NOTES ON

The Transfer of Property Act, 1882

by
Anil K. Nair
Advocate
High Court of Kerala
&
Adv. Ajitha P. Nair
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 CONTENTS
1, Introduction 1

2. Definition of Immovable Property 3

3.
Attestation 8
Noticeeand Constructive Notice
Definition of Transter of Property 13
5.
Properties Which Cannot be Transferred 16
6.
Oral Transter
Conditions Restraining Alienation 20
0.
Restraint on Mode of Enjoyment
10
Interest Deteminable On Insolvency 2
11
Transter in favour of Unbom Person
12 Rule against Perpetuity 29
13 Class Gift 31
14 Doctrine of Accumulation of Income 34
15 Vested Interest and Contingent Interest 34
16 Doctrine of Acceleration 3
17 Conditional Transfer 37
18 Doctine of Election 40
19 Doctrine of Apportionment 43
20 Transter by Ostensible Owner
21 Doctrine of Feeding the Grant by Estoppel 46

22 Qui Prior Est Tempore Potior Est Jure 49

23 Improvements by Bona fide Holder under Defective Title 5
24 Doctrine of Lis Pendens 54
25 Fraudulent Transfer 58
26 Doctrine of Part Performance
27 Sale of Immovable Property 67
Mortgage of Immovable Property 7
29 Redermption of Mortgage 8r
30 Doctrine of Consolidation 9
31 Liabilities of Mortgagor
Rights and Liabilities of Mortgagee
33 Doctine of Marshalling
Doctrine of Contribution 97
34
35 Doctrine of Subrogation
36 Redeem Up and Foreclose Down 100
37 Doctrine of Tacking 10
38. Charge 102
39 Lease of Immovable Property 103
Tenancy by Holding Over 112
40
113
41 Exchange 114
42 Gif
Actionable Claim 119
43
Sovled Problems 121
126
Previous Questions
 THE TRANSFER OF PROPERTY ACT,1882
Prepared by:
Anil. K. Nair
Advocate
High Court of Kerala
&
Adv. Ajitha P. Nair
2347135(0484), 9447500443 (Mob)
TOPIC -1
INTRODUCTION

The Transfer of Property Act, 1882 mainly deals with transfer inter vi
de
Vos (between living persons) of immovable property in India. The Act
fines the law relating to transfer of immovable property by act of parties.
Though the Act mainly deal with transfer of immovable property, there are
provisions in the Act to deal with transfer of movable property.

the
The Transfer of Property Act, 1882 has drawn heavily from both
Equity Courts in
principles laid down by the Common Law Courts and the
is to "define and amend
England. The preamble of the Act declares that it
of parties". When there is
certain parts of the law relating to property by act
English law can be applied on the
no specific provision covering a situation,
Very important changes
ground of "justice equity and good conscience".
Property ( Amendment) Act,1929.
were incorporated by the Transfer of

by operation of law such as sale

This Act does not deal with transfer
testa
execution of a decree, or disposition of property by means of will or
on
ment or succession.

immov
Act contains general principles of transfer of movable and
The
applicable to sale of immovable prop
able property and specific provisions
 erty, mortgage of immovable property. lease ofimmovablo property, exchangg
of movable and immovable property. gift of movable and immovable prop.

erty and transter of

'actionable claims'.
Scheme of the Act
Sections 1to 53 Aof the Transfer of Property Act contain general prin.
ciples of transfer. Of these general principles, sections 5-37 apply to he
to 53
transfer both movable and immovable property. Sections 38
of
apply only to transfer of immovable property.

Oections 54 to 57 deal ith sale of Immovable Property.

Sections 58 -104 deal with mortgage of immovable property.
Sections 105-117 deal with lease of immovable property.
Sections 118- 121 deal with exchange of movable and immovable propen,
Sections 122-129 deal with gift of movable and immovable property.
Sections 130-137 deal with transfer of actionable claims.

It is to be noted that, by virtue of section 2(d) of the Act,

nothing in the
second Chapter of the Act (sections 5 to 53 A) shall be deemed to
affect
any rule of Muhammadan law. Thus
where there is a rule of Muham
madan law which is inconsistent with the general
principles contained in the
Transfer of Property Act, the rules of
principles contained in the Act.
Muhammadan law will privail over the
 TOPIC -I|
DEFINE THE TERM " IMMOVABLE PROPERTY"
Or
WHAT IS MEANT BY FIXTURE ? WHETHER FIXTURES ARE
IMMOVABLE PROPERTY?

The Transfer of Property Act, 1882 mainly deals with transfer of immov
able property by living persons. The Act does not contain a comprehensive
definition of the term 'immovable property'.

Section 3 para 2 of the Act gives a negetive defintiton of the term im

movable property.

According to Section 3 para 2, "immovable property does not include

standing timber, growing crops or grass". This section does not give a clear
meaning of the term immovable property.

The General Clauses Act, 1897 defines the term immovable property
as follows:

" Immovable property includes land, benefits to arise out

of land and

things attached to the earth"

expression "Attached to the

The Transfer of Property Act defines the
earth means
Earth". The expression attached to the
shrubs
1. Rooted to the earth as in the case of trees and
or buildings
Embedded in the earth as in the case of walls
permanent beneficial
3. Attached to what is so embedded for the
attached.
enjoyment of that to which it is

word "immovable property"

One who considers the definitions of the
1882 and the General Clauses Act
Contained in the Transfer of Property Act,
definition of the expression "attached to the earth" in the Transfer
and the
following conclusion.
of Property Act will come to the
1. Land is immovable property
3
 2 Benefits to arise out of land are immovable properties
3.
ees and shurbs which are rooted in the earth are
immovable properties.
4
Buildings or walls which are embedded in the earth are
immovable properties building or walls
5. the
migs or chattels which are attached to
Tor the permanent beneficial eniovment of the building or
: Doors, windows etc
wans are immovable properties. Example
6
Standing timbers or arowing crops or grass are not
immovable properties.

Decided Cases
1. Marshall v. Green (1875) 33 LT 404
Inere was a sale of trees which are rooted in the earth. But as per the
agreement the trees were to be cut and severed immediately. The court
held that the sale was not one relating to immovable property. Further it was
held that "if it was contemplated that the purchaser should derive a benefit
from the further growth of the thing sold, from further vegitation and from the
nutriment to be afforded by land, it would indicate a transfer of an interest in
immovable property".

2. Seeni Chettiyar v. Shanthnathan (1897) 20 Mad 58 (FB)

In this case a person sold his trees which were rooted in the earth to
another person. The trees were needed to be cut after a period of four
years. The court held that the sale of trees were sale of immovable prop
erty. It is because the trees required further vegitation from the earth for
four years. It is benefit to arise out of land. Thus the transaction should be
by a registered document.

3. Subbaraya Mayya v. Lakkanna Shetty (1962 KLT 894)

In this case the trees standing on the property were sold as per a
written unregistered document. The vendee (buyer) was allowed to keep
the trees standing on the property till such time as he chooses to fell them.
Thus he was entitled to leave the trees growing on the land for an indefinite

4
 length of time. The sale was held to be not of standing timber, but of trees
growing on the land and therefore of immovable property. The transaction
required registration. Being unregistered, it is ineffective to confer on the
vendee any legal title to the trees in question.

3 Joseph v. Annamma (1979 KLT 322)

It was held that standing timber are trees fit for use for building or
repairing houses. This is an exception to thè general rule that growing trees
are immovable property.

4 State of Orissa v. Titahar Paper Mills Co. Ltd. (AIR 1985 SC 1291)

The Government of Orissa and the Company entered into a bamboo

contract and the Company would pay money to the Government for the right
to cut bamboo from the forest for a number of years.

The Court held that the bamboo contract was in respect of benefit aris
ing out of land and it is a sale of immovable property. The deed is to be
registered under the Registration Act.

5 Anand Behari v. State of Orissa (1995)

'X transferred the right to catch and appropriate all his fish in his lake
to Y. Y had paid to X large sum of money. The court held that the right to
catch fish from lake is a benefit arising out of land and it is immovable prop
erty. Such a transter should be in a registered instrument for its validity.

FIXTURES
When a chattel or movable property is annexed or attached to the soil
it becomes a fixture.

In England the general rule is that whatever is planted or built in the

soil belongs to the soil. The maxim is that 'QUIC QUID PLANTATOR SOLO,
SOLO, CEDIT'. Thus a house becomes part of the land on which it is con
structed.
 In India, things ombedded in the earth is regarded as immovable prop.
erty. Thus when a boundary wall is constructed it becomesimmovable prop-
erty. anything is attached to that wall for its permanent beneficial enjoy.

ment that thing also becomes immovable

property.

it becomes immovable
When upon a land
a
building is constructed foru
attached to that building
property. wien doors and windows are
windows
enjoyment the doors
and [fixtures] will be.
permanent beneficial
come immovable property.
fixture two thino.
In order to consider whether a chattel has become
are to be
considered.
1. Mode of Annexation
If a thing is resting by its own weight on the floor the presumption ie
that it is not a fixture. If things are fixed slightly to the cand it is fixture and
thus immovable property.

2. Purpose of Annexation
If things are attached the earth for its permanent beneficial enjoy
ment it becomes a fixture.

Decided Cases
1
Holland v. Hodgson (1872 LR 7 CP 328)
A mill was mortgaged as per a mortgage deed. On the floor of the mill
Some looms were attached by means of nails. The House of
Lords held that
those ooms were fixture and were not chattels.

2 Mohammad lbrahim v. N.C. Fibre Trading Co. ( ILR 1940 Mad

304)
A house and mill were mortgaged and the machinery of it was installed
on concrete pillars. The Privy council held that the machinery
installed was
for the permanent beneficial purpose of the building and thus
immovable
property.
6
3 United Commercial Bank v. K.F.C (1992 (2) KLJ
7B5)
A transforme placed on a cement motar base and gol
arth ConnoG
tion through iron bars was held to be not
immovable proporty. as ho ateG
ment was not for the permanent beneficial enjoyment of the
imnmovablo prop
erty. A movable property (chattel) which is attached to the
immovablo prop
erty will become immovable only if the attachment is for the permanent ben
eficial enjoyment of the immovable.

4 Chellappan Nadar v. Krishnan Nair ( 1963 KLT 750)

X has unauthorisedly constructed a building on the land of another.
The owner instituted a suit for eviction of the trespasser. The Court held
that in India one can own a building separately from the land. If that person
suffers a decree in ejectment, he must, at the option of the owner of the
land, be entitled to demolish and take away the materials of the building
leaving the land undamaged; or in the alternative, be paid the value of his
building as compensation. The only right which the builder has is that, in the
event of he being evicted, he should be allowed to take away the materials
or be paid compensation.

5 Duncans Industries Ltd v. State of U.P (2000) 1 SCC 633

There was sale of entire business of "fertilizer". The fertilizer plant
and machinery embedded in the earth was held to be immovable property,
as the intention of the party concerned at the time of embedment was to
have the embedment permanently.

7
 TOPIC -
ATTESTATION
WHAT ARE THE ESSENTIALS OF VALID ATTESTATION

The Tranasfer of Property Act 1882 deals with transfer of

immovable
property by aliving person to another person. The immovable property may
be
transferred by way of sale, mortgage, lease, exchange or gift. Under
the Transfer of Property Act certain transfers should be by registered instru.
ent. For instance a nerson can sel his immovable property worth Hs. 100:
more only through a registered instrument.

Hegistration is a process through which a document is officially re.

Corded. It takes place under the provisions of the Indian Registration Act
o00. The procedure for registration of a document is that the terms of
ranster is to be written on the stamped paper of
prescribed value. Thereaf.
ter the executant i.e., the seller or
mortgager has to put his signature and
two attesting witnesses should attest the
execution. This document which is
duly executed and attested is presented before the
Sub -Registrar. The
Sub- Registrar after taking the
statements of the executants and the thumb
impression of the executor on the register admits the deed for
The registration fee prescribed under the law is registration.
also to be paid. The docu
ment is then recorded in the prescribed
register. Thus for the validity of the
document it should be validly attested by witnesses.

According to
section 3 of Transfer of Property Act the
tions are necessary for a valid following condi
attestation.
1 The attestation must be done by twO or more
persons.
Attestation by only one witness is not valid.
2) The witness must be major and of
sound mind.
3) Each attesting witness must
either see the executant signing the
document or fixing his mark [Thumb
who has not seen the executant
impression on it) A witness
signing the instrument can also
 attest if he has roceived from tho
oxocutant a porsonal
acknowledgment of his signature or mark.
4) An attesting witness should sign the
instrument in the prosence
of the executant.
5) The attesting witness should not be a party to the transaction.

If a document is not validly attested it is ineffective and the document

cannot be enforced through a court of law,.

In Marci Celine D'Souza v. Rnie Fernandez (1998 (1) KLT 888),

the Court discussed the essential conditions of a valid attestation. Tney
are:

(a) Two or more witnesses must have seen the executant signing
the instrument or have received from him personal acknowledgment of his
signature.
(b) The attesting witnesses should put the signature in the presence
of the executant.
(c) The witnesses should have put the signature animo attestendi
or
i.e., for the purpose of attesting that they have seen the executant sign
have received from him personal acknowledgment of his signature.
document for some other
(d) If a person has put his signature on the
identifier or a regis
purpose, for example, to certify that he is the scribe or a
tering officer, he is not an attesting witness.

actually see the execution

In England the attesting witnesses should
exeuctant). Both the wit
of the instrument(signing the document by the
execution. In India a witness can
nesses should be present at the time of
even on personal acknowledgment of the executant though he has
attest
document.
Sont seen the execution of the

9
 TOPIC -IV
NOTICE and CONSTRUCTIVE NOTICE
Or
Rule in Tilak Dharilal v. Khedanlal

The word notice literally means to become aware of something. h.

Transter of Property Act contemplates three kinds of notice. They are:
(1) Actual Notice
(2) Constructive Notice
(3) Imputed Notice or Notice to Agent

1.
Actual Notice
IT a person has direct knowledge of a fact, he is said to have actual
notice.

Examples
(1) A executed a sale deed in favour of B. The sale
actual notice of the sale deed. deed was prepared byC. Chas

(2) Y is owner of an immovable property. Y

a loan. Thereafter Y offered to sell the mortgaged the property to Z for securing
mortgaged property to X. Y disclosed the fact of
existence of mortgage to X. X purchased the mortgaged
actual knowledge regarding the existence of mortgage, he isproperty from Y. As X has
said to have actual know!
edge of mortgage.

2. Constructive Notice
Constructive notice is the knowledge which law attributes to a
person
upon a presumption of existence of knowledge. The
edge attributed by law is irrebuttable. No presumption of knowl
that
evidencecan be adduced to show
there was no actual knowledge when
law attributes knowledge upon a
person.Constructive notice arises under the following circumstances:
a. Wilful
abstention from enquiry
b. Gross negligence from
c.
conducting enquiry
Registration of a document
d. Actual possession
 Wiltul Abstention from Enquiry
a person proposes to purchane some immovablo property, he has to
voriy the title deoda ot tho nollor and onsure that the sollor has good tite
and no otherperson has any right or chargo ovor such proporty. I he fails to
make necessary enquiry rogarding the title of the sollor and rights of othors
Ovor such propety, thero is wiltul abstontion trom onguiry. ln such a case,
he would be deomod to have notico of dofects in the title of the sollor, if any.
and of rights of othors ovor such property.

b Gross Negligonce
It a porson who deals with immovable property is guilty of gross negli
genco in making necessary onquiry regarding title of the transferor or rights
of other over such proporty, knowledge will be presumed.

