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CONCEPT OF PROPERTY
 Transfer of Property Act, 1882 is divided in 8 parts and contains 137 sections. It was
enacted on 17th Feb 1882 and enforced on 1st July 1882.
 This act is based on the legal maxim of nemo dat quod non habet i.e., nobody can transfer
a title which he himself does not possess (Exception section 43).
 TPA along with Indian Contract forms the code of contract and this act is applicable only
to immovable properties. It does not include gift under muslim law or death bed gifts.
 Section 5 – Section 37 is applicable to both movable and immovable.
 Section 38 – Section 53A covers general principles related to immovable property.
 It is not an exhaustive act. It covers 5 types of transfer & 1 actionable claim.
 These are: sale, mortgage, exchange, gift and actionable claim.
 A property can be of two types: Intangible and Tangible.
 Tangible property can be of two types:
- Movable
- Immovable
 This act was introduced by the 3rd law Commission in the year 1870 and was enforced on
1882.

PROPERTY

 The word “property” is derived from the Latin word proprietary and the French
equivalent properties, which means a thing owned.
 As a general rule property means anything which can be owned and transferred.
 In TPA we transfer the right which we have in a particular property.
 The jurisprudential concept of property was given in Maharashtra Co-operative bank v.
Asst. P.F. Commissioner (A.I.R. 2010, S.C. 268, p.42)
- In this case the apex court interpreted the definition of property given by Salmond
in the broadest and narrowest sense.
- In its widest sense, property includes a person's legal rights, of whatever
description. A man's property is all that is his in law. Every legal right recognized
by law for a person.
- In a second and narrower sense, property includes not all a person's rights, but
only his proprietary (estate or property) as opposed to his personal rights (status or
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personal condition). Only those rights which a person has over his estate. In this
sense a man's land, chattel, shares and the debts due to him are his property; but
not his life or liberty or reputation.
- In a third application, which is that adopted (here) the terms includes not even all
proprietary rights but only those which are both proprietary and in rem that means
against the whole world.
- The law of property is the right of proprietary rights in rem, the law of proprietary
rights in personam being distinguished from it as the law of obligations.
According to this usage a freehold or leasehold estate in land, or a patent or
copyright, is property; but a debt or the benefit or a contract is not.
- Finally, in the narrowest use of the term, it includes nothing more than corporeal
property - that is to say, the right of ownership in a material object, or that object
itself.

Definition of Property

 T.P.A does not define “property”

 According to Section 3 of that Act: "Immovable Property" does not include standing
timber, growing crops or grass. Thus, the term is defined in the Act by excluding certain
things. "Buildings" constitute immovable property and machinery, if embedded in the
building for the beneficial use thereof, must be deemed to be a part of the building and the
land on which the building is situated. It is a negative definition.
 As per Section 3(26) of the General Clauses Act 1897,"immovable property" "shall
include land, benefits to arise out of land and things attached to the earth, or permanently
fastened to anything attached to the earth.” It is a positive but incomplete definition.
 Section 2(6) of The Registration Act,1908 defines "Immovable Property" as under:
"Immovable Property includes land, building, hereditary allowances, rights to ways,
lights, ferries, fisheries or any other benefit to arise out of land, and things attached to the
earth or permanently fastened to anything which is attached to the earth but not standing
timber, growing crops nor grass". The above definition, implies that building is included
in the definition of immovable property.
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ESSENTIALS OF PROPERTY

 Immovable Property includes :

- Land
- Benefits arising out of land
- Things attached to Earth
 Things rooted in earth
 Things embedded in earth
 Things Attached to what is Embedded or rooted in earth (Doctrine of
fixtures).
 Land includes earth surface, anything which is on surface of earth or beneath the surface
of earth like mineral etc. will be included in definition of land. It means that anything
which is permanently fastened on the surface of earth will be included under the
definition.
 Benefits arising out of land (profit a prendre): In India it is known as benefit arising
out of land and in England it is known as profit a prendre. Therefore, any benefit arising
out of land like rent, revenue, fruits, fishing, minerals, etc. all these things are included in
immovable property.
- Anand Behera v. State of Orissa (1955) 2 SCR 919
- The petitioner had obtained a license to catch and appropriate all fish in specific
sections of the Chilka lake from its proprietor (Raja of Parikud). With the passing
of the Orissa Estates Abolition Act, 1951 ownership of the estate vested in the
State of Orissa. State of Orissa refused to recognize the license of petitioner.
Petitioner contended that their fundamental rights under Art 19(1)(f) and Art 31(1)
is being infringed and they also contended that ‘catching and appropriating fish’ is
a transaction relating to sale of future goods (which is the fish) and hence the Act
which is applicable only to immovable property would not be applicable on him.
- The court held that the lake is an immovable property and therefore the
petitioner’s right to enter in that estate (which he did not own) and carry away fish
from the lake is a ‘profit a prendre’ and in India it is regarded as a benefit that
arises out of the land and as such is immovable property.
- REASONING BEHIND JUDGEMENT: The SC while holding that right to
catch and carry away fish from specific sections of the lake over a specified future
period is a license to enter on the land coupled with a grant to catch and carry
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away the fish and this grant is a profit-a-prendre. Thus, as the sale of grant to
petitioner was oral. However, a right related tangible immovable property (in this
case, the fish), if it is more than Rs 100 needs to be registered (Sec 54 TPA). As
there was no registration in this case therefore no title or interest was passed to the
petitioner.
 Things attached to earth: It includes things rooted in the earth, embedded in the earth
and lastly things attached to what is so rooted or embedded in the earth.
 The question arises as to how to determine whether any movable property attached to the
earth or permanently fastened to anything so attached, has become immovable property.
 For this there are two well established tests in English law (Doctrine of Fixtures) which
are also applied in India by the courts. The two tests are:
- (1) Degree/mode of annexation: If a chattel is resting on its own way then it is a
movable property unless contrary is proved. If a thing is fixed to land even
slightly or is embedded by an external agency, then it is presumed to be an
immovable property unless the contrary is proved.
- (2) Object/purpose of annexation: If the object or the purpose is for the
permanent beneficial enjoyment then the thing will be an immovable property but
if it is only for temporary enjoyment then it will be a movable property. Therefore,
the deciding factor is the intention of the parties and it differs from case to case.
 (i) Things rooted in earth: anything which is rooted in the earth and when
it is severed from the earth it still derives nutrition from the soil then it will
be an immovable property but if it does not derive nutrition from the soil
after being severed it will be a movable property. Therefore, again the
intention of parties will be determining factor.
 (ii) Things imbedded in the earth: anything which is embedded in the earth
for the permanent beneficial enjoyment by an external agency is an
immovable property.
 (iii) Things attached to what is so imbedded: anything which is attached to
something which is embedded in the earth for its permanent beneficial
enjoyment is an immovable property. It includes window, doors, fan etc.
 MOVABLE PROPERTY: General Clauses Act defines movable property as “property
of every description except immovable property.” (Section 3).
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 The Registration Act, 1908, in Section 2(l)(9), provides an inclusive definition of

