence if neither meets the contractual obligations.
Definition of lease as per Section 105 of the Transfer of Property Act – a lease of
immovable property is a transfer of a right to enjoy such property, made for a certain

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time, express or implied, or in perpetuity, in consideration of 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.
Essential elements: the essential elements of a transaction of lease are –
a. The parties to lease – lessor and lessee.
b. The subject-matter of lease – immovable property.
c. There must be transfer of a right.
d. Duration of lease.
e. Consideration of lease – premium.
f. Acceptance of transfer by the lessee.
g. Lease must be made in the mode under Section 107.
h. Consideration may be of price paid or promised, or of money, a share of crops,
service or any other thing of value.
Common Types of Leases
Leases differ broadly, but there are some that are common in the property sector. The
structure of a lease is influenced by lessor’s preference, as well as the current trends in
the market. Some leases place the burden on a tenant while others put the entire load
over to the property owner. That’s not all; there are many different types in between.
Here are the most common forms of tenancy agreements.
1. Financial Lease
Financial leasing is a contract involving payment over a longer period. It is a long-term
lease and the lessee will be paying much more than the cost of the property or equipment
to the lessor in the form of lease charges. It is irrevocable. In this type of leasing the lessee
has to bear all costs and the lessor does not render any service.

2. Operating Lease
In an operating lease, the lessee uses the asset for a specific period. The lessor bears the
risk of obsolescence and incidental risks. There is an option to either party to terminate
the lease after giving notice. In this type of leasing lessor bears all expenses lessor will not
be able to realize the full cost of the asset specialized services are provided by the lessor.
This kind of lease is preferred where the equipment is likely to suffer obsolescence.

3. Leveraged and non-leveraged leases

In leveraged and non-leveraged leases, the value of the asset leased may be of a huge
amount which may not be possible for the lessor to finance. So, the lessor involves one
more financier who will have charge over the leased asset.

4. Conveyance type lease

In Conveyance type lease, the lease will be for a long-period with a clear intention of
conveying the ownership of title on the lessee.

5. Sale and leaseback

In a sale and leaseback, a company owning the asset sells it to the lessor. The lessor pays
immediately for the asset but leases the asset to the seller. Thus, the seller of the asset

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becomes the lessee. The asset remains with the seller who is a lessee but the ownership is
with the lessor who is the buyer. This arrangement is done so that the selling company
obtains finance for running the business along with the asset.

6. Full and non pay-out lease

A full pay-out lease is one in which the lessor recovers the full value of the leased asset by
way of leasing. In case of a non pay-out lease, the lessor leases out the same asset over
and over again.

7. Specialized service lease

The lessor or the owner of the asset is a specialist of the asset which he is leasing out. He
not only leases out but also gives specialized personal service to the lessee. Examples are
electronic goods, automobiles, air-conditioners, etc.

8. Net and non-net lease

In non-net lease, the lessor is in charge of maintenance, insurance and other incidental
expenses. In a net lease, the lessor is not concerned with the above maintenance
expenditure. The lessor confines only to financial service.

9. Sales aid lease

In case, the lessor enters into any tie up arrangement with manufacturer for the
marketing, it is called sales aid lease.

10. Cross border lease

Lease across national frontiers are called cross border lease, shipping, air service, etc., will
come under this category.

11. Tax oriented lease

Where the lease is not a loan on security but qualifies as a lease, it will be considered a tax
oriented lease.

12. Import Lease

In an Import lease, the company providing equipment for lease may be located in a
foreign country but the lessor and the lessee may belong to the same country. The
equipment is more or less imported.

13. International lease

Here, the parties to the lease transactions may belong to different countries which are
almost similar to cross border lease.

9. Licence (Section 52 of the Indian Easement Act, 1882)

Answer: Under the Indian Law, a license is governed by the Indian Easement Act, 1882.
Section 52 of the Act defines license as a permission by one person to the other or a
group of people to carry out any activity on the property of the grantor, which without

