TPA Bullet Notes

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pahujalawacademy.com/tpa
TRANSFER OF PROPERTY ACT (STUDY PLAN)
PAHUJA LAW ACADEMY
TRANSFER OF PROPERTY ACT

[EDIT] TPA
MAINS QUESTIONS
1. Explain the meaning of “Transfer of property” under Transfer of property Act. Also
discuss what can be transferred?
2. Distinguish between movable and immovable property..
3. Define explain expression “Immovable property” under Transfer of property Act.
4. What do you mean by (Profit a prendre) Explain through case law. .
5. Explain the doctrine of fixture. .
LECTURE-1
STAR FACTS
• Act ‘4’ of 1882
• Passed on 17/02/1882
• Came into force on 1st July 1882
[Trick to remember]
Property ——- (land)
• Signed by Lord Rippon
• Transfer of property is a subject in “concurrent list” of 7th schedule of Constitution of India

as [ENTRY 6 OF LIST III]
Except
That relating to agricultural land C is a state subject and the same is [ENTRY 18 LIST II]
FOR understanding PREAMBLE
OR
Scope/ object of this statute 1st understand
WHAT IS PROPERTY?
Property means anything to which any person may have legal title
[LEGAL- means something enforceable by law]Legal title comprises of Bundle of Rights

likewise ownership is nothing but Bundle of Rights which comprises
• Right to Sale
• Right to possess
• Right to enjoyment etc.
Following four factors will decide as to which statute will govern the transaction.
These are
The preamble of the Transfer of property Act, 1882 provides that it is expedient to define and
amend the law relating to transfer of property by act of parties.
By summarizing this we can arrive at the conclusion that T.P. Act 1882 is an Act to deal with
only specified transactions of transfer by Act of parties
Since
As has been already told that, prior to this enactment, the courts were deciding the matters
• By referring English Law on real properties
• Customary Laws &
• Justice, equity, good conscience and fair play.
Thus
The laws laid down so far were amended by this act and certain new provisions were
incorporated.
This preamble now is where as it is expedient to define and amend Certain parts of the law
relating to transfer of property by Act of parties
T.P. Act 1882 is supplemental to:-
• Indian Registration Act 1908
• Indian Contract Act 1872

THUS
From the above discussion we can safely infere that the PROVISIONS OF T.P. ACT are NOT
EXHAUSTIVE AND , This Act deals with transfer by Act of parties i.e. by living persons
,which is also known as inter-vivos transfer.
Living persons—for the purpose of this Act
Includes—[i.e. inclusive definition]
BUT
Laws governing such transfers to or by such company, associated body shall prevail upon the
provisions of this law.
NOW
Let us understand basic scheme of the Act if helps
• To understand the structure of Act
• To memorise sections
• To comprehend the concept of the Act.

Section 5 of TP Act 1882, defines –
An Act by which
• a living person
• conveys property
• to
—one or more living persons or
—himself or
—himself and one or more living persons
living persons for purposes of this act includes :-
• individual
• company
• association or
• body of individual either incorporated or not
Evident from the above definition

A person need not be an owner of the property
Thus, as per section 7
Persons competent to transfer are :-
• persons competent to contract and
• entitled to transferable property or authorize to dispose of transferable property not his

own.
The Transfer once done is operable forthwith in the absence of any express or
implied contract otherwise.
DEFINITION CLAUSE
1. Immovable property
2. Instrument
3. Attested
4. Registered
5. Attached to the earth
6. Actionable claims
7. A person is said to have notice.
Instrument means a legal document. Where a property is transferred through any document
is called instrument. Section 3 of the Act defines instrument as a non- testamentary
instrument. it clarifies that the Act excludes testamentary instruments.
Registered means
• Registered in any part of the territories to which TP Act extends, under the law regulating
registration of documents in those territories
Immovable Property
Defined in Para I of section 3 but the definition is neither comprehensive nor exhaustive and
is merely negative definition and merely provides :-
-Immovable property does not include
• Standing timber
• Growing crop and
• Growing Grass
Term immovable property is also defined u/S- 2(6) of Registration Act, 1908 –<
immovable property” includes land, buildings, 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.
S- 3(26) of 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.
Thus, holistic and harmonious construction of all the three definitions the term
Immovable property includes :-
1) Land,
2) benefits arising out of land (profit a prendre) &
3) Things attached to the earth
Attached to earth has been defined in para V of section 3 of TP Act

Benefit to arise out of earth :-
Is in peri materia with “Profits a prendre” in English law
Prendre means TO TAKE (a French verb)
The phrase “benefits arising out of land “ means profits derived from land without having
any substantial control over the land. it is also known as “profit a prendere”. Ordinarily / in
the absence of any intention to the contrary, all the benefits arising out of land stands
transferred to the transferee, forthwith.
Illustration :- 1. X sells his land to Y but defers the transfer of possession to another one year
so as to allow the benefits of the trees standing and growing thereon.
Illustration :- 2. X sells a forest to Y, the trees, rivers, minerals etc,. forming part of the land
will go with it forthwith in the absence of any express contract to the contrary or by necessary
implication.
Case Law:
Ananda behera vs. State of Orissa:
(AIR 1956 SC 17)
Held : Right to catch fish from chilka lake was held to be an interest in immovable property
being benefit arising out of land.
Shanta bai vs. State of Bombay

(AIR 1959 SC 532)
Held : Right to fell, cut and collect standing timber from the trees in various stages of their
growth and extending over a period of 12 years was held to be an interest in an immovable
property.
State of Orissa vs. Titaghur paper mills company limited
Things attached to earth:–
Is in peri meteria with “doctrine of fixture”–
And means :-
• Things rooted in earth
• Things imbedded in earth or
• Things attached to what is so imbedded for the permanent beneficial enjoyment of that to
which it is so attached.
Thus, the question of nature of property is a mix question of fact and law and can be
determined on the basis of –
• Intention, object and purpose of the party attaching the property
• Duration of attachment
• Degree of attachment
• Mode of attachment
And is known as doctrine of fixtures and is based on the maxim “quic quid plantature solo,
solo credit” which means whatever planted to soil belongs to soil.
Case law:
On the basis intention, duration and purpose
Bamdev Panigrahi vs. Manorama Raj
(AIR 1974 AP 226)
Touring talkie case.
Duncans industries limited vs. State of UP
(2000) 1 SCC 633

Fertilizer business case.
Sirpur parper mills limited vs. CCE
(1998) 1 SCC 400
Notice
Para VII of interpretation clause that is section 3 of TP Act deals with notice
Notice means:-
Knowledge of a fact
Significance :-
In law knowledge of a fact affects one’s legal rights & liabilities.
Types of notice:-
(i) Actual notice
(ii) Constructive notice
(1) Actual notice means and express notice and is a matter of fact. It is sufficient to raise the
presumption and determine the rights and liabilities of the party having actual notice of
material facts.
Pre Requisites of Actual notice :-
• Must be definite information
• Information shall be given by the person interested
• Information shall be given to the party to the transaction
• Information shall be given in the course of same transaction
(2) Constructive notice –also known as implied / deemed notice. The doctrine of notice
purely based on equity. It’s a mix question of fact and law
It is a knowledge with the court impute to the person under the circumstances raising strong
presumption.
Legal presumption of constructive notice is raised by the court under following

five circumstances
(a) Willful abstention from enquiry or search
(b) Gross negligence
(c) Registration as a notice
(d) Actual possession as notice
(e) Notice to the agent ( also called as ‘imputed notice’)
Llyod banks limited vs. P. E. Guzdar and Company (1929) 56 Calcutta 868
Imperial bank of India vs. U. Raj GYAW (1923) 50 IA 283
Ahamdabad municipal Corporation vs. Haaji Abdul gafoor AIR (1971) SC 1201
Md. Mustafa vs. Haaji Md Issa AIR (1987) Patna V

PAHUJA LAW ACADEMY
PRELIMINARY QUESTIONS
1. Immovable property does not include standing timber:
(a) True
(b) False
(c) Till it is rooted in the earth.
(d) Only the branches of timber does not include in immovable property.
2. A sheesham tree is:
(a) Movable property.
(b) Immovable property.
(C) Both movable and immovable property.
(d) Depend
3. “Standing timber-comes under the definition of ‘movable property, therefore; ‘bamboo’
would not come under the definition of immovable property”. This was laid down in:
(a) State of Orrisa v Titagarh Paper Mills Ltd.
(b) Md. Afzal v Qasim
(c) Rajenara v Shanta Singh
(d) Nalha Lal v Phoolchanara
4. Which of the following is an immovable property :
(a) Standing timber
(b) Growing crops
(c) Grass
(d) Tree bearing fruits
5. Which is not the immoveable property?:
(a) A lease of land
(b) Growing crops
(c) A right of way
(d) A life interest in the income of immoveable property
(a) A lease of land
(b) Growing crops
(c) A right of way
(a) A lease of land
(b) Growing crops
(c) A right of way

6. Which of the following does not come under the immovable property’ as per the T. P.
Act?
(a) Rights relating to lease
(b) Easementary rights
(c) Right to claim maintenance
(d) Sale of a ceiling fan
7. The term “profit a prendre“ means
(a) Things imbedded in the earth
(b) Things attached to the earth
(c) benefit arising out of land
(d) all of the above
8. Living person for the purpose of section 5 of the Transfer of Property Act, 1882 means
(a) an individual
(b) company
(c) association
9. The Transfer of Property Act, 1882 came into force on
(a) 1 July 1882
(b) 1 July 1881
(c) 1 September 1882
(d) 1 September 1881
10. ‘Imputed notice’ means
(a) actual notice
(b) constructive notice

(c) notice to an agent

[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. A sold a house to B and on that date B executed a separate that if he wished to sell the
house, he would not sell it to any other person unless A declines to purchase. Examine
the validity of this restraint on alienate..
2. What do you understand by conditional transfer of property?.
3. What is the difference between section 10 and 11 of the Transfer of property Act?.
4. Under which conditions a direction for accumulation is void?
5. What are the exceptions of the directions of accumulations ?
• Absolute transfer of property be transferred in case of sale, exchange and gift.

(Section 10)
1. Muhammad Raza v. abbas bandi Bibi (AIR 1932 PC 158.)
A partial restraint is valid and enforceable. A condition restricting the transfer outside the
family of the transferor is valid and enforceable.
2. Brahmanand v. Raushni
A transferee can transfer his property only in favour of any of his successor was held as an
absolute restriction & void.
3. Tagore v. Tagore (1878 Privi Counsel)
A transferee can transfer his property only for religious purpose been held as absolute
restriction & void
(Section 11)
• Restraining the mode of the transfer
• Transfer must be of absolute interest
• Absolute transfer of property be transferred in case of sale, exchange and gift.
(Section 12)
• Transfer involving the condition that in case of insolvency that in case of insolvency or
attempted transfer of the property would be void.
• Such condition is VOID but transfer is valid
Section 17 – Direction for accumulation

PAHUJA LAW ACADEMY
1. ‘Rule against double possibilities’ was recognized in which one of the following cases?:
(a) Girjesh Datt v Datadin.
(b) Whitby v Mitcell
(c) Ardeshir v Dadabhoy.
(d) Sopher v Administrator General of Bengal.
2. ‘Rule against accumulation’ is an important rule of the T. P. Act, laid down in:
(a) Sec. 17.
(b) Secs. 17-18.
(C) Sec. 18..
(d) Secs. 18-20
2. ‘Rule against accumulation’ is an important rule of the T. P. Act, laid down in:
(a) Sec. 17.
(b) Secs. 17-18.
(C) Sec. 18.
(d) Secs. 18-20
3. ‘What is the limit of accumulation of income in relation to the transfer of property -:
(a) Life of the transferor.
(b) A period of 18 years from .the date of the transfer.
(C) Both (a) and (b).
(d) Only (b).

4. ‘A direction for accumulation of income even beyond the periods stated in Sec. 17 of the
T. P. Act is valid if it is for the purpose of:
(a) Payment of the debts of the transferor.
(b) Provision of portions for children.
(C) Transfer beneficial to public, or for the preservation or maintenance of the property
transferred.
(d) All of the above.
5. ‘Under T. P. Act, a condition absolutely restraining the alienation is:
(a) Valid.
(b) Void.
(C) Voidable.
(d) Irregular
6. ‘‘A’ sold a property to ‘B’ on the condition that ‘B’ could not transfer the property
without ‘A’s consent
(a) The condition is illegal.
(b) The condition is legal.
(C) The condition is illegal and it completely takes away the power of transfer.
(d) None of the above
7. ‘Which of the following conditions amounts to an absolute restraint on alienation of

property:
(a) A condition that transferee shall not transfer the property by way of gift.
(b) A condition that transferee shall not transfer the property for a period of 5 years.
(C) A condition that transferee shall not transfer the property during the transferor’s
lifetime.
(d) A condition that transferee shall not transfer the property to a particular person.
8. A, B and C divided a Joint Family Property and made a settlement that if any of them
does not have a successor then he will not sold his portion and leave-it to other
relatives:
(a) The condition is illegal.
(b) The condition is illegal in relation to private property.
(C) The condition is illegal in relation to family property.
9. ‘A’ has certain property. ‘B’ is ‘A’s son and his only heir. Then:
(a) B cannot transfer the property during A’s lifetime.
(b) B can transfer the property during A’s life time.
(C) Both (a) and (b) are incorrect.
(d)The T. P. Act does not contain any provision in this regard.
10. A sells a house to B directing B that he cannot reside in it but can use it only as
agodown or shop , the condition being
(a) Valid.
(b) Void.
(C) Void, B is entitled to use the house as his residence.
(d) Valid, B is entitled to use the house as his residence.

[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. A transfers property of which he is the owner to B in trust for A and his intended wife
successively for their lives and after the death of the survivor, the eldest son of the
intended marriage for life. And after his death for A’s second son. Does the interest so
created for the benefit of the eldest son take effect? Decide.
2. What is meant by rule against perpetuity? Illustrate pointing out the distinction
between English and Indian Law.
3. A property is given to Anil for life and afterwards to Bimal. Bimal transfer this interest
to Chandan, Bimal dies during the life time of Anil. Chandan claims the property?
Decide.
4. How a property to an unborn person can be transferred?.
5. What are the exceptions of rule against perpetuity?
PAHUJA LAW ACADEMY
Transfer for the benefit of unborn person not in existence
(Section 13)
• No direct transfer to unborn person. A transfer to unborn person can be made in following
manner,
• Transfer for benefit of unborn person : two rules
1. Prior limited interest must be created in favor of a person in existence at the date of
transfer.
2. Further “the whole of the remaining interest” of the transferor in the property must be
given to the unborn person i.e. only absolute interest may be given
Leading cases
5. vesting of interest in favor of ultimate beneficiary may be postponed only up to the life or
lives of living person plus minority of ultimate beneficiary ; but not beyond that
Why a person desires to make a perpetual transfer?
• To attach his name with the property for long time or for always.
• To make sure use of property as transferor wants.
Exceptions of rule against perpetuity:

1. S- 18
2. Creation of charge
3. Renewal of lease (s-105)
4. Mortgage
5. Personal rights like right to preemption
6. Provision for payment of debt (sec -17)
PAHUJA LAW ACADEMY
1. Whether a transfer can be made in favour of an unborn person?
(a) Yes by machinery of trust
(b) Yes
(c) Guardian has got to be appointed first.
2. Section 13 of T. P. Act deals with:
(a) Conditions restraining alienation;
(b) Oral transfers
(c) Transfer for the benefit of unborn person..
(d) Registration of transfers
3. When does an unborn person acquire vested interest on transfer?>
(a) As soon as he is born.
(b) On attaining majority.
(c) On attaining 21 years.
(d) After marriage if female.

