scOPE: down about "Condition

Section 12 lays
attempted alienation".
making interest determinable on insolvency or

SECTION 12:
Sec. 12. Condition making interest determinable on insolvency or attempted alienation. Where property isS
transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any

son, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation
is void.

IMPORTANT POINTS:
A. Void Conditions: Section 12 invalidates two conditions, i.e.-
(1) if the transferee becomes insolvent: Where a property is transferred subject to a condition
that if the transferee becomes insolvent, the transferee shall cease the right against such property.
Such a condition is void.

(2) restriction/limitation any attempted transfer: Where a property is transferred subject to a

condition or limitation or restriction against any attempted transfer by the transferee.
B. Leases: This Section does not apply to leases, because a lease is a partial and temporary transfer.
C. Sale, Gift Exchange: This Section applies to sale, gift and exchange.
D. The Hindu and the Mohammedan Laws: The conditions of this Section are also recognized by
the Hindu and the Mohammedan Laws.