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such permission from the grantor would be considered unlawful. Interpreting section 52,
it can be said that when a person is given the right to use a particular property for certain
use, while the possession and control of the property are with the owner, the person will
be considered as the licensee. A license can be granted to only a definite number of
people, as a license is a personal right given to the licensee. Section 56 of the Easement
Act also states that a license cannot be transferred by a licensee or the right under the
license be exercised by his servants or agents. In the judicial pronouncement of Associated
Hotels of India Ltd. v RN Kapoor, the Apex Court gave a definition of a license. The Court
stated that when a document only gives the right to use a certain property in a certain
way, it’ll be considered as a license. The licensee is entitled to use the premises only in a
specific manner. Without the permission, his activities would be considered unlawful. The
essential features of a license can be thus summarized as-
1. A license does not create an interest in the property. It acts only as permission
which created a personal right with regards to the property.
2. A license authorizes certain acts on the property which would be otherwise
unlawful.
3. A license cannot be assigned or transferred to some third party
4. A license is not heritable.
5. A license is revocable.
6. A licensee cannot sue outsiders in his own name.
7. Licence is purely permissive right arising only by permission, express or implied,
and not by adverse exercise or in any other way.
A license is deemed to be revoked under the following circumstances:
1. When, from a cause preceding the grant of it, the grantor ceases to have any interest in
the property affected by the license;
2. when the licensee releases it, expressly or impliedly, to the grantor or his
representative;
3. where it has been granted for a limited period, or acquired on condition that it shall
become void on the performance or non-performance of a specified act, and the period
expires, or the condition is fulfilled;
4. where the property affected by the license is destroyed or by superior force so
permanently altered that the licensee can no longer exercise his right;
5. where the licensee becomes entitled to the absolute ownership of the property
affected by the license;
6. where the license is granted for a specified purpose and the purpose is attained, or
abandoned, or becomes impracticable;
7. where the license is granted to the licensee as holding a particular office, employment
or character, and such office, employment or character ceases to exist;
8. where the license totally ceases to be used as such for an unbroken period of twenty
years, and such cessation is not in pursuance of a contract between the grantor and the
licensee;
9. In the case of an accessory license, when the interest or right to which it is accessory
ceases to exist.

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The Transfer of Property Long Answers

1. Define Transfer of Property. What are transferable and non-transferable

properties?
Answer: Transfer of Property means an act by which a living person conveys property, in
present or in future, to one or more other living persons, or to himself, or to himself and
one or more or other living persons, and to transfer property is to perform such act.
The object of the Transfer of Property Act is to define and amend law relating to Transfer
of Property by act of parties and not to transfer by operation of law. A Transfer of
Property is a contract hence all necessary requirements to constitute valid contract are to
be fulfilled.
Essentials of a Valid Transfer
1. Transfer must be between two or more living Persons (Section.5)
The Transfer must be inter vivos. Therefore there cannot be a transfer to person
not in existence at the time of transfer. The living person includes company or
Association or body of individuals whether incorporated or not.
2. The property must be transferable (Section 6)
Property of any kind of may be transferred, except as otherwise mentioned in
Section 6 (a) to (I) cannot be transferred. Therefore those properties described in
the clauses (a) to (I) of Section 6 cannot be transferred. These are restrictions on
the Transfer of Property and any transfer in contravention of any of the clauses
given in Section 6(a) to (I) is null and void.
3. Persons competent to transfer (Section 7)
Every person is competent to contract and entitle to transferable property, or
authorized to dispose of Transferable property not his own, is competent to
transfer such a property either wholly or in part, and either absolutely or
conditionally, in the circumstances to the extent and in the manner, allowed and
prescribed by any law for the time being in force.
4. The Transfer must be made in the mode prescribed by the Act, under section 9
of the Transfer property Act, provides that for oral transfer, A Transfer of Property
may be made without writing in every case in which writing is not expressly
required by law.
5. The consideration or object of the transfer must be lawful.
No transfer can be made for an unlawful object or consideration as provided in
Section 23 of the Indian Contract Act, 1872.
6. The transfer must not be opposed to the nature of the interest effected thereby.
If the nature of property to be transferred does not admit of such transfer, it
cannot be transferred. (Section 6(h))
What may be transferred: As per Section 6 ‘Property of any kind may be transferred,
except as otherwise provided by this Act or by any other law for the time being in force.
a. Land,
b. Building,
c. Machinery,
d. Goodwill,
e. Patents,

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f. Actionable claims,
g. Vested interest (Section 19),
What may not be transferrable?
a. The chance of an heir-apparent succeeding to an estate, the chance of a relation
obtaining a legacy on the death of a kinsman, or any other mere possibility of a
like nature, cannot be transferred,
b. A mere right of re-entry for breach of a condition subsequent cannot be
transferred to anyone except the owner of the property affected thereby,
c. An easement cannot be transferred apart from the dominant heritage,
d. All interest in property restricted in its enjoyment to the owner personally cannot
be transferred by him.
e. A mere right to sue cannot be transferred,
f. A public office cannot be transferred,
g. Stipends allowed to defence personnel is not transferable.
h. No transfer can be made (1). Is so far as it is opposed to the nature of the interest
affected thereby, or (2). For an unlawful object or consideration, (3). A person
legally disqualified to be transferee.