In Imperial Bank of India v. U. Raj Gyaw (1923) 50 IA 283, a

purchaser was informed that the title deed was in the possession of a Bank
for safe custody. Ho omitted to make any enquiry from the Bank. Actually
the title deeds were mortgaged to the bank to secure a loan. It was held that
he was guilty of gross negligence and was deemed to have notice of the
rights of the Bank which had custody of the deeds.

C. Registration of Document
In India there was conflict of opinion as to whether registration of a
document operates as constructive notice. The Mumbai and Allahabad High
Courts held that registration of a document operates as constructive notice.
The Calcutta and Madras High Courts decided that a the registration did not
amount to notice.

Tilak Dharilal v. Khedan Lal (48 Cal 1)

In this case the Privy Council held that the registration of a document
may sometime operate as notice. It was held that the question whether
registration amounts to notice is not a question of law but a question of fact.

tn this case Xmortgaged his property first to Yby a registered docu

 ment. The very same propey Was aain mortgaged to Z. Tho subsequen
mortgagee (Z) claimed priority. The subsequont mortgag00 can claim prior.
Ity only it he was unaware ot the prior mortage. In this case tho COurt hel
prior
that the
subsequent had no
knowledge of the
mortgag,
and thus he
could claimmortgagee
priority.
Amendment in 1929
In 1929 the Transfer of Property Act was amended and it is made clea
registered it will
that when a
as compulsorily registrable rule in
constructive notice to all. Thus the
document is
Tilak Dharilal's
operis ateno
case

longer good law.

a

After the amendment in 1929 registration operate as constructive no-

tice subject to the following
conditions:
1. The Registration if
instrument must be compulsorily registrable. not
equired by law, it will not operate as constructive notice. Eg. An agreement
to sell.
2.
Hegistration must be performed according to the provisions of the
Indian Regisrtation Act, 1908.
3. Registration will operate as constructive notice only to subsequent
transferees.
4. Registration will operate as constructive notice only from the date of
registration.

Ouseph Souro v. Thommen Michael (1959 KLJ975)

The Kerala High Court held that by virtue of
imputation of notice, a
duty is cast upon all transferees to search the registry for any
prior transac
tion.

d. Actual Possession
If a person is in actual
possession of immovable property, any one Wiv
deals with that property shall be deemed to have
notice of title of the pos
sessor.

12
 In Daniels v. Davison (1809) 16 Vos. 249) A leased a house and a
garden to B and then agreed to sel the property to B A then sold the
property to C. It was held that C was affected by constructive notice of B's
rights with respect to the property. The Court held that where land is in the
OCCupation of some one other than vendor, the fact of the oGcupation gives
the purchaser constructive notice of any rights of the occupying ternat.

(3) Imputed Notice of Notice to Agent

A person shall be deemed to have notice of any fact if his agernt ac
quires notice. The general rule that the knowledge of the agent is the knowl
edge of the principal has certain limitations. They are:
1. The notice should be received by the agent as an agent.
2. The notice should be received by the agent during agency.
3 The notice should be received by the agent in the course of
the agency business.
4 The notice should be on a matter material to the
agency business.

The knowledge of an agent will not be imputed to his principal if the

agent has fraudulently concealed the fact and the party charging the princi
pal with notice was a party to the fraud.

13
 TOPIC -V PROPERTY"
DEFINITION OF "TRANSFER OF

1882 mainly deals with

transfer
inter
vi.
The Transter of Property Act,
nata. The Act de.
.fines
.ew e e n living persons) of immovable property In
the law relating to transfer of immovable property by act of parties

gn the Act mainly deal with

transfer of immovable propery, there are
of movable property.
ons in the Act to deal with transfer

operation of law such as sal

is Act does not deal with transfer by
execution of a decree, or disposition of property by means or WIn or testa.
ment or succession.

Section 5 of the Transfer of Property Act defines the expression "Trane.

fer of Property".

Transfer of property means an act by which a living person conveys

property to one or more living persons or to himself and one or more other
living persons. The expression Iiving person includes a company or asso
ciation or body of individuls whether incorporated or not but it does not
include God, idols and dead person.

The following are the essential ingredients of the expression "Transter

of Property"

1 Two Parties (Transferor and Transferee) to the Transfer

In a transfer of property there should be two persons. They are trans
feror and transferee. The person who by his act transfers or conveys his
property to another person is called "transferor". The person to whomn the
property is transfered is called transferee".

The transferor should be a living person. The transferor may be a

human being or a juristic or legal person such as a company or society. The
transferor must be competent to contract. He must have attained the age of

4
 majority He should be a person of sbud mind

The transtereo must also bo a living person The transferoo may bo

juristic person such as a company or society, The transtoree noed not be a
competent person. The transferee may be a minor or lunatiC.

Bhoopathy Nath v. Ramlal (1910)

It was held that an idol is not a living person and thus a gift of immov
able property to God is invalid, but a gift of immovable property in the name
of the administrator of the temple is valid.

One cannot transfer his property to himself, But one can transfer his
property to himself and one or more other living persons.

2 Conveyance
The transferor must convey the property to the transferee. Transfer
ring of property involves the creation of new title or interest in favour of the
transferee. Partition of Joint Family property is not a transfer of property.

3 Property
The transferor should transter property to the transferee. Property
means both movable and immovable property. It also includes tangible and
intangible property. The property which is the subject matter of the transfer
should be in existance on the date of transfer.

In Adavi Umma v. Mammu Mammad (1958 KLJ 521), it was held

that where there is a contract for the transfer of property which is not in
existence at the date of the contract, the intending transferee may, when the
property comes into existence enforce the contract by specific performance,
provided the contract is of the kind which is specifically enforciable in equity.
It is only when the transferor voluntarily executes a deed of transfer the
the transferee.
legal title of the transferor in that property passes from him to
If the transferor did not do so the transferee can sue for specific perfor
mance of the contract to transfer.
 Section 6 of the ransfer of Property Act specifically prohibits transtot
of certain properties and thus such properties cannot be the subject matter
2
of transfer ( see next topic)

In England the House of Lords decided in the leading case of Holroyg

V. Marshall (1862) 10 HLC 1, that a gift of future property is void. In India

transfer of future property is not valid. But there can be an agre

e
specitically entorced whe
ent to transter future property and which may be
he property comes into existence.

TOPIC - VI
PROPERTIEs WHICH CANNOT BE TRANSFERRED
Or
UNDER THE TRANSFER OF PROPERTY ACT PROPERTY OF
ANY KIND MAY BE TRANSFERRED. STATE ITS EXCEPTIONS.

The Transfer of Property Act defines and amends the law relating to
transfer of property by act of parties. The Transfer of Property Act governs
transfer inter vivos of immovable property in India. The Act does not deal
with transfer by operation of law or by means of will or testament.

The general rule under section 6 of the Transfer of Property Act is that
property of any kind may be transferred. There are certain exceptions to
this general rule. They are stated below:

1 Spes Successionis

The expression "Spes Successionis" means a mere chance of succes

sion.

By virtue of Section 6 (a) of the Act, the chance of an heir apparent

succeding to an estate or chance of a relation obtaining a legacy on the
death of a kinsman (male relative )or any other mere possibility of a like
16
 nature cannot be transtorred

On the death of tather a son will inherit his proporty by virtue of suG

cession law. Son is an heir apparent. He cannot transtor his father's prop
erty during the lite time of father.

The interest of a reversioner over the property held by a widow is an

example of spes successionis. Under the Hindu Law on the death of hus
band, the widow was entitiled to hold his property as a limited owner until
her death. On her death the property held by her as a limited owner would
come back to the heirs of the last male holder( Husband). The persons who
are entitled to the property on the death of the widow are called reversion
ers. They cannot transfer the property during the life time of the widow.

Decided Cases
(1) Holroyd v. Marshall (1862) 10 HLC 1
In this case the English court held that interest to arise in future (spes
successionis) could be transferred. If the interest of the transferor materialises
in fututre the transferee can claim the transferor to make good the transfer.

In India Section 6(a) creates a statutory prohibition. If a person trans

fers a mere chance of succession and even if the hope or expectancy
materialises, the transferee cannot claim the property in India.

(2) Anand Mohan Roy v. Gaur Mohan Malik(48 Cal 536)

A reversioner transferred the property in the hands of a widow to the
plaintiff. After the death of widow the reversioner succeeded to the property.
The plaintiff claimed the property and argued that the rule in Holroyd v.
Marshall should be applied and the reversioner should be compelled to make
good the transfer.

The court held that since there is a clear statutory prohibition to trasfer
spes successionis, a trasferee would not get any right. A transfer of spes
Successionis is void ab initio and it cannot subsequently be made valid
17
 Mad. 795)
Sampath Naidu ( AIR 1933
(3) X had executed
OTficial twov. mortgages over a property in respect of which hy
Assignee
had only spes successionis. After sometime he Succeeded to the propen,

and sold them to another person

The question before the court was that whether the mortgages were
void as it offended section 6(a) of the Transfer of Property Act. The coun

held that the mortgages were void.

2.
Khani Rawther v. Muhammed Rawther ( 2008(2) KHC
(4) Hasan
except to the youngest one :
Father gave properties to all his children
after his death, as a tamily ae
Weu of their shares, which they may inherit
children executed document.
Tangement and as part of the arrangement the
property retained hu
by which they relinguished their claim over the balance
orally in tavOur of the
the father. The father gifted the remaining properties
children attempted t
youngest child. After the death of the father, the other
interfere with the title and possession of the properties gitted to youngest
child and one of them fileda suit for partition of the properties, disregardinn
Thereupon the
the family arrangement made at the instance of the father.
youngest child filed a suit for declaration of his title and possession over the
properties. Both the cases were tried together and the lower court dis.

missed the suit instituted by the youngest child as he could not prove the
oral gift. Further the held that the properties are liable to be partitioned as
the documents executed by the children (other than youngest child)
relinguishing their right over the father's property was hit by section 6(a) and
hence the said documents are inoperative.

On appeal the Kerala High Court held that the provisions of section
6(a) are not applicable to Muslims and a Mohammadan heir may by his con
duct be estopped from claiming inheritance, if the release was part of a
compromise or family settlemement and if he has benefitted by the transac
tion. It was held that after the execution of documents relinguishing the
right over the father's property, the executants cannot be allowed to tum
18
round and argue that they are also entitlod to get share in the
The cOurt held that the youngest child alone is
porperties.
entitled to get the same.

2 Right of Re-entry
A mere right of re-entry tor a breach of a condition subsequent connot
be transferred. A lessor may reserve to himself a right of re-entry on breach
of a convenant in the lease. This right alone cannot be transterred. If the
lessor transfers the ownership of the leased property he may along with that
transfer the right of re-entry to the transferee.

3 Easement
An easement alone cannot be detached from the dominant heritage
and transferred separately. When the dominant owner transfers the domi
nant heritage he can also transfer the easment right.

4 Interest in property restricted in enjoyment to owner personally

An interest in property restricted for the enjoyment of the owner of the
property cannot be transferred by him. A service inam is an example of such
interest.

In Anjaneyalu v. Sri Venugopalalu (45 Mad 620 (FB) ), the court

held that a person who owns some property by way of service inam cannot
transfer that property. If he transfers, the alienation will be void.

5 A right to future maintenance

A right to future maintenace cannot be transferred. But a right to ar
rears of past maintenace can be transferred.

6 A mere right to sue

A mere right to sue cannot be transferred. A right of action for dam
ages in tort is a mere right to sue and cannot be transferred.

In Thoma v. Govinda Kurup ( AIR 1951 TC 180) it was held tha

right to claim mesne profits cannot be transferred.

19
 7 Public Officer
Public ottice
A public
and Salaray of a
transforrod. Similarly
salary of a public Of.
offico cannot be transferred
be
ficer whether before has bocome due cannot
or atter it

TOPIC - VII
ORAL Under
TRANSFER
the Transfer of Property Act every transfer of property need not
Oe in writing. There can be oral transfers also. By section 9 of the Act a
property may be made without writing in every case in which a
transfer of
writing the law expressly
is not required by law. Thus unless
expressly
quires any transaction to be in writing, there can be an oral transfer.

The following are instances of oral

transter.
() Surrender of lease.
(i) oale of immovable property of the value of less than Rs.100/.
() Mortgage by deposit of title deeds.
(iv) Leases from month to month.

TOPIC - VIlI
CONDITIONS RESTRAINING ALIENATION
Section 10 of the Transfer of Property Act provides for a
genera prin
ciple applicable in the case of transfer of movable and
immovable property.
According to Section 10 of the Transfer of Property Act, if the transt
eror of a property imposes a condition in the
transfer deed absolutely re
straining the transferee from disposing of his interest in the
condition is void. It is to be noted that the property the
condition which
restrainig the freedom of alienation alone will be void and the absolutely
Such is not void. The result is that transfer as
the transferee can ignore the void
tion and transfer the property to any one condi
else.

Section 10 prohibits absolute restraint on the

the prohibition is only partial,
freedom of alientation. I1
section10 is not applicable. in the case ol
20
partial restraint the condition will be valid and the transteroe will b0 bound
by the conditon,

Examples
1 A who is owner of a house transforsit to B with a condition that B

should not alienate the property during his lite time. The condition is void.
B can ignore such condition and transter the property to whomsover he
pleases. The transfer by B would be upheld by the court.

2. A transters his property to B with a condition that shall not transfer

the property to X but may alienate it to any one else. The restraint is only
partial and hence valid. The courts will give effect to such prohibition.

Decided Cases
1 Mohammad Raza v. Abbad Bandi Bibi (1932 PC 158)
which restrains the trans
In this case the court held that a conditon
feree from selling the property outside family is valid.

2 T.V.Sangam Ltd. v. Shanmugha Sundaram (AIR 1939 Mad. 769)

that transferee
In this case the transferor made a condition in the deed
property to a
should not sell the property outside family and if he sells the
the deed
family member it should be at the stated price. The price fixed in
The court
was very low and below the market price.
restaint and thus void.
held that the condition in effect resulted in absolute

3 Manohar v. Mahadeo (AIR 1988 Bom. 117)

property should not be
The sale deed contained a condition that the
transferee. The court held that the
sold to anyone outside the family of the
condition is void.

131)
4 Att Water v. Att Watter ( 52 ER
A deed of transfer contained a
condition that alienation shall be done
transferor. The court held that the
only in favour of the brothers of the
condition was invalid.
21
 Rosher v. Rosher (26 Chd. 801)
gave his ostalo to hIs SOn Subje
Will and
ner executed a ho should give
his
Conditon that it he intends to seoll the
property mothe
estate at the price of 3000 Pounds. The conditin.
thesell the estate at an under value was held to be a tota
O purchase
COmpelling the son to

restraint and hence void.