4. The ‘Rule against perpetuity is discussed in which section of T. P. Act?
(a) Sec 14.
(b) Sec15.
(c) Sec 13.
(d) Sec 17.
5. In transfer of property, law is against perpetuity because:
(a) The property will remain tied up forever.
(b) There will be no industrial progress.
(c) There will be loss to business.
6. “The rule against perpetuity applies only in those circumstances where a new interest
in immovable property is created.” This was held in:-
(a) Nafar Chandra v Kailash.
(b) Padamanath Ayyar v Sitaram Ayyar.
(c) T P Naidu v B. C. Jafferson.
(d) Ram Prasad v Ram Mohit.
7. ‘Rule against double possibilities’ was recognized in which one of the following cases?
(b) Whitby v Mitchell.
8. The rule against double possibilities has been incorporated under section
(a) Section 14
(b) Section 13
(c) Section 12
(d) Section 11
9. The restrictions contained under sections……………………. shall not apply in the case of a
transfer of property for the benefit of public in advancement of religion, knowledge,
commerce, health, safety, or any other subject beneficial to mankind.
(a) 14, 16 and 17
(b) 14, 15 and 16
(c) 13, 14 and 16.
(d) 16, 17 and 18
10. Provision for the Contingent and Vested interest has been given under sections
………….. respectively.
(a) 19 and 20
(b) 19 and 21
(c) 20 and 21
(d) 21 and 22
[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What do you understand by doctrine of acceleration?.
2. What do you understand by transfer by an ostensible owner?.
3. What is ‘doctrine of election’? State the exceptions of it, if any ?
4. What is “apportionment” ? state the relevant provision under the transfer of property
Act ?
5. What do you understand by ‘Feeding grant by Estopple’ ? State the relevant provision
under the transfer of property Act.
PAHUJA LAW ACADEMY
Doctrine of Acceleration (Section 27)
Essentials
(i) Section 27 of the Act contemplates a situation in which a second transfer takes effect on
failure of prior valid interest.
• Two interests created in the same transaction.
• Upon failure of the first interest the subsequent interest takes effect even though failure of
the first was not in the manner intended by the parties
Exceptions
Paragraph (2) of the section 27
First, where the prior interest is VOID the second interest dependent on it also fails and
cannot be carried out under this section.
Second , where the intention of the parties is clear and specific that the second transfer fails
in particular manner, the second or subsequent transfer would not take effect unless the
prior interest fails in that particular way.
Section 41
Transfer by Ostensible owners
Ostensible Owner— A person who have all characteristics of real owner except the
intention to own the property.
Essentials
• There is transfer of an immovable property by ostensible owner with express/ implied

consent of the real owner.
• The transfer is for consideration
• The transferee has acted in good faith.
• The transferee has exercised reasonable care in finding out the transferor’s power to make
the transfer.
NOTE—The above mentioned rule is exception to the maxim ‘nemo dat quod non habet’
‘Which means no person can transfer a better title than he himself’
[Section 35]
Doctrine of election
The doctrine of election is stated in Section 35 of the Transfer of Property Act alongside
Section 180 to 190 of the Indian Succession Act.
Section 180, Circumstances in which election takes place.—Where a person, by his will
professes to dispose of something which he has no right to dispose of, the person to whom
the thing belongs shall elect either to confirm such disposition or to dissent from it, and, in
the latter case, he shall give up any benefit which may have been provided for him by the
Will.
Section 182 in the Indian Succession Act, 1925
Section 182, Testator’s belief as to his ownership immaterial—The provisions of

sections 180 and 181 apply whether the testator does or does not believe that which he
professes to dispose of by his Will to be his own.
Illustrations
The farm of Sultanpur was the property of C. A bequeathed it to B, giving a legacy of 1,000
rupees to C. C has elected to retain his farm of Sultanpur, which is worth 800 rupees. C
forefeits his legacy of 1,000 rupees, of which 800 rupees goes to B, and the remaining 200
rupees falls into the residuary bequest, or devolves according to the rules of intestate
succession, as the case may be.
It states that when a party transfers a property over which he does not hold any right of
transfer and entailed in that transaction is the benefit conferred upon the original owner of
the property, such title-holder must elect his option to either validate such transfer of
property or reject it; upon rejection, the benefit shall be relinquished back to the transferor
subject nevertheless:
• “Where the transfer has been through gratuitous means and the transferor has become
incapable of making a new transfer.
• In all cases where the transfer is for consideration”.
An illustration to further explain:
A owns a property that is worth Rs 800. B professes to transfer the same to C through the
Rs1000 instrument to A. But the A, the owner opts/elects to retain his property and thus,
forfeits the gift of Rs 1000.
EXCEPTIONS
When the owner who is considering the election between retaining the property and
accepting a particular benefit, chooses the former, he is not bound to relinquish any
extraneous benefit that he gains through the transaction.
The acceptance of the benefit by the original owner shall be deemed to be as election by him
to validate the transfer, if he is aware of his responsibilities and the circumstances that might
influence a prudent man into making an election.
This knowledge of the circumstances can be assumed if the person who gains the benefit
enjoys it for a period of more than two years. Further discussion over this has been made
under the heading of “Modes of Election”.
If the original owner does not elect his option within a year of the transfer of property, the
transferor would require him to elect his choice. Even after the reasonable time, if he still
does not also still elect, the original owner shall be assumed to have elected the validation of
the property transfer as his choice.
In context of a minor, the period of election shall be stalled till the individual attains majority
unless he is represented by a guardian.
UNDERSTANDING THE PRINCIPLE
In simple words, a person utilizing the benefits of an instrument also has to carry the burden
attached. This doctrine is founded upon a model wherein a person persuades another to act
in a manner to his prejudice and derives any advantage from that, then he cannot turn
around and claim that he was not liable to perform his part as it was void. This doctrine is
universal and is applicable to Hindus, Muslims as well as Christians and is applicable to
movable as well as immovable properties.
So, this doctrine contains the principle that the exercise of a choice by a person left to himself
of his own free will to do one thing or another binds him to the choice which he has
voluntarily made, and is founded on the equitable doctrine that he who accepts benefit under
an instrument or transaction of his choice must adopt the whole of it or renounce everything
inconsistent with it. Thus, it is a general rule that a person cannot approbate and reprobate
at the same time. Also, the election is confined to the case of a gift or Will and does not apply
in case of a legal remedy.
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.
OTHER IMPORTANT CONDITIONS
Proprietary Interest
Election over a property is not asked to made by a person unless he holds a proprietary
interest which are disposed off in derogation of the person’s rights.
So, election cannot take place if the property that is decided by the transferor to be disposed
does not happen to be owned by any individual to whom an interest is being provided
through the transfer. Also, it cannot take place if the transferor does not provide any benefit
on the individual who is the original owner of the property.
“As part of the same transaction”
One cardinal condition for the doctrine of election to be executed is that the benefit conferred
upon the original owner should be as part of the same contract by which he transfers the
property over which he holds no right to transfer.
In the landmark case of Ramayyar v. Mahalaxmi, a widow had given a gift in excess of her
powers and had then provided a will which stated that “excluding the properties which I have
already given away, I will make the following dispositions”. The Court ordered that the
plaintiff under the will was not excluded from the election doctrine from contesting the
previous gift which wasn’t the issue of the will at all.
Donor’s Intention
In order to create a situation of election, it is important that the intention of the testator
should be clear with regard to disposing of the property which he does not own. Parol
evidence is not acceptable and thus the intention must be prima facie clear.
Indirect Benefit
The benefit that the original owner is conferred with has to be direct in nature and if indirect,
he does not need to elect. This principle is explained in Section 184 of Indian Succession Act,
1925 and states that “when the devisee who claims derivatively through another does not
take under the deed, and is not bound by the equity attaching thereto.”
Difference in Capacity
An individual can in one capacity utilize a benefit while can dissent or reject that benefit in
another capacity. It means to explain that it is possible to facilitate two roles of an individual
wherein he can for example, accept legacy for an estate while in his personal competence, he
could retain the property.
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:
1. He has to be aware of his duty to elect, and
2. There must be proof of knowledge of circumstances which would influence the judgment
of a reasonable man in making an election:
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 to him that it becomes impossible to return it to the original owner in its original state.
Difference between English Law and the Indian Law Perspective:
The English law depends upon the principle of compensation which means that if the
original owner does not choose to validate the transfer, he can keep the property and also the
benefit accrued, subject to compensation provided to the donee, to the extent of the property
he had suffered a loss for.
whereas in case of Indian law, this doctrine is influenced by the principle of forfeiture which
states that if the original owner does not choose to validate the transfer, the donee incurs a
forfeiture of the conferred benefit which goes back to the transferor.
COMPENSATION
Estimated cost of the property which is attempted to be transferred towards the transferee is
the approximation of the compensation that he shall receive. However, in context of
immovable properties, there arises the issue of changing value of the property according to
the lapse of time. Thus, this valuation is to take place at the date of the instrument becoming
operational rather than at the time of election
PAHUJA LAW ACADEMY
1. The ‘doctrine of election’ is laid down in:
(a) Sec. 30.
(b) Sec. 55.
(c) Sec. 34.
(d) Sec. 35.
2. In which of the’ following cases it was laid down that “no person can at the same time
accept or reject an instrument of transfer”.
(a) Rangamma v Atchama.
(b) Vidhyamma v V. Shakar Narayan.
(c) Tinkori v Krishna.
(d) Rendell v Pen.
3. The rule of election has been stated by Lord justice Lopez in:
(a) Cavendish v Dacre.
(b) Dalton v Fitzerald.
(c) Randell v Pen.
(d) Den v Slaiter.
4. Election implies:
(a) Choosing between two rights where there ista clear intention that both were not intended
to be enjoyed.
(b) Transfer under one condition where there are two conditions.
(c) Choosing one party for the transfer where there are two parties.
(d) None of the above.
5. Mark the incorrect statement in relation to doctrine of election:
(a) This rule will apply only when two properties are transferred by the same deed.
(b) The owner of the property should get a direct benefit from the transfer.
(c) The person professing to transfer property should have a right to transfer.
(d) The period of limitation for election is one year.
6. Which of the following is a leading case on ‘doctrine of .election’:
(a) Kapoor v Kapoor.
(b) Satyendra Nath Thakur v Nilkant Mishra.
(c) Ramnand v Ramamani.
7. The farm of Sultanpur is the property of C and worth Rs. 80,000. A, by an instrument
of gift professes to transfer it to B, giving by the same instrument Rs.1,00,000 to C. A
dies before the election. B shall be:
(a) Entitled to get Rs. 20,000 from C.
(b) Entitled to get Rs. 80,000 from C.
(c) Entitled to get Rs. 80,000 from A’s representative.
(d) Not entitled to get any amount from any one.
8. Which section deals with apportionment of periodical payments as between the

transferor and the transferee?
(a) Sec. 35.
(b) Sec. 36.

(c) Sec. 37.
(d) Sec. 38.
9. When property is transferred, what is to be apportioned between the transferor and the
transferee:
(a) Rents, annuities, pensions.
(b) Rents, annuities, pensions and dividends.
(c) Rents and annuities only.
10. A has let his house at a rent of Rs. 100 payable on the last date of each month. A sells
house to B‘ on the 15th of June. On 30th June what will be apportionment?
(a) A will get a Rs. 100.
(b) B will get Rs. 100.
(c) Rs. 50 to A and Rs. 50 to B.
(d) The tenant will be exempted from payment of rent of that month.
[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What do you understand by Doctrine of part Performance”? What are the requirements
of part performance?
2. Define fraudulent transfer under Section 53 of TPA?
3. What is doctrine of “lis pendens”? State the relevant provision under transfer of
property, Act 1882
4. Under what conditions a transfer of an immovable property is bound by the decision of

the Court?
5. What are the exceptions to the provision of fraudulent transfer, under transfer of
property, Act 1882?
PAHUJA LAW ACADEMY
DOCTRINE OF PART PERFORMANCE:- (Section-53A)
STAR FACTS:-
• Inserted by 1929 amendment Act.
• Substantially amended by 2001 amendment.
• Originated from the schools of equity.
• Applies only to transfers of Immovable Property.
Essential ingredients:-
• Contract to transfer must be in writing
• For consideration — signed by the Transferor.

• Certainty of terms as to constitute transfer.
• Document is registered (after 2001 amendment).
• Possession of property.
Taken by the transferee in part performance of the contract.
Transferee retained the possession & has done some act in furtherance of the contract.
Absolute transfers:-
• SALE—- chapter III, sections 54-57
• Exchange—Chapter VI Sections 118-121
• Gift———- Chapter VII Sections 122-129L
‘Lis pendens’
[Section 52]
The doctrine of ‘lis pendens’ as laid down under section 52 is as follow:
(A) During the pendency of a suit or proceeding.
(B) Property cannot be transferred or otherwise dealt with.
(C) If so transferred the transferee is bound by the decision of the court whether o not he had
notice of suit or proceeding.
Essentials of section 52
(A) There is a pendency of suit or proceeding.
(B) The suit or proceeding must be pending in a Court of competent jurisdiction.
(C) A right to immovable property is directly and specifically involved in the suit.
(D) The suit or proceeding must not
(E) The property in dispute must be transferred or otherwise dealt with by any party to suit.
(F) The transfer must affect the rights of the other party to litigation.
Fraudulent Transfer
(Section 53)
Fraudulent Transfer of Property and its effect
1. Introduction
The principle of section 53 is based on the rule of justice, equity and good conscience. The
section enumerates fraudulent transfer. A transfer made with intention to defeat any right of
the transferee or of any other person interested therein is called fraudulent transfer of
property. Such transfer is not void but voidable at the option of person named.
Fraudulent Transfer
What is Fraudulent Election?
• In Re More (1887)
• Musher shalu v. Lala Haqun Lal (1915 P.C)
• Abdul Shakur v. Arzee Papa Rau (1963 SC)
In all the three cases a fraudulent transfer based on fraudulent election in favour of any of
the creditor have been declared fully lawful and beyond subject of ambit of S.53
Essential Elements
1. There must be a contract of transfer of property.
2. The contract must be:-
a) In writing
b) Signed
c) Registered[sec 17(1-A) of reg. Act (1908)]
3. At the time of contract Plaintiff must be competent to transfer.
4. Defendant (Transferee):-
a) Either has taken possession already in possession done some act in furtherance of the
contract.
b) He has performed or is willing to perform his part of the contract.
PAHUJA LAW ACADEMY
1. Which section of T. P. Act deals with fraudulent transfers?
(a) Sec 53.
(b) Sec 52.
(c) Sec 51.
(d) Sec 55-A.

2. Every transfer of immoveable property made with intent to defeat or delay the creditors
of the transferor shall be:
(a) Void.
(b) Voidable.
(c) Valid.
(d) Irregular.
3. Under Section 53 of the Transfer of Property Act,’ 1882, every transfer of immovable
property made with the intent to defeat or delay the creditors of the transferor is: –
(a) Voidable at the option of any creditor of the transferor.
(b) Void and hence transfer of property is inoperative.
(c) Voidable at the option of any creditor so defeated and delayed.
(d) Void if made in favour of any person without consideration.
4. Every transfer of immoveable property made to defraud subsequent transferee, the first
transfer being without consideration is:
(a) Void.
(b) Voidable.
(c) Voidable at the option of subsequent transferee.
(d) Voidable at the option of transferor.
5. Section 53-A of T. P. Act deals with:
(a) Fraudulent transfers.
(b) Part-performance of a contract.
(c) Specific performance.
(d) Doctrine of election.
6. Mark the incorrect statement:
(a) The doctrine of part performance of contract is based on the general doctrine of
prevention of fraud.
(b) It is meant to protect transferee, who have taken possession, spent money in further
improvements, in reliance upon the documents which are ineffective as transfers for want of
registration, etc.
(c) The doctrine developed in English law as an equitable remedy to protect such transferees.
(d) In India, the doctrine applies to oral as well as written agreements.
7. WThe doctrine of part performance as given in Sec. 53-A of T.P. Act is:
1. A statutory right.
2. An equitable right.
3. Available in defence.
Codes:
(a) 1 and 3.
(b) 1 and 2.
(c) 2.
(d) 2 and 3.
8. Which is not the ingredient of Sect 53-A of T. P. Act?
(a) Agreement for transfer.
(b) Consideration.
(c) Transferee has performed his part.
(d) Moveable property.
9. An act of part performance must be an act in performance of:
(a) Crime.
(b) Tort.
(c) Contract.
(d) Will.
10. In which of the following cases, the Supreme Court held that: “In considering whether a
person is willing to perform his part of the contract, the sequence in which the
obligations under a contract are to be performed must be taken into account”:
(a) Perumal v Ramaswami.
(b) Ram Prasad v Ram Mohit.
(c) Nathu Lal v Phool Chand.
(d) Sant Lal v Kamla Prasad.

[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What is SALE? Whether it is mandatory to register the transaction?
2. What do you understand by mortgage? How many kinds of mortgage has been
prescribed under the Transfer of Property Act, 1882?
3. Briefly discuss the RIGHTS and LIABILITIES of the mortgagor.
4. Distinguish between mace shelling and contribution.
5. What are the essential elements of charge?
Section 13
Transfer of property for the benefit of person not in existence.