2. Doctrine of Part Performance with suitable illustrations.

Answer: Section 53A in the Transfer of Property Act, 1882
Part performance.—Where any person contracts 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 some act in furtherance of
the contract,
and the transferee has performed or is willing to perform his part of the contract,
then, notwithstanding that where there is an instrument of transfer, that the transfer
has not been completed in the manner prescribed therefore by the law for the time being
in force, the transferor or any person claiming under him shall be debarred from enforcing
against the transferee and persons claiming under him any right in respect of the property
of which the transferee has taken or continued in possession, other than a right expressly
provided by the terms of the contract:
Provided that nothing in this section shall affect the rights of a transferee for
consideration who has no notice of the contract or 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 transferee should have taken possession of the property and has done something in
furtherance of the contract;
4. The transferee should be ready and willing to perform his part of the contract; and

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5. 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: A contracts with B to sell his plot for X amount of money. A accepts the advance from
B towards the sale of the plot and hands over the possession of the said plot to B. After some
time, B is ready to pay the remaining sale amount but A refuses to accept the same. Further A asks
B to hand over the plot back to him.
Here B is ready to perform his part of the contract but A is not. In such a case, B can bring a case
requiring specific performance from A. It does not matter that the sale was not registered.

3. RIGHTS & LIABILITIES OF SELLER & BUYER OF THE PROPERTY, BEFORE & AFTER SALE
(SECTION 55).
Answer: In the absence of a contract to the contrary, the buyer and the seller of
immovable property respectively are subject to the liabilities, and have the rights,
mentioned in the rules next following, or such or them as are applicable to the property
sold:-
The seller is bound –
1. To disclose to the buyer any material defect in the property or in the seller’s title,
2. Producing all documents on the request of buyer,
3. Answering all the question pertaining to the sale by buyer,
4. After the payment by the buyer he has to execute a proper conveyance of the
property.
5. 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,
6. To give, on being so required, the buyer, or such person as he directs, such
possession of the property as its nature admits,
7. 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.
8. He must have the right to transfer the property,
9. Where the whole of the purchase money has been paid to the seller, he is also
bound to deliver to the buyer all documents.
Rights of the seller:
1. The seller is entitled to the rents and profits of the property till the ownership
thereof passes to the buyer,
2. To take the entire consideration amount before transfer of the property,
3. If the seller transfers the property before entire payment is paid, then he is
entitled to the charge upon the property for payment due and interest upon that
due.
The buyer’s duties:
1. To disclose to the seller any fact as to the nature or extent of the seller’s interest in
the property of which the buyer is aware, but of which he has reason to believe
that the seller is not aware, and which materially increases the value of such
interest.

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2. To pay the total purchase money as agreed on the due date.

3. Where the ownership of the property has passed to the buyer, to bear any loss
arising from the destruction, injury or decrease in value of the property not caused
by the seller.
4. To pay the rent, public charges and taxes if any on the property after the transfer.
Rights of the buyer:
1. Where the ownership of the property has passed to him, he is entitled to the
benefits, increases or profits on that property from that day.
2. To demand the documents from the seller,
3. He can demand the seller to clear the dues and encumbrances on the property,
4. To take the possession after the transfer,
5. To enjoy the property without any disturbances,
6. To inspect the documents of the property,
7. To know from the seller about the defects in title or in the property which is for
transfer,
8. After the due payment, the seller is entitled to get all documents pertaining to the
sale.