movable property. According to this, it is to include standing timber, growing crops and
grass, fruits on the trees, and juice in trees, along with the property of every description
other than immovable property.
 The term movable property is also defined under Section 22 of the Indian Penal Code,
1860. It states the term is to include corporeal property of every description, provided that
the same is not affixed to the land. The main proposition to be understood here is that the
property must not be attached to the land. However, the same immovable property might
become movable as soon as severed from the earth.
 The Supreme Court of India in the case of State of A.P. v. N.T.P.C. Ltd. (2002), held that
electricity falls under the category of property, and merely because it cannot be felt or
touched or moved, it will not cease to come under this category. Anything that possesses
all the attributes of a property can be considered property, be it a book, a piece of wood,
patents, copyrights, etc.
 In the case of State Bank of Patiala v. Chohan Huhtamaki (India) Pvt. (1981), the
Himachal Pradesh High Court held that standing timber, growing crops, grass, or other
such things which are attached to the earth, but the intention of making them a permanent
part of the land is not present, for example, machines that are attached to land but can be
shifted, all these come under the purview of movable property. Apart from this, the right
to worship, promissory notes of the government, rights of a purchaser to register his land,
royalty, etc also fall under the category of movable property.

DIFFERENCE BETWEEN MOVABLE AND IMMOVABLE PROPERTY

 As a general rule, a determinate or specified portion of land, or benefits that arise from
that land, along with the things attached to the earth, falls under the purview of
immovable property, whereas the movable property includes standing timber, grass,
crops, stocks, shares or any other property that a person owns, and that is capable of being
moved from one place to another.
 It is pertinent to note that while distinguishing between the above two, the first thing that
is considered is that movable property can be transferred from its position without
causing damage or change in its shape, size, colour or appearance. The same is not the
case with immovable property. Any attempt made to move immovable property might
affect the property.
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IMMOVABLE MOVABLE

It includes stocks and shares, growing crops,

It includes land, benefits arising out of land grass & things which are attached to earth but
and things attached to earth. are aggrieved to be severed before sale or
under contract of sale.

If the thing is fixed to the land even slightly or

it is caused to go deeper in the earth by an If the thing is resting on its own way
external agency then it is deemed to be presumption is that it is a movable property.
immovable property.

If the purpose of annexation of the thing is for

If it is only for temporary enjoyment then it is
permanent benefit the it is Immovable
a Movable property.
property.

Transfer of Immovable Property requires Transfer of Movable property does not require
registration. registration.

CASE LAWS

Shantabai v. State of Bombay, AIR 1958 SC 532

 FACTS: Shantabai’s husband had granted her the right to take and appropriate all kinds
of wood from certain forests in his Zamindary through an unregistered document. With
the passing of the Madhya Pradesh Abolition of Proprietary Rights (Estates, Mahals,
Alienated Lands) Act, 1950, all proprietary rights in land vested in the State U/S 3 of this
Act and the petitioner could no longer cut any wood. She obtained an order U/S 6(2) of
the Act from the Deputy Commissioner and started cutting trees. The Divisional Forest
Officer took action against her and passed an order directing that her name to be
cancelled and forfeited the cut materials. She moved the State Government against this
order but to no effect. Thereafter she applied to this Court under Art. 32 of the
Constitution and contended that the order of Forest Officer infringed her fundamental
rights under Arts. 19(i)(f) and 19(1)(g).
 LEGAL PRINCIPLE UPHELD: This case basically relates as to what constitutes
‘standing timber’. However, the SC has in its judgement also talked about the phrase
‘benefit arising out of land’ and held that right to enter upon land and cut trees is a benefit
arising out of land. The SC has based its decision on this point on the Anand Behera case.
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State of Orrissa v. Titaghur Paper Mills Co. Ltd., AIR 1938 ALL 115

 FACTS: Section 3B of Orissa Sales Tax Act, 1917 empowered the State Government to
declare goods or class of goods liable to be taxed. The government issued a notification
through which standing trees and bamboos agreed to be severed were liable to be taxed
on the turnover of purchase. Writ petitions were filed by a group of those people who had
entered into bamboo contracts and timber contracts with the State. The respondent (group
of petitioners who had entered into agreement with the State for the felling, cutting
obtaining and removing bamboos from forest areas ‘for the purpose of converting the
bamboo into paper pulp or for purposes connected with the manufacture of paper or in
any connection incidental therewith’, i.e., bamboo contracts).
 It was contended before the High Court that the subject matter of the bamboo contract
was not a sale or purchase of goods but was a lease of immovable property or was a
creation of an interest in immovable property by way of grant of ‘profit a prendre’ and
due to this the royalty payable under the bamboo contracts could not be made eligible to
either sales tax or purchase tax.
 LEGAL PRINCIPLE UPHELD: The SC after referring to the terms and conditions of
the bamboo held that “felling, cutting, obtaining and removing bamboos from forest areas
for the manufacture of paper” is a benefit to arise out of land and it would thus be an
interest in immovable property.
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CONDITIONS RESTRICTING TRANSFER

 Section 5 of the Transfer of Property Act, 1882 has several conditions for an act to be
defined as a ‘transfer of property’-
- A ‘living person’ must convey property. Conveying essentially means giving a
title of ownership on the property to the transferee. A living person has been
defined in the same section to include company, association or a body of
individuals whether it has been incorporated or not.
- The conveyance of the property can be carried out in both the present and the
future.
- This conveyance may happen towards one or more other living persons, including
himself.
 Section 7 of the Transfer of Property Act categorizes persons competent to transfer as-
- Every person is competent to contract under the Indian Contract Act, 1872 and
entitled to the transferable property.
- A person who is authorised to dispose of transferable property that he does not
have the ownership to.
 This property can be transferred wholly or partly, absolutely or conditionally, with regard
to the extent of the law and circumstances. The property, as stated above may be
conveyed to any living person including a company, association or a body of individuals
whether incorporated or not. Under Section 13, even an unborn child can be the transferee
of the property.
 Conditional transfer are permissible if not against law:
- Condition Subsequent (section 10,11,12,,17,29 & 31) (EFFECT : condition
would fail but transfer will be valid.)
- Condition precedent S. 25 & 26 (EFFECT : Transfer will fail)
 Sections 10, 11, and 12 of the Transfer of Property Act deal with the imposition of
restrictions or limitations in transfer of property.

