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attestation:
(2) Each attesting witness must sign the instrument in the presence of the executant
(3) Each attesting witness must
(a) See the executant signing the instrument of fixing his mark (e.g. thumb impresion) on it; or
(b) See some other person signing the instrument in presence of and under the direction of
executant; or
(c) Has received from the executant a personal acknowledgment of his signature or mark or
of the signature of such other person.
Noparticular form or mode of attestation is necessary. Two personswho are of the ageof majority
and possess sound-mind, can act as attesting witnesses. The parties to the transaction cannot be attesting
witnesses.eot | imay be tee Cwitne)
Section 5 provides that the 'transfer of property' is an act by which a living person conveys property,
in present or in futçre.
(a) To one or more other living persons
onpacity ony,
ditt aecrty oot in sane capacitM
ony, not
(b) To himself - |n a ditn
(c) To himself and one or mnore other living persons
"To transfer property' is to perform such act. Transfer of property is an act. Something has to be done
by the parties to transfer the property. It is not an automatic process. The legal effect of the act is passing of
property from one person to another.
Section 11 of the Indian Contract Act, 1872, provide for conditions of competency of a person for
making contract. A person is competent to contract if he is
) Of the age of majority, and
(1) Of sound-mind, and
(ü) Not otherwisedisqualified from contracting by any law.
Transfer of Property Act
Present fixed right: In avested
interest the transferee gets the
Vested and Contingent Interest meansthat the right accrues to the
transferee immediately.Present
present fixed right to the property. It
6 of enjoyment is postponed. fixed right accrues even though the
right
the time of
the point of view of accruing the nsferable and heritable: In vested interest the title of the
of interest. From
Transfer of property involves transter transferee is complete and therefore, it
can be
transferred. Vested interest can also be bought in
nterest may be of two kinds sale in execution of decree. It is a
Interests It means that
when the
transferee dies his vested interest devolvesSupon his legal heritable interest.
heirs. Heritability of interest
is a'test for ascertaining whether the interest is vested or
contingent.
Contingent interest
Vested interest
Contingent Interest
transfer is comnlete
When the interest is vested the transferee gets the interest immediately when the Section 21 provides that where, on a transfer of property,an interest
therein is Created in favour of a
dependent on uncertain future evens
When the interest is contingent the transferee gets the interest n tuture person
specified in the transfer. Section 19 deals with vested interest and Section 21 deals with contingent interest
(a) To take effect only on the happening of
Supreme Court in Usha Subbarao v. B.N. Vishveswaraiah, AlR 1966 SC 2260 held that an interaes
(b) Ifa specified uncertain event shall not happen, such person thereby acquires a
is said to be vested interest when there is immediate right of present enjoyment or a present right of future contingent interest
enjoyment. An interest is said to be contingent if the right of enjoyment is made dependent upon some in the property.
event or condition which may or may not happen. Happening or non-happening of uncertain furure event is acondition precedent for vesting. Such
Vested interest 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. Contingency means uncertain future event. For example, A
Section 19 provides that where, on a transfer of property, an interest therein is created in favour of a
person :
transfers the property to Bprovided that Clives up to age of 30 years. It is a contingent interest
(a) Without specifying the time when it is to take effect; or Where, under atransfer of property, aperson becomes entitled to an interest upon attaining aparticu
(b) In terms specifying that it is to take effect forthwith; or lar 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,
(c) On the happening of an (eventwhich must happen, such interest is vested, unless a contrary such interest is a vested interest.
intention appears from the terms of the transfer.
characteristics:
When no time is specified then the law presumes that Nature of Contingent Interest: Contingent interest has following
the intention of the transferor is that the
feree gets the interest forthwith. Similarly, if the trans Nature of Contingent Interest
which must happen then the interest is
transferor imposes a condition of
happening of an event
vested. In this situation event is bound to occur
may be specified. For example, Atransfers the but the time may or Non-heritable but transferable
property to Bwhich is to take effect upon Future possible interest
case interest accrues to B
immediately. Avested interest is not defeated by the death of death of C. In this
he obtains possession. the transferee betore possible interest. Property may or may not get
Future possible interest: Transferee only has a future specified
Nature of vested interest: Vested will only get the property when the condition
interest has following vested. Future interest in the sense that the transferee
characteristics: in the transfer happens or not happens.