4. MORTGAGE, RIGHTS & LIABILITIES OF MORTGAGEE & MORTGAGOR.

Answer: A mortgage is the transfer of an interest in specific immovable property for the
purpose of securing the payment of money advanced or to be advanced by way of loan,
an existing or future debt, or 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.
Kinds of Mortgage: Section 58 contemplates following kinds of mortgage:
1. Simple Mortgage Section 58(b),
2. Mortgage by conditional sale Section 58(c),
3. Usufructuary Mortgage Section 58(d),
4. English Mortgage Section 58(e),
5. Mortgage by deposit of title-deeds Section 58(f),
6. Anomalous Mortgage Section 58(g).

Rights of Mortgagor
Every mortgage-deed leaves a right to the mortgagor and a corresponding liability for
mortgagee and vice versa. Following are the rights given to a mortgagor given by the
Transfer of Property Act, 1882:
1. Right of redemption (Section 60),
2. Right of transfer of mortgaged property to a third party instead of retransferring it
to himself,
3. Right of inspection and production of documents
4. Right to accession
5. Right to improvements
6. Right to a renewed lease

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7. Right to grant a lease

Duties/liabilities of a mortgagor
Along with the rights given to a mortgagor, the Transfer of Property Act has also conferred
some duties on him. Following are the duties of a mortgagor:
1. Duty to avoid waste
2. Duty to indemnify for defective title
3. Duty to compensate mortgagee
4. Duty to direct rent of a lease to mortgagee
Rights of a Mortgagee:
1. Right to foreclosure or sale (Section 67),
2. Right to sue for mortgage-money (Section 68), in the following four cases the
mortgagee has a right to sue for the mortgage-money:
a. where the mortgagor binds to repay the money.
b. When the mortgagor's property is wholly or partly destroyed without the fault
of any party,
c. Where the mortgagee is deprived of the whole or part of his security by wrongful
act or default of the mortgagor.
d. Where the mortgagee being entitled to possession, the mortgagor fails to
deliver the same.
3. the mortgagee has the power to sell the mortgaged property without the intervention
of the court, on default of payment of mortgage money by the mortgagor in the following
three cases, Section 69 of the act.
a. When the mortgage is English mortgage between Non-Hindus, Non-Muslims,
and member of the race or sect notified by the State Government in the Official
Gazette.
b. When Government is the mortgagee, with the express provision of sale without
intervention of the court.
c. When the mortgaged property is situated at Calcutta, Madras, Bombay or any
other gazetted town or area.
4. Right to appoint a receiver (Section 69A).
5. The mortgagee has the right of accession to the increased mortgaged property.
6. If the mortgaged property is under lease, the mortgagee is entitled for renewal of the
lease for purpose of security.
7. The mortgagee has the right for reimbursement with interest for the money spent for
purposes like preservation of mortgaged property etc...,
8. When a property is mortgaged for successive debts to successive mortgagees a mesne
mortgagee has the same rights against mortgagee posterior to himself as he has against
the mortgagor.
Liabilities of Mortgagee:
1. Mortgagee bound to bring one suit on several mortgages (Section 67A).
2. To manage the property as a person of ordinary prudence would manage it if it
were his own.
3. To use his best endeavour to collect the rents and profits thereof.

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4. In the absence of a contract to the contrary, to pay Government revenue and

the other charges of a public nature and all rents, out of the income of the
property.
5. In the absence of a contract to the contrary, to make such necessary repairs as
the income of the property permits.
6. Not to commit any act, which is destructive or permanently injurious to the
property.
7. When the whole or any part of the property is insured against loss or damages
by fire, in case of such loss or damages to reinstate the insured property with the
money obtained from the insurance policy or to discharge the mortgage debt with
it, if the mortgagor so directs.
8. to keep clear, full and accurate accounts of all sums received and spent by him
as mortgaged and gives them to the mortgagor when asked.
9. To debit receipts from the mortgaged property or where such property is
personally occupied by him a fair occupation rent thereof after deducting the
expenses of management, the collection charges, revenue and costs of repairs, first
against the interest on the mortgage money and then against the principal.
10. To account for the receipts from the mortgaged property. Such accounting of
receipt from the property shall be taken in lieu of interest on the principal money
given to the mortgagor.

5. Define Easement, describe essentials and various kinds.

Answer:
Meaning and nature of Easements
The concept of easement has been defined under Section 4 of The Indian
Easements Act, 1882. According to the provisions of Section 4, an
easementary right is a right possessed by the owner or occupier of the land
on some other land, not his own, the purpose of which is to provide the
beneficial enjoyment of the land. This right is granted because without the
existence of this right an occupier or owner cannot fully enjoy his own
property.