1956 KLT 691)
6 Janaki Amma
Parameswaran Nair aV.limited restraint on alienation such as # that i
The Court held that

decide to sell the share allotted to im or her, it e

ase the sharers
anytoof whomsoever
be sold among the other sharers who offers to purchase ir

iS a valid restraint.

Sathyabhama Amma (1963 KLT 355)

7. N. M. Kadir Pillai v.
held that the restraint on alienation in the deed of partiti
The Court
being a partial restriction is not invalid.

Saraswathi Amma ( 1985 KLJ 43

8. Fatima Sarohibi Suresh v. K.
held that clauses imposing a total restraint on transfer o
The Court
out of circulation offend public policy
property or imposing rules which keep it
imp0sed by a deed of transfer. a
irrespective of whether such condition are
will or simple contract.

P. 16)
9 Cheeru v. Kelu Nair ( 1987 2 KLT SN 19
do not involve transfer, the prin
The Court held that though partitions
section 10 is applicable in cases of partitions also. #
ciple underlying in
is obtained is absolute ownership power of alienation must go along
what
that power will be against public policy and will be
with it. Any restraint of
void otherwise it wilI lead to perpetuity which is opposed t
deemed to be
because property is always considered transferable.
public policy
Exceptions
There are two exceptions to the principle that absolute restraints aro
void. The following are the exceptions:
1 Leases
In the case of a lease the landlord may absolutelv restrain the right of
alienation of the interest of the lessee. The lessor may stipulate for the right
of re-entry if lessee commits breach of the conditon.

2 Property transferred to Women

In England before 1935 there was a law validating absolute restraint
It was for the
on alienation imposed on married women during coverture.
protection of the women. This rule has been abolished in England in 1935.
In India such a law is recognised in the case of Christian women. This rule
is not applicable to Hindus, Mohammadans, Budhists and Parsi.

TOPIC - IX
RESTRAINT ON MODE OF ENJOYMENT

Section 11 of the Transfer of Property Act incorporates another gen

immovable property.
eral principle with regard to the transfer of movable or

interest (ownership)
By virtue of section11 in the transfer of absolute
condition restraining the mode of
of a property, if the transferor imposes any
transferee is not bound by the
its enjoyment, the condition is void and the
condition.

transferred, the transferee gets the right

When ownership of property is
the property as he pleases. A condition or direction in a
of enjoyment of
or enjoy the
sale, exchange or gift that the transfree can or cannot use
repugnant to the right of ownership and is
property in a particular manner is
therefore void.

Examples
a condition that B can cultivate only wheat
1 A sells his agricultural land to B with
23
 free to
but cannot grow the condition is void and B is
Crops of paddy
Crops of paddy. The qrow lhe
2 can only reside in the
A gifts a house to
cannot use it as a godown
B with a condition that he
or shop. The condition
house ang
it
is void and B can use as a
or shop. godown
Exceptions
1. Transfer of partial interest.
when the transfer is merely of partial
in the
Section 11 is Inapplicable
property. In the transfer of partial or limited
interest there is no intetrrestans-
fer of ownership. The lesssor may
Lease is a transfer of partial interest.
Impose any condition regarding the mode of enjoyment of the property. The
lessee would be bound by that condition.

Example
A leases his agricultural land to B for 10 years with a condition that B
should not plant mango trees. The direction is valid and B cannot plant
mango trees on the land.

2. Transfer of part of property

A condition or direction regarding the mode of enjoyment may be im
posed by the transferor if it is for the beneficial enjoyment of transferor's
own adjoining property. When the transferor alienates only a part of his land
and retains the other part with him, a direction may be imposed regarding
the mode of enjoyment of the transferred property for the beneficial enjoy
ment of that part which he retains.

Example
situ
X owns 10 cents of landed property and he resides in a building
out of the total extent
ated in the property. He sells to Y5 cents of bare land
imposed a condi
of 10 cents and retains 5 cents including the building. X
permanent structures o
tion in the sale deed that Y should not construct any
the construction woul
building on the land which is sold to him because
condition restraining Y from
obstruct the air and light to the House of X. The
24
constructing building is valid and he cannot construct building on the land

Negative and Positive Covenants

Restrictive Covenants may be Negative or Positive. Ifthe condition in
the transfer deed is not to construct a building on the land it is negetive
Convenat. It the condition is to construct a building on the land, it is a

Positive Covenant. Both Negetive and Positive convenants are binding on

the transferee. the case of subseguent transferees negetive restrictive
convenants are binding if they are having notice of such restrictive convenant.
Negetive covenants run with the land. Positive covenants are binding only
on the transferee and subsequent transferees are not bound by positive
Convenants.

Tulk v. Moxhay (2 1848 Phill 774)

surrounded
T owned a piece of land in London. This land had a garden
his succes
by houses. T sold the garden to E with a covenant that E and
ornamental garden
sors or assignees shall keep the garden in tact as an
garden
and shall not construct any building on it. After sometime E sold the
after the other
to another person. He sold it to some other person and one
the garden was purchased by M. He had notice of the restrictive covenant.
sought for injunction.
He attempted to build upon the land. T filed a suit and

transferee
The Court held that negetive convenants are binding on
it and injunction was
and subsequent transferees if they have notice of
Restrictive covenants are annexed to land and they run
with land.
granted.

held that a
In Joseph v. Chacko Thomas (1992 1 KLT 6) it was
beneficial enjoyment of
negative covenant if imposed on one land for the
original parties, but even on
another land would be binding not only on the
In other words, unless the covenant
effecting the
subseguent transferees.
portion of the land
enjoyment of land is for the benefit of another land or the
on any one not even
which retained by the transferor it will not be binding
between the contracting parties.
 In Leela v. Ambujakahi ( 989 2 KLT 142). it was held |hal h
Cannot be any dispute that undor soction 11 of the Transfer of Property A

no transforred absolutelyis
The
restriction is on the enjoyment of property
which cuts
down his justi
of the
vendee
absolute right
entitled to Ignore a
of property,
condition

and any direction in sale

estate is void
and
deed
enjowhiymch
contrary to the enjoyment
and would be
The only treated as non-est
of such
absolute
under the first part
condition is Ay
unentorcCth@ae h
of section 11 of

person entitled to impose and enforce such a portion the trany

feror and that too of the
him at the time of
only for the beneficial enjoyment
transfer. It cannot be enforced by the transferee
of an
h retained
other portion. A privies. The
only binds the parties or their
eror cannot contract transSe
another
tion 40
impose such
of the Act
a condition for the benefit ofperson.
deals with enforcement of the the restriction by the trans
or nis assignee against purchaser from the transferee. That sectio,
pre-Supposes existence of a right to restrain the enjoyment of his o
Property. Even under section second para of section 40 there must be
right or obligation for that
purp0se arising out of a contract and annexed t
ne oWnership of immovable property for the purpose of itS entorcemen
against a gratituous transferee or a transferee for consideration with noti.
of right or obligation.

TOPIC - X
CONDITION MAKING INTEREST DETERMINABLE ON
INSOLVANCY OR ATTEMPTED ALIENATION

By virtue of section 12 of the

Transfer of Property Act if a property i
transferred with a condition that the interest created by such
transfer shal
come to an end on the insolvency of the
transferee or on his attempt t
transfer it, the condition shall be void.

Example
X gifts his property to Y with a condition that in
case Y becomes insolvent or he a
tempts alienate the property his interest in the
property willbe
cease to be owner of the property and the property will be vesteddivested
and he snã
in X. The conditiO
imposed in the deed is void.

26
 There is one exception to the abovo statod rule. A lossor may impose
a condition in the lease deed to the offect that if the lessee becormes
insol
property the lessee's
vent or attempts to transfer his interest in the leased
interest shall cease to exist. Such a condition will be valid.

TOPIC - XI
PERSON
TRANSFER FOR THE BENEFIT OF UNBORN
Or PERSON
GIFT IN FAVOUR OF UNBORN
general
the Transfer of Property Act deal with
Sections 13 and 14 of favaour of an Unborn
Person.
in the case of gift in
principles to be followed not in existence even in mother's
person who is
An unborn person means a property in favour of an unborn
of
a person wants to make a gift
womb. If be followed.
are to
the following conditions
person
property to an unborn person.
cannot directly transfer the
1 He
interest) in favour of a living
create a prior interest (life property during his
He should and enjoy the
holder can possess
2
person. A life interest
not get absolute ownership.
will
life time. He ownership) shall
life interest (ie.,
remaining after creating the Thus ownership
should be
What is person.
3
to the unborn life interest
cannot be
absolutely transferred person. Limited or
be the unborn of an unborn
favour of interest in favour
transferred in Transfer of life
unborn person.
given to an
person is void.
property in the unbor
postpone the vesting of property shoulc
transferor cannot words the
4 The
of his majority. In other attainment of majority.
attainment
child beyond child on or before the
the
absolutely vested in and th
be contingent interest
favour of unborn child is a
The transfer in
5 27
 child should be intorost holdo.
ot tho lito The
born alive pior to tho doath not born
interest
before thecreated in favour of child will be olapsod if tho chld is
intorest is
aliv,
the interest
death of the life
transferred in
interostholder. In
child
caso the
will be
revertod to the eltaranstpseg.
eror or his legal favaour
of the
heirs.
6
Even if the terms of transfer provides for vesting of property in the
child majority,
the ife
immediately on
interest holder can
his birth or on the attainment of his
until his death
the
ownership possess and enjoy the
is vested in
the child.
property
though
In
Tagore v. Tagore ((1872) 9 Beng LR 377), it was held that a gift in
favour of an unborn
person is void under Hindu Law. However after the
enactment of the Transfer of Property Act, 1882 a gift made by a Hindu
favour of an Unborn Person is
valid.

n gt tO a person not in existence, on the date of transfer, is void

Under Muslim Law. The provisions of the Transfer of Property Act dealing
Witn gift are not applicable to Muslims and thuS a
Mussalman cannot make a
valid gift of property in favour of an Unborn
Person.
Girijesh Dutt v. Data Din (AIR 1934 Oudh 35)
"A gifted her property to her nephew's daughter 'B' for life and then
absolutely to B's male descendants, any. If there is no male child of B.
then to B's daughter without power of
alienation and if B has no descen
dants male or female, then to her nephew.

B died without a child. The court held that the gift

for life to B was valid
as B was a living person at the date of transfer. Gift in
favour of B's unbon
male issue was also valid since absolute interest was to be
vested in the
unborn on its birth. But gift in favour of B's unborn
daughter was void be
cause it was a gift of only limited interest. Since the gift in favour of unborn
daughter of B is void, the subsequent transfer in favour of the nephew also
ailed.

28
 TOPIC -XII
RULE AGAINST PERPETUITY
Rule in WHITBY V. MITCHELL

Section 14 of the Transfer of Property Act, 1882 deals with Rule

against
Perpetuity. "Perpetuity" means unending transaction or transferring the prop
erty in such a way that life interest only is created for generations.

If by a transfer, life interest is created in favour of a living person, say

X, and by the same transfer life interest is created in favour of unborn child
of X, and a life interest is created in faour of uborn child of that unborn child

of X and so on it is a transfer in perpetuity. If this transfer is allowed to

the transfer
operate the property cannot be alienated for generations and
will be violative of section 10 of the Act.

virtue of section 14, by a transfer the property should not be tied up

By
generations. A person can create lite
forever by creating life interest for date of transfer
in favour of any numnber of living persons at the
interests can
ownership can be transferred to an unborn person. He
and the absolute
ownership in the unborn child upto the date of at
postpone the vesting of vesting of absolute owner
He cannot postpone the
tainment of majority.
child beyond attainment of majority.
ship in the unborn
of
maximum permissible remoteness of vesting
Under Section14 the being plus minority of the
the life or lives in
absolute ownership is
unborn child at the date of transfer).
ultimate beneficiary (

person)
Examples person) for life, then to C(a living
transfers his property to B(a living first unborn child of
B
A then to the
(1) person) for life and
and then to D( a living
in the child on its attainment
Tor life be vested
condition that the property will the Act. However
absolutely with a against Section14 of
transfer is valid since it is not
bfmajority. The alive before the death of
D.
be born
he child should
 Atransters his propetyy lo B(a living person) for life, then to the first unbon Ch
(2)
be absolutely vested in
of B
only on
absolutely
his
with a condition that the
property will
favour of unborn child
transfer in
oti Iho ch
attainment of 30 years. The beyond
Since the vesting child should not be postponed
ment of majority.
of property in the unborn
alla
C( a
for life, then to
(3) A
transfers his
for life and then to D property
to B( a living
for life
person)
and then to the unborn
livingof Bpers,
child
for
(a living person)
for
and then to and then the unborn child of D life and th
unborn child of Cfor life
absolutely to unborn child of B's unborn child on his attainment of majority. The transl
infavour of B,C andD is valid but transfer in favour of unborn child of Bis yoid sing
only life interest is subsequent transfers in
created iin favour of that child. The favour
unborn children of C anddD are also void. The transfer of absolute interest in
unborn child of B's unborn child is also voId. tavour
In England the transferor can tie up the property Tor iTe or lives:
being plus 21 years from the death of last life interest holder. Thus by
transfer if life interest is created in favour of a living person and then to a
unborn person with a condition that the property will be absolutely vestedi
the unborn person only after 21 years of the death of the life interest holde
the transfer
valid. In India the property should be absolutely vested in th
unborn child on his attainment of majority.

Whitby v. Mitchell (1890) 54 Ch D 85

The trasferor gifted his property to B (a bachelor) for life, then to
born child of B for life, then to the unborn child of that unborn child foreve
The English Court held that the transferor had streched his imagination to
far. A child to a bachelor is a possibility. A child to an unborn child is
possibility upon a possibility. It is a transfer in perpetuity and hence voit
The rule in Whitby . Mitchell is also known as the rule against dout
possibilities. The rule against perpetuity is not applicable to a case whert
property is transferred for the benefit of the public.

30
 TOPIC - XIII
CLASS GIFT
or
Rule in LEAK v. ROBINSON

Section 15 of the Transfer of Property Act deals with gift in favour of a

class of persons or Class Gift.

A person can transfer his property for the benefit of a single unborn
person or tor the benefit of a class of such persons. When a gift is made in
favour of unborn children of X it is a class gift Even if the gift is made in
favour of unborn persons the provisions of section13 and 14 should be sat
isfied for its validity. In a class gift it may so happen that some of them may
not be entitled to take the property due to the violation of sections 13 and 14
in their case. In such a situation, the question is whether the other persons,
in whose cases the transfer is valid, can take the property.

In Leak v. Robinson (35 ER 979) the English Court held that in a

class gift, if it fails in part, it would fail in toto (completely). The result of this
decision is that no one can take the benefit of gift if it fails in part.

The rule in Leake v. Robinson was originally applied in India. But in

1929 section 15 was amended and it is made clear that a class gift which
fails in regard to some persons will not result in failure to the whole class.
Thus the persons in whose cases the trasfer is not violative of sections 13
and 14 can take the property. The resut is that the rule in Leak v. Robinson

is no longer a good law in India.