Rule Against Alienability

 Section 10 of the Transfer of Property Act: Condition

 Section 10 lays down that where the transferee is absolutely restrained from transferring
his interest in his property to another person because of a condition which came along
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when the property was transferred to the transferee, then this condition will be made void.
The transfer, from the transferor to the transferee would remain valid.
 For example, A transfers some property to B as a gift but with the condition that while A
is alive, B must not transfer the property to any other person. This condition will be held
void as it absolutely restrains B from transferring his interest in the property to another
person.
 This is commonly known as the ‘rule against alienability’. The Transfer of Property Act
is based on the principle that there can be a free transfer of property and has been
specifically made with regard to free transfer. If conditions restraining transfer are
imposed, then the free transfer would be restricted and there would be no use for the
Transfer of Property Act.
 However, only conditions mandating ‘absolute restriction’ are void. There are conditions
which call for partial restraint to be observed with regard to the transfer of property. If we
are to determine whether a condition is absolute or partial, then one must look at the
substance of the condition, and not merely the words. Therefore, restraints can be
classified into two categories.
 Restraining Alienation :-Where property is transferred subject to a condition or limitation
absolutely restraining the transferee or any person claiming under him from parting with
or disposing of his interest in the property, the condition or limitation is void, except in
the case of a lease where the condition is for the benefit of the lessor or those claiming
under him:
 PROVIDED that property may be transferred to or for the benefit of a women (not being
a Hindu, Muhammadan or Buddhist), so that she shall not have power during her
marriage to transfer or charge the same or her beneficial interest therein.
 CONDITIONAL TRANSFERS: Every owner of a property, who is competent to
transfer, may transfer his property either unconditionally or with certain conditions.
Conditions are limitations or restrictions on the rights of the transferees. Transfers which
are subject to restrictions are known as ‘conditional transfers’.
 These conditions may be either conditions precedent or conditions subsequent.
 CATEGORISATION OF RESTRAINTS:
- 1.Restraints on transfer for a particular time
- 2.Restraints directing control over consideration/money;
- 3.Restraints with respect to persons / transferee; and
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- 4.Restraints with respect to sale for particular purposes or use of property

 Absolute Restraints: An absolute restraint is such a restraint which completely takes
away the right of the transferee to alienate or dispose of the property. The transferee can
now no longer transfer his interest in the property to another person and he has no
freedom to do what he wants with the property in his capacity as the owner of the
property.
- Section 10 stipulates that any condition imposed on the transferee which would
amount to an absolute restraint on the right of the transferee to dispose of his
interest in the property shall be void. The property must be transferred to the
transferee subject to the condition.
- In Rosher v. Rosher (1884) 26 Ch D 801, A made a gift of a house to B, and gave
a condition that if B decides to sell the house during the lifetime of A’s wife, she
should have the option of purchasing it for Rs 10000, while the market value of
the house was set at Rs 10,00,000. This condition was held to be an absolute
restraint and was declared void.
- In Kannamal v. Rajeshwari, AIR 2004 NOC 8 (Mad), a life estate was to be
created in favour of ‘M’, but the transferor gave an absolute restriction along with
the property transfer to M, whilst divesting himself of all his interests in the
property. This restraint was held to be void as there was an absolute transfer.
- In Mohd Raza v. Abbas BandiBibi,(1932) 59 IA 236, a condition imposing
restriction for a particular time or transfer to a specific person has been held to be
void. A condition restricting the transferee from transferring the property outside
the family is valid as it is only partial restraint.
 Partial Restraints: A partial restraint is a condition which partially takes away the right
of the transferee to dispose of his interest in the property. Here, the right is not taken
away substantially. Section 10 does not explicitly talk about partial restraints. A condition
imposing partial restriction is valid.
- In Mata Prasad v. Nageshwar Sahai (1927) 47 All 484, there was a dispute
regarding succession between nephew and widow. A compromise was formed that
the widow had possession of the property while the title for the same was given to
the nephew with the condition that he was restricted from alienating the property
during the widow’s lifetime. It was held that the compromise and the condition
were valid and prudent in the present case.
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 Exceptions to the general rule: Section 10 provides two exceptions to the rule against
inalienability.
- First, Section 10 does not prohibit conditions or limitations in the case of a lease,
which are beneficial to the lessor or those claiming under him.
- Second, property may be transferred for the benefit of a woman who is not a
Hindu, a Muslim, or a Buddhist, such that she shall not have the power to transfer
the property or change her interest therein during her marriage.

Repugnant (unacceptable) conditions

 Section 11(Restriction repugnant to Interest Created) of the Transfer of Property

Act deals with repugnant conditions.
 Repugnant conditions are those that are inconsistent with the nature of the interest
transferred.
 Section 11 prohibits the imposition of any condition directing the transferee to apply or
enjoy in a particular manner, any interest that is transferred absolutely in a particular
manner. Such conditions or directions are void and the transferee is entitled to receive
property as if such a condition did not exist in the first place.
 The transfer itself is, however, not invalidated. These conditions are inconsistent with the
nature of the interest transferred. Therefore, they are called repugnant conditions.
 Any restriction which restricts the use and enjoyment of property transferred is void.
 For example, if A has transferred an agricultural land to B with a condition that B will not
use the land for agricultural purpose then such a condition will be void.
 When a property is transferred absolutely, it must be transferred along with all its legal
incidents. In Manjusha Devi v. Sunil Chandra, AIR 1972 Cal 310, the parties entered
into a sale for a piece of land. In the sale deed, it was mentioned that the buyer could only
use the land for setting up a factory for jute textile manufacturing. It was held that this
condition was invalid as the absolute interests in the land had been transferred to the
buyer and he could use it as he pleased.
 Section 11 is subject to one exception provided under Section 40(1) which provides that a
restriction can be imposed on the use and enjoyment of property transferred for securing
the beneficial enjoyment of another land is valid.
 Example: A has transferred a part of his land to B with a condition that he will mot
construct his building beyond 4 storeys because A uses another piece of land for
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agricultural purpose and if the construction is allowed beyond 4th floor he will not get
proper sunlight for agricultural purpose. Such a condition is valid.

Positive and negative conditions

 Positive conditions: These are those conditions imposed on the transfer where the
transferor imposes a condition on the transferee to do some act. For example, A transfers
land to B, on the condition that he shall maintain and keep filling up the well on that plot
of land. This condition is positive.
 Negative conditions: These are those conditions imposed on the transfer when the
transferor imposes a condition on the transferee to not do some act. For example, A
transfers land to B, on the condition that he shall leave open a four feet wide space on the
land, and would not build anything on it.

Difference between Section 10 and Section 11

 Section 10 specifies that in a transfer with condition that absolutely restrains the
alienation of the property by the transferee, the condition will be deemed to be void.
 Section 11 specifies that in a transfer where absolute rights in the property have also been
alienated to the transferee, and where a condition is imposed that the transferee cannot, in
spite of having the absolute right in the property, do an act for his enjoyment of the
property, such condition will be deemed to be void.
 Thus, the differences in these sections are that in Section 10 the condition is deemed void
due to absolute restrainment and in Section 11, the condition is deemed void due to the
transfer being of absolute nature.