Exception to sec-5
How?—sec-13
1. Prior limited interest must be created in favor of a person in existence at the date of
transfer.
2. Further “the whole of the remaining interest” of the transferor in the property must be
given to the unborn person.
1. Grijesh Dutt v/s Data din
2. Whitby versus Mitchell
PERPETUAL TRANSFER
MEANING HOW IT CAN BE MADE
1. It is tying up property for 1. By imposing a condition restraining alienation.

indefinite period. [Prohibited u/s -10]
1. It is disposition which 2. By creating a limited interest in favour of unborn
matter property in alienable for person one after another (Prohibited u/s 13)
an indefinite period.
3. It is a transfer for 3. By restricting vesting of interest in favor of

generation after generation unborn person U/S 13 even after attaining his
according to desire of the majority (Prohibited u/s 14 Transfer is void)
transferor.
Why a person desires to make a perpetual transfer?

To attach his name with the property for long time or for always.
To make sure use of property as transferor wants.
14 Rule against perpetuity
Section .13
Unborn person
Creation of limited interest in favour of person or persons living on the date of transfer
and
Generally on birth specially otherwise after attaining any age etc but never after
attaining majority
Vesting of interest in unborn person
Transfer whole remaining interest in the property in favor of
Sunder raj versus Natrajan (1925) P.C.
Exceptions of rule against perpetuity:
1. S- 18
2. Creation of charge
3. Renewal of lease (s-105)
4. Mortgage
5. Personal rights like right to preemption
6. Provision for payment of debt (sec -17)
PAHUJA LAW ACADEMY
1. Whether a transfer can be made in favour of an unborn person?
(a) Yes by machinery of trust
(b) Yes
(c) Guardian has got to be appointed first.
2. Section 13 of T. P. Act deals with:
(a) Conditions restraining alienation;
(b) Oral transfers
(c) Transfer for the benefit of unborn person.
(d) Registration of transfers
3. When does an unborn person acquire vested interest on transfer?
(a) As soon as he is born.
(b) On attaining majority.
(c) On attaining 21 years.
(d) After marriage if female.
4. The ‘Rule against perpetuity is discussed in which section of T. P. Act?
(a) Sec 14.
(b) Sec15.
(c) Sec 13.

(d) Sec 17.
5. In transfer of property, law is against perpetuity because:
(a) The property will remain tied up forever.
(b) There will be no industrial progress.
(c) There will be loss to business.
6. “The rule against perpetuity applies only in those circumstances where a new interest
in immovable property is created.” This was held in:-
(a) Nafar Chandra v Kailash.
(b) Padamanath Ayyar v Sitaram Ayyar.
(c) T P Naidu v B. C. Jafferson.
(d) Ram Prasad v Ram Mohit.
7. ‘Rule against double possibilities’ was recognized in which one of the following cases?
(b) Whitby v Mitchell.

[EDIT] TPA
MAINS QUESTIONS
1. What do you understand by doctrine of acceleration.
2. What do you understand by transfer by an ostensible owner ?
S-27, Para-2,
Where it is intended by the parties that the ulterior disposition shall take effect, only on the
failure of the prior interest must be in specified manner
Transfer by an ostensible owner– Doctrine of holding out
Looks like real owner
Transfer by an ostensible owner S.41

Essential Elements
Transferor must be appeared as a real owner.
He holds such position with consent of the real owner
The transferee must not be acquainted with the reality. ( he is in good faith)
The transfer must be for consideration.
Privy Council adjudicated that the Maquin could not could not challenged the vallidity of
transfer because the purchase was done in good faith.
When justice is to made between two innocent person then more innocent and more
innocent
Ram kumarKundu v/s Maquine, 1872
Transfer by unauthorized person who subsequently acquires the interest.(section.43)
“ Feeding the grant by Estoppel”
Essential Elements
innocent
The transferor must not have not have ti
tle to make the transfer

He must have represented that he has title.
The transferee has trusted on the transferor and get transferred the property with
consideration.
Subsequently transferor acquinted the title.
Case on Good Faith
Md. Sulaman v/s ShakeenaBiBi (1992 Allahabad)
Ostansible owner
Karmarivassy v/s Ratansi Nancy

INTRODUCTION to Doctrine of election
The doctrine of election is stated in Sec. 35 of the Transfer of Property Act alongside
Section 180 to 190 of the Indian Succession Act.
Sec-180. Circumstances in which election takes place.—Where a person, by his will

professes to dispose of some thing which he has no right to dispose of, the person to whom
the thing belongs shall elect either to confirm such disposition or to dissent from it, and, in
the latter case, he shall give up any benefit which may have been provided for him by the
Will.
Section 182 in The Indian Succession Act, 1925
182. Testator’s belief as to his ownership immaterial.—The provisions of sections 180 and
181 apply whether the testator does or does not believe that which he professes to
dispose of by his Will to be his own.
Illustrations
(i)The farm of Sultanpur was the property of C. A bequeathed it to B, giving a

legacy of 1,000 rupees to C. C has elected to retain his farm of Sultanpur, which
is worth 800 rupees. C forefeits his legacy of 1,000 rupees, of which 800 rupees
goes to B, and the remaining 200 rupees falls into the residuary bequest, or
devolves according to the rules of intestate succession, as the case may be.
It states that when a party transfers a property over which he does not hold any right of
transfer and entailed in that transaction is the benefit conferred upon the original owner of
the property, such title-holder must elect his option to either validate such transfer of
property or reject it; upon rejection, the benefit shall be relinquished back to the transferor
subject nevertheless :
“Where the transfer has been through gratuitous means and the transferor has become
incapable of making a new transfer.
In all cases where the transfer is for consideration”.[i]
An illustration to further explain :
A owns a property that is worth Rs 800. B professes to transfer the same to C through the
Rs1000 instrument to A. But the A, the owner opts/elects to retain his property and thus,
forfeits the gift of Rs 1000.[ii]
EXCEPTIONS
When the owner who is considering the election between retaining the property and
accepting a particular benefit, chooses the former, he is not bound to relinquish any
extraneous benefit that he gains through the transaction.
The acceptance of the benefit by the original owner shall be deemed to be as election by him
to validate the transfer, if he is aware of his responsibilities and the circumstances that might
influence a prudent man into making an election.
This knowledge of the circumstances can be assumed if the person who gains the benefit
enjoys it for a period of more than two years. Further discussion over this has been made
under the heading of “Modes of Election”.
If the original owner does not elect his option within a year of the transfer of property, the
transferor would require him to elect his choice. Even after the reasonable time, if he still
does not also still elect, the original owner shall be assumed to have elected the validation of
the property transfer as his choice.
In context of a minor, the period of election shall be stalled till the individual attains majority
unless he is represented by a guardian.
UNDERSTANDING THE PRINCIPLE
In simple words, a person utilizing the benefits of an instrument also has to carry the burden
attached. This doctrine is founded upon a model wherein a person persuades another to act
in a manner to his prejudice and derives any advantage from that, then he cannot turn
around and claim that he was not liable to perform his part as it was void. This doctrine is
universal and is applicable to Hindus, Muslims as well as Christians.
So, this doctrine contains the principle that the exercise of a choice by a person left to himself
of his own free will to do one thing or another binds him to the choice which he has
voluntarily made, and is founded on the equitable doctrine that he who accepts benefit under
an instrument or transaction of his choice must adopt the whole of it or renounce everything
inconsistent with it. Thus, it is a general rule that a person cannot approbate and reprobate.
Also, the election is confined to the case of a gift or Will and does not apply in case of a legal
remedy.
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.
OTHER IMPORTANT CONDITIONS
Proprietary Interest
Election over a property is not asked to made by a person unless he holds a proprietary
interest which are disposed off in derogation of the person’s rights.
So, election cannot take place if the property that is decided by the transferor to be disposed
does not happen to be owned by any individual to whom an interest is being provided
through the transfer. Also, it cannot take place if the transferor does not provide any benefit
on the individual who is the original owner of the property.
“As part of the same transaction”
One cardinal condition for the doctrine of election to be executed is that the benefit conferred
upon the original owner should be as part of the same contract by which he transfers the
property over which he holds no right to transfer.
In the landmark case of Ramayyar v. Mahalaxmi, a widow had given a gift in excess of her
powers and had then provided a will which stated that “ excluding the properties which I
have already given away, I will make the following dispositions”. The Court ordered that the
plaintiff under the will was not excluded from the election doctrine from contesting the
previous gift which wasn’t the issue of the will at all.
It is to be noted that different nature of two properties is not a bar to election by the owner
like in the case of Ammalu v. Ponnammal where a person who was managing the properties
of the daughter of his deceased brother, died leaving a will bequeathing a portion of it to B. It
was held that the doctrine of election did apply for the niece.
Donor’s Intention
In order to create a situation of election, it is important that the intention of the testator
should be clear with regard to disposing of the property which he does not own. Parol
evidence is not acceptable and thus the intention must be prima facie clear.
Indirect Benefit
The benefit that the original owner is conferred with has to be direct in nature and if indirect,
he does not need to elect.[xxi] This principle is explained in Section 184 of Indian Succession
Act, 1925 and states that “when the devisee who claims derivatively through another does not
take under the deed, and is not bound by the equity attaching thereto.”
Difference in Capacity
An individual can in one capacity utilize a benefit while can dissent or reject that benefit in
another capacity. It means to explain that it is possible to facilitate two roles of an individual
wherein he can for example, accept legacy for an estate while in his personal competence, he
could retain the property.
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:
1. He has to be aware of his duty to elect, and

2. There must be proof of knowledge of circumstances which would influence the
judgment of a reasonable man in making an election :
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 to him that it becomes impossible to return it to the original owner in its original state.
Difference between English Law and the Indian Law Perspective
The English law depends upon the principle of compensation which means that if the
original owner does not choose to validate the transfer, he can keep the property and also the
benefit accrued, subject to compensation provided to the donee, to the extent of the property
he had suffered a loss for.
But in the Indian law context, this doctrine is influenced by the principle of forfeiture which
states that if the original owner does not choose to validate the transfer, the donee incurs a
forfeiture of the conferred benefit which goes back to the transferor.
COMPENSATION
Estimated cost of the property which is attempted to be transferred towards the transferee is
the approximation of the compensation that he shall receive. However, in context of
immovable properties, there arises the issue of changing value of the property according to
the lapse of time. Thus, this valuation is to take place at the date of the instrument becoming
operational rather than at the time of election
CONCLUSION
Section 35 of the Transfer of Property Ac, 1882 explains the concept of the Doctrine of
Election. This project tries to deal with the various nuances involved in the doctrine through
the usage of various landmark judgments. Herein, special emphasis has been placed upon
providing a clear understanding of the conditions necessary for the election by the original
owner to take place. The differences between the Indian Law perspective as well as the
English Law perspective is brought out through critical analysis of the provisions i.e.
Principle of forfeiture and Principle of compensation. Various aspects such as Proprietary
Interest, Compensation estimated, indirect benefit, the intention of the donor etc have been
dealt and explained for the enhanced understanding over the model of Doctrine of Election.
PAHUJA LAW ACADEMY
(a) Sec. 30.
(b) Sec. 55.
(c) Sec. 34.
(d) Sec. 35.

(d) Rendell v Pen.
(c) Randell v Pen.
(d) Den v Slaiter.
to be enjoyed.


(a) Sec. 35.
(b) Sec. 36.
(c) Sec. 37.
(d) Sec. 38.
transferee:
[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What do you understand by doctrine of acceleration?
2. What do you understand by transfer by an ostensible owner?
Topic -10
Doctrine of Acceleration
S-27, Para-2,
Where it is intended by the parties that the ulterior disposition shall take effect, only on the
failure of the prior interest must be in specified manner
Transfer by an ostensible owner– Doctrine of holding out
Looks like real owner

Essential Elements
innocent
Essentials elements
The transferor must not have not have title to make the transfer
He must have represented that he has title.
The transferee has trusted on the transferor and get transferred the property with
consideration.
Subsequently transferor acquinted the title.
Case on Good Faith
Md. Sulaman v/s ShakeenaBiBi (1992 Allahabad)
Ostansible owner
Karmarivassy v/s Ratansi Nancy
Apportionment
PAHUJA LAW ACADEMY
(a) Sec. 30.
(b) Sec. 55.
(c) Sec. 34.
(d) Sec. 35.
(d) Rendell v Pen.
(c) Randell v Pen.
(d) Den v Slaiter.

to be enjoyed.

(a) Sec. 35.

(b) Sec. 36.
(c) Sec. 37.
(d) Sec. 38.
transferee:
6. Fraudulent Transfer of Property
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What do you understand by Doctrine of part Performance”? What are the requirements
of part performance?
2. Define fraudulent transfer?
Fraudulent Transfer
Fraudulent Transfer of Property and its effect
1. Introduction
The principle of section 53 is based on the rule of justice, equity and good conscience. The
section enumerates fraudulent transfer. A transfer made with intention to defeat any right of
the transferee or of any other person interested therein is called fraudulent transfer of
property. Such transfer is not void but voidable at the option of person named.
2. Relevant Provisions
(i) Section 53 Transfer of Property Act 1882.
(ii) Cross reference Section 17 of Contract Act
3. Meaning of Fraud
A false representation of a matter of fact, whether by words or by conduct, by false or

misleading allegations, or by concealment of that which shall have been disclosed, which
deceives and is intended to deceive another so that he shall act upon it to his legal injury.
4. Meaning of Transfer
Transfer means an act of the parties, or of law, by which the title to property is conveyed
from one person to another.
5. Meaning of Fraudulent Transfer

A transfer of property the object of which is to defraud a creditor or hinder or delay him or to
put such property beyond his reach is called Fraudulent Transfer.
Under Transfer of Property act, following points are important to explain of fraudulent
transfer of property.
(i) Voidable at option of Defeated or Delayed Creditor
Every transfer of immovable property, which is made with intent to defeat or delay creditors
of transferor, is voidable at option of any creditor, who is so defeated or delayed. For
example, Bashir is indebted to Ahmad, and he attempts to sell his house, and is intentions to
convert his house into cash to defeat Ahmad. And if Rasheed is aware of Bashir’s indebtness,
but he purchases Bashir’s house, then such transfer is voidable at option of Ahmad.
(ii) Rights of Transfer In Good faith and for consideration
Transfer of immovable property, which is made with intent to defeat or delay creditors of
transferor, does not affect rights of transferee in good faith and for consideration. For
example, Bashir is indebted to Ahmad, and he attempts to sell his house, and his intention is
to convert his house into cash to defeat Ahmad. And if Rasheed is not aware of Bashir’s
indebtness, but he purchases Bashir’s house against a consideration of ten lakh rupees, then
such transfer does not affect rights of Rasheed.
(iii) Law Relating to Insolvency
Transfer of immoveable property, which is made with intent to defeat or delay creditors of
transferor, does not affect any law, which is in relation to insolvency and which is in force.
(iv) Institution of Suit
If a creditor institute’s suit to avoid a transfer on this ground that it has been made with
intends to defeat or delay the creditors of transferor, it is considered that such suit is
instituted on behalf of all creditors or for benefit of all creditors.
(v) Voidable at Option of Subsequent Transferee
Every transfer of immoveable property, which is made without consideration and which
made with intent to defraud a subsequent transferee, is voidable at option of such transferee.
Conclusion
To conclude, it can be stated that two points are important as far as fraudulent transfer is
concerned; first point is that transfer of property act has discussed fraudulent transfer only
in respect of immoveable property. And second point is that person, who alleges fraudulent
transfer, is under burden to prove fraudulent transfer.
Fraudulent Transfer
[r/w S.6(h)2 and r/w S.23 of ICA 1872]
Exception of S.6(h)(2) [Sec. 53]
If a prior transfer is a transfer with consideration
1. When the transferee is in good faith and with consideration(para 2)

2. In case of fraudulent election among the creditors.(Based on cases)
3. When the property has been transferred under the law of insolvency(para 3)
Exception
Para 4 [Representative suit]
Any of the creditor so defeated or delayed
The subsequent Transferee
Shall be voidable at the option of

Sec-53(2) To defraud a subsequent transferee
Sec-53(1) To defeat or delay the creditors of the transferor
Every transfer of immovable property made with intent
Exceptions
1. When the transferee is in If the prior transfer is a Transfer with consideration. Good
faith and with
Consideration .
2. In case of fraudulent election among the creditors.
3. When the property has Been transferred under The law of insolvanncy.
What is Fraudulent Election?
In Re More (1887)
Musher shalu v.s Lala Haqun Lal (1915 P.C)
Abdul Shakur v.s Arzee Papa Rau (1963 SC)
In all the three cases a fraudulent transfer based on fraudulent election in favour of any of
the creditor have been declared fully lawful and beyond subject of ambit of S.53
Part Performance[S.53A]
History Of cases
Based on:- Maddison
v.s Aldendon
1883.A.C( lord
selbown)
In India
Concept
A person cannot be ejected on plaint of a person who
has made a contract to transfer the property to the
person in possession. If:-
1. He(defendant) has performed or ready to perform

his point in the contract and
2. The contract has been made with due certainity

as per law
Essential Elements
1. There must be a contract of transfer of property.

