Apportionment

According to the Transfer of Property Act, 1882, apportionment is of two kinds:—

(i) Apportionment by time—Section 36 deals with apportionment of periodical
payments as between the transferor and the transferee.
(ii) Apportionment by estate—Section 37 deals with apportionment of an obligation in
the event of the division of property to which it relates
36. Apportionment of periodical payments determination of interest of person entitled.
—In the absence of a contract or local usage to the contrary, all rents annuities, pensions,
dividends and other periodical payments in the nature of income shall, upon the transfer of
the interest of the person entitled to receive such payments, be deemed, as between the
transferor and the transferee, to accrue due from day to day, and to be apportionable
accordingly, but to be payable on the days appointed for the payment thereof.
 this is applied in case there is an income being generated from a property and no
specific terms as to its division is mentioned
 this income should arise periodically (quarterly, monthly, annually)
o eg: rents
 "Apportionment" means division. "Apportionment" is a division of a whole into parts
proportionate to the rights of more claimants than one."
 When any property yielding periodical income is transferred the question arises how
this income is to be divided between the transferor and the transferee. In this respect,
section 8 provides that the transferee is entitled to the interest or income accruing after
the transfer takes effect. The income which accrues from day to day, like interest,
creates no problem in distribution between transferor and transferee but the income
which accrues only at stated periods section 8 becomes unable to divide that. To
overcome this difficulty, section 36 provides that all periodical payments in the nature
of rent, annuities, dividends and pensions shall be deemed to accrue from day-to-day
and be apportioned between the transferor and transferee on that basis.
 Section 36 says that all rents, annuities pensions, dividends and other periodical
payments in the nature of income shall, upon the transfer of interest of the person
entitled to receive such payments, be deemed, as between the transferor and the
transferee, to accrue due from day-to-day, and to be apportionable accordingly, but to
be payable on the days appointed for the payment thereof. For example, A lets his
house at a rent of Rs 100 payable on the last day of each month. A sells that house to
B on 15th June. On 30th June, A is entitled to Rs 50 of the rent from the 1st to 15th
June and B is entitled to Rs 50 of the rent from 15th to 30th June. This is
apportionment by time.
 Inter Vivo Transfer
o An inter vivos transfer is a transfer of property made during a person's
lifetime.
o This section is applicable to inter vivos transfers between transferor and
transferee only
o It has no application when third parties are involved
o It does applies to transfer by operation of law
  Local usage
o Whenever a local rule excludes the application of this rule then in that case
this rule will not apply
o For example, in any certain area there may be local usage or custom prevalent
which may debar the operation of this section in that area. In such areas, this
rule will not apply
 Other periodical payments
o The expression "other periodical payments" occurring in this section are to be
construed according to the "ejusdem generis" rule according to which same
type of payments like rents, annuities, pensions, dividends are to be included.
o Will not include profits of partnership which occur only after adjustment of
accounts
 Payable
o Lalla Gangaram v. Mewa Ram: The apportionment does not affect the date
when the payment is to be made by the person liable. Therefore, if under a
lease, rent is payable at the end of the year but the lessor transfers or assigns
his interest in the middle of the year, both the transferor and transferee will
become entitled to half of the rent but the lessee will remain liable to pay only
at the end of the year
 Lakshmi Naranappa v Melothraman 214—In this case, the lessor had only a life
interest and died a month before the rent of the half year was payable. Here there was
no question of a transfer, yet the assignee of the lessor was held to be entitled to an
apportionment of rent for the period up to the death of the lessor.
 Other case done by Ma’am: Satyavaha Chabey v. Ram Kishore

37. Apportionment of benefit of obligation on severance.—When, in consequence of a

transfer, property is divided and held in several shares, and thereupon the benefit of any
obligation relating to the property as a whole passes from one to several owners of the
property, the corresponding duty shall, in the absence of a contract to the contrary amongst
the owners, be performed in favour of each of such owners in proportion to the value of his
share in the property, provided that the duty can be severed and that the severance does not
substantially increase the burden of the obligation; but if the duty cannot be severed, or if the
severance would substantially increase the burden of the obligation the duty shall be
performed for the benefit of such one of the several owners as they shall jointly designate for
that purpose:
Provided that no person on whom the burden of the obligation lies shall be answerable for
failure to discharge it in manner provided by this section, unless and until he has had
reasonable notice of the severance.
Nothing in this section applies to leases for agricultural purposes unless and until the State
Government by notification in the Official Gazette so directs.
Illustrations
(a) A sells to B, C and D a house situated in a village and leased to E at an annual rent of Rs.
30 and delivery of one fat sheep, B having provided half the purchase-money and C and D
one quarter each. E, having notice of this, must pay Rs. 15 to B, Rs. 7½ to C, and Rs. 7½ to
D, and must deliver the sheep according to the Joint direction of B, C and D.
(b) In the same case, each house in the village being bound to provide ten days' labour each
year on a dyke to prevent inundation, E had agreed as a term of his lease to perform this work
for A. B, C and D severally require E to perform the ten days' work due on account of the
house of each. E is not not bound to do more than ten days' work in all, according to such
directions as B, C and D may join in giving.
 Where on a transfer a property is given to several persons by portions, each transferee
is entitled to all the advantages accruing from the property in proportion to his interest
in it. This rule is subject to two conditions: —
o (i) the person on whom the burden of the obligation lies must have notice of
the severance. In simple words, the person who has to perform the
corresponding duty must have information that the original single owner has
divided his property,
o (ii) the obligation must be such which can be severed, and
o (iii) the severance should not increase the burden of his obligation; the person
with corresponding duty must perform the duty to several owners.
 Notice of severance
o The section says that the persons on whom the burden of obligation under
apportionment lies must have reasonable notice of severance
o The person on whom the burden of obligation lies shall not be answerable for
failure to discharge it in the prescribed manner unless and until he has had
reasonable notice of the severance.
 Severable Obligation
o The obligation must be such that it can be severed and can be performed in
parts in favour of each of the several owners. If the obligation cannot be
severed, it must be performed for the benefit of such one of the several owners
as they shall jointly designate for the purpose.
 No additional burden
o if the severance would substantially increase the burden of the obligation the
duty shall be performed for the benefit of such one of the several owners as
they shall jointly designate for that purpose
38. Transfer by person authorised only under certain circumstances to transfer.—Where
any person, authorised only under circumstances in their nature variable to dispose of
immoveable property, transfers such property for consideration, alleging the existence of such
circumstances, they shall, as between the transferee on the one part and the transferor and
other persons (if any) affected by the transfer on the other part, be deemed to have existed, if
the transferee, after using reasonable care to ascertain the existence of such circumstances,
has acted in good faith.
Illustration A, a Hindu widow, whose husband has left collateral heirs, alleging that the
property held by her as such is insufficient for her maintenance, agrees, for purposes neither
religious nor charitable, to sell a field, part of such property, to B. B satisfies himself by
reasonable enquiry that the income of the property is insufficient for A's maintenance, and
that the sale of the field is necessary, and acting in good faith, buys the field from A. As
between B on the one part and A and the collateral heirs on the other part, a necessity for the
sale shall be deemed to have existed.
39. Transfer where third person is entitled to maintenance.—Where a third person has a
right to receive maintenance, or a provision for advancement or marriage, from the profits of
immoveable property, and such property is transferred 1*** the right may be enforced against
the transferee, if he has notice 2 [thereof] or if the transfer is gratuitous; but not against a
transferee for consideration and without notice of the right, nor against such property in his
hands
40. Burden of obligation imposing restriction on use of land.—Where, for the more
beneficial enjoyment of his own immoveable property, a third person has, independently of
any interest in the immoveable property of another or of any easement thereon, a right to
restrain the enjoyment2 [in a particular manner of the latter property],
or of obligation annexed to ownership but not amounting to interest or easement.—where a
third person is entitled to the benefit of an obligation arising out of contract and annexed to
the ownership of immoveable property, but not amounting to an interest therein or easement
thereon, such right or obligation may be enforced against a transferee with notice thereof or a
gratuitous transferee of the property affected thereby, but not against a transferee for
consideration and without notice of the right or obligation, nor against such property in his
hands.
Illustration A contracts to sell Sultanpur to B. While the contract is still in force he sells
Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the
same extent as against A.
https://www.youtube.com/watch?v=38mhjA-W9yg&t=131s