Example
X' transferred his property to Y(a living person) for life and then absolutely to first three
unborn children of Y with a condition that the property will be vested in the unborn children
only when the third child attains majority. It is a class gift. In this gift sections 13 and 14
violate in the case of first two children. In sucha case the last child can take one third of
the property. The remaining two- third property will revert to Xor his legal heirs.
31
 TOPIC - XIV OF
INCOME
DOCTRINE OF ACCUMULLATION against
Property Act deals with
rulo
direc.
Section 17 of the Transter of
tion for accumulation of income
accumulate
direction to the in-
give
The transteror of property may
in part. Adirection for accumulation
come from the property either wholly or exceeds the periog
only when it
void
of income assuch is not void. It will be
prescribed in section 17.
transferor
given by the to
can be
By virtue of section 17 a direction the following period.
either of
accumulate the income from the property for

1. The life time of the transferor, or

date of the transfer.

C. Eighteen years from the
the
direction is to accumulate income for a period longer than
IT the
prescribed period. the direction shall be void for that period
above stated
Thus if the direction is to accumulate
Which exceeds the prescribed period. bound to
of transfer the transferee is
Income for 50 years from the date
income can be disposed of as if the
accumulate income for 18 years and the
directed to be made had
period during which the accumulation has been
exceeds the maximum per
elapsed. Any direction for accumulation which
missible period is void and inoperative.

Examples
Y should ac
1 X gifts his immovable property to Y with a condition that
cumulate income from the gifted property during the life time of X. The
direction for accumulation of income is valid.

Y should
2 X gifted his immovable property to Y with a condition that
accumulate the income from the property for 18 years or life time of X, which
X Iived 30 years from the date of transfer. Y is bound to
ever is longer.

32
 accumulate the income tor 30 years. I X had only lived for 10 yoars, thon Y
is liable to accumulateo
income for 18 years

3 X gifted his
immovable properly to with a condition that Y should
accumulate the income from tho property for 25 yoars form tho dato of trans
fer. Ymust follow tho diroction for accurnulation for 18 years and the period
excooding 18 years can be ignored. At the end of 18 years the accumulated
income can be disposed of as if the whole period of 25 years has elapsed.

EXCEPTIONS

There are three exceptions to the general rule that the direction for
accumulation shall not exceed the life time of transferor or 18 years form the
date of transfer. They are

1 Payment of Debt
The rule against accumulation embodied in 17 (1) is not applicable if
the purpose of such acCumulation is payment of debts incurred by the trans

feror or transferee.

Example
A makes a gift of his house to Y with a direction that out of the monthly rent
from the building an amount of Rs. 500/- shall be accumulated to clear off
his debt of a total amount of Rs.2,00,000/-. The direction for accumulation
of income is valid eventhough the period of accumulation continues after
the life time of the transferor or 18 years from the date of transfer.

2 Provision of portions for children

If the direction for accumulation of income is for providing portions (
maintenance ) for children or remoter issues of the transferor the accumula
tion of income may exceed the life time of the transferor or 18 years from the
date of transfer.

33
 3
Preservation
Direction to of Property
accumulate
income of the property for a longer periog
than the prescribed period under section 17 is valid if such direction is fo
transferred.
the property
maintenance or preservation of the

contained in section 17 of the Transter of Property Ac

eprinciple Woodford
based on the decision of an English Case - Thelluson v.

beqUuethed nis property ,

tnis case Thelluson exeCuted a will and
s and grand sons with a direction to
accumulate the Wnole inco.
during the lives of his 3 sons and 4 grandsons who were alive at the time ot
his death. accumulation we
The English Court held that the direction for
valid.

The decision led to the passing of the Accumulation Act,1800. The Ac:
IS popularly known as Thelluson Act. This enactment restricted the power of
the transferor to give direction to accumulate incomne. In England the trans.
teror can give direction to accumulate income for the life time of transferor
or 21 years from the date of transfer. The Indian rule has been framed on
the lines of English Law.

TOPIC - XV
VESTED INTEREST and CONTINGENT INTEREST

Section 19 of the Transfer of Property Act deals with Vested Interest

and section 21 of the Act deals with Contingent Interest.

When a person transfers his property to another the interest which the
transferee gets may be vested interest or contingent interest.

Vested Interest
A person gets vested interest in the property when the property
transferred in his favour under any of the following circumstances:

34
1. If the property is transterred without specityingthe timo whon it in to tako
effect : or

2. It the terms of transter specities that the transtor is to tako offect forth
with; or

3. It the terms of transfer specifies that the transter is to take ffect on the
happening of an event which is sure to happen.

Examples

when the gift is to

a) A gifts his property to B without specifying the time
interest.
take effect. The donee's interest in the property is vested

that the gift will take effect

b) A gifted his property to B with a stipulation
forthwith. The interest of the donee is vested interest.

that the sale will take effect

c) A sold his property to B with a condition
is sure to happen. The
on the death of C. The death of C is an event which
interest of the buyer is vested interest.

transferee
A vested interest will not be defeated by the death of the
of death of the trans
even though he has not obtained possession. In case
legal heirs can claim the
feree whose interest in the property is vested, his
heritable interest.
property. In other words the vested interest is an

Contingent Interest
if the transfer is
Aperson gets only contingent interest in the property
made under any of the following circumstances.

on the
1. If the terms of transfer specify that the transfer will take effect only
happening of a specified uncertain event; or

the
2 If the terms of transfer specify that the transfer will take effect only on

35
 non wncetain Ovont
happening ot a Bpecified
transtor will tako
IT the
terms
the happening ot of transter specity
a specitied
that the
uncortain event, the contingent interest ottect only on
become vested interest when the specified uncertain event happerns.

take
It the specify that the transfer will effect only on
terms of transter
uncertain event, the
the
will non-happening of a specified
vested interest on the non-happening
contingent interey
Tthe specifed
event
become uncertain
Examples
(1) A gifted his property to B with a condition that the gift would come in
Operation only if the house of B is destroyed by tlood within six months bx
interest in the gifted property is a contingent interest. B's house is
stroyed by flood within six months. The contingent interest becomes veste
interest on the expiry of six months.

(2) A aifted his property to B with a condition that the gift would come inte
operation only if the house of B is not destroyed by flood within six monthe
B's interest in the gifted property is a contingent interest. B's
house did not
destroy by flood within six monts. The contingent interest becomes
vested
interest on the expiry of six months.
If the transferee, who has only contingent
interest, dies before the
happening or non-happening of the specified uncertain event, the contin
gent interest will be defeated. The legal heirs of the transferee cannot
claim the property even if the condition is fulfiled after the death of
the trans
feree. In other words the contingent interest is not
heritable.

Both vested interest and contingent interest are

transferable.

36
TOPIC -XVI
DOCTRINE OF ACCELERATION

Section 27 of the Transter Property Act deals with Doctrine of Accol

eration.

By virtue of section 27, if an interest is created in favour of one person

and by the same transaction an ulterior disposition of the same interest Is
made in favour of 'another person on the failure of the prior interest in a
particular manner, the subsequent interest shall take effect upon the failure

of the prior interest although the failure may not have occured in the man
ner contemplated by the transferor. It is the doctrine of acceleration.

Example
A makes a gift of his property to B, who is wife of his son X. In the gift deed
it is provided that in case of dissolution of B's marriage by death of X, the
property gifted to B willgo to Ywho is dautghter of X. The marriage be
tween B and X is dissolved by divorce, By virtue of doctrine of Acceleration
the ulterior disposition in favour of Y shall take effect though the prior disp0
sition failed in another manner.

TOPIC -XVII
CONDITION PRECEDENT and CONDITION SUBSEQUENT
Or
"Law leans in favor of vesting and is against divesting". Com
ment
Or
Doctrine of Cy pres

A transfer of property may be absolute or conditional.

In the case of absolute transter there will be no condition with regard

to the vesting of property in the transferee or divesting of property from the
transferee. The vesting of property will not be depended on the happening
37
 happening of any futute event
conditione
In a transferor may stipulato with
transtet of property. the
regard or divesting of proporty
to
vesting of property in the transteree Irorm
the and divesting of
transteree.
may be Such
classified into
Conditons regarding vesting
two. They are property
Condition Precedent
Condition Subsequent.
ACondition Precedent is a condition or future event stipulated in the
terms of transfer deed, on the happening or non- haPpening of which
interest which is not yet vested in the transferee will become vested.

A Condition is a condition or future event on the

Subsequent happen-
non- happening of which the interest which is already vested in the
transferee will be divested.

Example
A executed a gift deed in favour of his son's widow B', with a stipulation
that the property will be vested in her forthwith. It is futher provided in the
deed that in case she re-marries, the property vested in her Will be
divested
from her and it will be vested in her daughter 'C. After two
years of this
transfer, 'B' remarried. The property vested in her would be divested from
her and it would be vested in 'C'. The re-marriage of B
operates as a condi
tion precedent as far as C is concerned and it operates as
condition subse.
quent for B.

Doctrine of Cy Pres
The expression Cy Pres pronounce it as 'See Pray') means 'as nearly
as possible'.

When there is a condition precedent, by virtue of section 26, the

property will be vested in the transferee even though the condition not

38
strictly fulfilled. In order to vest the property in the
transtereo the substantial
compliance of the condition precedent is sutficient. It is bocause law leans
in favour of vesting.

Example
A executed a gift deed with a condition that the
proerty gifted to B wIn Oe
vested in her only if she marries C with the consent of D.E and F. Before the
marriage of B with C, F became an unsound person. Bmarried C with the
consent of D and E. The condition is substantially complied with though not
strictly fulfilled. By virtue of doctrine of Cy Pres the property will be vested
in B. Law leans more in
favaour of vesting.

When there is a condition subsequent, by virtue of section 29, the

property will not be divested from the transferee unless the condition is
strictly fulfilled. Here the law leans more in favour of vesting and it is
against divesting.

Example
Aexecuted a gift deed with a condition that the property gifted to B will be
vested in her forthwith and in case she marries C without obtaining consent
of D,E and F the property will be divested from her. Before marriage of B
with C, F died. B marriedC without consent of D andE. Here the condition
imposed in the gift deed became impossible to fulfil strictly due to the death
of F. Since there is no scope for strict compliance, the vested interest will
not be divested eventhough B married without the consent of D and E. Law
views with disfavour the divesting of estates once vested.

39
 TOPIC -XVIl
DOCTRINE OF ELECTION
Section 35 of the Transfer of Property Act deals with Doctrine of Ele
alternatives'
tion. The word
'election'
trine was enunciated
means 'choose one
from
by Equity Courts in England.
This dor

election is that a person

The foundation
benefit under
of the doctrine of
an instrument should be ready to bear the burden. taking
The do.
a perosn cannot
trine of election
based upon the principle that
is
and reprobate at the same time. It means that one cannot accept
approbat
and reje
under the same instrument.

T the transferee claims the advantages conferred by an instrument

Sodid also be ready to bear the burden of such transaction. (One who lite
rose flower shall not fear the thorm One cannot have hot and cold at the
same time.

In order to apply the doctrine of election the following conditions are

be satisfied.

1 A person (say A) should have transferred his property to another

person (say B).

2 That other person's (B's ) property should have been transferred

to yet another person (say C) by the transferor(A).

3 Both the transactions (conferring the benefit to transferee (B) and

transfering his property to third person(C) )should be in the same
document.

4 The transferree(B) to whom the transferor(A) has conferred

benefit can make the transaction valid if he(B) waives his
objection with respect to the transfer of his property.
40
 If all the above conditions are satisfied tho person to whom the bonofit
is conferred (B) will be put in election either to accept tho instrumont in toto
or to reject it. He cannot at the same accopt and roject.

Example
"A" is owner of 20 cents of land on the opposite side of Government
Secretariate, Statue, Thiruvananthapuram. "B" is owner of 10 cents of land
at Neyyatinkara.
"A" executed a gift deed in favour of "B" and transferred his 20 cents
of land to B. By the same document "A" transferred B's land at Neyyatinkara
to "C". Here really "A" has no right to transfer B's Land to C. However, if B
waives his objection with respect to the transfer of his property to C, the
transaction becomes valid. Here the doctrine of election becomes appli
cable.
"B" should signify to the transferor(A) or his representatives his inten
tion to conform or to dissent from the transfer. If B fails to inform his
intention within one year the transferor(A) or his representative may require
B to make his election. If he does not comply with such requisition within a
reasonable time after he has received it, he shall be deemed to have elected
to confirm the transfer.
If B wants to take the benefit under the gift deed he should be ready to
qive his land to C. Bcannot take the benefit and reject the burden in the
instrument.
If B rejects the document, B is called 'refractory donee' and C be
comes 'disappointed donee'. A can retain his property and B can retain his
property. In such a case the obligation to compensate C would arise.

The rules regarding compensation to the disappointed donee is as folows:

a) If A, the original transferor, is alive on the date of rejection and is

capable of making a fresh transfer and the transfer was free and without
any consideration, no body is under any obligation to compensate C.
b) If there was consideration , A is bound to compensate C.

41
 the property of A
C)

back
I A is
to A's
dead on the date when B rejected,

heirs and they are under a

statutory obligation to
property of B
cot
compensate
The value of
Ifcompensationdead
unsound A ismind)
will be equal to the
of making a tresn transfer( ,
is incapable are under a statutory obligation ,
not his legalbutrepresentatives due
was free or
original transter
Compensate Cin all
cases Whether the
Sideration
and
the benefit may retra.
In England the refractory donee may retain shall
donee. But he
from transferring his property disappointed donee.
liability to give compensation to
to disappointed
But in India,
incur the
donee cannot do s0. In case he rejects the benefit he is refractoCom,n,
not bOund to
He cannot take the benefit and reject the
pensate the disappointed donee.
burden by paying donee.
Conpensation to the disappointed

Mangaldas v. Ranchordas (14 Bom 438)

A Hindu widow died after executing a Will in respect of some proper
belonged to her deceased husband and which she was holding as limites
owner. By that will she disposed of the property to X and she, out of he.
Own rnoney, gave Rs.2000 to P.
Both X and P were reversioners. They were entitled to the property, p
Claimed Rs. 2000 /- and one- half of the property as the reversionay heir.
The Court held that the doctrine of election is to be applied and P mue
elect to take either the legacy (Rs. 2000/-) under the will or one -half of the
immovable property. If he elects the legacy under the will he would get Rs
2000/- but he should give one-half of the property, which he is entitled as
reversioner, to X. If he rejects the legacy under the will he would get one
half of the property. In such a case Rs. 2000/- will go to legal heirs of the
widow. The legal heirs of the widow should compensate X (disappointed
donee) the value of one- half of the property.

42
 Cooper v. Cooper ((1874) LR 6 Ch. 15)
The basis of the doctrine of election was explained by the
House of
Lords this case. The facts of the case were like
in
this:
X gave some property in trust to sell after his death. The sale pro
ceeds were to be held in trust for his children and after his widow's death the
money was to be divided among his 3 sons as per the directions of his
widow.
The widow executed a deed and directed that the sale proceeds were
to be divided equally among the three sons, A ,B and C.
Later she executed another Will and by which she gave the entire sale
proceeds to A and a legacy of her own property to two sons, B andG.
A filled a suit against C and two sons of B( B died before the suit IS
filed) to elect between their claims under the deed of appointment and the
will.
" there is an obliga
While deciding this case the House of Lords held
a will or other instrument to give full
tion on him who takes a benefit under
a benefit." This is the basic
effect to that instrument under which he takes
principle of doctrine of election.