Condition of insolvency

 Section 12 provides that when the transferee becomes insolvent, and if he has some
interest in the property that was transferred to him by the transferor, the transferee still
would not lose his interest in the property. Hence, any condition stating that transferee
shall lose the interest in the transferred property on insolvency and this interest shall be
reverted back to the transferor shall be void.
 However, this section does not apply to a condition on a lease for the benefit of the lessor
or those claiming benefit under him. However, in Smith v. Gronow (1891) 2 QB 394, if
lessee assigns the lease and then is rendered insolvent, then this condition will not apply.
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 Condition Making interest determinable on insolvency or attempted alienation:

- Section 12 is an exception to Section 31 which provides that a transfer can be
made subject to certain conditions which are dependent upon the happening or
non-happening of a future specified uncertain event.
- Section 12 provides that if a transfer is made on a condition that if the transferee
becomes insolvent or attempts to transfer the property then his right in the
property will come to an end then such a condition is void.
- Nothing in this section applies to a condition in a lease for the benefit of the lessor
or those claiming under him.

SECTION 17. DIRECTION FOR ACCUMULATION

 Doctrine of accumulation is a way to restrain the enjoyment of property. Put differently, it

would imply restricting the favorable use and pleasure derived from the property.
 Section 17 of the act speaks about the accumulation of income of property or direction for
accumulation.
 A direction for the accumulation of income of property amounts to limiting beneficial
enjoyment of property. Such direction is void as per s.11 of the act but s.17 is an
exception to sec.11.
 Sec.11 is applicable where there are absolute transfers whereas s.17 applies to all kinds of
transfer. This section is akin to section 117 of Indian succession act, 1925.
 Accumulation = profits or income arising out of the property, it can be whole or in part.
 PERIOD FOR ACCUMULATION ARE:
- (i)Life of the transferor, or
- (ii)Period of 18 years, whichever is longer.
 Any condition beyond this period is invalid and not operative.
 The direction for the whole or part of the income can be made.
 ACCUMULATION OF INCOME: A direction which separates the income from the
ownership of property so as to form a separate fund, or so as to postpone the beneficial
enjoyment of property, is a direction for accumulation.
 The rule against perpetuities has for its object, the circumscription of the period during
which the property might be tied up in such a way as to prevent its being transferred
absolutely.
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 Earlier an accumulation of income could be directed for so long as the property could be
tied up without infringing the rule against perpetuities. The object of this section is to
make a separate rule further restricting the period for the accumulation of income.
 A direction for accumulation may be express as well as implied.
 RULE AGAINST PERPETUITIES: Independently of this section, a direction for
accumulation may be void under the perpetuity rule if the accumulation is directed for a
period in excess of that allowed by the pertuity rule.
 Thus, if A transfers property to B for life and then to the son of B who shall first attain the
age of 25, with a direction to accumulate the income till the son attains that age the
direction would be void under the perpetuity rule. However, if A transfers property to B
for life, and then to the first son of B who shall attain the age of 18 with a direction to
accumulate the income during the lifetime o B and until the son attains that age, there is
no infringement of the perpetuity rule, and the direction would be valid for one of the
statutory periods allowed by this section.
 VOID FOR REPUGNANCY: Indecently of this section, a direction for accumulation
may be void repugnancy. A direction for accumulation is a restriction is a restriction on
enjoyment such as is referred to in s 11. However, while s 11 is limited to transfers which
create an absolute interest in the transferee, s 17 refers indifferently to any transfer.
Where a transfer is of an absolute interest, the exceptions to this section are payment of
debts, provisions for portions and maintenance of property.

Section 29 of the Transfer of Property Act, 1882

 Provides that any condition that is required to be fulfilled after the transfer of any property
is called condition subsequent. This condition is to be strictly complied with and the transfer
will happen only after the completion of such condition. For example, A transfers any
property ‘X’ to B on the condition that he has to score above 75 percent in his university
exams. If B fails to achieve 75 percent marks then the transfer will break down and the
property will revert back to A.
 Although it is an essential requirement that the condition needs to lawful and if it is not
then the condition will be held as void and the transfer will not break down and will be
finalized. For example, A transfers the property to B on the condition that he shall murder
C. This condition is void and hence transfer will go through and the property will be kept
by B.
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Section 25 of the Transfer of Property Act, 1882

 Provides for Conditional Transfer. It means that any transfer that happens on the fulfilment
of a condition that is imposed on the other party for the transfer of property.
 For any kind of a conditional transfer to be valid, the condition that is imposed should not
be:
- 1. Prohibited by law,
- 2. Should not be an act that involves fraudulent acts,
- 3. Should not be any act that is impossible,
- 4. Should not be an act that is termed as violative of public policy,
- 5. Should not be immoral,
- 6. Any act that incurs any harm to any person or his property.
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DEFINITION OF TRANSFER
 Section 5 of the Act defines “Transfer of Property” as “In the following sections ‘transfer of
property’ means an ACT by which a Living Person conveys property in present or in future,
to one or more other living person, or to himself, and one or more other living persons, and
“to transfer property” is to perform such act.
 LIVING PERSON: In this section “Living Person” includes “a company or association or
body of individuals whether incorporated or not, but nothing herein contained shall affect
any law for the time being in force relating to transfer of property to or by companies,
associations or bodies of individuals.”
 CONVEYS PROPERTY: Transfer of property is an act of conveyance (creation of new
right in favour of a person). It is not necessary that the person who conveys needs to be the
owner of the property it is enough that he must be entitled to convey the property to other
person. The term property means anything capable of being owned and transferred.
 PRESENT OR IN FUTURE: It means that the transfer of property may be conveyed in
present or in future. It should not be interpreted that transfer of future property is valid in
TPA. The property to be transferred must be in existence on the day of transfer. (JUGAL
KISHORE v RAW COTTON CO. 1955SCR 1369)
 One or more other living person, or to HIMSELF Earlier the property cannot be transferred
to one self but in the year 1929 an amendment was made by which a person can transfer a
property to himself by adding the word himself in the act. viz cases of trust in which a
person transfers a property to trust and himself becomes a sole trustee.
 The Act contemplates the following kinds of transfers:
- (1) Sale
- (2) Mortgage
- (3) Lease
- (4) Exchange
- (5) Gift.
- (6) Actionable claims
 Transactions not amounting to Transfer of Property : “Transfer of property” means
‘conveying of property’, i.e., creation of new title or interest in the favour of the transferee,
if new title or interest has not created in favour of transferee, the property cannot be said to
be conveyed, thus no transfer of property.
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- 1- Partition
- 2- Relinquishment
- 3- Surrender
- 4- Easement
- 5- Will
- 6- Compromise
- 7- Family arrangement/ Settlement.