2. The contract must be:-
3. In writing
4. Signed
5. Registered[sec 17(1-A) of reg. Act (1908)]
6. At the time of contract Plaintiff must be competent to transfer.
7. Defendant (Transferee):-
8. Either has taken possession already in possession done some act in furtherance of the
contract.
9. He has performed or is willing to perform his part of the contract.
PAHUJA LAW ACADEMY
Pre QUESTIONS
1. Which section of T. P. Act deals with fraudulent transfers?
(a) Sec 53.
(b) Sec 52.
(c) Sec 51.
(d) Sec 55-A.
2. Every transfer of immoveable property made with intent to defeat or delay the creditors
of the transferor shall be:
(a) Void.
(b) Voidable.
(c) Valid.
(d) Irregular.
3. Under Section 53 of the Transfer of Property Act,’ 1882, every transfer of immovable
property made with the intent to defeat or delay the creditors of the transferor is:
(a) Voidable at the option of any creditor of the transferor.
(b) Void and hence transfer of property is inoperative.
(c) Voidable at the option of any creditor so defeated and delayed.
(d) Void if made in favour of any person without consideration.
4. Every transfer of immoveable property made to defraud subsequent transferee, the first
transfer being without consideration is:
(a) Void.
(b) Voidable.
(c) Voidable at the option of subsequent transferee.
(d) Voidable at the option of transferor.
5. Section 53-A of T. P. Act deals with:
(a) Fraudulent transfers.
(b) Part-performance of a contract.
(c) Specific performance.
(d) Doctrine of election.
(a) The doctrine of part performance of contract is based on the general doctrine of
prevention of fraud.
(b) It is meant to protect transferee, who have taken possession, spent money in further
improvements, in reliance upon the documents which are ineffective as transfers for want of
registration, etc.
(c) The doctrine developed in English law as an equitable remedy to protect such transferees.
(d) In India, the doctrine applies to oral as well as written agreements.
7. The doctrine of part performance as given in Sec. 53-A of T.P. Act is:
1. A statutory right.
2. An equitable right.
3. Available in defence.
Codes:
(a) 1 and 3.
(b) 1 and 2.
(c) 2
(d) 2 and 3.
8. Which is not the ingredient of Sect 53-A of T. P. Act?
(a) Agreement for transfer.
(b) Consideration.
(c) Transferee has performed his part.
(d) Moveable property.
9. An act of part performance must be an act in performance of:
(a) Crime.
(b) Tort.
(c) Contract.
(d) Will.
10. In which of the following cases, the Supreme Court held that: “In considering whether a
person is willing to perform his part of the contract, the sequence in which the
obligations under a contract are to be performed must be taken into account”:
(a) Perumal v Ramaswami.
(b) Ram Prasad v Ram Mohit.
(c) Nathu Lal v Phool Chand.
(d) Sant Lal v Kamla Prasad.
11. The doctrine of part performance -cannot defeat the right of a:
(a) Transferee for value.
(b) Transferee for value and” without notice of the previous contract or of its part
performance;
(c) Gratuitous transferee (without consideration).
(d) Transferee for value if he has notice of the-contract or of its part performance.
12. Transferee of the part performance has right to protect his possession:
(a) Wrong.
(b) Right can accrue only after payment of full consideration.
(c) Right.
(d) Delivery of possession is not necessary.
(a) Sec. 53-A furnishes a statutory defence to a person (transferee) who has no registered
title-deed/or a valid instrument in his favour to maintain (or protect) his possession.
(b) Sec. 53-A creates no real right, but only a right of estoppel between parties.
(c) A transferee can be a plaintiff or a defendant, but his object must be to defend his right of
possession, not to obtain it.
(d) The rights under Sec. 53-A can be used both as a shield as well as sword.
[EDIT] TPA
DOCTRINE OF PART PERFORMANCE
The Doctrine of Past Performance, based on principle of equity, developed in England and
was subsequently added to the Transfer of Property Act, 1882 via the Amendment Act of
1929. In law of contracts (for e.g., a contract for sale), no rights pass to another till the sale is
complete But if a person after entering into a contract performs his part or does any act in
furtherance of the contract, he is entitled to reimbursement or performance in case the other
party drags its feet.
Section 53A says that if a person makes a agreement with another and lets the other person
act on the behalf of the contract; such a person creates an equity himself that can not be
resisted on the mere grounds of absence of formality in the evidence or contract of such a
transfer. Thus, if the contract has not been registered or completed in the prescribed
manner, the transferor can still not go against the transferee or anyone claiming under him.
However, the deed should not be unsigned or unstamped. Nothing in this section affects the
rights of a transferee for consideration even if he had no notice of contract of part
performance.
Illustration: A contracts with B to sell his plot for X amount of money. A accepts the advance
from B towards the sale of the plot and hands over the possession of the said plot to B. After
some time, B is ready to pay the remaining sale amount but A refuses to accept the same.
Further A asks B to hand over the plot back to him.
Here B is ready to perform his part of the contract but A is not. In such a case, B can bring a
case requiring specific performance from A. It does not matter that the sale was not
registered.
As per law, a transfer of immovable property valued over Rs. 100 has to be registered. But it
was believed that strict compliance may lead to extreme hardships especially where one party
has already performed his part in the confidence that the other party will honor the
agreement. If such registration or other formalities have not taken place, the doctrine of part
performance will be applicable. If such a transferee takes possession of the property, he can
not be evicted due to an unregistered contract.
The section is a defense as well as a right that helps protect the possession against any
challenge. It tries to prevent fraud on the mere basis of ineffective evidence of the transfer.
The section does not confer a title upon the transferee in possession but it imposes a
statutory bar on the transferor.
Equity looks to the intent rather than to the form

ESSENTIALS OF THE DOCTRINE OF PART PERFORMANCE
a) There must be a written contract for transfer of an immovable property signed by or on
behalf of the transferor. The doctrine can not be applied if there is a void agreement or no
agreement.
b) There must be consideration;
c) The contracts should give out the terms of the transfer with reasonable certainty;
d) The transferee must have taken possession as a result of this contract or continued in
possession if he was already in possession of the property;
e) The transferee must have done some act in furtherance of the contract. Acts done prior to
the agreement or independent of it can not be deemed to be part performance of the
contract; and
f) The transferee should have performed his part of the deal or be willing to perform it.
WALSH vs. LONGSDALE and MADDISON vs. ALDERSON are two of the major cases that
have helped develop the doctrine of part performance in England. In India, this doctrine has
been enacted with a few modifications.
MADDISON vs. ALDERSON 1888

B was A’s servant. A had promised B a certain property as life estate, meaning B could enjoy
the property during his life time. B served A for years upon this promised life estate. The will
bequeathing such interest and property to B failed due to want for proper attestation. After A
died, one of his heirs brought action to recover the property from B.
It was held that the act of part performance could not be proof of the contract since the
performance was a condition precedent to the contract. The heir of A was able to recover the
said property.
The rule laid down in Walsh vs. Longsdale is not applicable in India – as it did not constitute
the doctrine of part performance.
Prior to the enactment of the Transfer of Property Act, 1882, the English law of Part
Performance was applied. Before Section 53A was inserted in the Transfer of Property Act,
1882, there were different views upon such application. After the Transfer of Property Act,
1882 came into force, some thought that Sections 54 and 59 which required registered
documents were necessary for sale of immovable property or regarding mortgage
respectively. While others argued that requiring strict compliance would be detrimental to
the rights of the impoverished masses of India who could be duped by scrupulous individuals
taking advantage of the law.
The Privy Council in MOHD MUSA vs. AGHOR KUMAR GANGULI AIR 1914 PC 27
(30) held that doctrine of part performance is applicable in India. There were divergent
views a few years later stating that doctrine can not be used to override statutory provisions.
Finally in 1929, the Transfer of Property Act was amended and the English law of part
performance became a part of Indian Laws though a little modified.
Equity on that as done as which ought to have been done.
Section 53A of the Transfer of Property Act, 1882
Part Performance – Where any person contracts to transfer for consideration any
immoveable property by writing signed by him or on his behalf from which the terms
necessary to constitute the transfer can be ascertained with reasonable certainty, and the
transferee has, in part performance of the contract, taken possession of the property or any
part thereof, or the transferee, being already in possession, continues in possession in part
performance of the contract and has done some Act in furtherance of the contract, and the
transferee has performed or is willing to perform his part of the contract, then,
notwithstanding that where there is an instrument of transfer, that the transfer has not been
completed in the manner prescribed therefore by the law for the time being in force, the
transferor or any person claiming under him shall be debarred from enforcing against the
transferee and persons claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right expressly provided by the
terms of the contract.
The proviso is an exception of sorts stating that the interests and rights of a subsequent
transferee for consideration will be protected as long as he had no notice of the contract
leading to the part performance due or the part performance thereof.
In India, the doctrine is used only as a shield and not to enforce rights as laid down by the
Supreme Court in Delhi Motors case. But it must be noted that the aggrieved party can either
be the plaintiff or the defendant in a suit as the case maybe.
ENGLISH AND INDIAN LAW
The English Law of Part Performance

1) The contract need not be written or signed by the transferor
2 The right under the doctrine is an equitable right
3) It can be used for enforcing the right as well as defending the right; and
4) It creates a title in the transferee.
The Indian Law of Part Performance
1) Section 53A deals with the Doctrine and state that the contract has to be written as well as
signed by the transferor
2) It is a statutory right;
3) It can only be used to defend the possession of the transferee; and
4) It does not create a title in the transferee.
After 2001 amendment to Section 53A, the application of the section has seen dilution – it no
longer serves as a ‘substitute’ for registration. It should still hold good for defects other than
registration. But, registration of sale of immovable property is compulsory and Section 53A
has been amended to incorporate the same.
[EDIT] TPA
Restraints on Transfer.
Sec. 10. Condition 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 of limitation is void, except in the case of lease where this
condition is for the benefit of the less or or those under him: provided that property may be
transferred to or for the benefit of a woman (not being a Hindu, Mohammedan or Buddhist)
so that she shall not have power during her marriage to transfer or charge the same for her
beneficial interest therein.”
This section lays down that where property is transferred subject to a condition absolutely
restraining the transferee from parting with his interest in property, the condition (and not
the transfer itself) is void. It may be noted .that ‘conditional transfers’ may incorporate a
condition prior to the transfer or subsequent to the transfer. In former cases, it is only if the
condition‘ is fulfilled that the transfer would take place, and if it is a condition that is either
opposed to public policy or is unlawful or immoral, the transfers subject to such conditions
would also become void(e.g. A agrees to transfer his house to B, on the condition that B must
marry his daughter D, within two years. D dies within a month of this agreement without
marrying B. The condition becomes impossible to perform, and the transfer would not take
place). Sec. 10 speaks about a condition that is subsequent to the vesting of the interest in the
transferee.
The general rule laid down in Sec. 10 is applicable despite there being an express
contract to the contrary, and prevents-the transfer or from controlling the power of
alienation of the transferee once the interest in the property is transferred. The underlying
principles behind this rule are that of equity, justice good conscience, that prevent the
transferors from incorporating conditions in the transfer deeds that are repugnant to the
nature of interest that is created. Suppose A transfers his property to B with a condition that
B shall never sell it. This condition is void and B may sell or not as he pleases. Similar would
be the case when a husband settles property on his wife and provides in the settlement deed
that she would have no power to sell the property without his consent.
The general economic principle is that the wealth should be in free circulation so as to get the
greatest benefit from it. The law favours alienation or transfer, rather than accumulation. A
right of transfer is incidental to, and inseparable from, the ownership of the property. An
absolute restraint is repugnant to the nature of the estate and is an exception to the very
essence of the grant.
It may be noted that Sec. 8 of the T.P. Act also lays down that unless a different intention is
expressed (or implied), a transfer of property passes forthwith to the transferee all the
interests which-the transferor is then capable of passing in the property and in the legal
incidents thereof.
Sec. 10 applies only to transfer made by the act of the parties and does not apply to Court
sales.
Absolute and Partial Restrains
Under Sec. 10, absolute restraints are declared void; however, partial restraints may be
allowed. In one English case, Jessel M.R. observed: “You may restrict alienation in many
ways; you restrict alienation by prohibiting a particular class, of alienation, or you may
restrict alienation by prohibiting it to a particular class of individuals, or you may restrict
alienation by restricting it to a particular time.”
An absolute restraint is one that takes away the power of alienation completely or
substantially e.g. a condition on the transferee that he shall not alienate property, except ‘for
religious purposes. Partial restraint is one that imposes some restriction on the power of
alienation but the transferee is substantially free to alienate property in a wide variety of
ways e.g. a condition that transferee cannot transfer the property for any religious purpose.
Thus, if power of alienation is restricted to a particular person, only then it is void as an
absolute restraint -If the power of alienation is exercisable in favour of a class of persons, it
would be construed as a partial restraint [Attwater v Attwater.]
Whether a condition amounts to a total or partial restraint depends upon the substance (i.e.
the real effect of the condition) and not the form of words laying down the condition. If the
effect is absolute, it would be struck off as bad howsoever clever language may have been
used. Thus, if A transfers a land to B and incorporates a condition that B can sell it to anyone,
but will have to pay 90 per cent of the consideration to A’s son, the practical effect would be
that B would be substantially deprived of his power to transfer it according to terms that are
beneficial to him. This condition therefore would be void.
In Gayashi Ram v Shahabuddin (AIR 1935 All 493), the court observed: “In order to
see whether there is absolute restraint or not, one has to examine the effect of all the
conditions and find whether for all practical purposes alienation is prohibited. The mere fact
that there may be some remote contingency in which there may be a possibility of an
alienation taking place would not necessarily take the case out of the prohibition contained
in Sec. 10.”
Illustrations
(i) A condition that transferee shall not transfer the property by way of gift, is a partial
restraint and thus valid.
(ii) Where the transferor stipulates that the property can be sold by the transferee only at a
fixed price specified by him before hand, or where he directs that the property should be
transferred for no consideration, or that out of sale proceeds something has to be paid to a
specific person or for a specific purpose like charity, it is any absolute restraint and thus void.
For instance, A sells a house to B for Rs. 10,000 with a condition, that if in future B wants to
sell it, 50 per cent of the consideration, should be given to charity, or should be given to the
transferor’s sister or any other relative. This condition is void. B may sell it to anyone and
keep the entire consideration.
(iii) A condition that transferee shall not transfer the property for a period of 3 years, is a
partial restraint and thus valid. However, if the restriction is for a period of 20 years, it was
held to be an absolute restraint [Renand v Tourangean (1867) LR 2 PC4].
If the restraint is for a short period and is coupled with a benefit to the transferor, such as an
option of re-purchase, it is a valid restraint For instance, A sells a house to B for Rs. 5 lakhs
with a condition that B would not sell it for five years; within that period if A could arrange
the money he would have an option to re-purchase it for Rs. 6 lakhs, It is a partial restraint
and is valid (Loknath Khound v Gunaram Kalita AIR 1986 Gau 52).
(iv) A condition that transferee shall not transfer the property to any member of a particular
person’s family or to a particular person only, is a partial restraint and thus valid.
On the other hand, a condition that transferee shall transfer the property only to a particular
person, then it will be an absolute restraint, as the name of that person might have been so
selected as to render it reasonably certain that he would not buy the property at all.
(v) As to the condition that if property should be sold “only inside the family, it depends
upon the facts and circumstances of the case whether the restriction is absolute or “partial.
In England, such a condition has been upheld as ‘a partial restraint [In re: Macley (1875) 20
Eq 186]. In India, the Privy Council upheld this condition in Md. Raza v Abbas Bandi Bibi
(AIR1932 PC 158).If the condition is that the transferee should not sell it outside his family
or eyen community, then it will be valid condition provided both transferor and transferee
are members of the same family or community. But, if the transferor himself sells the
property to an outsider, he cannot put a condition that binds the transferee to sell the
property only to members of the transferor’s family.
Where there are further conditions attached, it may become an absolute restraint e.g. a
further condition of ‘selling below the market price; or a condition to transfer property only
to transferor or his heirs and that too if they are willing to buy it and for a fixed price only.
(vi) A condition in a deed of partition that if any coparcener were to sell his share in a
residential house, other coparceners would be entitled to buy it was held to be valid.
However, a condition that he is not to sell his share, if he remains childless and leave it for
others is invalid.
A compromise by way of settlement of family disputes has been held to be valid, although it
involves an agreement in restraint of alienation. In Mata Prasad v Nagesher Sahal (1925) 47
All 884, a dispute relating to succession between a widow and nephew was compromised on
terms that the widow was to retain possession for life while the title of the nephew was
admitted with a condition restraining him from alienating during her life -time. The
compromise was held to be valid.
A provision in an agreement among the members of a joint Hindu family that they would
only enjoy the income of joint family properties and would not claim partition was held void,
though the partition is not alienation.
(vii) If A sells a property to B and B executes an independent agreement that if he wanted “to
sell it, he ‘would only sell it to A, was held valid, because A, while transferring the property
did not impose any condition. It was a special personal-agreement between the parties, not
touching land (Devi dayal v Ghasita AIR 1929 All 607).
(viii) A sells a property to B.”One of the conditions of the sale is that should B wish to part
with the property, he would sell it to A. The question then arises as to whether B would be
entitled to the property to C without any reference to A?
Now, it will be seen that this is merely a covenant to secure A the right of pre-emption,
i.e. to give him an opportunity for buying the property, and is therefore valid as it does not
amount to an absolute prohibition. Therefore, B should first make a reference to A. But, such
a covenant cannot have effect for an indefinite period. If the covenant for pre-emption
prejudicially affects the power of free disposal, it would be void.
A stipulation in a sale-deed that the vendee could sell back the property to the vendor only,
and to no one else, is more than a mere partial restraint, and therefore invalid.
LEADING CASE: ZOROASTRIAN COOP. HOUSING SOCIETY LTD. v
DISTRICT REGISTRAR, COOP. SOCIETIES (URBAN) [(2005) 5 SCC 632]
[A condition imposed in the byelaws that the property cannot be sold to a non- Parsi is
valid.
When a person accepts membership in a cooperative society by submitting himself to its