41. Transfer by ostensible owner.—Where, with the consent, express or implied, of the
persons interested in immoveable property, a person is the ostensible owner of such property
and transfers the same for consideration, the transfer shall not be violable 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.
The section says that—
o where with the consent (express or implied) of the persons interested in
immovable property,
o a person is the ostensible owner of such property, and
o transfers the same for consideration,
o the transfer shall not be voidable on the ground that the transferor was not
authorised to make it,
o provided that the transferee, after taking reasonable care to ascertain that the
transferor had power to make the transfer, has acted in good faith.
This sections employs the principle of doctrine of estoppel
 1.Ostensible Owner
o The first requirement of this section is that there must be an ostensible owner
o An ostensible owner is that person who is not the real owner of the property.
An ostensible owner is one who has all the indicia of ownership without being
the real owner.
o He is a person who is apparently the unqualified and full owner and not a
person who is a qualified owner like a mortgagee or hirer of goods.
o Jayadayal Poddar v Bibi Hazra, 247
 Facts: servant trying to pose as the owner because he would know their
whereabourts
 held that whether a person is an ostensible owner or not is a
substantive question to be decided on the basis of facts and
circumstances and this cannot be determined by law.
 The following considerations must be taken into account in deciding
upon the fact of ownership—
 (i) Source of the purchase-money, i.e., who paid the price of the
property?
 (ii) Nature of possession after the purchase, i.e., who had the
possession of property?
 (iii) Motive of giving benami colour to the transaction, i.e., why the
property was purchased in the name of other person?
 (iv) Relationship between the parties, i.e., whether the ostensible
owner and the real owner were friends, strangers or relatives? (v)
Conduct of the parties in dealing with the property, i.e., the conduct
who used to take care of the property and who had control over the
property? (vi) Custody of the title deeds, i.e., who had the title-deeds?
2. It is essential that the transferee has to act in good faith and conduct an enquiry
3. This section is an exception to Section 7 of TOPA
4. The provisions are also subject to the Benami Properties act
5. Kammana Sambamurthy v. Kalipatnapu Athutama
o The burden of proof that the transaction is benami and the transferor is the
ostensible owner lies on the person who claims to be the real owner
2. Express or Implied Consent
 It is necessary that the transfer of property must be made by the ostensible owner with
the express or implied consent of the real owner. The consent must be a real consent.
It must not have been obtained by fraud, coercion, force or undue influence 258
practised by the ostensible owner on the real owner of the property
 In case the real owner is incapable of giving the consent like minor or a religious
endowment, no one can hold himself out as an ostensible owner of such property.
6. Syed Abdul Khader v. Ravi Reddy
o Section 41 of the Transfer of Property Act provides that where, with the
consent, express or implied, of the person interested in immovable property, a
person is the ostensible owner of such property and transfers the same for
consideration,
 o 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 out 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 a discovery of it'
7. Guru Charan Singh v. Punjab State Board
8. Anoda Mohan v. Nilphamari
o A, a Hindu husband, purchased property in the name of his wife, B. The
property (land) was entered in the name of the wife in revenue records. After
A's death, his widow B, mortgaged the land to C, who took the mortgage after
due inquiry believing in good faith that B was the owner of the property. C
obtained a decree for sale on his mortgage and purchased the land. But at that
time D was in possession of the property for D had purchased the land in
execution of a money decree against A. C's suit against D for possession was
decreed. D was the successor in interest of A who had held out his wife B as
the ostensible owner and could not defeat the mortgagee who was a transferee
in good faith from the ostensible owner
o Held: It was held that since A himself had entered B’s name in the revenue record
and since A allowed her to deal with the property, there was an implied consent of A
to hold out B as an ostensible owner authorising him to transfer the property.
Accordingly, the mortgage could not be avoided.
9. Triloknath/manaklal v. Premchand
o Where the owner is not aware of his own ownership rights he is not debarred
from claiming that the transfer is made by an authorised transferor
o When he is not aware it means that he is illiterate
o Facts: illiterate wife signed on a paper
o Held: the benefit of doubt goes to the wife
10. MOST IMP FOR S41: RamCoomar Koondo v. Macqueen 1872 11 BENG LR 46
o One Alexander purchased certain landed properties in Calcutta in the name of
his mistress, Bunnoo Bibee. One of the two children born to him by Bunnoo
Bibee was Macqueen. She used to manage the properties and the sale deed
was also in her name. During the life-time of Alexander, Bibee sold the
properties to Ramdhone (father of Ramcoomar). After the death of Bibee,
Macqueen filed a suit against Ramdhone claiming the properties on the ground
that her father had left a will in her favour and that the Bibee was only
benamidar and Alexander was the real owner. However, Ramdhone pleaded
that he was a bona fide purchaser without notice of benami title of the Bibee
(the seller).
o The Calcutta High Court decided in favour of Macqueen.
o On appeal, the Privy Council held that even assuming that the Alexander was
the real owner and Bibee was merely ostensible owner but since the Alexander
had allowed Bibee to hold herself out as the real owner, he or his
 representatives could not recover upon secret title unless they could prove that
the purchaser had direct or constructive notice of the real title of Alexander
o Doctrine of Holding Out
 It is the 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 3 rd person purchases it for value from the
apparent owner in belief that he is the real owner then the person who
allowed the other person (apparent owner) to hold out shall not be
permitted to recover the title
3. No partition between Joint owners
 The property was jointly owned by three persons without any partition deed between
them. A transfer effected by only one of them was held to be no good. The transferee
exercised no care to see that there were other joint owners. He could not be regarded
as a bona fide purchase
4. Transfer for Consideration
 The protection of this section is available only when the transfer is for consideration.
If the transfer is without consideration, i.e., gratuitous, this section will not apply.
 This protection is also not available to gifts.
5. Transferer has acted in good faith and taken reasonable care
 Good faith means the bona fide intention, i.e., the transferee had acted honestly and in
the real belief that the ostensible owner was the real owner. Reasonable care is not
enough if there is absence of good faith
 The rule of law is that "he who seeks equity must do equity". Thus, the protection of
this section will be available only for that person (transferee) whose own conduct is
just and equitable.
 In the absence of good faith the court will presume a collusion between the ostensible
owners and the transferee.
 Rajpal Singh v. Saroj
o He who seeks equity must do equity
 Rai Sunil Kumar v. Thakur Singh
 Gurubaksh Singh v. Nibba Singh
o For example, where the real owner and the transferee lived in the same village
and the transferee was acquainted with the circumstances of his family, even
then he purchased the property from some other person, the court was slow in
believing the good faith of the transferee
 Nageshwar Prasad v. Raja Pateshri (reasonable care case)
 Baby Ranideb v. Manik Dey (reasonable care case)
o Mere good faith is not sufficient. The purchaser must establish that he made
reasonable enquiries
43. Transfer by unauthorised person who subsequently acquires interest in property
transferred.—Where a person 3 [fraudulently or] erroneously represents that he is authorised
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.
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 authorised 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 .
 when there is an unauthorized person then how do the transfers go about – no
effective title, or incomplete or does not hv the authority – incapable of passing on the
title
 Let’s go to the actual owner, the father should have taken care – both 41 and 43 can be
applied.
 Equitable estate – involved under Section 43
 This doctrine – the person must be making it though erroneously the property share
belongs to him transfers, but on the basis of the statements he make, the transferee
believes that he is the actual owner and if he fulfils his duty, then he gets the property
– under Section
 Case - Raja Pakse v Fernando (AIR 1920 PC
o Where a granter had purported to grant an interest in land which he did not at
the time possess but subsequently obtained, the benefit of his subsequent
acqusition goes automatically to the earlier grantee, that is feeds the estoppel.
Option given to the transferee to transact or not.
 4 essential conditions that apply to section 43 –
1. Transferor must be an unauthorized person
2. There is fraudulent or erroneous representation by such transferor regarding his
right of transfer – if transferee is misled about the property
Shri Narayan Chandra Saha v. Dipali Mukherjee: AIR 2002 CAL.229
- The transferee should have been misled – if the transferee has the knowledge about
no title and still acts upon it, then it seems like collusion in the eyes of law
3. Transfer is for a consideration
4. 4.Transferor subsequently acquires authority for the transfer – subsequent acquisition
– at some stage after the promise has been made and then he also gains acquisition of
property or interest. Automatically, no property will go to the transferee – because he
was misled initially – this contract became voidable at the option of transferee.
- This title that can be forced to be transferred, can only happen till the contract subsists.
If this transferor misled you, you will revoke the contract and after that transferor
acquires the interest then I can’t go back to get the property, the transferee wont have
that option.
There seems to be a conflict between section 6A and this section:
Spec successionis, heir apparent who didn’t have the tile, these transfers not valid. No title or
future title, that u currently don’t have, but 43 is giving effect to such a transfer.
Base principle – no conflict – 6 is substantive law whereas 43 is procedural aspect –
simultaneously working as principle of equity applies, hence section 43 valid.
Case: Jumma Masjid v. Kodimanimadra (AIR 1962 SC 847)
- Nature of Q – how to deal with the conflict
- A person who was heir apparent – he transferred the share to masjid – now when he
actually acquired the share, the masjid invoked section 43 – 300 rupees – this person’s
lawyers says its void ab initio as he was heir apparent – now which one to follow?
- The court observes – there is no ground for reading any conflict between the 2 sections
– both the provisions can be given full effect in their respective spheres. Section 6A is
a rule of substantive law whereas 43 is based on estoppel which is a rule of evidence
(procedure). It makes no difference in its application whether the defect of title in the
transferor arises by reason of his having no interest whatsoever in the property or of
his interest therein being that of an expectant heir.
- Simultaneously application – operate in favour of a bona fide transferee.
Case:
- Transferee knows there is a spec successionis case, then 43 wont apply as there was no
bona fide intention.