Characteristics of Vested Interest interest 1s not her1tabe interest. When
a person dies
Non-heritable but transferable: Contingent
Present fixed right to property not devoBve on to his heirs.
having a contingent interest, the interest does
S14 Transferable and heritable
515
7 Conditional Transfers
property may be transferred cither absolutely or conditionally. The transferor of property can
transfer the propertyin accordance with his wishes. It is for the transferee to accept the transfer or reject it.
Atransfer of property with certain conditions is called conditional transter. Conditions can be categorized
Collateral
Precedent Subsequent
Section 35 incorporates the rule of election. Election means choosing between twoinconsistent claims.
Under this doctrine if any transaction confers certain benefits to aperson and also imposes certain liabilities
then the person should either choose the whole transaction or reject the whole. He cannot be allowed to
retain the beneficial part of it and reject the liabilities. It is an equitable principle based on the maxim `no one
can approbate and reprobate at the same time. Doctrine of election does not allow a person to approve that part
of transaction which is beneficial to him and reject that part which is detrimental to him. It is an obligation
imposed upon by courts of equity to choose between two inconsistent or alternative rights or claims in case
there is a clear intention that a person should not enjoy both.
For example, if by a transaction 'A is given some money and he is required to transfer his house to "B
then 'A' willnot be allowed to keep the house as well as the money.
Essential elements for applicability of Section 35: Following are the elements of Section 35:
) A person professes to transfer a property not his own; and
(ii) In lieu of this transfer, the transferor confers certain benefits upon the owner of the property;
and
(1) Transfer of property and conferring of benefits must form part of the same transaction
(instrument).
(iv) The owner of the property is bound to elect either to take thebenefft and transfer his property
or to retain his property and give up the benefit.
Law prior to BenamiTransactions Act, 1988
Section 41 provides that where an immovable property is transferred with consideration by an osten
sible owner with express or implied consent of the real owner, the transfer cannot be denied by the real
owner. The transferee should act in good faith and exercise reasonable care in finding out the transferor's
power to make the transfer. The real owner is precluded or estopped from denying the transfer on the
ground that the transferor was an unauthorized person.
Essential conditions of Section 41: Following are the essential conditions for applicability of Sec
tion 41:
1. Transfer of immovable property by ostensible owner with express or implied consent of the
real owner.
2. The transfer is for consideration.
3. The transferee has acted in good faith and exercised reasonable care in finding out the transferor's
power to make the transfer.
The law incorporated in Section 41 issimilar to the rule of estoppelprovided under Section 115 of
the Indian Evidence Act, 1872. Section 41 is based on the rules laid down by the Privy Council in Ram
Coomar Koondoo v. MacQueen The court in this case held that where a man allows another to hold
himself out as the owner of the estate and a third person purchases it for consideration from the ostensible
owner, the man who allowed the other to hold himself out shall not be permitted to go back on this
statement. Therefore, Section 41 is based on the Doctrine of Holding Out' which is also grounded on
the principles of estoppel. It also provides an equitable remedy to a bonafide purchaser for the value without
notice. This protection is also available to subsequent transferees.
11 Doctrine of Lis-pendens
Section 52 incorporates the doctrine of lis pendens. 'Lis' means litigatjon and
pendens mcans pending
Doctrine of lis pendens is based on the maxim 'pendente lite mibil innovatuh which means
nothing new should
be introduced during the pendency of litigation. In other words, this
doctrine means that during the pen
dency of a suit no new interest or title should becreated. This rule is based on
expediencey i.e. necessity for
final adjudication. Supreme Court in K.N.
Aswathnarayana Setty v. State of Karnataka, AIR 201
27 held that thisrule rests upon equitable and just foundation that it
willbe impossible to bring an action or
suit toculmination if the alienations are permitted.