TOPIC - XIX
DOCTRINE OF APPORTIONMENT

Act deals with apportionment of

Section 37 of the Transfer of Property transfer
obligation on severance of the property. If as result of a
benefit or any
divided and held in several shares and the benefit of
the property is several
to that property as a whole passes from one to
obligation relating
must be performed in favour of such several owners
owners, the obligation property.
proportion to the value of each share in the
in the

Example had let it out to Y for a monthly rent of Rs.

building. He
X was owner of a property to A, B, and C. A
years. X sold the
1000/- for a period of 10 one- fourth share. C
purchased
B purchased
purchased one-half share. 2:1:1
pay the rent to A, B and C in the ratio of
One-fourth share. Y has to
43
 TOPIC XX OSTENSIBLE OWNER or APPARENT oWNER
OrTRANSFER BY

DOCTRINE OF HOLDING OUT

Section 41 of the Transfer of Property Act deals with validity of the

transfer effected by an Ostensible Owners.

wnose name
expression Ostensible Owner refers to a person in
Ine
another person who has paid
consideration
one property is purchased by
for the same.

immovable property in mv
If you pay the price and purchase some
publiC, I am not a real
name and allow mne to act as owner in the eyes of
is purchased in tha
owner but only an ostensible owner. If some property
name of Husband, for the sake of availing a building loan trom the the
government department in which he is working, out of the money paid to the
is the
wife by her father, the Husband is only an ostensible owner. The wife
real owner. It is because the consideration for purchasing the property is of
wife, though the document is taken in the name of Husband.

The general rule regarding the transfer of property is that a person

cannot transfer a better title than that he himself possesses. This principle
is contained in the maxim "nemo dat quod non habet". The transfer by
Dstensible owner constitutes an exception to this maxim. By virtue of Sec
ion 41 a transfer by ostensible owner confers good titile to the transferee.
his section is embodied on the basis of "doctrine of holding out.

xample
is the real owner of some immovable property. He allowed B to act as
vner of the property in the eyes of public. Boffered the property for sale n
epresence of A, and C purchased the property from Bin good faith be
wing that B was the real owner. A deliberately kept secret the correct

44
information trom C A cannot recover the oro0erty from C I1 is boGauto o
tne doctrine of Holding Out

In order to apply the doctrine of holding out as

Containod in 0
fthe Act the following Conditions are to be
satisfigd:

1. The transferor should b an ostensible owner of the properly.

2 The ostensible owner should be holding the oroperty with the

consent of the real owner.

3 The ostensible owner should have transterred the property with

the express or irnplied consent of the real owner

The transferee should have paid consideration and acted with

reasonable care and good faith

If all the above stated conditions are satisfied the transferee will get a
valid title.

Ram Coomar v. Macqueen (1872, 11 Beng LR 46 P.C)

In this case Mc Donald purchased some immovable property in the
name of his mistress Bunnu Beebi. She was only a beenamidar( a lender of
name) for the transaction. As between Mc Donald and Bunnu Beebi the real
ownership was with Mc Donald eventhough the sale deed was taken in the
name of BunnuBeebi. Bunnu Beebi was only an ostensible owner or appar
ent owner.

Bunnu Beebi offered the property for sale. X purchased the property
from her believing that she is the real owner. X took the possession of the
property. There was no objection from Mc Donald.

After few years, Mc Donald executed a will and bequethed the property,
which was transterred by Bunnu Beebito X, in favour of his son, Macqueen.
 iled a nuit against Ram Coomar for Ihe rocovery of prop.
erty Ram Coomar was the son of deceased X, Iho purchasor of property
Macqueen
from Bunnu Beebi
The Pivy Council hold that Bunnu Beebi was an Ostensible OWner

and when such an Ostensible

Owner makes a
transfer for

faith will get a

good title.
consideration
the good
purchaser who has acted in
SN 12 E
In Subramonia Pillai v.
Kumara Pillai (1986 KLT P.7), t Was
conditions
of the Act the following are to ba
held that to attract section 41

satisfided: ostensible owner.

(1) The transferor should be an
for good consideration.
(2) The transfer should be
(3) transferee should act in good faith, should be diligent, takino
The
transferor had requisite powor
reasonable care to ascertain that the
to transfer.
any of these inseparable elements is wanting, the transferee Canna.
If
seek the aid of the section.

TOPIC -XXI
ESTOPPEL
DOCTRINE OF FEEDING THE GRANT BY
or
ESTOPPEL BY DEED

Section 43 of the Transfer of Property Act deals with the common law
doctrine of Feeding the Grant by Estoppel.

The doctrine of feeding the grant by estoppel protects a transfere

who purchased the property in good faith from a person who has no title.
The doctrine of feeding the grant by estoppel or estoppel by deed can b
explained with the help of an example:
X is not the owner of a particular property. He has no authority t
transter it. He fraudulently represented that he has authority to transter
46
 and offot6d he popety tor sale lo Y
taith for oonsideration While this contractYpurchasod
the proporty in goo0
of 6alo is subsisting, X acquires
of getn
ownership in be proporty Then the transteroe gets, by virtue of
doeno of leeding the gant by ostoppel. an ootion to claim the title of k or
o TojoT ho poperty ond claim the returo of
consideration which he has
pald to X

In order to apply the

doctrine of feedina the grant by estoppel as con
tained in secion 43 of he Transfer of Proporty Act the following
aro to bo satisliod:
Condition5

A porson should have transterred some immovable property to

anothor porson,

2 The Transterror should not have a valid title to the property or

loaal authority to transter the property.

3 Tho transleror should have fraudulently or erroneously

represented
that ho has titlo lo the property or legal authority to
transfer it.

3 Tho transforoo should have paid consideration and acted upon

tho faith of the fraudulent representation of the transferor.

Tho transferee should have acted in good faith.

5. While the contract of transfer is subsisting the transteror should

have either acquired or got an interest in the property.

If all the above conditions are satisfied the transferee can claim the
interest which the trarnsferor has acqired in such property or reject the transter
and claim the roturn of consideration which he has paid.

17
 loot
(40 Cat | (CC), the doctino of
Khedan Lol
nkdharilal v Bucknastor as ollow
oxplainod by Lord
ing the gtant by estoppel Was

proporty, grants Dy coiveyahir,

whats0ovor to
an who has no titlo he subs0quently acquiros an
estato, and
whicth in form
would carry the legal
instantly passos (1o h.
arant. tho ostate
oST sufficient to satisfy tho
transtree)".
the Court hel
( 1986 KLT SN 113 P.71),
In Bhargavi V. Lakshmi which he
applies whenever a person transfers property to
Section 43 transterable inte.
representation that be has a present and
Otitle, on a takes
representation, the transferee
a tras.
est therein, and acting on that
43 the grantor must have
fer for consideration. In order to attract section
grant an interest in land which he did not at the time possesn
purported to
principle of section 43 is that the benefit o
Our subsequently acquires. The Section 42
automatically to the earlier grantee.
tne acquisition must go
who makes a repre.
embodies a rule of estoppel and enacts that a person
contrary as against a person whe
Sentation shall not be heard to allege the
transferee knows that his transfero.
acts on the representation. When the
transfer he cannot be said to have acted
does not have the title professed to
Acting on a wrong representa.
on a fraudulent or erroneous representation.
and the basis if the
tionbelieving it to be correct is the basis of the section
grant by operating on
rule embodied in the section that estoppel will feed the
property. That principle
any interest which the transferor may acquire in the
to the transferee and he
has no application when the true facts are known
takes the transfer with knowledge of absence of title.

Section 43 makes it clear that if the transferor makes a transfer

and
of his interest in the property to another person for consideration
the transferee has accepted the transfer in good faith and without
notice of the existence of the option of the prior transferee, his inter
inter
est will be protected and the prior transferee cannot claim the
est of the transferor.

48
Example
X is not the real owner of an
immovablo porperty. Ho is not authorisod to
alienate the property. He fraudulontly
to sell tne property. Y
rOprosonted to Y that ho is authoris0
purchased the proporty from X in good faith and tor
consideration. X subsequently acquires the ownership of tho propony
offered the property to Z for sale and Z
purchased the property in good Tam
and tor consideration from X without the
knowledge of the existence of
option available to Y. Under such a
circumstace, the right of zovor the
property will be protected.

Renu Devi v. Mahendra Singh (2003) 10 SCC 200

The Supreme Court held that the doctrine of feeding the grant by es
toppel which is in essence a principle of equity stands statutorily recognised
in India by s.43 of the Transfer of Property Act. The principle is based partiy
on the common law doctrine of estoppel bydeed and partly on the equitable
doctrine that a man must make good his contract when he acquires the power
of pertormance. The rule is that if a man, who has no title whatever to the

property, grants it by a conveyance which in form carries the legal estate,

and he subsequently acquires an interest sufficient to satisfy the grant, the
ought to be done.
estate instantly passes. Equity treats that as done which
transfer itself was invalid or if the
The doctrine may not apply if the deed of
consideration and without notice.
third party has acquired title bona fide, for

TOPIC - XXII
EST JURE
QUI PRIOR EST TEMPORE POTIOR

maxim means "prior transferee in point of time has better title in

The
of the Act deals with the priority rights of different transfer
law". Section 48
ees of an immovable property.
rights in
Immovable property can create by transfer
An owner of an An owner of
different persons with regard to the same property.
favour of times.
mortgage his property for any number of
immovable property can
different persons. While a mortage is in existence
The mortagees may be
49
 he can mortgage the very Same property to anothor porson. After creating
anothor person. In such a
mortgages
case the firsthemortgagee
may gift thewillvery
get same property to
first charge over the property. The doneo's

title will be
subject to the earlier mortgages.
the later transfer
If
there are the same property
will be subject to successive
transfers of
general principle is contained i
the prior This
tne maxim transfer.
Qui Prior Est Tempore
Potior Est Joe

Exceptions
There are certain exceptions to the general principle of priority. They
are:

1.
yvirtue of section 78 of the Transfer of Property Act, if through the
aud, misrepresentation or gross nealect of a prior mortgagee, another
Person has been induced to advance money on the security of the mort
gaged property, the prior mortgagee shall be postponed to the subsequent
mortgagee.
2. Section 79 deals with second exception. If a mortgage is created for
present and future advances and the maximum amount to be secured is
expressed at the time when the first mortgage is created, the first mortagee
can claim priority over the intermediate mo rtgagees even for future ad
vances. In order to claim priority the intermediate mortagees should have
notice of prior mortgage.

Example
A mortgaged his property to B as seccurity for a loan of Rs. 1,00,000/- and for
future advances upto a maximum of Rs.2,00,000/-. The mortgage deed is registered.
The mortgagor (A) subsequently mortgaged the very same property to C as a secutity
for a loan of Rs. 50,000/- After creating the second mortage, B lent Rs. 1,00,000/- to A
on the security of the earlier mortgage.
In this case B shall have priority over C for the
total amount of Rs.2,00, 000/- eventhough he has lent Rs. 1,00, 000/- to A after G had
lent Rs. 50,000/- to A. It is because C had notice of the earlier mortage.

50
 TOPIC - XX
IMPROVEMENTS MADE BY BONAFIDE HoLDER UNDER DE
FECTIVE TITLE
Or
DOCTRINE OF EQUITABLE ESTOPPEL BY ACQUISCENCE
Section 51 of the Transter of Propeorty Act deals with right of compen
sation Ot a transteree who holds the property under detective title and mado
ontitled to tho
SOme lmprovements in the property in g00d faith that he is
property.

the proporty undor

By virtue of Section 51 a transteree, who holds
can claim compensation
detective title and has made some improvements,
from the better title holder who ovlcts
for the improvements made by him
him from the property.

apply section 51 of the Transter of Property Act the tollow

In order to
satistied.
ing conditions are to be
as a
taken possession of a property
1 A person should have
trespasser
transferee. He should not be a
absolutely
in good faith that he is
2 He should have believed
entitled to the property.
done some improvements in the property.
He should have
3
defective
4. His title should be property
should have opeted to evict the holder of
The real owner
5
the property
under defective title from property
conditions are satisfied the real owner of the
If all the above under defective title or to
holder of property
evict the
has an option either to property. ln case he opts to
evict the
holder of the
sell his interest to the improvements made by the holder
compensation for the
holder, he should pay claim
his interest to the holder, he can
case he opts to sell made
in the property. In excluding the value of improvements
the property
the market value of
by the holder.
Example property. B, without any authority
the real owner of an immovable
Ais
fraudulently representing that he is A. Cin
from A,sells A's
property y to Cby case, A nas got
that property. In such a
Sod Taith constructeda building on If A
to evictC from the property or to sell the property to C.
Pon either by C
C, he should pay to C the value of imprvemts made
es to evict
The amount to be paid in respect of improvement shall be the estimated

time of eviction. If he decides to sell the

nue oT the improvement at the
property excluding the
POperty to C, he can claim the market price of the in Section
principle contained
vaide of improvements made by C. This is the
51 of the Transfer of Property Act.

the Court held that the holder

In Narayana Rao v. Basavarayappa,
of improvements as
Or property under defective title is entitled to the value
on the date of actual eviction.

court held that the

In L R. Creet v. Gangari, (AIR 1937 Cal 129) the
principle of section 51 does not apply to trespassers.

In Kedar Nath v. Mathu Lal, (40 Cal 55 (PC), a Hindu widow sold
estate without
property in which she had only a widow's estate or limited
legal necessity. The vendee made some improvements in the property. The
reversioner filed a suit to set aside the sale and recovery of property. The

court held that the reversioner should pay compensation to the vendee for
the improvements he h¡d made in the property.

In Sarasamma v. Laisal Either (1993 (1) KLT 37), it was held that
the right to claim value of improvements should be put forward in the suit

itseld, in answer to the claim for recovery of possession at least as an alter

nate plea. Execution court is bound to execute the decree as it stands and

cannot grant any other relief other than what is granted as per the decree.
unless there is any provision of law specifically empowering the executing
court to do so. If the claim for value of improvements is put forward for the
first time before the executing court, it cannot give necessary relief unless

52
 the decree contains a provision for the samo in tho
decre0.

Doctrine of Equitable Estoppel by

In
Acquiescence
England the doctrine of oquitablo ostoppol by acquisconco protoGi
bona fide holders under defective title from
eviction by the roal ownor
AcquisCence means that a perSon abstains from intertoring while a violatton
of his right is in progress. Itoperates by way of estoppel against the true
Owner.

Tne doctrine of equitable estoppel was explained by Lord Cranworth in

the following words in the leading case of Ramsen V. Dyson (1866)

"IT a stranger begins to build on my land supposing to be his own and

I, perceiving his mistake, abstain from setting him right and leave him to
persevere (continue) in his error, a Court of Equity will not allow me after
wards to assert my title to the land (and recover the land) on which he had
expended money on the supposition that land was his own."