Essential elements of the Transfer of Property Act, 1882

 To be a living or juristic person: For a transfer of property, there must be a transfer

between living or a juristic person. In Shiromanigurudwara Prabhakar committee,
Amritsar v. Sri Somnath Dass (2000) the court defines a juristic person which can be an
individual firm, corporate, company society, association, but not a partnership. Anyone
who can sue or can be sued would satisfy this requirement.
 Transfer through Conveyance: Conveyance of property can be either done in the present
or in the future. It is necessary to ensure nothing is transferred before the title.
 The Property must be transferable: According to Section 6 of transfer of property Act,
1882 there are properties which cannot be transferred:
- The chance of an heir-apparent succeeding to an estate, the chance of a relation
obtaining a legacy on the death of a kinsman, or any other mere possibility of a like
nature cannot be transferred.
- The mere right to re-entry for breach of a condition subsequent cannot be transferred
to anyone except the owner.
- The easement right cannot be transferred.
- The interest of the property restricted in its enjoyment to the owner cannot be
transferred.
- Political pensions, public office, the salary of the public officer cannot be
transferred.
- The right to sue cannot be transferred.
- Stipends to military, navy or the airforce, political pensioners, and civil pensioners
cannot be transferred.
- No transfer cannot be made as opposed to the natural interest or if the object or the
consideration is unlawful then the transfer cannot be held valid.
- The right to future maintenance cannot be transferred.
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- Tenants having an untransferable right to occupancy, the farmer of an estate in

respect of which default has been made in paying revenue or lessee of an estate
under the management of the court of wards, to assign his interest as the tenant,
farmer, or lessee.
 Transfer of property must be done by a competent person: For a valid transfer, it is
necessary that the property transferred should be of a sound mind, should not be
intoxicated, must be a major or he is not a person disqualified by law cannot enter into a
contract of transfer of property with another person.
 The transfer should be made in a prescribed form: The transfer of property need not be
in be made in writing however certain property to transfer then it must be in writing:
- Sale of movable property value more than a hundred rupees.
- Sale of intangible must be in a written format.
- All mortgages which are more than a hundred rupees should be transferred in a
written form.
- The transfer of actionable claims must be in a written form.
- A gift in a form of immovable property.
- Lease of immovable property exceeding more than one year.
 The rule against perpetually: It is necessary that the property must be transferred during
the lifetime of an individual perpetuity rule should not be followed during the time of
transfer of property.
 Property cannot be transferred to an unborn child: A property cannot be transferred to
an unborn child necessary to consider that while transferring the interest of the property
person should be above the age of 18 years.
 Conditional transfer of property: Under Section 25 of the transfer of property Act, 1882,
the property can be transferred complying to the condition mentioned. If the condition
becomes impossible, forbidden by law, opposed to public policy, or is immoral the transfer
would be held void.
- Illustration: A is interested in purchasing B’s property but B sets a condition that
A in order to purchase B’s property has to kill C here the transfer is through
unlawful act, therefore, the transfer would be held void.

What may be Transferred

 Section 6 “Property of any kind may be transferred, except as otherwise provided by this
Act, or by any other law for the time being in force.”
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 Clause (a) to (i) of This section enumerates different kinds of property which cannot be
transferred (Exceptions to Section 6)
- Spes Successionis: Clause (a) describes spes successionis cannot be transferred.
This clause states that the transfer of a bare chance of a person to get a property is
prohibited under this section. For example, Arun expecting that Chandini, his aunt,
who had no issues, would bequeath her house worth Rs. 50,000 transfers it to
Bhushan. The transfer is invalid as it is a mere matter of chance of receiving the
property on the part of Arun. Thus, it is invalid.
- Right of Re-entry: Clause (b) mentions that the right of re-entry cannot be
transferred. The right to re-entry implies a right to resume possession of the land
which has been given to someone else for a certain time. The section mentions that
the right of re-entry cannot be transferred by itself apart from the land. For example,
A grants a lease of a plot of land to B with the condition that if shall build upon it,
he would re-enter — transfers to C his right of re-entering in case of breach of the
covenant not to build. The transfer is invalid.
- Easement: Clause (c) mentions that easement cannot be transferred. An easement
is a right to use or restrict the use of land of another in some way. For example, the
right of way or right of light cannot be transferred. These right cannot be transferred
without the property which has the benefit of it.
- Restricted Interest: Clause (d) mentions that an interest restricted in its enjoyment
of himself cannot be transferred. For instance, if a house is lent to a man for his
personal use, he cannot transfer his right of enjoyment to another.
- Maintenance: Clause (dd) restricts the transfer of the right to maintenance. Such a
right cannot be transferred as such right is for the personal benefit of the concerned
person.
- Mere right to sue: Clause (e) provides that mere right to sue cannot be transferred.
The prohibition has been imposed as the right to sue is a right which is personal and
exclusive to the aggrieved party. For example, a person cannot transfer his right to
sue for the damages suffered by him due to breach of contract by the other party.
- Public office: Clause (f) forbids the transfer of public offices. The philosophy
behind the prohibition is that such a transfer may be opposed to public policy in
general. A person is eligible to hold a public office on the grounds of his personal
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qualities, and such qualities cannot be transferred. Thus, the transfer of public
offices is prohibited under this section.
- Pensions: Clause (g) of section 6 provides that pensions cannot be transferred.
Pensions allowed to military and civil pensioners of government and political
pensions cannot be transferred. In simpler terms, a pension may be understood as
any periodical allowance which may be granted in regard to any right of office but
only on account of the past services offered by the pensioner.
- Nature of Interests: Clause (h) of this section is titled as nature of nature. This
clause prohibits transfer which will oppose the interest affected thereby. The
transfer is also forbidden if the object or consideration of the transfer is unlawful.
Moreover, a transfer by a person who is legally disqualified from being a transferee
is also forbidden.
- Un-transferable interests: Clause (i) of section 6 was inserted by the Amendment
Act of 1885. The clause declares that certain interests are untransferable and
inalienable. For example, a farmer of an estate, in respect of which default has been
made in paying the revenue, cannot assign his interest in the holding.

Kinds of transfer under the Transfer of Property Act, 1882

 Sale of immovable property: There is a transfer of ownership from the buyer to the seller
in exchange for the price. Delivery of tangible property from the seller to the buyer.
 Mortgage of immovable property: The property gets transferred from the buyer to the
seller in the form of a mortgage where the immovable property is mortgaged to secure a
loan. The mortgagor has to pay the principal loan along with the interest to release the
immovable property from the mortgage.
 Leases of immovable property: The possession of the property is being transferred from
one person to another person for a fixed price in this scenario there is no transfer of
ownership.
 Exchange of immovable property: When two persons mutually decide to transfer
immovable property it would be referred to as an exchange of property.
 Gift of immovable property: According to the transfer of property Act, 1882, gift refers
to a transfer of movable or immovable property violently or without the consideration, by
one person that is donee, to donor transfer is accepted by and on behalf of the donee.
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Transfer to an Unborn Person

 As per the Indian Law, section 13 of Transfer of Property Act 1882 defines an unborn child
as a child or a baby in its mother’s womb. A person still yet to born does not have any
existence and is not counted as a living person but still the property can be transferred to
the CHILD.
 Legal status of an unborn child: An unborn child is termed as a person post his/her birth.
Infant enventresa mere i.e. child in the womb is supposed to take birth for many reasons.
As per the property law, the unborn child can attain definite rights and inherit the property
but only in case he or she is born alive.
 Although the unborn child cannot be considered as a person yet his/her rights can be vested
in the hands of his/her trustees.
 Rights of an unborn child on property under the property act: The thesis of child
enventresa mere under the property act gives the right on property to an unborn child only
if he or she is born alive. By the time he/she is born, till then all the rights lay in the name
of his or her parents/trustees.