44. Transfer by one co-owner.—Where one of two or more co-owners of immoveable

property legally competent in that behalf transfers his share of such property or any interest
therein, the transferee acquires as to such share or interest, and so far as is necessary to give
effect to the transfer, the transferor's right to joint possession or other common or part
enjoyment of the property, and to enforce a partition of the same, but subject to the conditions
and liabilities affecting, at the date of the transfer, the share or interest so transferred.
Where the transferee of a share of a dwelling-house belonging to an undivided family is not a
member of the family, nothing in this section shall be deemed to entitle him to joint
possession or other common or part enjoyment of the house.
 (1) Where a co-owner of an immovable property legally competent in that behalf transfers
his share in such property,
 (2) the transferee acquires—
o (a) transferor's right to joint possession, other common or part enjoyment of the
property (not where the transferee has taken a share of a dwelling house belonging
to an undivided family and he is not a member of that family), and
o (b) transferor's right to enforce partition of the property (subject to the conditions
and liabilities affecting the share so transferred)
 Where a property is jointly owned by two or more persons, such property is known as
co-owned property. Co-owners may have equal or unequal shares in the property. Till
the property is not partitioned and shares separated, each co-owner is entitled to
common enjoyment of property. Now, when one of such co-owner transfers his share
in co-owned property, the transferee of such property steps into the transferor's shoes.
 The transferee takes the place of such co-sharer and becomes entitled to joint
possession of property and other common and part enjoyment of property. He will get
all the rights and liabilities of the transferor on the date of transfer in the joint
property.
 The transferee like transferor can enforce the partition of the property where the
transferor himself had that right. But his right will be subject to the conditions and
liabilities affecting the transferred share.
 In this section, an exception has been created in favour of Hindu Undivided Family.
 Case: Balai Chand Sau and others v Brindavan Dasa Adhikari and others – AIR
2019 CAL.289
o If no dwelling house then the transferee is substituted in the shoes of transferor
– all the rights will be given – if the property is subject to a mortgage then he
has to equally pay it, then the first part of the section is not a problem
o Where share is not determined, it is presumed that there is equal share
 Case: Jahidul v. Abushama (D) through LRs Jameda Begum and others – AIR
2022 JAU.13
 Case: Angoori Bai v. Nishank Jain and others – AIR 2020 NOC.603 MP
o Different situations
o Dwelling house not only mean residential premises also includes adjacent
buildings, gardens – privacy maintain karne ke liye this section is applied
 Case: Dorab Cawasji Warden v. Coomi Sorab Warden – AIR 1990 SC 867

45. Joint transfer for consideration.—Where immoveable property is transferred for

consideration to two or more persons and such consideration is paid out of a fund belonging
to them in common, they are, in the absence of a contract to the contrary, respectively entitled
to interests in such property identical, as nearly as may be, with the interests to which they
were respectively entitled in the fund;
and, where such consideration is paid out of separate funds belonging to them respectively,
they are, in the absence of a contract to the contrary, respectively entitled to interests in such
property in proportion to the shares of the consideration which they respectively advanced.
In the absence of evidence as to the interests in the fund to which they were respectively
entitled, or as to the shares which they respectively advanced, such persons shall be presumed
to be equally interested in the property
 Whenever a single property is bought by multiple people it depends on the manner of
contribution (interests, benefits, rights, liabilities)
 Section 45 says that where an immovable property is transferred:—
o (1) for consideration (value) to 2 or more persons, and
o (2) such consideration (value) of property is paid out of a fund belonging to
them in common,
o (3) they are entitled to interest in such property identical to their interest in the
common fund respectively (if there is no contract to the contrary), but
o (4) where such consideration is paid out of separate funds belonging to them
respectively,
 o (5) they are entitled to interest in such property in proportion to the shares of
consideration paid or advanced by them respectively. (when there is no
contract to the contrary).
o (6) In case there is no evidence as to their interest in the fund to which they are
entitled or the shares which they have respectively advanced—it will be
presumed that they are equally interested in the property.
 If the consideration is paid out of a common fund their shares would be the same as
their interest in the common fund.
 Kapil Kumar v. Naresh Kumar
o Where the purchase money is from the common fund share money is
proportionate
 In the absence of evidence showing in what shares the consideration was paid there is
a presumption that the co-owner's interest was equal. When a person can produce
evidence of the amount of his share but fails to do so, he cannot avail himself of this
presumption of equality
 Rajeshwari v. Balchand Jain
o This section talks about the quantum of interest and its determination where
more than 1 joint purchaser of property exists