It includes the right to do or continue to do something or to

prevent or to continue to prevent something in connection with or in
respect of some other land, which is not his own, for the enjoyment of his
own land.

The word ‘land’ refers to everything permanently attached to the earth and
the words ‘beneficial enjoyment’ denotes convenience, advantage or any

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amenity or any necessity. The owner or occupier referred to in the

provision is known as the Dominant Owner and the land for the benefit of
which the easementary right exists is called Dominant Heritage. Whereas
the owner upon whose land the liability is imposed is known as the Serviant
Owner and the land on which such a liability is imposed to do or prevent
something, is known as the Servient Heritage.

Illustrations-
1. ‘P’ being the owner of certain land or house has a right of way over
Q’s house, adjacent to his house, to move out of the street. This is
known as right of easement.
2. A voluntary dedication of right by ‘X’ to the public for passing or re-
passing over a surface of certain land is not a right of easement.
3. X’s right to go on his neighbour Y’s household for fetching water
from the well for the purpose of his own household is a right of
easement. Here, the way to the well is through Y’s land only. Hence,
X has an easementary right to pass through Y’s household.

In the words of great jurist Salmond, easement is that legal servient

which can be exercised on some other piece of land specifically for
the beneficial enjoyment of one’s own land. Right of easement is
basically a form of privilege, the integral part of which is to do an act or
prevent certain acts on some other land for enjoyment of one’s own land.

Other examples of right of easement includes-

• Right of way
• Right to discharge rainwater
• Right to sunlight etc

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Essentials of Easements

1. Dominant and Servient Heritage

For the enjoyment of right of easement, necessary existence of two
properties i.e. dominant and servient heritage is a must. This is because
as per the definition, it is the right exercised by the owner or occupier of one
land for enjoying the benefit of his/her land, over the land of some other
person. Dominant and servient heritage cannot be one. Thus, the existence
of two properties and that to be separate from each other is essential.

2. Separate owners
For exercising the right of easements, owners of the two properties shall be
different and not a single person.

3. Beneficial Enjoyment
The object of easements is that the dominant owner enjoys it in a way which
includes express and implied benefits.

4. Positive or Negative
Easements can be either positive or negative. Former refers to a right
through which the dominant owner does some act to exercise the right over
the land of the servient owner. Whereas, the latter denotes an act of
prevention. In a negative easement the dominant owner prevents or restricts
the servient owner from doing certain act or acts.

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In a right of easement an owner of dominant heritage can do an act or

prevent the servient owner from doing something but he cannot bind the
servient owner to do something for him.

The easementary right exists only when two heritages are adjacent to each
other. It is a right in rem, which means a right available against the whole
world. Easement as a right is always annexed to the dominant
tenement. It is a right of re-aliena which means a right over a servient
tenement and not on one’s own land.

Kinds/ Types of Easements -There are four types of easements, Section 5 of

the Easement Act deals with the types of easements. It provides that the
easements are continuous or discontinuous, apparent or non apparent.

A) Continuous Easement - A continuous easement is one whose enjoyment

is, or may be, continual without the act of man.

Illustration - A right annexed to B’s house to receive light by the windows

without obstruction by his neighbour A. This is a continuous easement.

A continuous easement is extinguished when it is totally cease to be enjoyed

as such for an unbroken period of 20 years.

B) Discontinuous easement - A discontinuous easement is one that needs the

act of man for its enjoyment.

Illustration -A right of way annexed to A’s house over B’s land. This is a
discontinuous easement.

C) Apparent easement -An apparent easement is one the existence of which

is shown by some permanent sign which, upon careful inspection by a
competent person, would be visible to him.

Illustration- Rights annexed to A's land to lead water thither across B's land
by an aqueduct and to draw off water thence by a drain. The drain would be
discovered upon careful inspection by a person conversant with such
matters. These are apparent easements.

D) Non-apparent easement - A non-apparent easement is one that has no

such sign.

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Illustration - A right annexed to A's house to prevent B from building on his

own land. This is a non-apparent easement.

Another example to explain non-apparent easement is that the right to stop

construction over a certain height.