In order to apply the doctrine of estoppel by acquiescence three condi

tions are to be satisfied:
1. The person expending money should have believed himself to be
building on his own land
2. The real owner at the time of the expenditure knows that the land
belongs to him and not to person expending the money.
3. The real owner should have abstained from interfering with the
work of construction of building by the holder of property.

The doctrine of Equitable Estoppel by Acquiesence prevent the real

owner from evicting the person holding the property under defective title.
But section 51 allows the real owner to evict the holder of property under
defective property by paying compensation for the improvements made by
him.
TOPIC -XXIV "IMMOVABLE PROP.
THE CONSEQUENCES OF TRANSFER OF
OF APENDING SUIT
ERTY" WHICH IS THE SUBJECT MATTER
DOCTRINE OF LIS PENDENS

Transfer of Property Act deals with doCtrine of Lis

Section 52 of the Nihil Innovetur
Ut Lite Pendente
Pendens as expressed in the maxim litigation
introduced in a pending
The maxim means nothing new should be

berore a court
expression "Lis Pendens" means "a suit pending
Tne
of law".

durina
the Act. which deals with the transfer of property
Section 52 of
in a court of law regardig immovabe property, gives
tne pendency of a suit
answers to the following questions.

can transfer immovable property, which

1. Whether either party to a suit acompetent
pending in
the subject matter of the suit, while the suit is
Is
court?
court without permission of that
the
transferred without permission of the Court, what are
2 If property is
COsequences?

during the pendency of any

suit or
section 52 of the Act,
By virtue of immoy.
compentent court either party cannont transfer the
proceeding in a except
which is the subject matter of the suit or proceeding,
able property, impose. Thus.
authorithy of the court and on such terms as it may
under the
that before making a transfer of property which is the
the general rule is
obtained.
of the court is to be
subject matter of dispute leave
the plaint
said to be pending from the date on which
A suit is
and until the the complete satisfaction or discharge
instituted in the court
a final decree passed in the
suit.

54
 durng the pendeney of the auil one ae
the property without consent of the utiee to le t t
ut to hoton wil e
decree as if he is the ranelerot i
The transfer as suclh ia not vod
evontlwwd, , wao w6 i m
L io
boibaen a i hp de ol t m
the transter of ptoperty durino
pedeey of he oull hn f h oeo m
favour of the transfeor, the tranntor pp ea olan obenolll o e
the decree is not in favour o he
tanelom Ibo uonoloroo will b i
the terms of decree eventlouoh ho ie nol aonty o be 9il

In order to apply the doottine of lie pendonn tho

(ollowino Wwo9
are to be satisfied

1 A suit or proceeding slhould be ponding n a oo nhlia

2 The cOurt should be a copotont oowt to loodo lhe oputo
3 The dispute should be regardiny he tilht of pallos with ogal lo
immovable property.
4. There should not bo collualon botwoon the patioa o ho sul
5 One of the parties to suit should have tAnalotod ho poporty
without the consenl of he cout

If all the above conditions are satialiod tho ranloroe will bo boud by
the terms of decree as il the transloot bieoll,
pendens.

Example
X was owner of the immovable properly. X yiltod ho popety to Yand
possession is deliverod to him. Tho git was vitiatol by an
to set aside the gift doed on tho gound of laud wIilo tho 9ul io ponding
in the court, Y translerrod the poporty lo Zwilliol ho oosontof he oout
The possession of the proporty was dolivorod to Z
a party in the suit. The suit ondod in lavou of Xal ho 0ot oot aslo the
gift deed and dirocted delivery of poss0sslon In suoh a oase Z is boumd to
give possession of the proporly to X Ho oannol olaim my pol6oion
 decreo.
not bound by tho
Zin
collusive one,
However if the suit was a

De G &7, 566)
Bellemy Sabine (1857) (1
v. aside of a salo
de0d and rocovery of
sotting
Xfiled a suit against Yfor
of tho
suitY transforrod
the institution
pOssession of the property. After of this trang-
aginst Y without knowledge
property to Z. X continued the suit aside the sale deed
fer The action ended in tavour of X. The court set
make certain payments
to Y. Z
challenged
executed by Xand directed Xto the suit nor aware of
was neither a party to
the decree on the ground that he
Z who is the transferee trom Y pending the
beld that
e decree. The court was unaware or ne pendino
decree eventhough he
SUT was bound by the amount which X owes
to
receive from X the
suit. However he iS entitiled to
Y

pendens is that the transteree is bouDd

doctrine of lis
Tne eftect of the vesting oT the tile in him
court. It does not prevent the
Oy the decision of the decided in the suit. The
the rights of the parties as
o0T makes it subject to it does not conflict
and good to the extent that
transter pendente lite is valid
in the suit as established under the decree.
parties
With the rights of the

v. Bhaskara Pillai (1987 (1) KLT SN 63 P.471

In Saraswathy Amma
principles of
the Court held that the doctrine of lis pendens is founded on
doctrine of notice, but on
law and equity. The rule is not based on the
adjudication. It is immeterial whether
expediency, i.e., the necessity for final pending proceeding.
the alienee pendente lite had, or had not, notice of
The conditions required are:
having authority.
(1) Pendency of a suit or proceeding in any court
collusive.
(2) The suit or proceeding is not
specifically in question.
(3) Any right to immovable property is directly or
pendency of the suit
(4) The property is transferred by a party during the

purchaser pendente lit

If all the above conditions are satisfied the
sells to him and be
becomes representative -in - interest of the party who
no duty cast upo
comes bound by the decree passed against him. There is

56
 the plaintitf to inform the transferee or give warning to
him as a
precedent to the applicability of the rule of lis pendens. When the cona
is hit by the rule of lis pendens the
document
transferee takes the document oniy soo
iect to the ultimate result of the suit. The
doctrine of estoppel is not appil
cable in a case coming under section 52 of the Act.
Thus the purcnas
pending litigation cannot plead that the silence of the plaintiff would operate
as estoppel against him.

In K.A. Khader v. Rajamma John Madathil (1993 (2) KLJ 575). t

was held that the effect of the doctrine is not to annul all voluntary
transters
effected by parties to the suit, but only to make the decree passed binding
on the transteree even if he is not a partv to it. The transfer will be valld
subject to the result of the suit.

Problem

X, who is owner of immovable property, executed a mortgage by conditional

sale of his property in favour of Y for securing a loan of Rs. 1,00,000/-. He
agreed to repay the loan amount within one year. X was also indebted to Z
an amount of Rs. 25,000/- at that time. It was an unsecured debt. X failed
to repay the amount to Y and Z. Z instituted a suit for recovery of money. Z
applied for attachment before judgement of the property of X. The court
passed an order of attachment of property of X which was mortgaged to Y.
At the end the trial court passed a decree in favour of Z. Thereafter Y
instituted a suit for foreclosure of the mortgaged property. While this suit
was pending before the court, Z applied for execution of decree passed in
his favour and the court sold the property of X. The property sold in execu
tion of the decree was purchased by A. The suit instituted by Ywas decreed
in his favour and court declared that he is not liable to be redeemed. Dis
Cuss whether A is bound by the decree.

Answer
A, who is purchaser pending litigation, is bound by the decree passed
in the suit filed by Y. In this context the following decisions of the Kerala
High Court are relevant.
57
 was held that k
704), it
(2) KLT
Kumaran (1988 involuntary allenations like court
In Cheriya v. applicable to of th litigation
principle of lis pendens is
is bound by the result
pendente lite so must it bind the
sale also The purchaser result must
bind the party,
since the through him.
on the principle that and interest from or
title
person deriving his right,
1989 (2) KLT SN 48 P.40) i
Nair (
Vasudevan Pillai v. Ramesh Property Act does nos
In the Transfer of
though section 52 of sale, the principle
Was held that
such as court auction
sales, sale in ex-
apply in terms to involuntary Acourt
alienations as well.
such
of lis pendens would apply to the institution OT a mortgage
to
decree held subsequent it the prOperty had
ecution of a money This is so even
rule of lis pendens.
Suit is vitiated bythe
attached before the institution of the mortgage suit.
been

TOPIC - XXV
FRAUDULENT TRANSFERS
transfers. This section
with fraudulent
Section 53 of the Act deals
two types of fraudulent
transfers.
deals with
intention to
Section 53 says that a transfer made with
The first part of option of the
will be voidable at the
defraud the cre ditors of the transferor for consider
creditor. If the transfer ofproperty is made in good faith and
voidable at the option of the creditor.
ation the transfer is not

Examples
called Black acre. He owed one
1 X was owner of an immovble property
Black acre to Z without consid
lakh rupees to Y. X transferred his property
of Y.
eration. The transfer is voidable at the option

X was Owner of immovable property called Green acre.

He owed one
2.
lakh rupees to Y. He sold his property Green acre to Z for two lakhs rupees
and used that money for meeting marriage expenses of his daughter. Ti

58
 transteree has purchased the property from X in good faith and for consider*
ation. cannot treat the transter as voidable.

Tne second part of section 53 savs that a prior

transfer made witnou
consideration to defraud subsequent transferee for consideration shall be
voidable at the option of the subsequent transferee.

Example
X is owner of immovabale property Black acre X is a Musslman. He oraliy
gifted the immovable property to Y and
subsequently sold the very same
property to Z for consideration. The subseguent transferee can file a suit to
set aside the earlier gift

Twynes Case (1601) (Reported in Smith's Leading Cases- Vol 1)

X owed four hundred pounds to T and two hundred pounds to P. X
transferred his movable properties to T in satisfaction of the debt. Even
after the transfer X continued in possession of the property. P filed a suit
against X for recovery of the money and obtained a decree in his favour. P
moved fot attachment and sale of movable property in the possession of X,
T claimed that the property was transferred to him for consideration( 400
pounds owed to him) and thus not liable to attachment and sale.

The court held that the transaction between X and T was kept secret
and the secrecy is badge of fraud. Eventhough there is consideration there
is no good faith and thus the transfer to T was not valid. It was held to be a
fraudulent transfer.

In United Industries v. Mathal Joseph (1984 KLJ 885), it was held

that there could be no doubt that where it is established that the debtor
transferred the immovable property with intent to defeat or detraud credi
tors, it is for the transferee to prove that he purchased the property for suffi
cient consideration and in good faith, without being aware of the deceitful
intention of the vendor.

59
 n Ithaku Abraham v. Kesavan
Damodaran (1987 (2) KLT 551), in
a
Was held that there is no bar against subseguent croditor seeking to aVoid
Act. A transler
anster as provided in section 53 of the Transfer of Property
instance
ntented to cheat future creditors would he egually voidable at their

TOPIC - XXVI
DOCTRINE OF PART PERFORMANCE (Section 53 -A)
Doctrine of Part
Section 53 A of the Transfer of Propertv Act deals with
Pertormance. The doctrine of Part Performance was evolved in England. It
is a doctrine propounded by Courts of Equity in England.

contracts relat
In England the Statute of Frauds. 1677 reguired that all
provided that an action
Ing to land to be in writing. Section 4 of the Statute
contract
Could not be brought upon a contract for the sale of land unless the
Statute of
was in writing and signed by the transferor. The object of the
Frauds was to guard against the fraud by avoiding oral evidence.

Example
adjacent
X' is owner of Black acre. 'Y' is owner of White acre which is lying
'X' needs the White acre for carrying out some devel
to the property of 'X*
opmental operation. 'Y was not ready to sell the property to 'X'. If oral
evidence regarding agreements for sale of immovable property is admis
establish that y' has
sible 'X' can procure two or three witnesses and try to
performance.
agreed to sell the property at a lesser price and obtain specific
Frauds.
This types of fraudulent activities could be avoided by the Statute of

But the stringent provisions of the Statute of Frauds was utilised by

ingenious persons to commit fraud. The owners of property orally agreed to
sell the property and after receiving price and delivering possession of prop
erty succeeded in avoiding the specific performance of the contract and evict
ing the innocent buyers only for the reason that the agreements for sale

were not in writing as required under the Statute of Frauds. ln order to

avoid such fraudulent activities the Equity Courts evolved the Doctrine ol

60
 oart Pertormance and protected the
ahat a
possession of the buyer on the groun
Statute cannot be allowed to make an instrument of fraud.
In order to apply the doctrine of part
performance in England the Tol
Iowing conditions are to be satisfied.

1) There must be an oral agreement to transfer immovable property.

2) The statute should make it clear that the contract must be in writing
and signed by the transferor.

3) On the basis of the oral agreement the transferee must have put in
possession of the property or done some act which would be
referable to the contract. An act of part performance (ie., taking
possession or doing some act) must be done in performance
of the contract.

4) The transferee should be ready and willing to do his part, if any.

If all the above conditions are satisfied, the transferor cannot evict the
transferee fromn the property or avoid the specific performance of the con
as required by
tract only on the ground that the contract was not in writing
Performance.
the statute. This principle is known as Doctrine of Part

to serve him
In Maddison v. Alderson ((1883), A induced a woman
years by a verbal promise to
as a house- keeper without wages for many
without making any
leave her in his will a life-estate in his land. He died
possession of his esatate.
will, At the time of A's death the Woman was in
woman. The woman de
The leglal heir of A filed a suit for eviction of the
perofrmapce. She contended that her
fended the suit on the ground of part
promise and thus she is entitled
Service with A was part performance of the
The court held that her continuance in the
to possession until her death.
contract as alleged and thus reiected
Service of A did not refer directly to the
as part pertormance of the contract
her claim. Thus inorder to claim an act
61
 the act pertormed must be unequivocally relerable to the alloged conttacg

In India section 53 (A) of the Transfer of Property Act deals wih th

doctrine the
doctrine of Part Performance. In order to apply the
conditions are to be satisfied.
(ol owin
immovable property ror
ere must be a contract to transfer
1

Consideration.

signed by the transteror or his

2. Tne contract must be in writina and
agent.

of the contract,
3. The transferee should have, in part performance
taken possession of the property.

4 If the transferee was already in possession of the property, he

the
should continue to be in possession in part performance of
contract.
Contract and has done some act in furtherance of the

5 On the part of the transferee, he should be ready and willing to do

he
his part of contract. He should be ready to pay the consideration if
has not already paid it.

If all the above conditions are satisfied, eventhough the transfer ha

not been completed in the manner prescribed therefor by the law for th
time being in force, the transferor or any person claiming under him shall b
debarred from enforcing against the transferee and persons claiming und
him any right in respect of the property of which the transferee has taken o
continued in possession, other than a right expressly provided by the term
of the contract.

62
 Impact of section 17(1A) of the
Registration Act,1908
AS per Section 17 (1A)of the Registration Áct. 1908, the docu
ments Containing contracts to transfer tor consideration, any immov
able property for the purpose of section 53A of the
erty Act shall be registered if thev have
Transtel
been executed on ot at
commencement of the Registration and other related lawS (AT
ment) ACt,2001, and if such documents are not registered on or ate
sUch cOmmencement, then, they shall bave no effect for the purpose
of the said section 53A.