bye-laws and secures an allotment of a plot of land/building, and, places on himself a
qualified restriction in his right to transfer the property by stipulating that the same would
be transferred back to the society or with the prior consent of the society to a person
qualified to be a member of the society, it cannot be held to be an ‘absolute restraint on
alienation offending Sec. 10, T.P. Act.]
Facts and Issue- In this case, the Zoroastrian Cooperative Housing Society acquired certain
lands from the State Government for the purpose of erecting houses for residential use of its
members and to further the aims and objects of the Society. As per the bye-laws, the objects
of the Society were to carry on the trade of building, and of buying, selling, letting and
developing land in accordance with cooperative principles and to establish and ‘carry on
social, re-creative and educational work in connection with its tenets (Parsis) and the Society
was to have full power to do all things it deemed necessary or expedient, for the
accomplishment of all objects specified in its bye-laws, including the power to purchasing
property and to erect, pull down, repair, alter or otherwise deal with any building thereon.
The qualification for becoming a member- in the Society was that the person should be a
Parsi and that the transfer of a share to him had to have the previous sanction of the
Committee of the Society.
Respondent 2 (one of the members of Society) appears to have started negotiations with
Respondent 3, a builders’ association, in violation of the restriction on sale of shares or
property to a non-Parsi. The Society, in that context, filed a case before the Board of
Nominees for an injunction restraining Respondent 2from putting up any construction and
from transferring the same to outsiders in violation of Bye-laws of the Society. Thereafter,
Respondent 2 applied to the Society for permission to transfer his share to Respondent 3.
The said application was rejected by the Society, since according to it the application was
contrary to the Gujarat Cooperative Societies Act, 1961, Rules and the bye-laws of the
Society. Respondents 2 and 3 challenged the rejection by way of an appeal before the
Registrar of Cooperative Societies.
The Tribunal, in the revision filed by the Society, took the view in an interim order that
the bye-law restricting membership to Parsis was a restriction on the right to property and
the right to alienate property and, therefore, was invalid in terms of Article 300-A of the
Constitution. This order was challenged by the Society before the High Court. A learned
Single Judge of the High Court dismissed the writ petition essentially holding that the
restriction in a bye-law to the effect that membership would be limited only to persons
belonging to the Parsi community, would be an unfair restriction; such a byelaw would
amount to a restraint ion alienation and hence would be hit by Sec. 10 of the T.P. Act The
Society challenged the said decision before a Division Bench, but remained unsuccessful.
Obsemations— Before the Supreme Court, learned Counsel for the appellants contended that
under Article 19(1)(c) of the Constitution, Parsis had a fundamental right of forming an
association and that fundamental right cannot be infringed by thrusting upon the
association, members whom it does not want to admit or against the terms of tits bye-laws.
He also contended that there was nothing in the Act or the Rules‘ which precluded a society
from restricting its membership to persons of a particular persuasion, belief or tenet and the
High Court was error in holding that membership could not be restricted” to members of the
Parsi community for whose benefit the very Society was got registered. He also submitted
that there was no absolute restraint on alienation to attract Sec 10, T.P. Act and the restraint,
if any, was only a partial restraint, valid in law. There was nothing illegal in certain persons
coming together to form a society in agreeing to restrict membership in it or to exclude the
general public at its discretion with a view to carry on its objects smoothly.
The learned Counsel for the respondents contended that Sec. 4 of the Act clearly indicated
that no bye-law could be recognized which was opposed to public policy or which was in
contravention of public policy in the context of the relevant provisions in the Constitution
and the rights -of an individual under the laws of the country. A bye-law restricting
membership in a cooperative -society, to a particular denomination, community, caste or
creed was opposed to public policy and consequently, the authorities under the Act and the
High Court were fully justified in rejecting the claim of the Society. He also contended that
the High Court was light in holding that the bye-law concerned operated as a restraint on
alienation and such a restraint was clearly invalid in terms of Sec. 10, T.P. Act.
The Apex ‘Court observed: So long as the approved byelaw stands and the Gujarat
Cooperative Societies Act does not provide for invalidity of such a bye-law or for interdicting
the formation of cooperative societies confined to persons of a particular
vocation/community/ persuasion/ sex, it could not be held that the formation ‘of such a
society under the Act would be opposed to public policy and consequently liable to be
declared void.
The appellant Society was formed with the object of providing housing to the members of the
Parsi community; it is open to that community to try to preserve its culture and way of life
and in that process, to work for the advancement of members of that community by enabling
them to acquire membership in a society and allotment-of lands or buildings in one’s
capacity as a member of that society, to preserve its object of advancement of the
community. There is nothing is the Gujarat Cooperative Societies Act which precludes the
formation of such a society. There are cooperative societies of handicapped persons,
cooperative societies of labourers and agricultural workers.
The court further observed: Sec. 10, T.P. Act cannot have any application to transfer of
membership. Transfer of membership is regulated by the bye-laws. The bye-laws in that
regard are not in challenge and cannot effectively be challenged in view of what we have held,
above. Sec. 30 of the Gujarat Cooperative Societies Act itself places restriction in that regard;
it restricts the right of ‘a member to transfer his share only in favour of the Society or to a
member of the Society and when the committee has approved such transfer.
Sec. 10 relieves a transferee of immovable property from an absolute restraint placed on his
right to deal with the property in his capacity as an owner thereof. As per Sec. 10, a condition
restraining alienation would be void. The section applies to a case where property is
transferred subject to a condition or limitation absolute restraining the transferee from
parting with his interest in the property. The bye-laws provide that he should have the prior
consent of the Society for transferring the property or his membership to a person qualified
to be a member of the Society. These, are restrictions in the interests of the Society and its
members and consistent with the object with which the Society was formed. It is also not
possible to say that such a restriction amounts to an absolute restraint on alienation. The
restriction, if any, is a self-imposed restriction. It is difficult to postulate that such a qualified
freedom to transfer a property accepted by a person voluntarily, would attract Sec. 10. At
best; it is a partial restraint on alienation. Such partial restraints are valid if imposed in a
family settlement, partition or compromise of disputed claims [vide Mohd. Raza v Abbas
Bandi Bibi AIR 1932 PC 158; Gummanna Shetty v Nagaveniamma AIR 1967 SC 1595].
The court concluded: Further, the fact that the rights of a member/allottee over a building or
plot is attachable and saleable in enforcement of a decree or an obligation against cannot
make a provision like the one found in the bye-laws, an absolute restraint on alienation to
attract Sec. 10. Of course, it is property in the hands of the member on the strength of the
allotment. It may also be attachable and saleable in spite of the volition of the allottee. We
are, therefore, satisfied that the that the restriction placed on rights of a member of the
society to deal with the property allotted to him must be deemed to be invalid as an absolute
restraint on alienation is erroneous.
Decision— Respondent 3 is restrained from entering the property or putting up any

construction therein on the basis of any transfer by Respondent 2 in disregard of the bye-
laws of the Society without the prior consent of the Society]
Partition and Family Settlements
LEADING CASE: K. MUNISWAMY v K. VENKATA$WAMY
(AIR 2001 KARNT. 246)
[Sea 10, T.R Ad would not apply to the partition/family settlements, since there is no
transfer of title contemplated in a partition. However, on the ground of sound public policy
and total restraint on the right of alienation in respect of immovable property which
prevents free circulation is void. Thus, a restriction, prohibiting the parents absolutely from
transferring the property, amounted to an absolute restraint.]
Facts and Issue— In this case, the question arose whether a life interest created by a partition
deed amounts to transfer of property absolutely or partially.
Pursuant to a partition, ‘A’ schedule property is given to the parents, ‘B’ schedule property is
given to the plaintiff (son) and ‘C’ schedule property to the defendant (son). It is agreed that
parties shall have to get their names mutated in khatas and pay the-taxes henceforth on their
own and that they can enjoy the said properties allotted -to their shares in the manner they
like and ‘A’ schedule property given to Kittappa and his wife (parents) shall be enjoyed
during their life time and thereafter; the plaintiff and defendant shall share the said property
equally. In other words, a condition in the partition deed provided that the parents were to
enjoy the properties only during their lifetime and after their deaths, this property was to be
partitioned equally between their sons (plaintiff and defendant). N0 similar condition was
appended to the shares of the sons. This creation of life interest meant that the parents had
no power to alienate the property during their lifetime.
However, during the year 1977, the parents sold the property under registered sale deed in
favour of the respondent-defendant. After the demise of both the parents, the suit is filed by
the appellant-plaintiff seeking partition of half share in the property contending that the
parents had no absolute right of alienation. The respondent contested the suit and claimed
exclusive title in the property.
Observations- The Trial Court has referred to the ruling of this Court in Muddegowda
Bakkappa v Mallikarjuna [ILR (1980) 1Kant 767] held thus: The creation of the absolute
ownership in each one of the sharer in the properties allotted to him in the partition is a legal
incident of partition. That being so, the recital contained in the partition deed that after the
death of Doddabasappa his three sons should get the properties fallen to the share of
Doddabasappa divided among themselves cannot at all interpreted to have had the effect of
creating a limited estate without a right of transfer in Doddabasappa in the suit schedule
properties which were allotted to him in the partition. Such an interpretation would be
opposed to the legal concept of partition as understood in Hindu Law.
Similarly, in K. Venkatarammanna v K.B. Rammanna Sastrulu (1868-1869) 4 Mad HCR 345,

the facts of the case discloses that in a partition by a separate agreement it was stipulated
that any one of the parties to the agreement or their heirs dying leaving no issue should not
sell or transfer as a but should on his death be divided by the shareholders In regard to the-
said stipulation it is held thus: The obvious purpose of these stipulations was to frustrate
indefinitely the right of alienation which was a legal incident of the absolute estate created by
the partition in effect to convert the estate in the case of each sonless or issueless possessor
into a mere life enjoyment.
Either in the family settlement or a partition by mutual consent a restrictive covenant

partially proprietary could be agreed upon. But however, creating the absolute baragainst the
alienation -is not said to be permissible even according to the tenets of Hindu Law. In Mohd
Raza v Mt. Abbas BandiBibi (AIR 1932 PC 158), in a compromise in the family arrangement,
property was to a widow with a condition that she would not alienate the property outside
the family, held that: “The terms of the compromise were binding that the restriction as to
alienation was only partial and that such a partial restriction was neither repugnant to law
nor to justice, equity and good conscience.” “It seems clear that after the passing of the
Transfer of Property Act in 1882 a partial restriction upon the power of disposition would
not, in the case of a transfer intervivos, be regarded as repugnant In view of the terms of Sec
10,and in the absence of any authority suggesting that before the Act a different principle was
applied by the Courts in India, their Lordships think that it would be impossible for them to
assert that such an agreement as they are now considering was contrary to justice, equity,
and good ‘conscience.”
In Channabassappa v Shankaraiah (1961 Mys LJ 443) it is held that when a partition takes
place between two or more members of a Hindu joint family, it would be difficult to regard
‘the partition as involving a “transfer” of any property from one co-sharer to another. All that
a partition brings about is dissolution of the co parcenary property and it is transferred into
more than one estate and each one of the persons who formed the Hindu joint family
becomes entitled to one of such estates to be exclusively enjoyed by him as its sole proprietor
Hence, a condition in a partition deed to which one of the parties agreed that he could not
alienate certain properties but would enjoy them during his and his wife’s lifetime cannot be
regarded as a void condition. As the partition did not result in a ‘transfer of property, Sec. 10
was inapplicable. The principle of Sec. 10 is that, if an absolute estate is created and after the
creation of such estate a condition which brings about a diminution of that absolute estate is
created, the condition so annexed amounting inevitably to a circumvention of the law and
being repugnant to the very nature of the estate which was created is unenforceable and
therefore void.
The court, in the present case, observed: It becomes explicit that per re the provisions of Sec.
10, T.P. Act would not apply to the partition and family settlements, since there is no transfer
of title contemplated in a partition. However, on the ground of sound public policy any total
restraint on the right of alienation in respect of immovable property which prevents free
circulation is to be held void, but, any partial restraints or limitation would be valid and
binding.
The character of the estate, whether limited or absolute, did not depend purely on the terms
or expressions used to describe it, but have to be taken in totality, looking at the substance,
and the intention of ‘i the parties. This has to he gathered by looking to the entire document
as a whole In the instant case, the plain reading of the partition deed suggests that ‘A’, ‘B’ and
‘C’ Schedule properties are given to the shares of the respective parties-with an emphasis
added that “each one of them should get their khata of the property mutated in their names
and should enjoy the properties in the manner they like.” This would give us no doubt and
difficulty to appreciate that what is granted is an absolute estate and not a limited estate. The
restrictive covenants should be cautiously and carefully interpreted.
Decision- The court held that a restriction, prohibiting the parents absolutely from
transferring the property, amounted to an absolute restraint on alienation and was therefore
bad in eyes of law. This shows that had it been a creation of a limited estate in the first place,
only then could this condition have been operative.
Where the property was given by father to the son under a family arrangement with a
condition that with respect of a portion of it, the son was prohibited from making any
alienation during the life time of the father, it was held to be not an absolute restraint and
therefore was valid and binding on the son (Ratanlal v Ramanuj Das AIR 1944 Nag 187). A
condition that if any coparcener wanted to sell his share the other coparceners would have a
right to buy it, is valid (Aulad Ali v Ali Athar AIR 1927 All 170).
Exceptions to Sec. 10
Lease— When the condition is for the benefit of the lessor, it will be valid. The less or can
always restrict his lessee’s liberty of alienation. The logical reason for this exception is that a
landlord should be free to choose the person who shall be in possession of his land. Thus, a
condition in a lease, that the lessee shall not sublet or assign (otherwise the less or may re-
enter) is valid. Also, a condition in the lease deed that the lessee would compulsorily have to
surrender the lease in the event the less or needs to sell the property is valid (Rama Rao v
Thimappa AIR 1925 Mad 732).
Married woman – The second exception is for the benefit of a married woman (not being a
Hindu, Muslim or Buddhist), so that she shall have no power, during her marriage to
transfer or charge the property or even her beneficial interest therein. Thus a condition
restraining alienation maybe imposed when the property is transferred to a married woman.
If she is a widow or unmarried, no restraint can be imposed on her power of alienation.
Sec. 12. Condition making interest determinable on in solvency or attempted alienation
“When property is transferred subject to a condition or limitation an interest therein,