TRANSFER OF PROPERTY CASES

1. A transferred his property to an unborn person who is in mother’s womb. Decide the
rights of the unborn person. (Jan-2017, Dec-2015).
Answer:
Issue: Can ‘A’ transfer to a person who is in his mother’s womb?
Rule: As per Section 13 of the Transfer of Property Act, 1882, property can be transferred to a
person who is in his mother’s womb at the time of transfer.
Application: The Transfer of Property Act, 1882 deals only with the transfers of property between
living persons (inter vivos). An unborn person means a person not in existence even in the
mother’s womb. A child in the mother’s womb is considered to be a competent transferee.
Therefore, the property can be transferred to a child in mother’s womb because the child exists at
that time but not to an unborn person who does not even exist in mother’s womb.
Every transfer of property involves transfer of interest. As soon as the property is transferred,
the transferor is divested of that interest and the interest is vested in the transferee. For vesting
of interest, therefore, it is necessary that the transferee must be in existence.
Conclusion: In the given case ‘A’ the transferor can transfer the immovable property to a person
who is in his mother’s womb and he is a valid transferee and transfer is valid.

2. A party to a suit transfers the disputed property to a third party. Is such transfer valid?
Explain with reasons. (Jan-2014).
A property in dispute, and in respect of which a civil suit is pending, was sold by one of the
partners to the suit. Is such sale valid? Discuss the legal position. (Aug-2013)
Issue: Can a property, during the pendency in any court, transferable?
Rule: Lis pendens Section 52 of Transfer of Property Act, 1882.
Application: Lis pendens” means a suit under consideration of any court of law. It is an action
which is pending in any court. This section is based on the maxim “ut lite pendent nihil innovetur”
which means that nothing new should be introduced into a pending litigation. Therefore, the
property which is in dispute should not either be sold or otherwise dealt in by any party to the
dispute during the pendency of the suit or proceeding. Where a suit or proceeding is pending
between two persons with respect to an immovable property and one of these parties sells or
otherwise transfers the subject-matter of litigation, then the transferee will be bound by the
result of the suit or proceeding whether he had the notice of the suit of proceeding or not. This is
known as the rule of lis pendens. This rule affects the purchaser because the law does not allow
litigants pending litigation to give to others any right to the property in dispute so as to prejudice
the other party.
APPLICATION OF SECTION 52 OF TRANSFER OF PROPERTY ACT – CONDITIONS TO BE
SATISFIED: the following conditions must be fulfilled for applicability of this section -
1. There must be a pending suit or proceeding,
2. The suit or proceeding must be pending in a court of competent jurisdiction;

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3. The suit or proceeding must not be a collusive one;

4. A right to immovable property must be directly and specifically in question in that
suit or proceeding,
5. The disputed property must be transferred or otherwise dealt with by any party to
the suit.
6. The alienation must affect the rights of any other party to the dispute.
7. Any transfer of such immovable property or any dealing with such property during
the pendency of the suit is prohibited except under the authority of court,
8. if such transfer or otherwise dealing with the property by any party to the suit or
proceeding affects the right of any other party to the suit or proceeding under any
order or decree which may be passed in the said suit or proceeding.

Conclusion: In the given case transferring a property, on which a suit is pending in the court, the
transfer is valid but the transferee will be affected by the judgment of the suit, irrespective of
whether he is having actual or constructive notice of the suit.
Fayaz Husain Khan v. Prag Narain.

3. Some property transferred to D in case of A, B and C shall all dies under the age of 18
years. Examine what type of interest is vested in D? (Jan-19, Jan-17).
Issue: Is the case pertains to contingent interest? Yes.
Is transfer of contingent interest valid? Yes.
Rule: Contingent Interest (Section 21 of Property Act, 1882):
An interest the vesting of which takes place after the fulfilment of some conditions precedent,
till the condition is fulfilled remains contingent.
In a transfer of property a person get a contingent interest in the property when:
(i) The specified uncertain event happens, the happening of which was a condition for
vesting of interest, or
(ii) The specified uncertain event does not happen, the non-happening of which was a
condition for vesting of interest and the event has become impossible to happen.
Application: In the case of a contingent interest, the interest becomes vested only when either of
the condition is fulfilled. For example, where A makes a gift to B provided X survives the age of 25
years, the interest of B is contingent. Where A makes a gift to B provided X does not survive the
age of 25 years, the interest of B again is contingent.
The main characteristics of a contingent transfers are:
(i) The contingent interest is a transferable interest,
(ii) It is not heritable. On the death of a person having contingent interest, his interest
does not pass to his legal heirs. The legal heirs of such a transferee do not get any
interest.
(iii) Death is not an uncertain events but survival at the death of another is an uncertain
event.
Conclusion: The transfer is valid under Sec 21 and D will be vested of transferred property if A, B
and C die under the age of 18 years till that time its contingent interest.