Example
A who IS owner of an immovable property agreed to sell his propery Dy a
written document to Bfor a total price of Rs. 5,00.000/-. Bpaid an amount
ofRs.1,00,000 as advance. The possession the property was handed
over to B in part performance of the contract. By virtue of section 53A of the
Transfer of Property Act, 'A' cannot evict 'B' from the property so long as Bis
ready to pay the balance price. As per section 17 (1A) of the Registration
Act,1908, the contract to transfer the property should be a registered one to
get the protection of section 53 A.

In order to apply the doctrine of part performance in India the contract

for transfer should be in writing and signed by the transferor. But in England
the agreement need not be in writing. It may be oral.

In India the transferee should take possession of the property or if

already in possession he should have done some act in furtherance of the
agreement. But in England transfere e need not take possession of the
property. Any act on the part of the transferee is sufficient to apply the
doctrine provided that the act should be in frutherance of the contract and
exclusively referable to the alleged contract.

In Govind Rao Mahadik v. Devi Sahai (AIR 1982 SC 989) the

Supreme Court held that a person claiming the benefit of section 53- A must
always be shown to be ready and willing to pertorm his part of the contract
6.3
 his part of the
If it is
shown ready and willing to perform
that he was not performance.
contract, he will not the doctrine of part
for protection of
qualify
Karthiyani Amma (1987 (2) KLT 762), the Kerala High
V. a de.
Court Considered the essential necessary for making out
conditions
follow.
fence of part performance to an for eviction by the owner. The
action
ing are the essential conditions tor invoking section 53A as a defence to an

action for eviction by the owner.

1, to transfer for consIderation any
ie ransteror should have contracted
Immovable property by writing signed by him.
contract, taken
2. The transferee should have in part performance of the
possession of the property or any part thereof.
3 IT the transferee was already in possession, he should continue in
possesion and should have done some act in furtherance oT thne
contract.
4 The transferee should have performed his part of the contract or he
should be ready and willing to perform his part of the contact.

It was further held that no period of limitation is prescribed for invoking

section 53A of the Act. Even if the suit for specific performance is barred by
limitation, the transferee is neverthless entitled to resist the transferor's suit
for ejectment and to defend his own possession.

In Kutty Kuttapai v. Pappen Appukuttan (1989 (2) KLT SN 61 P.50),

it was held that a person who obtained possession persuant to an agree
ment for sale and has performed acts in furtherance of the contract and has
performed or is willing to perform his part of the contract can invoke the
section as a shield to defend the action by the owner to evict him from the
property. Section 53A can only be used as a defence to an action for evic
tion. In order to invoke the section the defendant must have his performed
part of the contract or he should be willing to to perform his part of
the
contract.

64
 In Kunjamma Daniel v. Wilfred Moses (19A6 KLT SN 72 P. 44),
was nela tnat tOur conditions are necessany for making out the derence
the equitable relief of part
performance to an action in ejectment Dy te
owner. Ihey are:
1 Tnat tne transferor has contracted to trancfar for
consideration ay
immovable property by writing signed by him.
2. Inat the transferee has in part Derformance of the contract taken pos
session of the property or any part thereof. or continues in possession
part performance of the contract.
3 That the transferee has done some act in furtherance of the contraGt.
4 That the transfree has perftormed or is willing to perform his part or the
contract.
It was further held that in order to establish the defence under section
53A to get the equitable relief by denying the right of the owner to get recov
ery possession, it is for the defendant to establish by positive evidence
that he or she has performed or willing to perform her part of the contract.

In Sultan v. Zohra Beevi (1989 (1) KLT 149), the court held that what
is conferred by section 53A is only a right available to the defendant to pro
tect his possession. It does not create a title in the defendant. For invoking
in
the benefit under section 53A it must be satisfied that the transferee has,
part performance of the contract, taken possession of the property or any
part thereof or the transferee being already in possession, continues to be in
act in
possession in part performance of the contract and has done some
furtherance of the contract. One of the essential conditions to be pleaded
under section 53A of the Act is that the transferee has performed or is willing
be looked
to perform his part of the contract. No amount of evidence can
attract section 53A there must
into if there is no pleadings to that effect. To
property in part
be pleading that he continues to retain possession of the
furtherance of the
performance of the contract and had done some act in
obtain possession
Contract. Section 53A postulates that the transferee must
detendant who has no possession of
of the property as per agreement. A
benefit of section 53A of the Act.
the property cannot claim the

65
 In Mohammadunni Haji v. Ramachandran (1989 (1) KLT 861), the
Court stated the essential conditions for invoking section 53A of the Act
Ihere should be a contract to transter the immovable property tor Gonsider.
athon. The contract must be in writing. The contract must be signed by or on
behalt of the person sought to be charged under the section. The terms
necessary to constitute the transfer should be reasonable. In such a con.
tract the transferee as in part performance of the contract should take pos.
ession of the property or any part thereof. If the trasferee is already in
Possession on the basis of a contract and if he continues in possesSIon in
part performance of the contract and has done some act in furtherance of
the contract. Further the transferee should have pertormed nis pat of the
Contract or he should be willing to perform his part of the contract.

In P.C Thomas V. Lalitha Beevi (AIR 1993 Ker. 335), it was held that
aperson claiming the benifit of the doctrine of part-performence, when he is
already in possession prior to the contract should do something indepen.
dent of the mere retention of possession to evidence part performence. Mere
Continued possession though guite legal and valid by itself could hardly be
an act of part performence unequivocally referable to the subsequent con.
tract.

In Devasia Chacko v. Venkitakrishna lyer ( 1992 (1) KLT 850), i

was held that there may arise situations in which itcould be open to a trans
feree coming under section 53A of the Transfer of Property Act to file suit for
injunction to restrain the transferor or persons claiming under him from
interferring with his possession . Asuit for injunction by transferee against
transferor is maintainable to protect his possession.

In Radha v. Narayanan Nair (1994 (1) KLJ 51), the court held that in
order to attract the section taking possession or continuing in possession
must be in part performance of the contract. Possession obtained subse
quent to the agreement and not referable to it, is not an act of part perfor
mance. An act of trespass is not an act referable to the contract or in pan
performance of it, and hence a transferee-trespasser cannot claim the ben
66
 efit of section 53A.

In
Hamzabi v. Syed Karimuddin (2001) 1 scc 414, it
when a mortgagor / vendor agrees to was nelo e
sell the
mortgageel putative vendee in possession, themortgaged propery
mortgagee s
subsummed or merged in his right as a putative vendee
against the transferor, provided under section don
cOurse the pre-conditions for the applica
tion of section 53A are fulfilled. In
such a situation the equity of redumption
in the mortgagor /vendor is lost to
the extent that the mortgagor
claim pOSsession of the mortgaged property. The only Cannot e
right left with the
owner is to sue for the completion of the
contract.
TOPIC -XXVII
SALE OF IMMOVABLE PROPERTY
Or
Definition of Sale
Or
Difference Between 'Contract of Sale' and Contract for Sale'
Or
What are the Rights and Liabilities of Seller and Buyer
Or
Doctrine of Marshelling by Subsequent Purchaser

Sections 54 to 57 of the Transfer of Property Act deal with the sale of

immovable property in India.

Section 54 of the Transfer of Property Act defines sale. Section 55

deals with rights and liabilities of buyer and seller. Section 56 deals with
doctrine of marshelling by subsequent purchaser. Section 57 deals with
discharge of encumbrances on sale.

Definiton of Sale

Section 54 of the Transfer of Property Act defines Sale Sale is a

transfer of ownership of Immovable Property in exchange for a price.
67
 The price may be paid of promised to pay. The price need not be fully paid

t may be partly paid and partly promised to pay.

transfers his absolute ownership in the
n a sale the vendor or sellor
consideration. The
property to the buyer or vendee. The buyer has to pay
consideration should be price and it should be money.

Essentials of Sale
The following are the essentials of a sale.

1 Two Parties
They are seller and buyer. The
In a sale there will be two parties.
to transfer the property. He
Seller or vendor must be a person competent
have titile to the property. The
must be competent to contract. He must
favour of minor who has paid
Buyer or vendee may be a minor. A sale in
consideration is valid.

2. Subject matter
transferable under section 6 of
The property which is sold should be
properties which cannot be transferred are
the Transfer of Property Act. The
successionis is an example of non.
given in section 6 of the Act. Spes
be transferrable immoy
transferrable property. The subject matter should
of
of movable property is governed by the Sale
able property. The sale
Goods Act, 1930.

Consideration
immovable property to
In a sale the seler transfers ownership over the
should be price and it should
the buyer for consideration. The consideration
property it will
be money. If consideration is given in the form of any other
or promised
not be a sale, but it will be an exchange. The price may be paid
or partly promised to pay.

4 Conveyance
one hundered
If the value of the subject matter of sale is less than

68
 rupees and is tangible immovable
delivery possession. If the property. the sale can be effected
mere
by
of
rupees. tne transter can be effected value
of property exceeds one hundred
onlv by a reaistered
case of Ihtangible property, sale
can be effected only by a
instrument. n e
ent irrespective of the
value of the property. registered
In likkal Devaswom v.
Naravanan Raahavan (1965 KLT T00
FB). it was held that sale of immovable
pronerty worth more than Rs.100 by
delivery without registered instrument would be of no
avail, Such a sale can
he effected only by a registered instrument.
Distinction between Sale(contract of sale) and Agreement for sale(contta
for sale)

In the case
sale the ownership is transferred from the vendor to the
vendee with immediate effect. In the case of contract for sale the ownership
in the property will be transferred only on a future date.

Sale creates a right in rem in favour of the buyer. Contract for sale
does not create any interest in or charge upon such property. Contract for
sale creates a right in personam. In England a contract for sale will give
rise to an equitable right in favour of the buyer.

In Kochuvareed v. Mariappa Gounder ( 8 DLR TC 573), it was held

that in English law an equitable estate is created in favour of the purchaser
who has entered into contract for the sale of immovable property. Under the
Indian law unless and until a sale deed is actually brought into existence by
act of parties or under a decree of court, the party who has contracted for
the purchase cannot be said to have acquired an ownership over the prop
erty.

In Konar v. Thiruvadinatha Pillai ( 1956 KLT 880), it was held that

an agreement for sale does not create any interest in property in favour of

the buyer.
69
 In Kumaran Unni v. Mohammed Kani (1958 KLT 836). it was held
e contract for sale by itself would not create any interest or charge on
the immovable property in favour of the promisee.

ndla a contract for sale of immovable property need not be by a

egistered instrument (Explanation to section 17 of the Registration Act, 1908).
Towever in order to file a suit for specific performance of the Contract it
should be on a stamped paper.
Rights and Liabilities of Seller and Buyer

Section 55 of the Transfer of Property Act, 1882 deals with rights and
llabilities of seller and buyer. The rights and Liabilities of the buyer and
seller can be classified and studied into two heads. They are

1
Rights and Liabilities Before Completion of Sale

2 Rights and Liabilities After Completion of Sale.

1.Rights and Liabilities before Completion of Sale

A. Sellers Liabilities Before Completion of sale

(a) Duty to disclose material defects[Sec. 55 (1) (a) 1

A seller is under an obligation to disclose any material defect in the
property to the buyer. He is bound to disclose only those defects which the
buyer could not with an ordinary care discover and the seller is aware of it.
If the seller has failed to disclose the latent defect which are known
to him
the suppression of the material defect would amount to fraud and the
buyer
can file a suit to set aside the sale.

70
 Gajapathi v. Alagia (1886)9 Mad 89
A sold a property to B. After he has conveyance, B dis-
cOvered that under a decree of accepted the
alloted to C. A's partition portion
a of the property had been
omission to disclose the existence of the decree was held
o be fraudulent and
the court set aside the sale deed at the
instae
Exception to Caveat Emptor
The age old rule is caveat
emptor(let the huver beware). It 1s To e
buyer to see whether the property is
suitable for his purpose. But as
exception by s.55(1) (a) the seller is bound to disclose material detecIS
the propeny which the seller is awarel Le.. latent defects). But
it may be
said that patent defects are within the
caveat emptor rule.
(b) Duty to produce title deeds for
inspection Sec.55 (1) (b) J

A seller is under an obligation to produce all documents of title relating

to the property which are in the seller's possession to the buyer for exami
nation. This duty arises only when the buyer makes a request.

Bishandas v. Hazi Fazal (1937) Pesh 8

If the seller fails to produce the title deeds for inspection of the buyer
on his demand it would entitle the buyer to repudiate the contract for sale.
He can also claim refund of the earnest money, if any, with interest.

Maung Po Te v. Maung Shwe Ko (1916) 35 IC 373

In this case the court held that there is no obligation to produce title
deeds unless the buyer makes a request. In the absence of a request the
duty under this section does not arise.

(c) Duty to answer questions as to tilte Section 55 (1) (c) ]

The seller is bound to answer to the best of his information all relevant
question put to him by the buyer in respect of the property or title deed.

71
(d) Duty to execute conveyance_ [section 55 (1) (d) )
bound to execute a
eouyer pays or tenders the price the seller is
proper Conveyance of the property.

(e) Duty to take care of

property a
her the date of contract of sale and before the delivery of property
ener is bound to take care of an ordinary prudent man of the property and
all the documents of title relating to it.

() Duty to pay out-goings

The seller is bound to pav all public charges due in respect of property
upto the date of sale. If the sale is not subject to encumbrances, the seller
las to discharge all encumbrances on the property existing on the date of
sale deed.

In Thampatty V. Thampan (1956 KLT 302), it was held that under

Section 55 (1) (g) of the Transfer of Property Act, when the sale is not sub
ject to encumbrances, the seller is bound to discharge all encumbrances on
the property existing on the date of sale deed. The seller must be deemed
to have made a contract of indemnity if it turns out that there were encum
brances on the property on the date of the sale.

B. Buyer's Liabilities Before Completion of Sale.

(a) Duty to disclose facts materially increasing the value

The Buyer is bound to disclose to the seller as to any fact with respect
to the nature or extent of sellers interest in the property of which the buyer is
aware but the seller is not aware if the fact would increase to value of the
property.

(b) Duty to pay price

The buyer is under an obligation to pay the price to the seller at the
time of completing the sale.

72
e Seller's Rights Before Completion of Sale

(a) Aightto rent and profit

By virtue of section 55 (4) (a) the soer is
entitled to the rens ae
orofits of the property till the ownership is transferred to the
buyer.
p. Buyer's Rights Before Completion of Sale

(a) Right to charge for price pre-paid.

By virtue of Section 55 (6 ) (b) the buyer is entitled to a charge on the

property which the seller has agreed to sell for the price which he has al
ready paid. By virtue of the charge, the buyer can file a suit to sell the
property of the seller for recovery of the prepaid price.

In lbrayi v. Pokkan (1989 (1) KLT 581), it was held that under section
55 (6) (b) of the Transfer of Property Act the buyer has got a charge for the
price prepaid, in anticipation of the completion of the agreement. This charge
attaches from the moment the buyer pay any part of purchase money and is
only lost in case of his own subsequent default. The charge on the property
is enforceable not only against seller but all persons claiming under him. A
transferee for value with notice or without would be liable under section 56

(6) (b) of the Act. The buyer's charge under this section is a statutory charge
and he is entitled to enforce against property and plea of want of notice by

third party purchaser is of no avail.