46. Transfer for consideration by persons having distinct interests.—Where immoveable

property is transferred for consideration by persons having distinct interests therein, the
transferors are, in the absence of a contract to the contrary, entitled to share in the
consideration equally, where their interests in the property were of equal value, and, where
such interests were of unequal value, proportionately to the value of their respective interests.
Illustration (a) A, owing a moiety, and B and C, each a quarter share, of mauza Sultanpur,
exchange an eighth share of that mauza for a quarter share of mauza Lalpura. There being no
agreement to the contrary, A is entitled to an eighth share in Lalpura, and B and C each to a
sixteenth share in that mauza.
(b) A, being entitled to a life-interest in mauza Atrali and B and C to the reversion, sell the
mauza for Rs. 1,000. A's life-interest is ascertained to be worth Rs. 600, the reversion Rs.
400. A is entitled to receive Rs. 600 out of the purchase-money. B and C to receive Rs. 4000
 This section is converse of section 45 because this section deals with apportionment
of consideration between joint-transferors whereas section 45 dealt with
apportionment of interests among the joint-transferees.
 The principle of this section is that where two or more persons, who are tenants-in
common, sell their shares, they are entitled to share the consideration in proportion to
the value of their interest in the property.
 Where immovable property is transferred for consideration by persons having distinct
interest in the property,
 the transferors would be entitled to equal share in the consideration when their
interests in the property were equal (in the absence of the contract to the contrary),
and
  where the interests of the transferors were unequal, the transferors would be entitled
to shares proportionately to their interests in the property.

47. Transfer by co-owners of share in common property.—Where several co-owners of

immoveable property transfer a share therein without specifying that the transfer is to take
effect on any particular share or shares of the transferors, the transfer, as among such
transferors, takes effect on such shares equally where the shares were equal, and, where they
were unequal, proportionately to the extent of such shares.
Illustration A, the owner of an eight-anna share, and B and C, each the owner of a four-anna
share, in mauza Sultanpur, transfer a two-anna share in the mauza to D, without specifying
from which of their several shares the transfer is made. To give effect to the transfer one-anna
share is taken from the share of A, and half-an-anna share from each of the shares of B and C.
 According to this section,
o where co-owners of immovable property transfer a share in it,
o without specifying that the transfer is to take effect on which particular share
of the transferors
o the transfer takes effect on such shares (among such transferors)— (a) equally,
where the shares of transferors were equal, and (b) proportionately to the
extent of shares, where the shares were unequal.
 Where co-owners of a property transfer a share in that property without specifying
how the transfer is to take effect, in such a case where the shares of co-owners are
equal, transfer becomes effective equally on such shares. But where the shares of co-
owners are unequal, the transfer becomes effective proportionately on such shares
[s 48] Priority of rights created by transfer.— Where a person purports to create by
transfer at different times rights in or over the same immoveable property, and such rights
cannot all exist or be exercised to their full extent together, each later created right shall, in
the absence of a special contract or reservation binding the earlier transferees, be subject to
the rights previously created.
 This section is based on the maxim, qui prior est tempore potior est jure, which means
that one which is first in time is better in law
 An owner of a property can assign either all or any of his rights in the property i.e., he
may sell the property, mortgage it or give on a lease. When he sells the property all his
rights in the property are transferred to the transferee but when he lets it or mortgages
it, only some of the rights are transferred. The owner can deal with the remaining
rights in any lawful manner.
 An owner of a property can create any number of transfers in respect of the same
property either at the same time or at different times
 This section says that if there are successive transfers of the same property, the later
transfer is subject to the prior transfer
 If two or more transfers are executed on the same date, then the evidence may be
taken as to which was executed first and that will have the priority.
  Exceptions—Many exceptions also have been recognized to this rule and they are
given below:—
o Section 50 of the Registration Act gives priority to a subsequent registered
deed over a prior unregistered deed of which the registration is optional.
However, this exception is subject to the doctrine of notice
o Where transfer deed is executed through fraud, misrepresentation, or gross
negligence of prior transferee (mortgagee), the priority of the prior mortgagee
will be postponed
o In a suit for partition, if the receiver under the direction of the Government
mortgages the whole or part of the estate, the mortgagee would be entitled to
priority over an execution creditor by whom the property was attached after
the commencement of the suit for partition
o The lien of a co-sharer for owelty money on partition is entitled to precedence
over prior mortgages of property allotted to the co-sharer who is liable to pay
owelty
o A previous mortgage by a co-owner of his share was subject to a prior charge
created by a manager over the whole estate under section 98 of the Bengal
Tenancy Act
 the exercise of the option by the real owner

VERY IMP SECTION WILL COME IN EXAM FOR SURE

Section 52: Transfer of property pending suit relating thereto.—During the 1 [pendency]
in any Court having authority 2 [ 3 [within the limits of India excluding the State of Jammu
and Kashmir] or established beyond such limits] by 4 [the Central Government 5 ***], of 6
[any] suit or proceeding 7 [which is not collusive and] in. which any right to immoveable
property is directly and specifically in question, the property cannot be transferred or
otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any
other party thereto under any decree or order which may be made therein, except under the
authority of the Court and on such terms as it may impose. 7
[Explanation.—For the purposes of this section, the pendency of a suit or proceeding shall be
deemed to commence from the date of the presentation of the plaint or the institution of the
proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding
has been disposed of by a final decree or order and complete satisfaction or discharge of such
decree or order, has been obtained, or has become unobtainable by reason of the expiration of
any period of limitation prescribed for the execution thereof by any law for the time being in
force.
 Lis Pendens
o “Lis pendens” means a suit under consideration of any court of law.
o This section is based on the maxim “ut lite pendente nihil innovetur” which
means that nothing new should be introduced into a pending litigation.
Therefore no new interest can be created either eg: mortgage
o 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
 o . 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.
o Lis pendens affects the purchaser because the law does not allow the litigants
pending litigation to give others any right to the property in dispute
o The principle underlying the object of section 52 is to maintain the status quo
unaffected by the act of any party to the litigations pending its determination.
o The principles contained in this section are in accordance with the principle of
equity, good conscience or justice because they rest upon an equitable and just
foundation, that it will be impossible to bring an action or suit to a successful
termination if alienations are permitted to avail
o During pending litigation you cannot transfer property
o And anything that is less than transfer wont be sale
o The essentials for sale
 Transfer of ownership
 Monetary value
 Both parties be competent
 Subject matter should be immovable property
 Transfer must be in accordance with the law
 This is also in relation to Section 10 of the CPC which deals with matters that are
subjudice
o You cannot transfer or create interest while pending dispute
o Under CPC the court will not help the frustrated transferee because there is no
constructive notice
o Transfer of the disputed property will not be valid
 Practically, TPA and CPC are both applied and at the end of the day it is the courts
discretion and if the valid title goes against the transferor court are under no
obligation to give compensation to the frustrated transferees
 KN Aswath Narayana Setti v. State of Karnataka
o This rule of lis pendens rests on equitable and just principle that it would be
impossible to bring a suit or action to culmination if the alienation is permitted
o The absence of this rule would lead to multiple and never ending litigation
 Rajendra Singh v. Santa Singh
o The Court said as far as the doctrine of lis pendens is concerned, the whole
object of the doctrine of lis pendens is to subject parties to the litigation as
well as others, who seek to acquire rights in immovable property which are the
subject matter of a litigation, to the power and jurisdiction of the Court so as to
prevent the object of a pending action from being defeated;