4. Property is transferred to ‘A’ for life and the remainder to his eldest son on attaining 25
years of age. ‘A’ has no son on the date of transfer. Is the transfer valid? Decide (Mar-18)
Property is transferred to Rama for life and the remainder to his elder son on attaining 21
years of age. Rama has no son on the date of transfer. Is the transfer valid? (May-17) &
(June-14).

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Issue: Is the transfer Valid? Yes.

Rule: Section 14 of the Transfer of Property Act, 1882: 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
(i) There should be a transfer of property.
(ii) Transfer is to create an interest in the favour of an unborn person.
(iii) Interest so created should take effect after the life-time of one or more persons living
at the date of such transfer and during the minority of the unborn person.
(iv) The unborn person should be in existence at the expiration of the interest of the living
person.
Application: The unborn person is the one in whose favour the interest is created. This vesting of
interest in favour of the ultimate beneficiary is preceded by life interest of one or more living
persons. Life interest is always a limited interest. It is necessary that the ultimate beneficiary
must come into existence before the death of the last preceding living person. The vesting of
interest in favour of ultimate beneficiary may be postponed only to the life or lives of living
persons and minority of ultimate beneficiary but not beyond that.
In the given case the ultimate beneficiary is A’s son and A is having life interest in the property
which is limited.
Enjoyment postponed: the explanation to the section 19 provides that an interest shall not be
a vested interest is not to be inferred merely from a provision whereby the enjoyment the
property is postponed. A condition postponing enjoyment does not prevent the interest vesting
immediately, but it is itself void for repugnancy after the transferee has attained majority.
Repugnancy arises in such a situation where there is inconsistency between the two rules. An
illustration may be taken: where A transfers property to B in trust for C, and directs B to give
possession of the property to C when he attains the age of 25. C has a vested interest and is
entitled to possession at the age of 18(majority).
Conclusion: In the given case the property will be transferred to the eldest son of ‘A’ after
attaining the age of 18 years, this is a vested interest transfer.

5. ‘A’ purchases property in the name of ‘B’. ‘B’ sells the property to ‘C’ without A’s
authority. ‘A’ sues to recover the property from C. Decide (Jan-19), (Mar-18) & (Dec-15).
Issue: Is the transfer by ‘B’ valid? Yes, provided that the transferee, after taking reasonable care
to ascertain that the transferor had power to make the transfer, had acted in good faith.
Rule: Transfer by ostensible owner Section 41 of the Transfer of property Act, 1882: Where, with
the consent, express or implied, of the persons interested in immovable property, a person is the
ostensible owner of such property and transfers the same for consideration, the transfer shall not
be voidable on the ground that the transferor was not authorised 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.
Application: The general principle of law of transfer of property is that no person can transfer to
another a right or title greater than what he himself possesses. The maxim on which this principle
is based is nemo dat quod non-habet, i.e., no one can transfer better title that he himself has. This
general rule has certain exceptions too. One exception is that if the true owner of property
permits another to hold himself out as the real owner, a third person who deals in good faith with
that other person may acquire a good title to the property as against the true owner.
Benami transactions: The law relating to transfer of property by an ostensible owner under this
section are now subject to the provisions of Benami Transactions (prohibition of the Right to

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Recover Property) Act, 1988, “Benami transaction” means any transaction in which property is
transferred to one person for a consideration paid or provided by another person. In simple
words, the person who purchases the property and pays the price for it, does not purchase the
property in his own name but in the name of any other person. The other person whose name is
used as the owner of the property is known as benamidar (ostensible owner). In truth, he holds
the property on behalf of the real owner because he is not the real owner. The Benami
Transactions act of 1988 provides that where a property is transferred benami (i.e., in the name of
another person), the person, in whose name the property is held, shall become the real owner.
The Benami Transactions Act, 1988 provides that no suits, action or claim to enforce any right in
respect of any property held benami against the person in whose name the property is held or any
other person shall lie by the person claiming to be the real owner of the property. In other words,
the real owner now after the enforcement of this Act cannot claim the property from the
benamidar by any suit, claim or action. The defence of being the real owner shall also not be
allowed.
Conclusion: The Transfer of Property Act says that the transferee should act in good faith while
dealing but after the passing of the Benami Transactions Act, 1988 the transferee will become the
real owner and the ostensible owner cannot claim the property. In the given case the sale is valid.