Section 52 provides that during the pendency in any Court of any suit or proceeding which is
not
collusive and in which any right to immoveable property is directly and specifically in
question, the property
cannot betransferred or otherwise dealt with by any party to the suit or proceeding so as to
affect the r1ghts
of any other party 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.
Basis: Bas1s of lispendens is 'necessity'. English court in Bellamy v. Sabine held that this doctrine is
common to both law and equity. In absence of this doctrine suit or proceedings cannot be brought to a
successful termination. This basis of the doctrine has been accepted by Indian Courts as well. As a matter
of public policy this doctrine prevents the parties from disposing the disputed property in such a
manner so
as to interfere in the court's proceedings. This doctrine strikes at the attempt of the parties to frustrate the
pending suit and decree. If the property is transfered during the pendency of the suit then the transferee is
bound by the decree even though he did not have any knowledge of the pending suit.
Essential requirementsfor application of Section 52: Following are the essential requirements of
Section 52:
1. There must be pendency of a suit or proceeding.
2. The suit or proceeding must be pending in a court of competent jurisdiction.
3. Aright to immovable property must be directly and specifically involved in the suit.
4. The suit or proceeding must not be collusive.
5. The property in the dispute must be transterred or otherwise dealt with by any party tosuit.
6. The transfer must affect the rights of the other party to litigation.
When above conditions are fulfilled, the transferee is bound by the decision of the court
14 Sale of Immovable Property
Definition of Sale
Section 54 provides that 'Sale' is atransfer of ownership in exchange for apice paid or promised or
part-paid and part-promised.
Essential elements of a valid sale
Transfer of Ex_hange
Money Parties must Subject matter Transfer has been
ownership consideration be competent must be made in accordance
Pledge Mortgage
vSection 58 (a) provides that mortgage is the 'transfer of an interest in specific immovable propertyfor
the purpose of securing
The payment of money ladvanced or to be advanced by way of loan, or
() An existing or future debt, or
() The performance of an engagement which may give rise to apecuniary liability.
Mortgagor
Parties
-Mortgagee
The transferor is called amortgagor. The transferee is called amortgagee. The principal moneyand
interest of which payment is secured for the time being are called the mortgage money. The instrument by
which the transfer is efected is called a mortgage deed. Supreme Court in Mathai Mathai v. Joseph
Mary. (2015)5 SCC622 held tha a mortgagor and mortgagee must be a person competent to contract and
capable to transfer and hold the property.
Essential elements of a mortgage: Following are essential elements of a mortgage
(1) There must be transfer of some interest.
(2) The interest transferred must be of some specific immovable property.
(3) The purpose of transter of interest must be to secure payment of any debt or, performance ol
an engagement which may give rise to a pecuniary Iiability.
Right of redemption
Meaning: Generally, right to redeem means right to recover something by mak1ng payments. In
contextof mortgage it means the mortgagor's right to get back the property mortgaged after paying back
mortgage-money. Mortgage does not connote absolute transfer of property. Property is transterred only
by way of security for payment of mortgage money.Once the mortgage money ispaid back the purpose
1S achieved and the mortgagor is entitled to get back his property. Mortgagee has no right to retain any
interest in the property once all dues are paid. The basis of right of redemption is the residuary interest
which is left in the property in favour of mortgagor. Since mortgage does not envisage absolute transfer of
interest in the property, it simply means that certain interest is always left with the mortgagor. This interest is
called residuary interest. Residay leeyt
Section 60 provides that at any time after the principal money has become due, the mortgagor has a
Tight, on payment or tender pf the mortgage-money, to require the mortgagee:
(a) To deliver to the mortgagor the mortgage-deed and all documents relating to the mortgaged
property which are in the possession or power of the mortgagee;
(b) Where the mortgagee is in posession of the mortgaged property, to deliver possession tothe
mortgagor; and
(c) Either to re-transfer the mortgaged property or to execute and to have registered an
acknowledgement in writing that any right inderogation of his interest transferred to the mort
gagee has been extinguished.