 Bellamy v. Sabine
o The principle on which this doctrine rests was explained in the leading case of
Bellamy v Sabine, 366 in which Turner, LJ observed: “It is, as I think, a
doctrine common to the courts both of Law and Equity and rests, as. I
 apprehend, upon this foundation that it would plainly be impossible that any
action or suit could be brought to a successful termination, if alienations
pendente lite were permitted to prevail. The plaintiff would be liable in every
case to be defeated by the defendants alienating before the judgement or
decree, and would be driven to commence his proceedings de novo, subject
again to be defeated by the same course of proceeding.”
o In the same case, Lord Cranworth observed that the doctrine did not rest on
the ground of notice. His Lordship said: “It is scarcely correct to speak of lis
pendens as affecting a purchaser through the doctrine of notice, though
undoubtedly the language of the courts often so describes its operation. It
affects him not because it amounts to notice, but because the law does not
allow litigant parties to give to others, pending the litigation, rights to the
property in dispute, so as to prejudge the opposite party.”
 Conditions for applicability of Lis Pendens
1. Pendency of the suit
2. Case before a competent jurisdiction
3. Right to IP should be directly or indirectly involved
4. Suit or proceeding should not be collusive or fraudulent
5. Disputed property must be transferred or other wise dealt with
6. The transfer must affect the rights of the other person
 Requirements for applicability of the section
 Pendency of suit
o The first requirement of this section is that there must be a pending suit or
proceeding in a court of competent jurisdiction
o The Explanation appended to the section says that the pendency of a suit or
proceeding shall be taken to commence from the date of presentation of the
plaint or the institution of the proceeding in a court of competent jurisdiction.
The suit or proceeding continues until it has been disposed of by a final decree
or order and complete satisfaction or discharge of such decree or order— (i)
has been obtained, or (ii) has become unobtainable by reason of the expiry of
the period of limitation prescribed for its execution by the law of limitation.
o The doctrine of lis pendens cannot be availed of by the transferor, it is really
intended for the benefit or protection of the other party, i.e., party in the suit
other than the transferor
o the purchaser during the pendency of a suit would be bound by the result of
the litigation. Transaction, therefore, is not rendered void and/or of no effect
o lis pendens applies to ex parte proceedings, injunction proceedings etc
 Competent Court
o Competent jurisdiction means having a competency to try the suit.
o According to the civil Procedure Code, the suit regarding immovable property
must be filed in the court in whose jurisdiction the property is situated. If
immovable property is situated within the jurisdiction of more than one court,
then the suit can be filed at any place where part of the property is situated
o This doctrine will be applicable to suits pending before a court in India or in a
court established beyond the limits of India by the Central Government.
 o Tagore Manjhi v. Jaladhari
 Plaint presented to higher grade jurisdiction must be taken to be
presented before a proper court as a court of competent jurisdiction
 Cannot do transfer during that time
 Right to immovable property
o Direct right has to be involved, attached
o The subject matter of the suit must be clearly and pointedly in contest, the
property must have been property described by definite legal or general
descriptions of its character, status, etc., so that it can be identified by
description.
o A mere right to sue, not connected with the ownership of property is not
property, and therefore, this section will not be applicable to it.
o Manika Gramini v. ellapa
 Issue: Hindu widow claimed that the stepson had to maintain her from
his property
 Held: her interest in property is not there she does not have title
o Case: Manika Gramini v Ellapa (1896 19MAD 271)
 Hindu widow files a case against stepson – she asked for maintenance
– plaint point out about certain properties through which maintenance
can be given – no direct right of this widow will be affected or its not
under question – 52 won’t apply – even if stepson will sell the property
this section can’t be applied

 Collusive Proceedings
o Collusion in judicial proceeding is a secret arrangement between two persons
that one should institute a suit against the other in order to obtain the decision
of judicial tribunal for some sinister purpose.
o In a collusive suit, the claim put forward is fictitious, the contest over it is
unreal, and the decree passed therein is a mere mask having the similitude of a
judicial determination and worn by the parties with the objects of confounding
third parties
o The distinction between a collusive and fraudulent proceeding was explained
in the case of Nagubai v B Sham Rao. 401 It was observed by Venkatarama
Aiyar J, that, “in a collusive proceeding a claim put forward is fictitious, the
contest over it is unreal, and the decree passed there is a mere mask having the
similitude of a judicial determination and worn by the parties with the objects
confounding third parties. But when a proceeding is alleged to be fraudulent,
what is meant that the claim made there in is untrue, but the claimant has
managed to obtain the verdict of the court in his favour and against his
opponent by practising fraud on the court.............while in a collusive
proceeding the contest is a mere sham, in a fraudulent suit it is real and
earnest.”
o Usman Gani Abdul kader kardhari v. Ajit indravadan thakar
 Transaction was done by an ostensible owner and the transfer was
considered bonafide
 Property must be transferred or otherwise dealt with
 o The term “transferred” in this section includes leases, mortgages, sales and
exchange
o The person who purchases property from any of the parties to the litigation
will be bound by the result of the suit or proceeding. The expression
“otherwise dealt with” includes such action like raising of construction
wrongfully. Therefore, the operation of this doctrine cannot extend to person
whose title is paramount to that of the parties to the suit or whose title is not
anyway connected with them
o Bala Ramonadara v. Dalului
 In this case, A made a gift of his land to his daughter R in 1910. In
1914, the plaintiff sued A to recover possession of land. During the
pendency of the suit A died and R was brought on records as his legal
representative. However, she sold the land before she was brought on
the record as legal representative. The plaintiff thereupon sued the
defendants (purchasers) to recover possession of the land on the
ground of lis pendens. However, it was held that R was not party to the
suit of 1914 in her own right and the sale to defendants took place
before she was brought on record, therefore, doctrine of lis pendens did
not apply. It was further observed by the court that even if R had sold
the property after she was brought on record, the result would have
been the same because the transfer was made in her own right as
owner, and on record she was a representative of her father A only.
o The question of good faith in entering into the transaction is absolutely
irrelevant to the application of the rule of lis penden
o Case: Shokat Ali v Gulam Sabir and another AIR 2021 NOC 475 HP
o Relinquishment doesn’t come under TPA but the court said u cant under
any circumstance – dispose off the property – 52 will apply
o Case: Thompson press India Ltd v Nanak builders and investors Pvt ltd
AIR 2013 SC 2389
o Surrender the property or compromise – the doctrine will apply –
merely the compromise – the rights that are being created will not
be taken away
o Doesn’t annul the conveyance or the transfer but makes it
subservient to the rights of the parties in the litigation
o Rajeev Gupta v. Prashant Garg
 While the immovable property dispute was pending before the court,
during that time the involved parties compromised based on a will
 While this compromise was ongoing the property was transferred
 The court held that sec 52 would be applicable to all transactions
including compromise
 The transfer must affect the other party
o The very object of this doctrine is to protect only the parties to the litigation
against alienations by their opponents pending the suit. The words “any other
party” mean any other party between whom and the party alienating there is an
issue for decision which might be prejudiced by alienation
  Exceptions to Lis Pendens
o when during the pendency of a suit a transfer is made with the permission of
the court, the principle of lis pendens is not applicable
o The court may permit such a transfer subject to such terms as it may impose.
The transfer will be permissible only when the prescribed conditions will be
fulfilled.
o The parties can apply to the court for permission of transfer and the court will
grant permission if it deems fit
 Impleadment
 Injunction Order
 Movable property
o Sec 52 does not apply to movable property
o Kumuvi Koya v. Ahmed Kutti
 sec 52 does not apply to movable property
53. Fraudulent transfer.—(1) Every transfer of immoveable 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 immoveable 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.]
[53A. Part performance.—Where any person contracts to transfer for consideration any
immoveable 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 2***, or, where there is an instrument of transfer, that the transfer has
not been completed in the manner prescribed therefor 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.]
 The essential requirements of this section are given below:—
o (1) There must be a transfer of an immovable property.
o (2) It must be valid under s5
o (3) Transfer must have been made to with intent to defeat or delay the
creditors of the transferor.
o (4) the transfer shall be voidable at the option of the creditor whose interest
has been defeated or delayed.
o Exceptions—(1) the rights of a transferee in good faith and for consideration
are unaffected. (2) any right created by the law of insolvency remains
unaffected.
 There must be transfer of immovable property
o The requirement to bring about application of this section is that there must a
transfer of immovable property valid in law.
o When the transfer is valid and confers a good title upon the transferee only
then this section will be applicable. This section does not cover nominal, sham
or simulated transfers of property because in such cases there is no intention to
transfer the property and no right is conveyed in the property
o This section will be applicable only where the transaction is a transfer of
property within the meaning of section 5 of this Ac
 Section 5 says that “transfer of property” means an act by which a
living person conveys property, in present or in future, to one of more
other living persons, or to himself and one or more other living person.
Surrender and relinquishments are not transfers of property
 Intent to defeat or delay creditors
o the transfer must have been made with intent to defraud creditors. The term
“creditor” is understood in some wide sense in this section. It includes all
those who are creditors at the date of the transfer as well as those who become
creditors subsequent to the date of fraudulent transfer
o The intention must be to defeat or delay the creditors generally and not to
prefer one creditor over another
o If the following conditions are present, it may lead to an inference of defeating
or delaying creditors:—
 (i) where the debtor sells all the property keeping nothing to himself.
 (ii) the consideration is not adequate.
 (iii) the transfer is made secretly.
 (iv) the transferor tries to take off his property out of the reach of those
persons who might become his creditor.
o Musahar Sahu v. Hakim Lal
 s. In this case, A was a creditor of B who filed a suit to recover his debt
in December, 1900. During the pendency of suit in January, 1901, he
applied for an attachment before judgment of certain properties of B. B
filed an affidavit in February that he had no intention of alienating his
 properties and the application of A was dismissed accordingly. The sale
defeated A but it was for adequate consideration and in satisfaction of a
genuine debt and as the debtor reserved no benefit for himself, it was
not a case of one creditor being performed to the detriment of another
and the sale was not voidable under section 53. Lord Wrenbury
observed here that, “the transfer which defeats or delays creditors is
not an instrument which prefers one creditor to another, but an
instrument which removes property from the creditors to the benefit of
the debtor. The debtor must not retain a benefit for himself. He may
pay one creditor and leave another unpaid.”
 Held: PC goes on to declare that a preference given to one creditor
over another in satisfaction of debts will not amount to a fraudulent
transfer. Fraudulent transfer means that transfer which removes the
property from the creditor for the debtor’s benefit.