2. Rights and Liabilities After Completion of Sale

A. Rights of Seller After Completion of Sale

: (s, 55(4)(b)
(a) Charge for Price not paid : Unpaid Vendor's Charge
By virtue of Section 55 (4) (b) the seller has a charge for the balance of
owner.
price unpaid if the sale is completed and the price is unpaid. If the
to the buyer the seller ic
ship and possession of the property have passed
73
 and the
not entitled to get the the sale is complete
If
has passed topossession
deliver
ownership bach. seller cannot refuse to the
the buyer the
the
possession to the buyer eventhough price is not paid.
before pay.
If the to the buyer
ment of the
ownership of the property has passed
seller is entitled to
a charge
whole of the purchase money, the
upon the property hands of the buver. By virtue of the Charge. the
ne court and
seller can file a
suit for a decree for sale of the property through
there
to the seller only if
IS a
tor recovery of the price. This available
right is
Contract to the contrary.
to the
In Webb v. Macpherson (1904) the seller sold his property
ouyer and posSession was delivered to him. By a seperate agreement, the
The buyer tailled to pay
buyer has agreed pay the price in instalments.
the instalment and the seller filed a suit to enforce his right of charge.

The buyer defended the suit on the ground that the seller's right is lost
in instalments. He
Since there is an agreement to pay the purchase price
argued that it was a contract to the contrary and because of this agreement
the right of charge is lost. The court held that the execution of an agreement
contract to
to pay the purchase money in instalments will not amount to a
contrary to destroy the right of charge.

In Sundara Raja v. Sakthi Takies (1967) Mad 127, the court held
that merely because the vendor has accepted a kind of security ( a cheque
or a promissory note) the vendor's charge respect of the unpaid purchase
money would not be lost. In order to loose the charge the terms of contract
should clearly state that the charge will not be available to the seller.

In Narayanan Moopil v. Narayanan Prabhakaran (1993 (1) KLT

41). it was held that if the price of the property which is the subject matter of
a registered sale deed is not paid, the vendor cannot on that account get the
sale deed avoided. All that, he can do in such circumstance is only to sue for
purchase price and that amount will get a charge on the property as unpaio
74
purchase money under
section 55 (4) ((b) of tho Iranstor of Properly Aot.
mn U. Meenatoor v. Mra Amy Honl Colabwalla (1900 KL
355), it was held that a soller is ontitled to a charge on the property lor tho
unpaid purchase money as providod tor in sub-fiootion (4) of tiootion 66 of
the Act. take
There cannot, theoroforo, be doubt that ho In ontitlod to
any gantod in
such steps to See that the socurity is court
not doplolod. Tho
junction trom cutting. trees trom tho land sold.

8. Buyer's Right After Completion of Sale

(a) Right to Rents and Protits (Section 55 (6) (a)

By virtue of Section 55 (6) (a) it tho ownorship ot tho proporly has
passed to the buyer, ho will be entiled the benolit of improvomonts in ho
property and to the rents and profits.
C. Seller's Liability After Completion of Salo

(a) To deliver possession (Section 55 (1) (0)

By virtue of Section 55(1) (0) the sollor is bound to givo to the buyor tho
possession of the property. This duty arisos only whon tho buyor makos a
demand. The seller cannot refuse to deliver tho possossion on tho ground
of non-payment of price.

(b) Implied Covenant for Title(Soction 55 (2)

By virtue of section 55 (2) of the Transfor of Proporty Act the sollor
the sollor
shall be deemed to contract with the buyer that the interost which
transferred to the buyer subsisted at the time of transter and he has powor
no title at the time of
to transfer the same. If it is found that the seller had
transfer or he had only defective title, the buyer can repudiate the sale and
This is the implied cov.
recover the price which he has paid to the sellor.
a romedy of
enant for title. By virtue of this COvenant for title the buyor has
aler convoy.
repudiation in case the seller's title is found to be defectivo
ance.
 In Balakrishna Menon v. Kesavan (1985 KLT 862), it was held that
shall be deemed
as per section 55 (2) of the Property Act, a seller
Transfer of professes
to contract with the buyer that the interest which the seller
to transfer the same,
transter to the buyer subsists and that he has power
of the defect
This warranty of title subsists whether the buyer is aware
title or not.

(C) To deliver title deeds on receipt of Price (Section all

vitue of section 55 (3) the seller is bound to deliver to the buyer
Oy
buyer pays tne price.
nens or title relating to the property when the

D. Buyer's Liabilities After Completion of Sale

(a) Bare loss to the Property (Section 55 (5) (C)

sole is destroyed, the buyer
ATter the completion of sale if the property
has to bare the loss.

(b) To pay outgoings (Section 55 (5) (d)

all public charges in
After completion of sale the buyer is bound to pay
respect of the property.

Doctrine of Marshelling by Subsequent Purchaser

of mar
Section 56 of the Transfer of Property Act deals with doctrine
of
shalling by subsequent purchaser. It is a right available to a purchaser
is owner
property which is already mortgaged to another person. If A' who
of two properties mortages both the properties to 'M' and subsequently
sells one of the properties to 'B' the subsequent buyer (B) of the property
can demand M to proceed first against the proeprty which is not sold to B for

satisfying his claim. This right is called marshelling by subsequent pur

chaser.

The doctrine of marshelling by subsequent purchaser can be illustrated

with the help of a diagram.

76
 B

In tne dbove diagram, suppose A is owper of two immovable proper*

ties X and Y and A mortaged both the properties to M for
securing a loal:
While tnis mortage is subsisting A sells property Y alone to B. B Is the
subsequent purchaser. By virtue of the provisions of the Transfer of Prop
erty Act M(mortagee) can proceed against property X or Yor both for the
purpose of recovery of mortgage money. If Mproceed against Property Y
first and his claim is satisfied by the sale of the property, B will be in diffi
culty. So section 56 says that B can direct M to proceed first against prop
erty X which is not sold to him. This right of B is known as marshelling. M
has to first proceed against property X. If his claim is satisfied from property
Xitself he should leave property Y for B. If M's claim could not be satisfied
from property X , he can proceed against property Y.

77
 PROBLEMS
1.Raju leased a public
house to Babu who agreed not to keep any publlc house within
a mile of the permises. Babu
assianed the leoses to Unni. Examine whether Unny Is
bound by the agreement.
hint: Section 11 of the Transter of Property Act deals with validity of condi.
tions restraining the mode of enjoyment. The general rule is that in the

transferor of absolute interest, tho transferor cannot impose any condition

If any condition re
restraining the mode of enjoyment of the transferee.
straining mode of enjoyment is imposed in the transfer, the condition is void.
However in the case of lease, the lessor may impose any condition regard
The condition may
ing the mode of enjoyment of the property by the lessee.
be a positive covenant or negetive one. Both positive and negetive cov
binding
enants are binding on the transferee. The negetive covenants are
on the subsequent transferees also. given problem Raju has im
In the
posed a negetive covenant. It is binding on Babu and Unni ( Read Topic- ViI)

leased. The notice expires.

2. Pthe lessor gives Q the lessee notice to quit the property
rent which has become due in respect of
The notice expires, GQ tenders and Paccepts
Is the notice waived? Give reasons.
the property since the expiration of notice.

notice expires, Y
X the lessor gives Y the lessee
notice to quit the property leased. The
of the notice.
period subsequent to the expiration
tenders and X accept rent due for a
basis of the notice. Will X succeed ?
X wants to evict Y on the
determnines on the
section 111 (h) a lease of immovable property
Hint: By
notice to quit the proporty leased, duly given by one party
the expiration of a
soction 11(h) is waived
By section 113 a noticO given under
to the other. any
implied consent of the person to whom it is given, by
with the express or intention to treat the lease
person giving it shnowing an
act on the part of the illustrations.
as subsisting. Section 113 gives two
Jeood
the ToSSee, nottce to quit the property
A the lessor. gives
B,
become duue in
a) Rtenders and A accopts, rent which has
he notice expires.
the e xpiration of tho nos The notice is
property since
espect of the
121
 Waived

(b) proporly loasod,

A, the lessor, gives B, the notice to quil
the
loioo
Te notice expires, and
lessee: A givos
to B a8
B remains in possesslo
second notice to quit. The first notico is waived.
80ction 113 ot
The given illustration (a) to
problems are based on tho s0ctin.
the Transfer of principlo containod n
113 read with Property Act.T we apply tho
docidod that tho notico givon by
P is waved.
illustration (a), it can safoly be
oviction by
succood in a suit for
lessor, a
Once
fresh notico
notice is
is to be
waaivod, to
(ho
given.
not
that she should
3.

any
Bindu makes
building upon
a aift of a site to
Krishna with a condition
it so as to obstruct the view of the sea from his
houso, construct
makes constructions in the site. Is there any remedy for Bindu ?
Krlshna
Hint: Section 11 of the Transtor of Property Act deals with vaiaity of condi
tions restraining the mode of enjoyment. The general rule is
that in the
transferor of absolute interest, the transteror cannot impoSe any condition
restraining the mode of enjoyment of the transferee. If any condition rg
straining mode of enjoyment is imposed. in the transfer, the condition is yoid
However there are two exceptions to the said rule. By one of the excep
tions, a condition or direction regarding the mode of enjoyment may be im
posed by the transferor if it is for the beneficial enjoyment of transferor's
own property. When the transferor alienates only a part of his land and
retains the other part with him, a direction may be imposed regarding the
mode of enjoyment of the transferred property for the beneficial enjoyment
of that part which he retains.

In the given problem,

Bindu makes a gift of a site to Krishna with a
condition that she should not construct any building upon it so as to
obstruct
the view of the sea from his house.
Krishna makes constructions in the Site.
Bindu can seek injunction from a civil court.

4. A transferred the properties to the leagal heirs of an unborn person who is not even
in the womb. Examine the
legality.
Sections 13 and 14 of the Transfer of Property Act deal with general

122
 principles to be followed in the case of gift in
favaour an Unborn Porson.
An unborn person means a person who is not in
existence oven in mothor's
womb. If a person wants to make a gift of property in
favour ol an unborn
person the following conditions are to be
followed.
1. He cannot directly transfer the property to an
unborn porson.

2. He should create a prior interest (life intorost) in favour of a living

person. A life interest holder can possess and enjoy the property during his
life time. He will not get absolute ownership.

3
what is remaining after creating the life interest (ie., ownership) shall
De absolutely transfered to the unborn person. Thus
ownership should be
transterred favour of the uborn person. Limited or life interest cannot be
in
given to an
unborn person. Transfer of life interest in favour of an unborn
person is void.

4
Tne transferor cannot postpone the
vesting of property in the unborn
child beyond attainment of his maiority. ln other
Words the property should
be absolutely vested in the child on or before the attainment of majority.

5. The transfer in favour of unborn child is

a contingent interest and the
child should be born alive prior to the death of the
life iinterest holder. The
interest created in favour of child will be elapsed if the child is
not born alive
before the death of the life interest holder. In case the
interest is elapsed
the interest transferred in favaour of the child will be
reverted to the transf
eror or his legal heirs.

6 Even if the terms of transfer

provides for vesting of property in the
child immediately on his birth or on the attainment of his majority, the life
interest holder can possess and enjoy the property until his
death though
the ownership is vested in the child.

In the aiven problem, A transterred tne properties to the leagal heirs f

123
 sOction 14 of the
virtue of
an unborn person who is even in the womb. By
not an unborn
of unborn child of
Act. one cannot property in favour
transter hence void.
ne transter is hit hy section 14 and
child

5. house. After
sometime Ramu refused to
Ramu allowed his heir to park his car in his
neighbour claimed it as easement right
Soour to park in his house Ramu's
will fail, as Ramu
Hint:ln the given problem, the claim of Ramu's neighbour
the car) only to nis neir and nt
ated an easment riaht ( riaht to park
in his Claim only if h.
to his neighbour. Ramu's neighbour can succeed
w that he has either an
easment by grant, or easment by prescriDtion
Act)
any other easement. (Read - Notes on Easement
before appropriat
5.A transferred his property to B during the pendency of litigation
the validit, at
COurt concerning such property as subject matter in dispute. Examine
the transfer.

Hint: By virtue of section 52 of the Act, during the pendency of any suit or
proceeding in a compentent court either party cannont transfer the immov
able property, which is the subject matter of the Suit or proceedina. except
under the authorithy of the court and on such terms as it may impose. Thus,
the general rule is that before making a transfer of property which is the
subject matter of dispute leave of the court is to be obtained.
A suit is said to be pending from the date on which the plaint is
instituted in the court and until the the complete satisfaction or discharge of
a final decree passed in the suit.

If during the pendency of the suit one of the parties to the suit transfers
the property without consent of the court, the transferee will be bound by the
decree as if he is the transferor eventhough he was unaware of the suit.
The transfer as sUch is not void. It is because section 52 does not prohibit
the transfer of property during pendency of the suit. Thus if the decree is in
favour of the transteror, the transteree can claim the benefit of decree. If
the decree is not in favour of the transferor. the transferee will be bound by
the terrns of decree eventhough he is not a party to the suit.

124
 has been walking,
7. Albert is the owner of a land through which his neighbour Alchard
death of both Albert
as there was no other way for him, for the last 36 years. After the

the sons of Albert refueed nermiealon to the sons of Richard tO Walk Over
dnd HiChard,
of Rlchard's family members is violated
by
neir land. Discuss whether anv riaht
refusal,
Richard's family
easement by prescription available to
mm: Tne right of -Notes on Ease
violated by the refusal of sons of Albert. (Read
members is
ments)

125
 econd Year LL. B. Dearee (il1 Year & IV LL. B. [V Years])
Examination
Part | - Paper IV
Transfer of Property & Easements
Tirne: 3 hours Maz. Marks: 80

Section A
Answer any ten of the following.
1. Inter -
vivos
2. Actionable claim
3. Attestation
4. Doctrine of fictures
5. Condition Subsequent
6. Oral transfers
7. Profit-e-prendre
8. Constructive notice
9. Marshalling
10. Merger
11. Donatio moritus causa
12. Foreclosure

(10 x 2 = 20 marks)
Section - B
Answer all the four questions
13. X, transferred the properties to the legal heirs of an
unborn person who
is in the wornb. Exarnine the legality of the transaction.
14. X, allowed his neighbour to park his car in his house. After
sometimes
X refused to park the cark in his house X's
neighbour claimed if as a
easrnentary right. Decide.
15. A, rmortgaged his property to B to Rs. 5 lakhs with a condition that A
has
no right to redeern it for 50 years. A got prize worth of Rs. 25 lakhs in a
lottery. Now he wants to redeem his mortgage. B reguses. Decide.
16. A, borrowed noney by merely handing over the LIG policy on his hTe
frorn a Bank. Later A, dies leaving his wife. The widow as well as the bank

126
Claimed the money from C a0ainst the noiicy Docide who will sucGe
marks)
(4 x 6 = 24
Section - C

Answer any three questions.

17. What properties are not transferable undeor T.P. Act ?
18. Write a note on doctrine of lection.
19. Explain the doctrine of feeding the grant by estoppel. easements.
Define easement and explain the arounds for extinction of
20.
regarding detemination of lease.
21. Define lease and explain tho law x 12 = 36 marks)
(3

127
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