6. ‘A’ makes a gift to X, Y and Z. X and Y accept while Z refuses. What happens to the gift?
(Jan-19, Mar-18 and Jun-14).
Issue: Is a Gift made to two or more persons jointly valid? Yes valid.
If one or more donees do not accept, still is it a valid gift? Yes to the extent of gift which was
accepted.
Rule: Gift to several persons of whom one does not accept Section 125 of The Transfer of Property
Act, 1882.
Application: Gift may be made to two or more persons jointly. For the validity of the gift it is
necessary that it must be accepted by all the donees. Section 125 provides that 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. This means that where one of the several donees does not accept
the gift, the gift is void only for his part of interest which he would have taken, had he accepted
the gift. Where the donee is unable to accept due to his incompetency, his guardian must accept
the gift on his behalf. For example, a gift is made to four persons jointly A, B, C and D by a person
named X, without specifying their shares in the gift. Each will be entitled to ¼ (one-fourth) share
in the gifted property. Suppose D does not accept his share of gift, then his share will revert back
to donor X. It will not be added to the shares of other donees.
Conclusion: In the given case Z has refused the gift of A, and X and y have accepted the gift, Z’s
part will be reverted to the donor A. Now the property is owned by X, Y and A each have 1/3 of
right.

7. A takes a lease of a building for being used as a dyeing factory. He stores chemicals there,
needed for his business. The building is burnt down and must damage is caused because
of storage of those chemicals. Discuss the liability of A. (May-2017), (Jun-2014).
Issue: Is ‘A’ responsible for the damage and should restore the property? Yes.
Rule: According to Section 108 {Clause (k) to (q)}, the lessee is under the following liabilities:
a. duty to disclose facts materially increasing the value of property,
b. duty to pay rent or consideration of lease,
c. duty to maintain the property,
d. duty to give notice of any encroachment on the property to the lessor,
e. duty to use the property in a reasonable manner,

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f. duty not to erect permanent structure on the property,

g. duty to re-transfer the possession on determination of lease.
Application: Duty to maintain the property Section 108(m): clause (m) provides that the lessee is
bound to keep and on the termination of lease to restore the property in as good condition as it
was when he was put into possession. The lessee is bound to maintain and restore the property
in the condition in which it was lent to him.
Conclusion: In the given case A is bound to maintain the property and has to restore it to bring to
the original condition.

8. Mr. Siva allowed his friend Mr. Rama to park his car in his house. After some time Mr. Siva
refused to park the car in his house. Mr Rama claimed that it is easement right. (May-17).
A allowed his neighbour B to park his car in A’s house. After some time A refused to park
B’s car in his house. B claimed it is easement right. (Dec-15).
Issue: Is it easement? No
Is A’s refusal of B’s car parking is valid? Yes.
Rule: Section 52 in the Indian Easements Act, 1882
"License" defined. -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.
Application: License is a permission to do something, which without the license would not be
allowable.
Conclusion: In the given case Mr. Rama is allowed to park his car its license not easement and Mr.
Rama’s claim is non-maintainable.

9. Property X, Y and Z are subjected to a Mortgage. The mortgagor sells the equity of
redemption of X to A of Y to B and of Z to C. if the mortgagee satisfied his mortgage out of
X what remedy is available to A. (May-17).
Here the mortgager has mortgaged his three properties to a single person and later he sells the
properties to different persons (here the meaning of equity of redemption is sale only) and after
that the mortgagee, to recover his dues wants to sell the property X which now owned by A.
Under Section 67A of the Transfer of Property Act, 1882, Mortgagee when bound to bring one
suit on several mortgages. - A mortgagee who holds two or more mortgages executed by the
same mortgagor in respect of each of which he has a right to obtain the same kind of decree under
Section 67, and who sues to obtain such decree on any one of the mortgages, shall, in the absence
of a contract to the contrary, be bound to sue on all the mortgages in respect of which the
mortgage-money has become due.

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