 Mala fide intention can be proved through direct or circumstantial evidence to arrive
at a conclusion whether a transfer can be voidable or not. Strong presumption towards
fraudulent transactions come when:
o 1. Property was sold in secrecy and/or haste.
o 2. Where the judgment-debtor has received a decree against him.
o 3. When the transferor is indebted and tries to alienate a part, or a
substantial part of the property.
o 4. Where the value of consideration is substantially different from the
actual value of the property.
o 5. Sale agreement on paper, but there is no evidence of the transaction.
These are called sham agreements or transfers. They exist only on paper. Such
cases are strongly presumed to be ridden of mala fide intentions.

o Mina Kumari v Bejoy Singh

 A obtained a decree for his debt against B. Before the property could
be attached in execution, B sold the property to C in part satisfaction of
a debt due to her. The property was then attached and sold in execution
to D. It was held by the Privy Council that C was entitled to possession
of the property as against D. It was true the B had deliberately given
preference to a creditor C with whom he had family ties but still the
transfer was not fraudulent under section 53.

 Transfer to be voidable
o Any transfer made with intent to defeat or delay creditors is not void. It is
voidable only at the option of the creditors whose interests have been defeated
or delayed by debtor (transferor).
 Exceptions
o First exception says that section 53(1) will not impair the rights of a transferee
in good faith and for consideration
 o Second exception says that it will not affect any law for the time being in force
relating to insolvency.
 Good faith and consideration
o Where a transferee acquires property from the debtor in good faith and for
value, he is not affected by the rule contained in sub-section (1). If the
creditors establish that the transfer was made with the object of defeating them
the burden shifts on the transferee to prove that he had paid a fair price for the
property and that he was not a party to the fraud
 Subsequent Transfer
o Sub-section (2) of section 53 provides that a transfer made gratuitously with
intent to defraud a subsequent transferee shall be voidable at the instance of
that transferee.
o This sub-section comes into play where a prior transfer is made without
consideration and a subsequent transfer of the same property is made for
consideration. The prior transfer without consideration should have been made
with intent to defraud creditors
 Palamalai Mudaliyar v South Indian Export
o A, who was in embarrassed conditions, wished to convert his property into
cash so as to conceal it from his creditors. B, who was aware of his condition,
assisted him by purchasing the property. The sale was held to be voidable
under section 53
 Dayaram v. Nadir Chand 1934 Lah.318
o Creditors may not have a recourse in the case of a bona fide transfer.
o The transfer must have a pecuniary value and must not be gratuitous. In case
of consideration, the right of the transferee entering into the agreement in good
faith, will be protected u/s 53.
 Farman Singh v. BN Sinha AIR 1940 Lah.
o where the transaction is gratuitous, the section does not apply.
o There is a general rule: when given to the first transferee, and then
subsequently transferred to another. The first transferee shall have a batter
title.
Section 53A
 (1) where any person contracts to transfer— (a) for consideration, (b) any immovable
property, (c) by writing signed by him or on his behalf, (d) from which the terms
necessary to constitute the transfer can be ascertained with reasonable certainly
 (2) the transferee— (a) has in part performance of the contract, taken possession of
the property (or any part thereof), or (b) being in already possession, continues in
possession in part performance of the contract and has done some act in furtherance of
the contract, and (c) has performed or is willing to perform his part of the contrac
 Doctrine of part performance
o The doctrine of part-performance also known as “equity of part-performance”
says that if a person has taken possession of an immovable property on the
basis of a contract of sale and has either performed or is willing to perform his
part of the contract, then, he would not be ejected from the property on the
 ground that the sale was unregistered and the legal title has not been
transferred to him
o The doctrine of part-performance was firmly established in England in the
case of Maddison v Alderson, 489 in which Lord Selbourne observed: In a
suit founded on part-performance, the defendant is really charged upon the
equities resulting from the acts done in execution of the contract and not upon
the contract itself. If such equities were excluded, injustice of a kind which the
statute cannot be thought to have had in contemplation, would follow.
 Essentials
o (1) There must be a contract to transfer an immovable property for
consideration.
o (2) The contract should be in writing and its terms can be ascertained with
reasonable certainty.
o (3) The transferee should have taken the possession of the property in part
performance of the contract or if he is already in possession, should have
continued in possession in part-performance of the contract, and should have
done something in furtherance of the contract.
o (4) The transferee is ready and willing to perform his part of the contract.