The rightconferred under Section 60 is called a right to redeem and a suit to enforce it is called a suit
for redemption.This provision is applicablewhen the right conferred by this section has not been extinguished
by act of the parties or by decree of acourt.
1.
Exercise of Right of Redemption: Mortgagor may exercise his right of redemption in any of the
following manner
to mortgagee orhis
authorized agent
Right of foreclosure or sale As3lutke
Section 67 gives the right to the mortgagee to toreclose or sale. Foreclosure means terminating the
mortgagor's right of redemption. It can be said to be acounterpart of redemption. It must be noted here
that right of redemption isan absolute rightye. it cannot be regulated by the contract between the parties
whereas right of foreclosure is not an absolute r1ght. tcan be regulated by the contract between the parties.
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Services Mains Examinations : Volume
A Compendious Guide to Judicial
means that right
6/ starts with the phrase in the absence of a contract to the contrary'. It clearly
ocCtion between
Section 67 can be casily reulated by the contract between the parties and any contract
8iven under
Section 67. Section 67 provides
following
the parties will certainly prevail over the provisions given under
two important rights:
1 Right of foreclosure
secb9-wrtontindovrn ot
inteveullan
2 Kight of sale - with
obtain from the court adecree that the mortgagor
Section 6/ provides that the mortgagee has a right to
decree that the property be sold. This
shall be absolutely debarred of his right to redeem the property, or a
right can be claimed in the following circumstances -
any time after the mortgage-money has become due andbefore a decree has been made for
nt
the redemption, or
2. Before mortgage-money has been paid or deposited)
Nature of remedies available to mortgagee: Following table shows the nature of remedies available
to mortgagee.
By operation of law
Tranfer of Property At
Leases of Immovable Property Term: 1he period for which the right of
enjovment of the property is transferred is called 'term' of
16 the lease. It may be a lease in
perpetuity. The term must be mentioned in the deed of
lease.
Definition of Lease Perpetual or permanent lease: Where the term of alease is neither
method, the lease may be valid only ifit is apermanent lease (lease in fixed nor ascertainable by any other
Section 105 defines 'lease', 'lessor, lessee, 'premium 'and 'rent'. It provides that a lease of immovable
created either expressly or by necessary implication. Where the deed perpetuity). Permanent leases may be
expressly provides that right of enjoyment
made tor a certain time (express or implied) ori is for indefinite period or for the life of grantee or
property 1S a transfer of aright to enjoy such property, that the grant has been made in perpetuity, the
permanent
share of crops, service or an.. lease is deemed to have been
Jþerpetuity, in consideration of a price paid or promised, or of moncy, a made in favor of lessee.
other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee
Duration of certain leases
Lessor - Transferor
It has already been discussed that the term or duration is an essential element of lease. Such period is
Parties to lease
generally fixed by the mutual agreement of the parties. However, if the parties have not murually agreed to
Lessee - Transferee
the duration of lease then, in absence of any local law or customs, the duration is governed by provisions
The transeror is called the lessor. The transferee is called the lessee'. The price is called the 'premium' of Section 106. It provides that in the absence of a contract, local law or, usage in respect of duration of
a lease
The money,share, service or other thing, to be rendered is called the 'rent'.
(a) Alease of immovable property for agricultural or manufacturing purposesshall be deemed to
Thus, lease is the transfer of right of enjoyment of property. It is not the transfer of ownership. The
interest which is transferred is right to use or enjoy the immovable property. It contemplates the separation be a lease from year to year; and
from
of right of ownership and right of possession. (b) A lease of immovable property for any other purposes shall be deemed to be a lease
month to month.