Section 13 TPA

 “Transfer for benefit of unborn person – Where, on a transfer of property, an interest is

created for the benefit of a person not in existence at the date of the transfer, subject to prior
interest created by the transfer, the interest created for the benefit of such person shall not
take effect, unless it extends to the whole of the remaining interest of the transferor in the
property.”
 Person in existence: To begin with, the ultimate beneficiary of the transfer is an unborn
person, who is not yet in existence. Child may not be physically born, but from conception
itself, he is considered as a person in existence. Transfer of interest in property is valid
from the day of conception, though the same shall vest on birth of such child.
 No Direct Transfer: A transfer cannot be directly made to an unborn person. Such a
transfer can only be brought into existence by the mechanism of trusts. It is a cardinal
principle of property law that every property will have an owner. Accordingly, if a transfer
of property is made to an unborn person, it will lead to a scenario wherein the property will
remain without an owner from the date of transfer of property till the date the unborn person
comes into existence.
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 Prior Interest: Section 5 of TPA mandates transfer of property inter vivos or between
living persons only. Since, the transferor wishes to pass interest on to a person not in
existence, to overcome this predicament a prior interest is created in favor of living person
on the date of transfer.
 Absolute Interest: The entire property must be transferred to the unborn person. The
transfer to an unborn person must be absolute and there should be no further transfer from
him to any other person.An interest which remains only for the lifetime cannot be conferred
on an unborn person. Under the English law, an unborn person can be conferred an estate
only for his lifetime. This concept of English law, however, is subject to a restriction known
as the rule of double possibilities. This rule was recognised in the case of Whitby Mitchell.
The rule states that life interest to an unborn person should not be transferred as doing so
will give rise to existence of two possibilities. The first possibility will be the birth of the
unborn person to whom the life estate was to be transferred and the second possibility will
be the coming into existence of issues of that unborn persons. Thus, the transfer of property
to an unborn person can be permitted only if the absolute interest is transferred and not just
the life estate.
 Illustration: “A” owns a property. He transfers it to “B” in trust for him and his intended
wife successively for their lives. After the death of the survivor, it is to be transferred to the
eldest son of the intended marriage for his life, and after his death, it is to be transferred to
A’s second son. The interest so created for the benefit of the eldest son does not take effect
because it does not extend to the whole of A’s remaining interest in the property.

The rule of Double Possibilities.

 This rule was recognised in the case of Whitby vs. Mitchell.

 The rule states that life interest to an unborn person should not be transferred as doing so
will give rise to existence of two possibilities. The first possibility will be the birth of the
unborn person to whom the life estate was to be transferred and the second possibility will
be the coming into existence of issues of that unborn persons. Thus, the transfer of property
to an unborn person can be permitted only if the absolute interest is transferred and not just
the life estate.
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RULE AGAINST PERPETUITY

 Rule against perpetuity has been dealt under section 14 of Transfer of Property Act, 1882.
Perpetuity simply means “indefinite Period”, so this rule is against a transfer which makes
a property inalienable for an indefinite period.
 Section 14 of the ‘The Transfer of Property Act, 1882’ (TPA) is rightly called ‘Rule
against perpetuity’ as it limits the maximum time period beyond which property cannot
be transferred.
 Starting from the date that the transferor transfers the property + lifetime of the last prior
interest holder’s + gestation period of the unborn beneficiary + 18 years, ( ‘Age of
majority of persons domiciled in India’ under section 3 of The Majority Act, 1875).
 This period is called the perpetuity period, and vesting of the property in the transferee
cannot be postponed beyond this limit.
 The rule under this section is that the property must not be tied up for perpetuity
(indefinite time period).
 A perpetuity may arise in the following ways:
- By taking away from the transferee his powers to transfer (such a condition is void
under section 10 as being a condition subsequent)
- By creating future partial interest in favour of unborn (such remoteness of vesting
is void under Section 14).
 Rule against perpetuity is the rule against such creation of future remote interest or we
can say is a rule against remoteness of vesting(interest). Remoteness here means “The
state of being unlikely to occur”
 No transfer of property which is creating an interest which is to take effect after
- The lifetime of one or more persons living at the date of transfer who has been
given life interest in the property and
- The minority of such person who shall be in existence before the death of last
preceding prior interest.
 The primary objective behind the rule against perpetuity is that no property should be left
to be alienated for an indefinite period, for that will render the property to be destroyed or
damaged. Free and active circulation of property for the purpose of effective trade and
commerce and proper maintenance of the property, is another necessary objection of the
rule against perpetuity that needs to be noted.
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 ESSENTIALS:
- There must be a transfer of property
- The absolute interest must be created in favour of transferee (Unborn person) who
is the ultimate beneficiary.
- The ultimate beneficiary must come into existence before the death of last preceding
life interest.
- The vesting of interest in favor of ultimate beneficiary must not be postponed
beyond the life of preceding life interest & the minority of the ultimate beneficiary.
- Section 14 checks any postponement of vesting beyond the life of prior life interest
plus the period of gestation and the minority of ultimate beneficiary.
 The rule against perpetuity applies to both wills and deeds, but there are some differences
in how it is applied to each.
- Wills: The rule against perpetuity applies to the transfer of property through a will.
A will must be executed and take effect during the lifetime of the testator (the person
making the will) or, if the testator is dead, within a specified period of time after
their death. If the will creates a perpetuity that exceeds the maximum permissible
period, it is considered void under the rule against perpetuity.
- Deeds: The rule against perpetuity applies to the transfer of property through a
deed. A deed is a written instrument that conveys ownership of property from one
person to another. The rule against perpetuity applies to the transfer of property
through a deed in the same way as it applies to a will, but with some important
differences. For example, a deed may be executed at any time, and the grantor (the
person conveying the property) does not need to be alive at the time of execution.
 Both wills and deeds are subject to the rule against perpetuity, but the manner in which the
rule is applied to each can differ depending on the specific circumstances and the
jurisdiction in which the property is located. In general, the rule against perpetuity serves
to prevent the creation of interests in property that last for an indefinite or excessive period
of time, and to ensure that property is used and transferred in an efficient and fair manner.
 Exceptions to rule of perpetuity: Section 18 of TPA provides protection from rule against
perpetuity when the transfer is in favor of public viz. advancement of religion, knowledge,
commerce, health, safety or any other object beneficial to mankind.
- Does not apply to personal agreements that do not create interest in property.
- Renewal of lease agreements.
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- Covenant for redemption of property under mortgage.

- Charge created over property, as this does not amount to transfer of interest.
- Contract of pre-emption.