 Prabodh Kumar Das v. Dantamara Tea Co. Ltd. AIR 1940 PC 1

o Nature of the rights of transferee – no right, interest or title created. Only a
right to continue in possession. Passive equity – not a right of action.
Transferee cannot go to the court and take an injunction because the
subsequent transaction is valid in the eyes of law. Only a mere shield will be
given to the possessor, instead of a sword.
o Whether the transferee must be considered as a defendant or claimant. Divided
opinion – defendant because defending the right of possession, claimant
because enforcing a claim. Merely in a position to defend the possession, and
nothing else. Capacity of the plaintiff-defendant is irrelevant. He cannot be
evicted.
 Moolchand Bakhru v. Rohan AIR 2002 SC 812
 Express written agreement for transfer is sine qua non for applicability for doctrine of
part performance.
 CHAPTER III OF SALES OF IMMOVABLE PROPERTY
Section 54 Sale defines, Sale how made and Contract for Sale
 Definition of Sale
o Section 54 says that “sale” is a transfer of ownership in exchange for a price
paid or promised or part-paid and part-promised
o Therefore, sale is transfer of ownership for money consideration. It implies an
absolute transfer of all rights in the property sold.
o No rights after sale are left with the transferor
o Sale is different from mortgage
 Mortgage there is a transfer of right to enjoy the property
o essentials for sale
 Transfer of ownership
 Money consideration
 Both parties to be competent
 Subject matter should be immovable property
 Transfer must be in accordance with the law
 Absolute interest
o vijay kumar sharma v. Devesh Behari Saxena
 all rights and liabilities to be sold
 ownership means the bundle of rights and liabilities have been
transferred
 Section is not mentioning any restraint – previously TPA tries to
restrain trnasactions for the benefit of others as well – 54 – there is no
restraint – benami are also considered valid sale transactions – while
law tries to put restraint – as the intention might be different in other
cases – but transaction is a valid sale transaction

o Jay Narayan Paras Ram puria v. Pushpa devi saraf

 benami transactions are valid sale
 Monetary Consideration
o The money consideration, i.e., the price is the essential element of a sale. At
the time of contract of sale the price must be ascertained for which the
property is going to be transferred.
o The price may be paid at the time of execution of sale, before it in advance or
after the sale
o If the price is neither ascertained nor rendered ascertainable, the contract is
void for incompleteness, and incapable of enforcement; it is not, however,
necessary that the contract should in the first instance determine the price
o Commissioner of Income Tax v. M/s Moto store
 Price has not been defined in the Transfer of Property Act, 1882 but
that expression has to be understood in the same sense as is understood
in the Sale of Goods Act. Every sale implies a contract of sale and like
any other contract, the contract for sale of immovable property must be
based on mutuality
  Exchange does not count as consideration
o Hakim Singh v. Ram Sanchi
 For the validity of a sale, inadequacy of consideration is not any
relevant factor. Even where the price or consideration is found by the
court to be less than the market value of the property, the sale is held to
be valid
o Baljinder Singh and Ors. v. Wattan Singh and Ors.
 The determination of price in the sale deed is up to the parties and the
part performance is left to mutual understanding
o The sale deed must mention the consideration and details related to part
payments
 Competence of parties
o There must be at least two parties in a sale. The person who transfers the
property is known as transferor or seller or vendor. The person purchasing the
property is known as transferee, purchaser or vendee
o For constituting a valid sale, both the seller and purchaser must be competent
on the date of sale
o The seller must be competent to contract, i.e., he must be of sound mind and
must have attained the age of majority. 5. Besides that, he must be the owner
of the property which he is going to sell. 6. He must have a legal title to it only
then he can sell the property.
o V Ethiraj v. Sridevi
 Minor is a competent transferee but not a competent transferor
 Where the purchaser was aware that the seller was only half owner of
the property as indicated by the schedule in the suit, it was held that he
could not claim that he was a bona fide purchaser without notice of the
proceedings relating to the property. He was not entitled to claim
absolute ownership of the entire propert
o Jamida Begum v. Shami Mohd
 Under undue influence
o Angoori devi v. Dalbir Singh
 Sale by an insane person
 Benefits arising out of the land and Covenants running with the land
o Section 54 has provided two modes of transfer of immovable property
 (i) Delivery of possession
 Registration of sale deed
o Delivery of Possession
 Where the property is tangible immovable property of the value of one
hundred rupees and upwards or in the case of a reversion or other
intangible thing, transfer can be made only by a registered instrument.
 Where the market value of the property is less than hundred rupees, the
oral sale of immovable property is completed merely by possession.
The court, however, satisfied itself that the entire consideration has
been paid
o Registration of Sale deed
 Where the value of tangible immovable property is Rs 100 or more, the
sale of such property requires registration of the deed. Where the
property is intangible immovable property of any valuation, it will
require registration for completion of sale.
 The transfer of an immovable property can only be effected by
executing a registered document, mere making of agreement of sale or
executing of power of attorney would not transfer the right, title or
interest in an immovable property
o Vanlal Rusti Pachuan v. LR
 Sale deed ke basis par security ko loan diya – sale challenged –
immovale property ka sale hence valid
o Kaliya Perumal v. Rajagopal
 True test of passing of ownership is going to be determined through
intention of the parties – date of execution is not an invariable
mandatory point – intention prevails on how and when to transfer the
property.

Sale Contract for Sale

A sale of an immovable property is the contract for sale is merely an agreement for
transfer of ownership the sale of property in future on terms agreed
between the parties.
After sale, all the rights and liabilities of the contract of sale no interest of the vendee is as
owner transfer into the vendee such created in the property. The ownership
of the property remains in the vendor.
A sale conveys a legal title to the purchaser A contract of sale does not convey a legal
because absolute interest of the vendor passes title to the purchaser. It does not create any
to the vendee (purchaser). right in the property or charge upon the
property in favour of the party to the contract
A sale creates a right in rem contract of sale creates a right in personam
A sale requires a compulsory registration contract of sale does not require any
where the sale is of tangible immovable registration.
property of Rs 100 or more, a reversion and
any intangible thing

Section 55: Rights and liabilities of buyer and seller

 Rights and liabilities of the buyer and seller can be categorised into two
o Before completion of sale
o After completion of sale