reserved or to or for the, benefit of any person, to cease on his becoming insolvent or
endeavouring to transfer or dispose of the same, such condition or limitation is void. Nothing
in this section applies to a condition in a lease for the benefit of the less or or those claiming
under him”.
Sec. 12 provides that a condition that the grantee shall cease to have any right on becoming
insolvent or that he shall cease to have any interest on attempting to alienate property is
void. However, a lessor is entitled to impose a condition terminating a lease in the event of
the insolvency of the lessee or when the lessee attempts to sublet or assign the lease.
The reason for the exceptions made in this section is that it would be unjust that the grantee
should enjoy and possess all the indicia of ownership of property and yet be deprived of the
right of alienation incident to such ownership; and it is equally unjust that the creditors who
may have made advances on the strength of the property should be prevented from recourse
to the property transferred for, satisfaction of their, debts on account of a clause in the
transfer, which they may know nothing about. The liability of the estate to be attached by the
creditors on a bankruptcy or judgment is an incident of the estate which is transferred.
RESTRICTION ON FREE ENJOYMENT OF PROPERTY
Sec. 11. Restriction repugnant to interest created — “Where, on a transfer of property, an

interest therein is created absolutely in favour of any person, but the terms of transfer direct
that such interest shall be applied or enjoyed by him in a manner, he shall be entitled to
receive and dispose of such interest as if there was no such direction.
Where any such direction has been made in respect of one piece of immovable property for
the purpose of securing the beneficial enjoyment of another piece of such property, nothing
in this section shall be deemed to affect any right which the transferor may have to enforce
such direction or any remedy which he may have in respect of a breach thereof.
One of the essential legal incidents of ownership of property is the right of free enjoyment of
the thing owned. Sec. 11 lays down that any condition restraining the enjoyment of property
which is transferred absolutely is void. The principle is that a condition will be void, if it
detracts from the very completeness of the interest created. A full ownership confers upon its
owner complete liberty of action with regard to its enjoyment, disposition and management,
so that if a transfer of such interest were accompanied by a condition that the transferee
should always let the land at the definite rent or cultivate it in a particular manner, the
condition would be void on the ground of its repugnancy with absolute ownership.
When a property is transferred absolutely (e.g. sale, exchange or unconditional gift; but not a
lease or a mortgage or a grant for life), it must be transferred with all its legal incidents; the
vendor is not competent to sever from the right of property incidents which the law
inseparably annexes to it, and thereby to abrogate the law by a private arrangement. Thus,
the following restrictions are void –
A condition attached with transfer of an absolute interest in estate that the grantee will
reside in a particular place in estate.
The transferee should always let the land at a definite rent or cultivate it in a particular
manner.
A condition in a deed depriving the co-owner of his claim to partition in respect of
common property: Similarly, a direction not to partition property until all the sons
attained majority.
A transfers his house to B with the condition that B would not demolish it.
A gift restraining enjoyment.
Where A executes a lease of his house to B with a condition that he would live in it, and
would not use it for commercial purposes, and B opens -a shop in the premises, A can sue B
for violation of the lease deed and stop him from using the same for commercial purposes
However, where A (owner of a house occupied by two tenants) sells it to B with a condition
that B would not collect rent from the tenants or evict them, these conditions would not be
binding on B, as they would be repugnant to the interest that is created in his favour by this
absolute transfer.
Distinction between Sec. 10-and Sec. 11
Under Sec. 10, the restriction is directed against the transfer of the interest (large or small).
While under Sec. 11, the restriction is directed against free enjoyment. However, where the
interest is limited, the enjoyment of it will be also limited. For example, when a widow’s
interest is created, a direction that she should enjoy only the usufruct without either
encumbering the corpus or committing the acts of waste.
Sec. 1O is applicable to all transfers, whether limited or absolute, whereas Sec. 11 will not
apply unless the transfer is absolute, and the condition/restriction is imposed by the ‘terms
of the transfer’. Thus, where a man transfers his land-to another, reserving a right of
residence to himself, and the terms of the transfer enjoin on the transferee that he shall not
have the right to drive away the transferor, the condition will be valid, because the transfer is
not made absolutely.
If an absolute interest is created by a deed of transfer, it takes effect, notwithstanding

subsequent words in the deed restricting the right of full ownership. This, however, does not
mean that the transfer or cannot reserve some right in his own favour during his life time. It
is to be remembered that under Sec. 10, an absolute restraint is void, whereas under Sec. 11,
only a restriction repugnant to the interest created by the transfer is void. Sec. 11 is
practically a corollary to Sec. In other words, Sec. 10 relates to the power of the owner to
alienate the property, and makes total restraint on it void, while Sec. 11 protects the power of
the owner to enjoy the property in any manner whatsoever, without there being dictation
from anyone.
However, both sections seek to restrain the owner of the property to unduly interfere with
the rights of the owner of ‘the property once the property has passed to him along with all the
rights.
Exception to Sec. 11
According to it (second para of Sec. 11), the transferor may impose conditions restraining the
enjoyment of land if such conditions are for the “benefit of his ‘(transferor’s) adjoining land”
(rule laid in Tulk v Moxhay case). The transferor is competent to issue such direction if it has
been made in respect of one piece of immovable property for the purpose of securing the
beneficial enjoyment of another piece of property, and he is also competent to enforce such
direction or any remedy which he may have in respect of a breach thereof. Such conditions
can been forced only by the transferor and not by the transferee of the other portion of the
property (Leela v Ambujakshy AIR 1989 Ker 308).
The following illustrations may be noted in this regard:-
A makes an absolute gift of a house to B, and directs that B shall not raise it higher, so
as “to obstruct the passage of light and air to A’s adjoining house, the direction will be
valid.
A owns two properties X and Y and sells X to B and imposes a condition that B shall lay
out money in building and repairing a drain passing over X adjoining Y The restriction
is valid and enforceable.
A grants a lease of his zamindari to B, reserving to himself all the minerals and a few
plots of land in the middle of his zamindari for working the mines and storing minerals,
and directs B to allow passage to his mines to and from there served plots, the direction
is binding.
A owns a land adjoining his house that 11¢ sells to B with a condition that B would the
front lawn as a garden, as A himself had in his own house, so that both the houses do
not appear dissimilar. The direction is binding.
Sec. 40. (Burden of obligation of imposing restriction on use of land)
According to Sec. 40, “where, for the more ‘beneficial enjoyment of his own immovable
property, a third person has, independently of any interest in the immovable property of
another, a right to restrain the enjoyment in a particular manner of the latter property, such
right may be enforced against a transferee with notice thereof or a gratuitous transferee of
the property affected thereby, but not against a transferee for consideration and without
notice of the right.”
When a person transfers his immovable property, the transferee is often required to
enter into a covenant whereby the transferor imposes on the transferee conditions
restraining the enjoyment of land transferred for the benefit of adjoining land. The
‘conditions restraining’ are known as covenants. A covenant is an agreement in writing
creating an obligation, which may be positive or negative in nature:-
Positive covenant (‘burden on land’)— It stipulates the performance of some act or the
payment of money. Its enforcement necessitates compelling the covenant or to put his
hand into his pocket. For example, a covenant that the transferee would form the strip
of land (attached to the transferred property) into a road and would ever afterwards
keep it in repair.
Negative covenant (‘benefits of a covenant’)— A restrictive covenant which forbids the
commission of some act e.g. not to erect buildings.
In determining whether there is a positive or negative covenant, it is the substance of

covenant and not its form that matters. For example, if in a covenant, to build on it is
allowed, but if sell any building the licencee would pay 1/4thof the sale-price to the owner.
The condition was negative and restrictive, it being in -substance a restriction on licencees’
selling the land (Prabbu Narain v Ramzan, 41 All 417).
Covenant running with the land
A covenant is said to run with the land, when either the liability to perform it, or the right to
take advantage of it, passes to the transferee of the land For example, a covenant in a lease
for renewal thereof is one running with the land, and may be enforced against all transferees.
Similarly, a covenant for title runs with the land.
A covenant which runs with the land is one which binds the land in its inception, or which
affects the nature, quality or value of the land; it must be one that touches or concerns the
land, i.e. it must enhance the value of the land, or benefit it in some other way. For example,
a covenant to pay rent and right to have quiet enjoyment. Again suppose A grants sub-soil
rights to a company and the company agrees to pay damages if the surface land caves in or
subsides. This is a covenant running with the surface land.
All covenants are binding as between the transferor and transferee. Sometimes, they are
enforceable even against the purchasers from the transferee and they are then said to “run
with the land” (i.e. such covenant are attached to the land irrespective of who is the owner of
such land).A negative or restrictive covenant always runs with the land, while a positive
covenant never runs with the land.
A (owner of a house) sells the adjoining land to B with a condition that B would leave
open some area for the seller’s benefit A died and his successors sued the assigns of B to
enforce the covenant, when he attempted to build upon it. They can do so as this covenant
ran with the land [Rogers v Hosegood (1900) 2 Ch 288].
A combined reading of Sec. 11 and Sec. 40 will bring out the following points:—
By virtue of Sec. 11, the original transferee is bound by all covenants (positive or
negative).
By virtue of Sec. 40, the subsequent transferee (a purchaser from the original
transferee) is bound only by negative/restrictive covenant. A positive covenant cannot
be enforced against a subsequent transferee [Haywood v Brunswick P.B.Building
Society (1881) 8 QBD 403; Austerberry v Corpn.OfOldhan (1889) 29 cm) 750].
In the latter case, A conveyed land adjoining his own land to B with a condition that he would
maintain and repair a road on it, to which B agreed. B later sold the land to C, and A sold his
land to D. D sued C to enforce the covenant. It was held that he could not do so as a (positive)
covenant i.e. a burden on land, can be enforced only if it amounts to either a grant of an
easement, or a rent charge or an estate or interest in land.
To bound a subsequent transferee for a negative covenant, the covenant must be for the
benefit of adjoining land, and must be annexed to the covenantee’s land. Such
transferee for consideration must have ‘notice’ of the said covenant.
A subsequent transferee for consideration and without notice is not even bound by a
negative covenant.
A gratuitous transferee (a transferee without consideration)is bound by such covenant,
whether he has notice of it or not
Exception— Between a lessor and lessee, even a positive covenant bind a transferee
from lease, and the question of notice is immaterial.
Rationale — A ‘negative covenant’ is like the benefit of a covenant and thus runs with the
land so that it can be enforced by the transferee to the person who has the benefit of the
covenant (i.e. covenantee). A ‘positive covenant’ is a burden of a covenant and thus even
though it be annexed to the land, it will not -bind the transferees. The reason for this rule is:
If a person sells land with a covenant he would not get full value. Why should a purchaser
from him be then allowed to ignore the covenant and sell it free of covenant and get better
value?
Illustrations
(a) If A has only one piece of land and sells it to B; a covenant (negative or positive) would
not be binding on B.
(b) If A has two pieces of land and sells one to B with a covenant for the beneficial enjoyment
of another one, the covenant would bind B, whether it is positive or negative.
(c) If B sells the above land to C, C would be bound by covenant with A, if covenant is
negative and C had notice of it.
(d) If A sells the land to D, D will have all the rights of A and can enforce negative covenant
against B.
LEADING CASE: TULK V MOXHAY [(1848) 2 PHILL 774]
In this case, X, the owner of vacant, land and several houses surrounding it (forming a
square), had sold the vacant land to E, who covenanted that he would keep it in the same
condition (i.e.unburdened with buildings) and thus maintain the ground (vacant)and square
garden by carrying out sufficient and proper repairs. The ground passed by diverse
intermediary conveyances with the same covenant. Finally Y purchased it, and he wanted to
construct a building thereon, although he had notice of the covenant. X filed a suit and an
injunction restraining Y from building.
The position at common law was that since the covenant constituted a “burden” upon the
land (positive covenant) it could not, therefore, bind Y. It was contended on Y’s behalf that
the seconditions were enforceable only as between the parties to the contract and not against
the subsequent purchasers for value.
This position was clearly unjust, since X had legitimate interest in preserving the amenities
of the surrounding parts which he” had retained. Impressed by the justice of X’s claim, Lord
Cottenham, L.C.- cast about to same reason for granting the injunction. He found himself
able to do so by holding that since Y had notice, his conscience was affected by the covenant.
In other words, the decision in favour of X amounted simply to this, that he had an equitable
interest in the enforcement of the covenant. Thus a new class of equitable interest .was
created in order to supply the deficiencies of the common law. This interest as defined and
modified by subsequent authorities has now become restrictive or negative covenant of
modern law.
It was contended by the defendant that the vendee could not violate contract, but the
purchaser from him may violate. The court observed that if this contention is accepted, it
would be impossible for an owner to sell any part of his property without incurring the risk of
rendering what he retains worthless. It was further contended by the defendant in this case
that the covenant does not run with the land. The court observed that question is not
whether the covenant does not rum with land, but whether the party be permitted to use the
land in a manner inconsistent with the contract entered into. The court in this case, thus, laid
down two rules:—
Gevenants between the transferor and the original transferee are always enforceable.
Negative covenants are binding on the subsequent transferee with notice.
It was held that no one purchasing with notice of an equity can stand in a different situation
from that of the party from whom he purchased; and therefore, Y who was aware of the
conditions in the contract, irrespective of their character, was bound by it.
Comments— The general rule of the T.P. Act is that the purchaser gets all the rights which
the transferor had in that property. But, in the above case, the transfer was subjected (a
condition imposed) to ‘beneficial enjoyment’ of the transferor’s property. The rule inTulk v
Moxhay forms an exception to Sec. 11 and also incorporated in first para of Sec. 40.
[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What do you understand by Sale?
2. What is contract for Sale and How it is different from Sale?
3. Distinguish between sale and a lease /Mortgage/Exchange?
4. Define Sale?
5. What are the essentials of the sale?
6. What are buyer’s and seller’s rights and liabilities?
PAHUJA LAW ACADEMY
1. . …………….. is a transfer of ownership in exchange for a price paid or promised or part
paid and part promised:
(a) Sale.
(b) Mortgage.
(c) Pledge.
(d) Exchange.
2. Which section defines ‘sale’ in T. P. Act?
(a) Sec 53.
(b) Sec 53-A.
(c) Sec 54.
(d) Sec 55.

3. When the registration of sale is necessary:
(a) Movable property above Rs. 100.
(b) Immovable property above Rs. 100.
(c) Immovable property of any value.
(d) Only (a) and (b).
4. Which of the following could be the subject matter of sale:
(a) A Right of re-entry.
(b) Easement.
(c) Ocean water.
5. Which of the following could be the subject matter of sales as per the T. P. Act:
(a) Movable property.
(b) Immovable property.
(c) Tangible property.
(d) Intangible property.
(a) There need not be two parties to a sale; the seller could himself be the buyer.
(b) Without consideration a sale would be void.
(c) The seller must be a person competent to transfer; the buyer must be a person competent
to be a transferee.
7. Which one of the following is NOT an essential element of sale?
(a) Parties.
(b) Subject matter.
(c) Transfer or conveyance.

(d) Payment of price in cash.
8. ……………. itself does not create any ‘interest or charge’ on the property:
(a) Sale.
(b) Agreement of sale.
(c) Transfer.
(d) Exchange.
9. A sale (mark the incorrect statement):
(a) Passes an absolute interest in the property to the purchaser.
(b) Conveys a legal title to the purchaser.
(c) Creates a right in rem.
(d) Creates a right in personam.
10. In which of the following cases it was held that Sec. 54 is applicable to both Hindus and
Muslims:
(a) Abdullah v Ismail.
(b) Gafruddin v Hamid Hussain.
(c) Permanand v State.
(d) Raghubir v Kunj Bihari
11. Rights and liabilities of buyer and seller have been laid down in which section of the T.
P. Act:
(a) Sec. 54.
(b) Sec. 55.
(c) Sec. 56.
(d) Sec. 57.
12. What is the buyer’s right before sale:
(a) A charge on the property for the purcliase money paid by him and the interest on such
purchase money.
(b) Benefits of any increase in the value of property and the rents and profits thereof.
(c) Right to take possession.
13. What is the buyer’s liability after sale:
(a) To bear any loss arising from destruction, injury or decrease in the value of property.
(b) To disclose to the seller any fact which materially increases the value of property.
(c) To pay or tender the purchase-money to the seller.