CASES

 Rambaran Prosad vs Ram Mohit Hazra & Ors (1967): In this case, there was a Pre-
emption-Agreement between parties to give to each other the right of preemption. The issue
in this case was whether such agreement binds successors-in-interest thereby offending the
rule against perpetuity, or not. The Apex Court had opined that the rule against perpetuity
does not apply to personal contracts which do not create interest in property.
 R. Kempraj vs. M/S Burton son & Co (1970): In this case the lease was created for 10
years with a clause of renewal on the same terms . When in 1961 the first period of ten
years was about to expire the lessee asked for a renewal of the lease. On the lesser refusing
to do so, the lessee filed a suit for specific performance. The suit came before the Supreme
Court with issue as to “whether a clause for renewal of lease can be regarded as creating an
interest in property, and thus hit by the rule against perpetuity and thus is void”. It was held
that the rule against perpetuity contained in Section 14 of the Act of 1882 would not be
applicable as no interest in property had been created of the nature contemplated in the
provision. In simple words the rule of perpetuity does not apply to contracts for perpetual
renewal of leases.
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VESTED AND CONTINGENT INTEREST

VESTED INTEREST

 Section 19 of the Transfer of Property Act, 1882 states about Vested Interest. It is an
interest which is created in favour of a person where time is not specified or a condition
of the happening of a specified certain event.
 The person having the vested interest does not get the possession of that property but has
the expectancy to receive it upon happening of a specified certain event.
 For example, A promises to transfer his property to B on him attaining the age of 22. B
will have vested interest in A’s property till the time he does not get the possession of it.
 Death of the person who is having this interest will not have any effect over that interest
as after the deceased, the interest will vest in his legal heirs.
 For example, in the above example, if B dies at the age of 21, then the interest vested in B
will pass on to the legal heirs of B and they will be entitled to the property in the prescribed
time period.
 Interest should be vested: This is the basic meaning of the provision that lays down that
interest should be created in favour of a person where time is not specified or a condition
of the happening of a specified certain event. A person should profess to transfer a
particular property in order for this interest to be created.
 Right to enjoy property is postponed: When interest is vested in a person, he does not
immediately get the possession of that property and hence cannot enjoy that property.
- But any person who is not a major and has a guardian is only entitled to the vested
interest after he attains majority.
- For example, X agrees to transfer the property ‘O’ to Y and directs his guardian Z
to give him the property when he attains the age of 22. Y gets vested interest once
he attains the age of 18.
 Time of vesting: The interest is vested right after the transfer is initiated. Nothing can
stop the interest from vesting in the person in favour of whom the transfer is to be made.
 Contrary Intention: The transferor can specify a particular time as to when the interest
will be vested in the person who will receive the property.
 Death of the transferee: If the transferee dies before getting the property in his
possession, the interest vested in him will now vest in his legal heirs and they will get the
possession of that property once the condition is fulfilled.
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 In the case of Lachman v. Baldeo , a person transferred a deed of gift in favour of another
person but directed him that he will not get the possession of that property until the
transferor himself dies. The transferee will have a vested interest even though his right of
enjoyment is postponed.

Characteristics of Vested Interest

 Vested interest creates a present right that is in effect immediately, although the enjoyment
is postponed to the time prescribed in the transfer. It does not entirely depend on the
condition as the condition involves a certain event.
 Death of transferee will not render the transfer invalid as the interest will pass on to his
legal heirs.
 Vested interest is a Transferable and heritable right.
 Section 20 of the Transfer of Property Act, 1882 states about vested interest to an unborn
child. The interest in the property will be vested in him once he is born. The unborn child
may not get the right of enjoyment of the property immediately after having vested interest.

Concept of Contingent Interest

 The crux of the contingent interest is ‘specified uncertain event’.
 Section 21 of the Transfer of Property Act, 1882 states about Contingent Interest. It is an
interest which is created in favour of a person on a condition of the happening of a specified
uncertain event. The person having the contingent interest does not get the possession of
that property but has the expectancy to receive it upon happening of that event but will not
receive the property if the event does not happen as the condition is not fulfilled. Contingent
interest is entirely dependent on the condition imposed on the transfer.
 For example, A agrees to transfer the property ‘X’ to B on the condition that he shall secure
90 % in his exams. This condition is uncertain and the happening of the event or not
happening is in doubt and therefore B here acquires a contingent interest in the property
‘X’. He shall get the property only if he gets 90 % and when the condition is fulfilled.
 In the case of Leake v. Robinson, the court held that whenever a condition involves a
bequest that is to be given ‘at’ a particular age or ‘upon attaining’ a particular age or ‘after’
attaining this particular age, then it can be derived that the transfer involves a contingent
interest.
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Characteristics of Contingent Interest

 This interest is entirely dependent upon the condition. It only happens when the condition
is fulfilled.
 Death of the transferee before getting the possession of the property will result in the failure
of continent interest and the property will remain with the transferor.
 Contingent interest is a Transferable right, but whether it is heritable or not, it depends upon
the nature of such any transfer and the condition.

Important aspects surrounding contingent interest

 Interest: In a transfer if a condition is such that the transfer will take effect only upon the
fulfilment of that condition and till that time, the interest is contingent.
 Contingent Interest exists in wills: Any bequest to a wife, son or daughter can be a
contingent interest if the condition provides so.
 Exception: When a person who has an expectancy in the rights of ownership of a particular
property, and he for the time being till the happening of the event, gets any sort of income
that arises from that property. This interest in the property does not come under the aspect
of contingent interest.
 Section 120 of the Indian Successions Act, 1925 lays down the exceptions for contingent
interest.
 Section 22 states about the transfer to a group or class of members with a contingent
interest. For example, there is a transfer to a group of 5 people, and the condition is that the
property will be vested in persons who attain the age of 40 years on this particular date.
The persons who have attained this age will get an interest in the property and people who
have not, will not get an interest in that property.
 Section 23 states about a transfer that happens after happening of an event that was
mentioned in the transfer involving contingent interest. This provision simply lays down
one of the two branches of Section 21 that laws down about contingent interest. The two
branches are happening of an event and non-happening of an event. This Section states
about what happens after the happening of the specified uncertain event.
 Section 24 states about a transfer to a group or class of members who will get the property
on a condition that they shall be living at the specified date. This is also a contingent interest
as the event mentioned here is an uncertain event. The transfer will only take place for those
people who satisfy the condition of surviving at a particular date. The legal heirs of the
deceased cannot claim an interest in that property as a transfer involving a contingent
interest solely depends upon the fulfilment of the condition.
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RULE OF ELECTION
 The doctrine of election is stated in transfer of property act 1882 in section 35 and within
180-190 of Indian succession act.
 Election means a choice between two alternative or conflicting rights. Granting two rights
in such a way that one is higher than the other, you can choose either of them. You cannot
have both.
 The applicant cannot use both, the recipient must choose between two inconsistencies or
alternative rights. Basically it means that the person taking the benefit should also bear
the burden. (C. Beepathuma V. Viduri Shankar Narayana Kadambolithya AIR 1965SC
241).
 It is an important part of the transfer of property act 1882 to resolve property conflicts
among people. This principle was derived from the equity principle where a person
cannot retain all the benefits of a transaction thus, he cannot keep the property and get
benefits still. They have to elect for or against the instrument.
 The doctrine of election is a general legal rule that requires the recipient to choose whether
the heir wants to own someone else’s property and decide whether to preserve the property
or accept his intentions.
 Example: A promises to give B, 50 lakh but only on one condition that he will sell his
house to C, now B here has to make the election on what to do? If he takes A’s offer he
will have to give his house to C. On the other hand if he doesn’t, he won’t get 50lakh also
hence he has to make an election on what to choose.
 Maitland’s describes its doctrine of election as (Maitland’s lecture on equity)
- Adopt all the contents of that instrument.
- Accord to all its provisions.
- Cede all rights that are inconsonant.