Essential elements of lease
subject to the mutual
The phrase 'in absence of a contract, local law or usage' indicates Section 106 is
between the parties with respect to the
agreement, local law or usages. Thus, if there is an agreement
Parties Right to enjoy Consideration of lease then this section will not be applicable. Similarly, if the terms of the lease are governed by
Term duration
[Lessor and Lessee] operation and in that case the term of the lease will
immovable property [Premium and Rent] any local law or usage then also this section will have no
be governed by respective local law or usage.
agricultural or manufacturing purposes are
Parties: Lessor and lessee both must be competent to Agricultural or manufacturing purposes: Leases for expressly
contract. Lessor must also have right to transter reference may be had to Section l17 which
the possession of property. Lease executed by minor is deemed to be leases for year to year. However,
void. Lease in favour of minor is void because it provisions of this section. Hence, by virtue of Section 117 the
contemplates an obligation against the minor to pay the rent and other exempts the agricultural leases from the The object of
obligations. cannot applicable to agricultural leases.
presumption of yearly tenancy under Section 106 117 further provides that the State
Right to enjoy immovable property: Lease is not the local usages. However, Section
transfer of ownership of property. It is only Section 117 is to retain the established provisions of Chapter V
the transfer of right to enjoy for the application of any of the
immovable property. This limited interest which is 'right of Government may by notification provide
property is called demise. The property must be enjoyment of (relating to leases) to
agricultural leases.
immovable within the meaning of Section 3 of the Act. new or different article. There
must be involvement of
Consideration: The consideration in lease may be rent or Manufacturing activity involves production of
recovered as consideration from the lessee is paid by him at premium. If the whole amount to be producing a commodity.
labour or machinery for
one time (in lump-sum) such provides that:
called premium. If the
consideration of the lease is paid periodically, it is known as rent. consideration 1s Termination of lease: Section 106 further 6 months notice
is terminable, on the part of either lessor or lessee, by
not be necessarily in the form of
money. It may be in the form of services, in Consideration need (a) Alease from year to year
or in the form of anything of value. the form of share of crops, and
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A Compendious Guide to
(b) Alease from month to month is terminable, on the part of either lessor or lessee by 15 days
notice.
commence from the date of receipt of notice. Sert
Section 106(2) provides that the period will
by or on behalf of the perSOn giving it Su
106(4)provides that every notice must be in writing, Signed
mentioned therein falls short of -L.
notice shall not be deemed to be invalid merely because the period
period specified
period specified in Section 106, if the suit or proceedings are filed after the expiry of the
in Section 106(1).
Service of notice: Notice to terminate the lease may be served by any of the following modes:
Service of Notice
Essential elements of a valid gift: Following are the essential elements of a valid gift:
Theterm 'onerous' means 'burdened'.Onerous gift is a gift of such property which is burdened with
liabilities. Section 127 provides that where a single gift consists of several properties some of which are
onerous (burdened) and the others are beneficial, the donee must accept the whole gift. He cannot be
allowed to accept the beneficial part of gift and reject the onerous part. This rule is based on the maxim
,Juisensit commodum debet et sentire onus which means that 'one who accepts the benefit ofatransaction must
also accept the burden of it.
It further provides that ifagift is made in the form of two or more independent transactions to the
same person, the donee is at liberty to accept the beneficial property and refuse the onerous one.
Onerous gift to disqualified person: Section 127 Part III provides that where an onerous gift is
made to a disqualified person (i.e. person not competentto contract) and such person accepts thegift, he
has a right, to repudiate the gift on attaining qualification.
Movables which are tangible properties are chose in possession' while which are intangible properties are
chose in action'. Beneficial interests in 'chose in action' are known as actionable claims.
(1) Such instrument must be signed by the transferor or by his duly authorized agent.
Transfer will beeffective upon the execution and all rights and remedies of the transferor, shall vest in
the transferee whether the notice of the transfer is provided or not.
Actionable claim cannot be transferred
by an oral assignment. However, registration is not required in transfer of actionable
claim. For example, 'A
owes money to 'B', who transfers the debt to C. "B then demands the debt from 'A', who,
not having
received the notice of the transfer, pays B.The payment is valid.
Requirement of notice: Notice of the transfer of actionable claim is not necessary for completing
the transfer. It must be noted that until the debtor gets notice of the fact that the claims has been transferred
to a third person, his dealings with the original creditor shallbe protected under the law. Section 131
590 Samarth Agrawal Books