[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. Define & explain “Actionable Claims”.
PAHUJA LAW ACADEMY

Actionable claim is defined in Section 3 of the Transfer of Property Act as a ‘claim to any debt
other than a debt secured by mortgage of immovable property or by hypothecation or pledge
of movable property or to any beneficial interest in the movable property not in the
possession, either actual or constructive of the claimant which the civil courts recognize as
affording grounds for relief, whether such debt, or beneficial interest be existent, accruing,
conditional or contingent.
Accordingly, this mean, it excludes not only a claim to any immovable property for a debt but
also a debt secured or any movable property in possession of the claimant. It follows,
therefore that it is a claim for a simple debt or liability and which can be realized by a legal
action.
An actionable claim is called, in English Law, a chose in action or a thing in action as against
a chose or money in possession. It denotes incorporeal personal property of all disciplines
and an interest in corporeal personal property not in possession of the owner which
accordingly can only be claimed or enforced in action. Therefore, while the different types of
movable property governed by the Sale of Goods Act can be called as chose in possession, an
actionable claim is also a type of movable property called chose in action. It is also a movable
property because a debt is a property and anything which is not immovable property is
movable property.
Actionable claim as defined in Section 3 of the Transfer of Property Act, as a chose in action
is different from two other such chooses in action namely the right or property by way of
copyright, trade-mark, patent, or design, and also to stocks and shares or debentures of a
limited Company or the negotiable instruments under the Negotiable Instruments Act, which
also evidence a debt and which are recoverable by legal action.
Section 137 of the Transfer of Property Act clearly provides that sections 130 to 136 will not
apply to stocks and shares or debentures or to instruments which are negotiable or to
mercantile documents of title to goods. Marine Insurance claim is also excluded by Section
135 A of that Act and is dealt with in the Marine Insurance Act, XI of 1933. They are also
governed by independent separate statutes passed in respect thereof and are not, therefore,
governed by the Transfer of Property Act. That Act in Section 130 only provides for transfer
of actionable claims as defined and circumscribed by the Transfer of Property Act. As to
transfer of the earlier mentioned actionable claims separate provisions are made for transfer
thereof by the statutes governing them.
Actionable claims within the meaning of Section 3 of the Transfer of Property Act, therefore,
cover (i) claims to unsecured debts and (ii) claims to beneficial interest in moveable property
not in possession actual or constructive whether present or future., conditional or
contingent. Such actionable claims could be (a) a right to claim maintenance (b) a right to
arrears of rent (c) a right to annuities (d) moneys payable under a contract for price or
advance (e) a right to claim benefit of a contract (f) a partner’s claim for accounts and his
share therein (g) insurance claim, other than marine insurance (h) salary in arrears (i) book
debts (j) a fixed deposit receipt, etc. However, a mere right to sue is not assignable.
Similarly, a decree is not assignable under this section, as no legal action is required to be
taken to recover the claim. The decree itself can be executed. Similarly any other property
which is not transferable, under Section 6 of the Transfer of Property Act is not assignable
under Section 130 of the Transfer of Property Act. Marine Insurance Policy, negotiable
instrument and documents of title to goods are specifically excluded by Section 135 A and
Section 137 of the Transfer of Property Act as stated above.
PAHUJA LAW ACADEMY
1. A right to sue for damages is:
(a) An actionable claim.
(b) Not an actionable claim
(c) Not only a mere right to sue
(d) Transferable
2. Which of the following combinations are correctly matched
1. Mense profit – Actionable claim.

2. Claim of a Muslim wife for unpaid dower – Actionable claim.
3. Unsecured debt -Actionable claim
4. Profit under a “sale of goods contract – Actionable claim.
Select the correct answer using the codes given below:
(a) 2, 3 and 4
(b) 1, 2 and 3
(c) 2 and 3.
(d) 1 and 4
3. Transfer of actionable claim has exception – u/s 130 of T.P. Act:
(a) It does not apply to transfer of life insurance policy
(b) It does not apply to the transfer of marine or fire policy
(c) It does not apply to vehicle insurance policy
(d) None of the above policy applies

[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What do you means by Mortgage? Also explain different types of mortgage.
2. A executed a registered mortgage deed on 20-8-1990 in favour of B in respect of certain
property to secure an amount of Rs. 50,000/- advanced to him. The amount was re-
payable within 3 years. It was a simple mortgage without possession. A did not exercise
his right to redeem the mortgage within the stipulated time. B has filed a suit for
declaration with consequential relief of possession, recovery of damages, mesne profits
and permanent injunction. Decide.
3. A executed two registered deeds of mortgage by conditional sale for Rs. 5,000/- and
Rs. 6,000/- in respect to 10 Katha of land, each with a condition to recovery if A
returns the amount within 5 years, A returned the mortgage money within the time.
But, B refused to re-convey the land and contended that it was out and out sale with
condition of re-conveyance and not mortgage by conditional sale. Decide. Support your
answer with case law. Refer to relevant provisions of T.P.A., 1882.
MORTGAGE OF IMMOVABLE PROPERTY
DEFINITION OF MORTGAGES
According to Sec 58(a) Transfer of Property Act – a ‘Mortgage’ is the transfer of an interest in
specific immovable property for the purpose of securing-
(a) The payment of money advanced or to be advanced by way of loan.
(b) An existing or future debt, or
(c) The performance of an engagement, which may give rise to pecuniary liability.
The person who takes loan under a mortgage, i.e. who transfers the interest in his immovable
property is called Mortgagor. The person in whose favour, the property in mortgaged i.e. who
advances loan, is called mortgagee. The sum of money taken as a loan under mortgage is
called mortgage-money and the instrument of deed of transfer is called mortgage-deed.
ESSENTIAL ELEMENTS OF MORTGAGE

Following essential elements are necessary in mortgage :
1. There must be transfer of interest

2. The interest transferred must be of some specific immovable property.
3. The purpose of transfer of interest must be to secure payment of any debt or
performance of an engagement which may give rise to a pecuniary liability.
Transfer of interest: In a mortgage there is transfer of some interest vested in the

immovable property. There is no transfer of absolute interest or ownership. The interest is
transferred in favour of the mortgagee, who advances the money as loan. lt is the interest in
property which gives him (mortgagee) the right to recover his money from mortgagor’s
property. However, mortgage is not a transfer of all the interest. After transferring this
interest in favour of mortgagee, there still remains a vested remainder with mortgagor.
The first essential condition of a mortgage is that there must be a transfer of some interest in
the property of mortgagor. The transfer of interest means transfer of property. Therefore,
mortgage is transfer of property within the meaning of Section 5 of this Act. Accordingly, all
the essential conditions for a valid transfer must be fulfilled also in mortgage, e.g., it must be
between two living persons, to maintain such transfers rather it is sufficient if the deed
means to suggest that there is transfer of interest, (property) by way of mortgage.
2. Specific immovable property: The property which is being mortgaged must be

specific immovable property. The immovable property must be specifically mentioned
in the deed. It must be mentioned in a reasonably certain manner so that it can be
identified as to which property is being talked about, on the other hand where the
property has been described in a manner that it can be ascertained without any doubt,
the property is specific even though no particular details are given in the deed.
For example, my house and landed properties.
3. The purpose of mortgage: Consideration of mortgage the last essential element of

mortgage is its purpose. The purpose of mortgage must be to secure a debt. Mortgage is
a transfer of property supported with some consideration: the consideration of
mortgage is to secure a debt. Mortgagor transfers the interest in his property to
mortgagee in consideration of security for payment of some kind of loan taken by him.
The loan may be in the from of
(i) Money advanced or to be advanced
(ii) An existence of further debt, or
(iii) The performance of any engagement giving rise to a pecuniary liability.
MORTGAGOR
The person who actually mortgages the property is mortgagor, but a new section 59-A
introduced by the Amendment Act 20 of 1929, says that a mortgagor includes a person
deriving title under the original mortgagor. This section really refers to such persons as heirs,
executors, and administrators. who derive their title from the mortgagor for the purpose of
section 68(a), however, the term mortgagor does not include the transferee of the mortgagor,
for the transferee is not by the mortgagor’s personal covenant though in clause (c) of that
section a subsequent purchaser would be included.
A mortgage by minor, who is incompetent to contract, is void. The creditor cannot recover
money even under section 64 and 65 of Contract Act in case of mortgage by a minor.
MORTGAGEE
A mortgagee is a person in whose favour a mortgage is created. The term also includes, under
the new section 59-A, a person deriving a title under the original mortgagee. Every mortgage
deed must name some person as a mortgagee, otherwise it cannot be a mortgage. Thus, a
security bond given to the court cannot be enforced as a mortgage, for the court is not a
judicial person. A mortgage executed in favour of minor who has advanced the whole of the
mortgage money is enforceable by his or by other person on his behalf.
MORTGAGE MONEY
The expression ‘mortgage-money’ means the principal money and interest of which payment
is secured for the time being. Accordingly, a mortgagor cannot redeem the property on the
repayment only of the principal money. He must also pay the interest there on because the
interest is regarded as a charge upon the property just as much as the principal amount.
The parties are, however, free to enter into any contract to the contrary. But the mere fact
that the mortgagor makes himself personally liable for the payment of interest is not
compatible while the inter also forms a charge on the property.
KINDS OF MORTGAGES
Section 58 provides following kinds of mortgage:
1. Simple mortgage
2. Mortgage by Conditional Sale
3. Usufructuary mortgage
4. English mortgage
5. Mortgage by deposit of title deeds, and
6. Anomalous mortgage.
A brief account of each kind of mortgage is given below :

(1) Simple mortgage Sec 58 (b) :Where the mortgagor promises to pay the mortgage —
money (loan) without delivering possession of the mortgage-property and agrees expressly or
impliedly that in case of non-payment of loan, the mortgagee shall have the right to cause the
mortgage property to be-sold, the mortgage is simple mortgage. The key features are :
(i) The mortgagor retains the possession of the mortgaged property.
(ii) The mortgagor must personally under-take to pay the mortgage money.
(iii) The parties must expressly or impliedly agree that in the event of the mortgagor, failing
to pay according to his contract, the mortgagee shall have right to cause the mortgaged
property to be sold.
Simple mortgagee cannot foreclose, the real right transferred is right of sale (See note
‘mortgage’ and ‘right to cause the property to be sold’. under section 58)
The case of Papmma Rao vs. Prarap Korkonda (1896) 19 Mad 249, 23 IA 32 illustrates the
impossibility of remedy of simple mortgage leading to a foreclosure, for when the court
erroneously gave a remedy of a decree for possession against which the mortgagor did not
appeal, the Privy Council held 15 years later that the mortgagee was in wrongful possession
as mortgagor has right of possession. The remedy of sale is also available in some anomalous
mortgages which involve the transfer of a right of sale.
Limitation for a suit for sale is under Article 62 of the Limitation Act 1963, i.e. 12 years from
the time-when the mortgage money become due. If the net proceeds of the sale are
insufficient, there will be a personal decree for the balance if the mortgagor is personally
liable and if the personal claim is not barred by limitation. This is provided in Order 34, Rule
6 of the Code of Civil Procedure, but such an order may be made on a motion upon a consent
decree even though the terms of the decree are silent as to the personal remedy.
Under the amended R 4 and 5 of Order 34‘of the Code of Civil Procedure there- are two
decrees, a preliminary mortgage decree, followed in case of default by a final decree for sale.
(2) Mortgage by Conditional Sale: Sec. 58(c), In this form of mortgage, there is no
personal liability on the part of the mortgagor to pay the debt. The remedy available to the
mortgagee is by foreclosure only.-The mortgagee remains content with the property
mortgaged, and cannot look to the other properties of the mortgagor, the latter not having
any personal liability.
A mortgage by conditional sale is an ostensible sale, which is to ripen into an absolute sale on
breach of the condition as to payment; in other words, on the breach of the condition, the
contract executes itself, and the transaction is closed, and becomes one of absolute sale to be
enforced in a particular manner, called foreclosure. A mortgage is foreclosed by obtaining a
declaration from the court to the effect that the mortgagor will be debarred of his right of
redemption. Such a declaration ripens the ostensible ownership of the mortgage into
absolute ownership.
A mortgage by conditional sale is non-possessory (i.e., no delivery of possession is given

under it), and therefore, the mortgagee does not have the advantage to repay himself, as is
the case in a unsufructuary mortgage.
The right of a mortgagee (in this type of mortgage) is to close the transaction in case of
default of repayment on the due date, and claim the property as an absolute owner. But this
right can be enforced, not privately, but only by a suit for foreclosure. The mortgagee does
not acquire any personal right against the mortgage or as in the case of a simple mortgage;
nor is he entitled to the possession of the property. In fact, by virtue of this mortgage, he can
only acquire ownership over the property which, however, will not vest in him in spite of a
default of payment on the due date, until there is a decree for foreclosure.
(3) Usufructuary Mortgage Sec. 58(d) : The essential elements of usufructuary

mortgage are as follows:
(i) Delivery of possession of the mortgage-property or an express or implied undertaking by

mortgagor to deliver such possession.
(ii) Enjoyment or use of the property by mortgagee until his dues are paid off.
(iii)No personal liability of the mortgagor.
(iv) Mortgagee cannot foreclose or sue for sale of mortgage-property.
Delivery of possession : The characteristic feature of usufructuary mortgage is the

transfer of possession of mortgage-property which is ‘security’ for payment of his money.
Where the mortgagee is entitled under the mortgage deed to continue possession of property
until payment of mortgage money, the transaction is usufructuary mortgage. It is not
necessary that delivery of possession is made at the time of execution of the deed. The
mortgagor may take an undertaking that he would deliver the possession on a future date.
Such undertaking or promise may either be express or implied. Therefore, where under the
terms of a mortgage-deed the possession is to be delivered to the mortgagee subsequent to
the date of mortgage, the transaction is still a usufructuary mortgage. The mode of delivery of
possession depends upon the nature of property. Where the mortgage property is a tenanted
house the only way in which possession can be given to mortgagee is to give him the right to
collect the rents and appropriate them towards the debt.
Enjoyment of rents and profits: In a usufructuary mortgage, the mortgagee has right to
‘use’ the property until the debt is fully paid. Generally, the mortgagee adjusts the interest
out of the rents and profits from the mortgage-property.
No personal liability: in a usufructuary mortgage, there is no personal liability of the
mortgagor. Mortgagee cannot sue the mortgagor personally for payment of his debt. He is
entitled only to retain the possession of mortgage-property till his debt is fully paid.
No foreclosure or sale: The mortgagee is entitled to continue possession and enjoy it until
the debt is fully paid off. He can neither sue the mortgagor personally nor can exercise his
right of foreclosure under section 67 of this Act. This right is not available to usufructuary
mortgagee.
(4) English mortgage: Sec. 58(e), An English Mortgage is a transaction in which the
mortgagor binds himself to repay the mortgage money on a certain date, and transfers the
mortgaged property absolutely to the mortgagee, but subject to a condition that the
mortgagee will retransfer it to the mortgagor upon payment of mortgage money as agreed.
The three essentials of this form of mortgage, therefore, are
(i) that the mortgagor shall bind himself to repay the mortgage money on a certain day
(ii) that the property mortgaged shall be absolutely transferred to the mortgagee; and
(iii) that such absolute transfer shall be made subject to a proviso that the mortgagee will
retransefer the property to the mortgagor on payment by him of the mortgage money on the
day on which the mortgagor bound himself to repay the same. The chief characteristic of this
mortgage is that the operative words should be the same as in an absolute conveyance.
4.1 English mortgage and simple mortgage – Distinction: In English mortgage,

there is a transfer of ownership of the property with a promise to repay the debt on a certain
date, the mortgagee is entitled to the possession of the mortgaged property and to enjoyment
of the payment of mortgage money. Further a simple mortgagee can bring the property to
sale through court.
4.2 English mortgage and mortgage by conditional sale- Distinction:
1. English mortgage contains a covenant to repay. This imports a personal liability on the
part of the mortgagor. In a mortgage by conditional sale, the mortgagor has no
personal liability.
2. The remedy of the English mortgagee is that of sale while the remedy of a mortgagee by
conditional sale is foreclosure.
3. in an English mortgage, the ownership is transferred to the creditor but is defeasible by
repayment of the debt. In conditional mortgage, a qualified ownership is bestowed
upon the creditor which by foreclosure proceedings is transformed into an absolute
title when the mortgage commits default.
4. The mortgagee in English mortgage has a right to possession but not a mortgage under
a mortgagee by conditional sale.
4.3 Distinction between English Mortgage and Simple Mortgage
English Mortgage
1. What is transferred –
– in English mortgage property is absolutely transferred to mortgage, whereas in single

mortgage only the right to sale is transferred.
2. Right is possession –
— in English mortgage, mortgagee being the owner of the property, has a right to enter into
Immediate possession of it.
— whereas in simple mortgage the mortgagee has no right to enter into immediate
possession of the property.
3. Under sale out of Court –
—in English mortgage mortgagee has in certain cases a right to sale7without intervention of
court.
_ but in simple mortgage, ea right to sale-without; intervention of court isn’t confirmed.
Simple Mortgage:
1. Only the right of sale is transferred.