 Duties of Seller before completion of Sale

1. Seller’s Duty of Disclosure [Section 55(1)(a)]
a. The seller is bound to disclose to the buyer any material defect which is
present either in the property or in the title of the seller to the property
b. It is necessary that the defect must be a material defect about which if the
buyer had known he would not have purchased that property.
 c. The defects in the title may be encumbrance or charge on the property,
existence of an easement (not easement of right) and restrictive covenants etc.
The defects in the property may include a right of way and existence of
nuisance in the neighbourhood.
2. To Produce Title-deeds [Section 55(1)(b)]
a. The seller is bound to bring all the documents of title relating to the property
in his possession or power for the inspection of the buyer. T
b. The seller is bound to produce all the documents demanded by the buyer
c. The buyer should examine all the documents relating to the property for his
own protection. The documents may be examined either at the seller’s place or
buyer’s place
d. If the buyer does not demand any such document, the seller is under no duty to
produce them
3. To Answer Questions as to Title [Section 55(1)©
a. The seller is bound to answer to the best of his information all the relevant
questions put to him by the buyer in respect of the property or its title
b. Since the buyer is getting the ownership of the property it is in his interest that
he must be fully satisfied about the ownership rights of the seller and his
authority to make the transfer
4. To Execute a Proper Conveyance [Section 55(1)(d)]
a. If is the duty of the buyer to execute a proper conveyance on the payment or
tender of the amount due in respect of the price. Conveyance means the
transfer of ownership.
5. To take care of Property and Title-deeds [Section 55(1)(e)].
a. This clause says that between the date of contract of sale and the delivery of
property, the seller is bound to take as much care of the property and all
documents of title relating to it which are in his possession as an owner of
ordinary prudence would take of such property and documents.
6. To Pay Outgoings [Section 55(1)(g)]
a. This clause says that the seller is bound to pay all public charges and rent
accrued due in respect of that property up to the date of 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.
 Duties of Seller after Completion of Sale
1. To Give Possession [Section 55(1)(f)]
a. The seller is bound to give, on being so required, the buyer or such person as he
directs, such possession of the property as its nature admits. The seller is to give
possession of the property either to the buyer or his authorised person whenever
the buyer so requires.
b. The delivery of possession will depend upon the nature of the property to be
transferred. In the case of tangible immovable property the physical control is to
be given over the property
2. Implied Covenant for title (section 55 (2))
 a. Sub-section (2) says that the seller shall be deemed to contract with the
buyer that the interest which the seller professes to transfer to the buyer
subsists and that he has the power to transfer the same
b. .The legal effects of such covenants are given below:— (a) The covenant
implies absolute warranty of title. (b) This liability is limited to which the
seller professes to transfer. (c) If a defect is found in the seller’s title after
completion of sale, the buyer would become entitled to sue for damages
and to claim return of the purchase-money if he is dispossessed in
consequence of his seller’s defective title. 88. (d) The covenant runs with
the land and it is enforceable by subsequent purchasers of land
c. Section 55(2) of the Transfer of Property Act, 1882 deems implied contract
for title in every conveyance and even in cases where there is a completed
contract of sale, the purchaser is entitled to cancel the contract and seek the
refund of purchase money.
3. To Deliver Title-deeds on Receipt of Price [Section 55(3)]
a. Sub-section (3) of section 55 says that where the whole of the purchaser-
money has been paid to the seller, he is bound to deliver to the buyer all
documents of title relating to the property which are in the seller’s
possession or power.
 Sellers Rights before sale
1. (a) Right to take Rents and Profits [Section 55(4)(a)].—This sub-section says that
the seller is entitled to the rents and profits of the property till the ownership of it
passes to the buyer. Sale is completed when the ownership is transferred to the
buyer. Till the ownership is transferred the seller continues to be the owner of the
property and in that capacity he becomes entitled to the rents and profits of the
property. Till that time the seller has every right to enjoy the profits of the
property.
a. In case the buyer takes possession of the property before completion of
sale, the seller has the right in such a case to realise interest on unpaid-
purchase money
 Sellers Right after Sale
1. Charge upon Property for Unpaid Price [Section 55(4)(b)]
a. This clause says that where the ownership of the property has passed to the
buyer before payment of the whole of the purchase-money, the seller
becomes entitled to a charge upon the property— (a) in the hands of the
buyer, (b) any transferee without consideration, or (c) any transferee with
notice of non-payment, (d) for the amount of the purchase money or if any
part of the purchase money remaining unpaid, and © for interest on such
amount of purchase money or any part unpaid from the date on which the
possession has been delivered.
b. The completion of sale of an immovable property does not depend upon
the payment of price because the price may be paid or promised to be paid
c. Therefore, this right has been given for the protection of the seller who has
given possession of his property to the buyer but has not received full
price.
 d. The seller is entitled to claim not only the unpaid price money but also the
interest on such amount.
 Buyer’s liabilities before Completion of Sale
1. To Disclose Facts Materially Increasing Value of Property [Section 55(5)(a)
a. The buyer is liable to disclose any fact which materially increases the
value of the property to the seller before completion of sale when the seller
is not aware about that
2. To Pay the Price [Section 55(5)(b)
a. —Clause (b) says that the buyer is bound to pay or tender, at the time and
place of completing the sale, the purchase-money to the seller or to such
person as he direct;
b. For the completion of sale, the seller has the duty of execution of deed and
the buyer has corresponding duty of payment of price. The buyer is not
bound to pay the full amount before transfer or ownership. He may either
pay the price or promises to pay it at the time of completion of sale. The
buyer is not bound to pay the price until the conveyance is executed
c. He can pay directly to seller or person directed by him
d. Where the property is sold free from encumbrances the buyer will tender
the full price to the seller but where any encumbrance is still a charge on
the property sold, the buyer may pay out such charge-holder and retain that
sum from price to be paid to the seller
 Buyers rights before completion of sale
1. To charge for Price Prepaid [Section 55(6)(b)]
a. According to sub-section (6)(b), the buyer is entitled to a charge on the
property unless he has improperly declined to accept delivery of the property,
as against the seller and all persons claiming under him, to the extent of the
seller’s interest in the property for the amount of any purchase money properly
paid by the buyer in anticipation of the delivery and for interest on such
amount.
b. The principle underlying this section is a trite principle of justice, equity and
good conscience. The charge would last until the conveyance is executed by
the seller and possession is also given to the purchaser and ceases only
thereafter
c. Charge not lost by merely accepting delivery
 Buyers liabilities after completion of sale
1. (i) To Bear Loss to the Property [Section 55(5)©].—Clause © says that where the
ownership of the property has passed to the buyer, the buyer is bound to bear any loss
arising from the destruction, injury or decrease in value of the property not caused by
the seller. Therefore, if any loss occurs to the property either by way of accidental
destruction or deterioration after the ownership has vested in the buyer, the buyer will
bear the loss.
2. (ii) To Pay Outgoings [Section 55(5)(d)].—Clause (d) says that where the ownership
of the property has passed to the buyer, as between himself and the seller, the buyer is
bound to pay all the public charges and rent which may become payable in respect of
the property, the principal moneys due on any encumbrances subject to which the
property is sold and interest thereon afterwards accruing due. After the completion of
 the sale the buyer becomes the owner of the property and he becomes liable to pay the
outgoings, for example, Government dues, taxes, rents and revenue etc. This liability
is in between the seller and the buyer

 Buyer’s Right after Completion of Sale

1. Benefit of Increment [Section 55(6)(a)].—According to this clause, where the
ownership of the property has passed to the buyer, the buyer is entitled to the
benefit of any improvement in the property or increase in the value of property
and to the rents and profits thereof. The buyer is not only entitled to the rents and
profits of the property but also to the increase in the value of the property and any
improvement in the property.

1. Rogers v Hosegood 103.—In this case, the purchaser of a plot of land covenanted not to
erect more than one dwelling house on the plot which would be used for residential purpose
only. The court held that such a covenant runs with the land and can be enforced by an
assignee of the covenantee.
2. Gajapathi v Alagia 104.—A sold a property to B After the conveyance, B discovered that
under a decree of partition, a portion of the property had been allotted to C It was held by the
court that the sale was fraudulent and the conveyance could be set aside.
3. Central Bank of India v CL Vimla. 105.—The case involved debt recovery proceeding
initiated by the Bank. Under a settlement, the property of the guarantor was auctioned. The
auction purchaser was put in possession of property and eight years had passed since then.
Registration was also got done in his favour. Sons of the guarantor claimed their share in sale
proceedings after adjustment of bank dues. The auction purchaser alleged that he was paying
a huge amount of Rs 5 lakhs every month on the loans taken for purchasing the property. The
court held that the principle of equity and good conscience had come into play. The auction
sale could not be set aside at that stage. Possession of the auction purchaser was not to be
interfered with.

56. Marshalling by subsequent purchaser.—If the owner of two or more properties

mortgages them to one person and then sells one or more of the properties to another person,
the buyer is, in the absence of a contract to the contrary, entitled to have the mortgage -debt
satisfied out of the property or properties not sold to him, so far as the same will extend, but
not so as to prejudice the rights of the mortgagee or persons claiming under him or any other
person who has for consideration acquired an interest in any of the properties
 If the owner of two or more properties, mortgages them to one person and then sells
anyone of those properties to another person, the buyer is entitled to claim that the
mortgage-debt be satisfied out of the properties not sold to him.
 Therefore, this section protects the interest of the buyer and it applies only between
the buyer and the seller and not as between the subsequent purchasers
 The section is based on the principle that when a person purchases some property free
from encumbrances, his absolute interest should not be prejudiced
 . Marshalling by 109. Subs. By Act 20 of 1929, section 18, for the original section
purchaser is exercisable only between the buyer and the seller. It cannot be exercised
detrimental against the rights of the mortgages or other person claiming under him or
any person having an interest in any of the properties.
 Eg: “If two estates X and Y are subject to a common charge and estate X be sold to
A, A will as against his vendor and his representatives have a prima facie equity in the
absence of express agreement and whether or not he had notice of the charge, throw it
primarily on estate Y in exoneration of estate X