Principle underlying Doctrine of Election

 Allegans contraria non est audiendus meaning, he is not to be heard who alleges things
contradictory to each other.
 Further this principle was explained by Lord Hather in Cooper v. Cooper
 “If it is found that the instrument purports to deal with something which it was beyond the
power of the donor or settlor to dispose of, but to which effect can be given by the
 P a g e | 15

concurrence of him who receives a benefit under the same instrument, the law will impose
on him, who takes the benefit, the obligation of carrying the instrument into full and
complete force and effect.”

Section 35. Election when necessary

 Where a person professes to transfer property which he has no right to transfer, and as part
of the same transaction confers any benefit on the owner of the property, such owner must
elect either to confirm such transfer or to dissent from it; and in the latter case he shall
relinquish the benefit so conferred, and the benefit so relinquished shall revert to the
transferor or his representative as if it had not been disposed of, subject nevertheless,
 where the transfer is gratuitous, and the transferor has, before the election, died or otherwise
become incapable of making a fresh transfer, and in all cases where the transfer is for
consideration, to the charge of making good to the disappointed transferee the amount or
value of the property attempted to be transferred to him.
 Illustrations: The farm of Sultanpur is the property of C and worth Rs. 800. A by an
instrument of gift professes to transfer it to B, giving by the same instrument Rs. 1,000 to
C. C elects to retain the farm. He forfeits the gift of Rs. 1,000. In the same case, A dies
before the election. His representative must out of the Rs. 1,000 pay Rs. 800 to B.
 The rule in the first paragraph of this section applies whether the transferor does or does
not believe that which he professes to transfer to be his own.
 A person taking no benefit directly under a transaction, but deriving a benefit under it
indirectly, need not elect.
 A person who in his own capacity takes a benefit under the transaction may in another
dissent there from.
 Exception to the last preceding four rules : Where a particular benefit is expressed to be
conferred on the owner of the property which the transferor professes to transfer, and such
benefit is expressed to be in lieu of that property, if such owner claims the property, he
must relinquish the particular benefit, but he is not bound to relinquish any other benefit
conferred upon him by the same transaction.
 Acceptance of the benefit by the person on whom it is conferred constitutes an election by
him to confirm the transfer, if he is aware of his duty to elect and of those circumstances
which would influence the judgment of a reasonable man in making an election, or if he
waives enquiry into the circumstances.
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 Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed,
if the person on whom the benefit has been conferred has enjoyed it for two years without
doing any act to express dissent.
 Such knowledge or waiver may be inferred from any act of his which renders it impossible
to place the persons interested in the property professed to be transferred in the same
condition as if such act had not been done.
 Illustration: A transfers to B an estate to which C is entitled, and as part of the same
transaction gives C a coal-mine. C takes possession of the mine and exhausts it. He has
thereby confirmed the transfer of the estate to B.
 If he does not within one year after the date of the transfer signify to the transferor or his
representatives his intention to confirm or to dissent from the transfer, the transferor or his
representative may, upon the expiration of that period, require him to make his election;
and, 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.
 In case of disability, the election shall be postponed until the disability ceases, or until the
election is made by some competent authority.

ESSENTIALS

 The transferor must profess to transfer a property which he has no right to transfer.
 The transferor must have given some benefit to the owner of the property.
 The confirmation of benefit and the transfer of property both must be made in the same
transaction directly to the owner.
 The confinement of benefit must be made in the same capacity in which the owner owns
the property.
 If the owner dissents from transferring, then he must relinquish the benefit to the transferor.

COMPENSATION TO THE DISAPPOINTED TRANSFEREE

 Where the transfer is gratuitous and the transferor dies before the election is made or has
become incapable for making a fresh transfer then the disappointed transferee must be
compensated.
 The amount of compensation must be equal to the value of the property about to be
transferred.
 If the transfer is for consideration, then also the disappointed transferee is also entitled for
compensation.
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PRESUMPTION OF ELECTION

 Acceptance of benefit by the real owner constitutes confirmation of transfer. Therefore, if

the real owner being aware of his duty to elect and of the circumstances and accepts the
benefit then it is a confirmation of transfer.
 If the real owner enjoys the benefit for 2 years without dissenting a presumption is there
made that he has the knowledge and he is bound to transfer.
 Where the real owner has accepted the benefit and has exhausted it making it impossible to
return the benefit then a presumption is raised that he has given acceptance to transfer.

REQUISITION OF ELECTION

 Where the real owner has accepted the benefit and 1 year has passed then the transferor
may give a notice to him within a reasonable time.
 If no transfer is made within reasonable time, then a presumption is raised regarding the
confirmation of election.

SUSPENSION OF ELECTION

 Election stands postponed where the real owner suffers from any disability such
postponement continues till the disability continues.
 During the subsistence if disability any other competent person may transfer the property
on behalf of the real owner.

Conditions precedent for equity of election:

 A transfer of property by a person who has no right to transfer;

 As a part of the same transaction, he must confer some benefit on the owner of the property
and
 Such owner must elect either to confirm such transfer or to dissent from it.

Modes of Election

 The election by the owner can either be direct or indirect. In direct election, it is simply
through communication about the elected choice or option. Though, in case of an indirect
election, “the acceptance of the benefit by the original owner is subject to two conditions:
 He has to be aware of his duty to elect, and
 There must be proof of knowledge of circumstances which would influence the judgment
of a reasonable man in making an election :
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- Enjoyment for two years of the benefit by the person on whom it is conferred with
any dissent”
- The election shall be presumed when the donee acts in such a manner with the
property gifted.

Mohd Afzal vs. Ghulam Qasim, 1903

 In this case Mr. A who was the king transferred 2 villages in favour of his youngest son C.
When Mr. A dies his eldest son B along with the Government of Bombay was declared as
the chief. B gave some consideration to C and asked him to recognize B as the King, C
took the consideration and gave him the recognition. Afterwards, B asked C to transfer him
2 villages as he is the King, C denied. It was held the Doctrine of Election will not be
applicable as it was not made in the same transaction. Therefore, C is entitled to take the
benefit under one transaction and may dissent from electing under other transaction.