2. The mortgagee has no right to enter into immediate-possession of property
3. A right of sale without the intervention of the Court is not conferred on a simple
mortgagee.
(5) Mortgage by deposit of title deeds (Enquitable mortgage) [Sec. 58(f)]
A mortgage by deposit of tile-deeds is popularly called an equitable mortgage on the analogy

of similar expression used in English law. In England, this form of mortgage creates a mere
equitable security, as distinguished from an actual mortgage, which is ordinarily called a
legal mortgage and is, therefore, unenforceable against a bonafide purchaser for a legal estate
without notice. But in India, it creates, not merely a right in personam, but a right in rem
which cannot be defeated by any defence of bonafide purchaser without notice, consequently,
it will operate also against a subsequent legal mortgage of the same estate. In England, this
form of mortgage is rightly called an equitable mortgage, but in India, the later expression is
a misnomer, because here, it is in fact a legal mortgage.
Characteristics of a mortgage by deposit of title deeds :

(i) It can be created in town of Calcutta, Madras and Bombay (and other town which may be
notified in official Gazette). It can be created in such town by deposit of title deeds, even
though the property is outside those towns.
(ii) It is not necessary that all the deeds should be deposited, it is sufficient that material
documents are deposited. It is effected by deposit of material title deeds.
(iii) No delivery of possession of property takes place.
(iv) It is made to secure a debt – or advances made, or to cover future advances,
(v) No registration is necessary, even if there is writing recording the deposit.
(vi) It prevails against a subsequent transferee who takes under a registered instrument.
(vii) It prevails- against all who are not bonafide purchasers for value without notice.
6) Anomalous mortgage Sec.58(g) : An anomalous mortgage is a transaction which is,

in fact, a mortgage (as defined in the Act), but is not any of types of mortgage considered
above. In other words, it is a mortgage other than those categorically defined in the section.
Instances of such mortgages are Kanam, Ottiand Peruartham mortgages of Madras and the
San mortgage of Gujarat.
Characteristics of anomalous mortgage:
It would include a simple mortgage, usufructuary mortgage and a usufructuary

mortgage by conditional sale.
Possession may or may not be delivered.
lf for Rs. 100 or upwards, it must be registered; if below Rs. 100. it may be registered or
by deliver of possession.
Sub Mortgage : A mortgage – debt being an immovable property, the mortgagee can assign
its interest in the mortgage property. A mortgage by the mortgagee of his interest under the
original mortgage is called a sub mortgage; A sub mortgagee is entitled to a decree for sale of
the mortgage rights of his mortgage.
A puisne mortgage arises where A mortgages his property to B by a legal mortgage and then
mortgages it again of C either by an equitable mortgage or by creating a charge on the same
property.
Rights and Liabilities of Mortgagor
Right of mortgagor : The right of mortgagor are given in section 60 to 65A. Mortgagor’s
rights are as under :
(i) Right to redeem the mortgage
(ii) Right of inspection and production of documents relevant to the transaction of mortgage.
(iii) Right to redeem the mortgage separately or simultaneously.
(iv) Right to appropriate accession if any, to the mortgaged property.
(v) Right to appropriate improvements, if any, to the mortgaged property.
(vi) Right to renewal of lease where the mortgaged property is leasehold.
(vii) Right to effect lease of the mortgaged property.
According to above Rights, we can discuss further the most important point.
Right of Redemption:
Right to redeem is the right to recover something by making certain payments. Mortgagor’s
right of redemption means mortgagor’s right to recover or get back the property after making
payment of loan. Mortgage is a transfer of an interest in immovable property for securing the
loan. By way of security, the mortgagor transfers an interest in his immovable property. If
the loan has been paid, the interest so transferred must revert back to the mortgagor.
Mortgagor’s right to redeem the mortgage property after repayment of loan is a right which
rests in him by virtue of his residuary of ownership in the property. Immovable property is
bundle of several interest and out of all such interests only, ‘an interest is transferred to
mortgagee as security for repayment of loan. After creating an interest in favour of
mortgagee, the mortgagor still has the remaining interests. The remaining interest is called
residuary ownership in the mortgage property.
In England, the right to redeem a mortgaged property by application to the chancery court-
was known as “equity of redemption” A mortgagee who wish to get rid of the equity of
redemption could do so only by obtaining from the court of chancery ‘an antidote’ invented
by itself, i.e a decree for foreclosure.
Under the Indian law, the terms “right to redeem” and “equity of redemption” are
synonymous. There is no distinction between the legal right of redemption. The mortgagor’s
right to redeem, even after the expirty of the date fixed for payment, is not an equity, it is a
statutory right recognized by sec. 60 of The Transfer of Property Act.
Once a mortgage always a mortgage :

The right to redeem is a natural incident of mortgage. Notwithstanding any stipulation to the
contrary, a mortgagor, at any time after the principal money has become payable and before
his equity of redemption has been actually foreclosed, has on payment of his debt, the right
to get back his property free of all conditions or liens. The right of redeeming the mortgagor’s
property is an indefeasible right, and cannot be taken away from him by any law or contract.
The right of redemption cannot be detached from the mortgage. This rule is well expressed
by the maxim “Once a mortgage always a mortgage”.
The mortgage may be redeemed at any time after the principal money has become due.
Therefore, unless the money becomes due, the mortgagor cannot insist on redeeming his
property, nor can the mortgagee attempt to foreclose. Again, the right of redemption subsists
until the mortgage is actually foreclosed, that is till a decree is passed in foreclosure suit. So,
generally, these two rights accrue at the same time and subsist upto the same time, and this
incident is often described by saying that the right of redemption and foreclosure are co-
extensive. This maxim, of course, assumes the absence of any valid stipulation (express or
implied) to the contrary.
The maxim, “once a mortgage, always a mortgage“ may be applied to explain following two
situations:
(i) First, where at transaction is intended by the parties to be a borrowing transaction under
a mortgage, though it is carried out in the form of a sale, equity will not allow the mortgagor
to be deprived of his right of redemption. A mortgage is always considered as redeemable
even though there is an express agreement between the parties that it cannot be redeemed
after the due date.
(ii) Secondly, equity does not permit any clog on redemption. A clog on redemption means
any stipulation or provision in the mortgage-deed which restricts the mortgagor’s right of
redemption. Any contract or agreement or provision incorporated in the mortgage to
prevent mortgagor’s right of calling back the property on payment of loan is a ‘clog’ on the
equity of redemption. A ‘clog’ on redemption is void. A stipulation which amounts to a ‘clog’
on redemption is void and cannot be enforced as being contrary to the very nature of
mortgage.
Clog on redemption:
Clog on redemption means condition or stipulation which prevents the mortgagor from
reclaiming the mortgage-property on re-payment of the loan.
The right of redemption is not-voidable in the sense that it cannot be denied to the
mortgagor even though he may have by express contract abandoned his right to redeem the
property. Equity in its insistence upon the principle that a mortgage is intended merely to
afford security to the lender, has held an agreement which prevents redemption as void. The
section (Sec. 60) is not prefaced by any such words as in absence of a contract to the
contrary. The right of redemption is therefore a statutory right which cannot be fettered by
any condition which impedes or prevent redemption. Any such condition is void as a clog on
redemption. A mortgagee’s suit for sale was compromised on terms that the mortgagor
should take possession as usufructuary mortgagee; and that thereafter the mortgagor should
have a right to redeem at any time taking out execution. The Madras High Court held that
this term of consent decree was invalid as it had the effect of reducing the time of
redemptions from 60 to three years. On appeal to the Privy Council, the point did not arise as
their lordships held that on a proper construction of the decree it did not exclude the
mortgagor’s right by suit. A mere agreement between the mortgagor and the mortgagee by
which the mortgagor agree to convey certain lands to the mortgagee in satisfaction of the
mortgage does not extinguish the mortgage.
The Supreme Court has held that the right of redemption under a mortgage deed can come to
an end only in a manner known to law. Such extinguishment of the right can not take place
by a contract between the parties, by a merger or by a statutory provision which debars the
mortgagor from redeeming the mortgage. A mortgagee in possession of the property will
have to deliver possession to the mortgagor when a suit of redemption is filed, unless he is
able to show that the right of redemption has come to an end or that a suit is liable to be
dismissed on some other valid ground.
The mortgagor’s right of redemption is exercised on payment or an offer of payment to the

mortgagee at the proper time and at the proper place,‘ of the mortgage money. When it is
extinguished by the act of the parties, the act must take the shape and observe the formalities
which the law prescribed. The expression ‘Act of parties’ refer to same transaction
subsequent to the mortgage and standing apart from mortgage transaction. Under Indian
law, the right of redemption is a statutory right which cannot be fettered by any condition
which impedes or prevents redemption. Any such condition is void as clog on redemption.
The legislature has quite advisedly not used any such words as “in the absence-of a contract
to the contrary’ in sec. 60, with a view to prevent the mortgagor from counteracting himself
out of his right of redemption at the time of mortgage. lt is therefore, manifest that the right
cannot be clogged. What is a clog on equity of redemption is a matter of act in each case.
Some instances of clog on redemption
1. Condition of sale in default.

2. Postponement of redemption for long term.
3. Condition postponing redemption in default on a certain date.
4. Restraint on alienation.
5. Collateral benefits to mortgagee.
6. Penalty in-case of default.
Now, we discuss the instance of clog on redemption in details :

1. Condition of Sale in default: A condition which makes mortgage a sale in default is a’
clog on redemption. Stipulation entered into on date and time of mortgage and
included in the deed that in default of repayment of loan within the fixed date, the
mortgagee shall be deemed to be purchaser of the mortgage property is a ‘clog’ on
redemption. Such stipulation converts mortgage into a sale.
In Gulab Chand Sharma vs. Saraswari Devi AIR 1977 SC 242, there was a mortgage by
conditional sale. The mortgagor was given time of four years for repayment of the loan. The
mortgage property was on lease. The deed provided that in case the mortgagee received any
notice from any public authority for breach of covenants of lease within four years, the
mortgagee shall become owner of the property. The Supreme Court held that this stipulation
in the mortgage-deed was a clog on mortgagor’s right of redemption and as such it cannot be
enforced. Similarly, where a document contained an agreement that if the mortgagor could
not pay the amount on due date the document is to be treated as sale, the agreement was
held to be a clog on equity of redemption and the document was treated as mortgage}-I deed.
In case of Meherhan Khan vs. Makhan, 57 IA 168 Court held that, if one of the terms
mortgage contains a term that the mortgaged property shall not be alienated by the
mortgagor continuance of the security even for the purpose of paying of the mortgage, it is
void as a clog on redemption. A right of redemption is not only confined to the mortgage, but
the mortgagor shall redeem by paying the money out ofhis own pocket and not by raising a
loan on the security of the mortgaged property or by sale it is inequitable and incapable of
enforcement;
2. Postponement of redemption for long term: The postponement of right of

redemption for a long period is not necessarily a clog on redemption. This is so because
in certain cases postponement of right of redemption for a long term may be
convenient for both the parties.
In Gangadhar vs. Shankarlal, It was held by the Supreme Court of India that the term in the
mortgage that it will-not be redeemable until the expiry of 85 years was not a clog in the
circumstances of the cases. Delving the opinion of the Court, Sarkar J. observed.
“the rule against clogs on the equity of redemption no doubt involves that the courts have the
power to relieve a party from his bargain. If he has agreed to forfeit wholly his right to
redeem in certain circumstances, that agreement will be avoided. But the courts have gone
beyond this. They have also l relieved mortgagors from bargains whereby the right to redeem
has not been taken away but restricted. The Court’s jurisdiction to relieve a mortgagor from
his bargain depends on whether it was obtained by taking advantage of any difficulty or
embarrassment that there might have been in when he borrowed the money on the
mortgage. Was the mortgagor oppressed? Was he imposed upon? If he was, then he may be
entitled to relief. We then have to see if there was anything unconscionable in the agreement
that the mortgage would not be redeemed for 85 years. Is it oppressive? Was he forced to
agree to it because of his difficulties? Now this question is essentially one of fact and has to
be decided on the circumstances of each case.
Accordingly, the rule is that if the length of the term is found oppressive, redemption would
be allowed before the expiry the term. Har Dayal Singh vs. Raja Ram Singh, (1933) 9 Luck.
151. In Fateh Mohammad vs. Ram Dayal vs. Ram Dayal. (1 92 7) 2 Lick. 588 I. C. 160, a
period of 200 years was held to be oppressive and unreasonable and a clog on redemption.
3. Conditional postponing redemption in default on a certain date: The

condition or stipulation which postpones the mortgagor’s right of redemption in case of
default in payment at certain date, is regarded as .a clog on redemption.
In Mohammed Sher Khan vs. Seth Swami Dayal AIR 1922 PC 1 7, the mortgage was for a
term of five years. There was a stipulation in the deed according to which if mortgagor could
not pay the money the mortgagee was entitled to take possession of the mortgage-property.
The stipulation further provided that mortgagee shall remain in possession for twelve years
during which the mortgagor cannot redeem the mortgage. It was held by the Privy Council
that the stipulation was a clog on mortgagor’s right of redemption because it hindered
(restricted) an existing right of redemption. The stipulation was, therefore, held void and not
enforceable. It is to be noted that right to redeem the mortgage-property can be exercised by
mortgagor just from the date on which the mortgage-money becomes payable. Accordingly,
any stipulation postponing the right of redemption beyond this period bars mortgagor’s right
of redemption and is clog.
4. Restraint on Alienation: If the mortgage contains a term that the mortgaged

property shall not be alienated by the mortgagor during the continuance of the security
even for the purpose of paying off the mortgage, it is void and a clog on redemption. A
right of redemption is not only confined to the mortgagor but it can also be exercised by
the assignees (Section 91). Obviously, therefore, a stipulation that the mortgagor shall
redeem by paying the money out of his own pocket and not by raising a loan on the
security of the mortgaged property or by sale is inequitable and incapable of
enforcement.
5. Collateral benefit to mortgagees: Collateral benefits to mortgagees are not
necessarily clog on redemption. Under a mortgage he is entitled to get back his money
together with interest at usual rate. In a usufructurary mortgage, the mortgagee has
right of possession and taking rents and benefit of the property which he adjust against
interest. These benefits are inherent benefits of a mortgagee. Such benefits are not
collateral benefits. Collateral benefits are those benefits or advantages which are given
to a mortgagee in addition to above-mentioned benefits. That is to say, an advantage
which is in addition to mortgage money with interest, is a collateral benefit.
In order to say that collateral benefits to mortgage may be ‘clog’ on redemption, it is
necessary that:
(a) The collateral benefits given to the mortgagee are unfair and unconscionable, and
(b) The collateral benefits to mortgagee are part of the transaction of mortgage; not an
independent benefit.
The Biggs Case (1898) 2 Ch. 307
The owner of a hotel mortgaged it to a brewer. In the deed there was contained a provision
that during the continuance of the security which was fixed at 5 years, the mortgagors would
buy from the mortgagee exclusively all beer to be sold on the premises. The mortgagors, after
2 years, ceased to buy beer from the mortgagees and claimed to be entitled to redeem the
hotel. Romer, J ., held that they were entitled to neither the one thing nor the other. They
acquiesced in his decision as to the continuance of the security, but appealed on the other
point. The court of Appeal affirmed Romer, J. ’s judgment, granting to the mortgagee an
injunction to restrain the mortgagors from buying beer elsewhere in breach of the promise in
the deed.
The Noakes Case (1902) A.C. 24. In 1897,one Rice a licensed victuller bought a public
house under a lease expiring in 1923. Not being in a position to provide all purchase money
he took a loan of 4,800 pounds from Noakes and Co. on mortgage of the public house. It was
agreed that for the whole of the remainder of the lease he would sell no beer on the premises
except what was bought from the mortgagee. In 1899 Rice wished to pay off the debt. Noakes
& Co. were willing to accept the repayment and recover the public house, but not to release
the covenant binding Rice not to sell in the beer not purchased from Noakes and Co. Rice
thereupon brought an action for a declaration that he was entitled to a reconveyance with a
release from the covenant. It was held that mortgagor on payment of all that was due upon
the security was entitled to a reconveyance of the property free, from the said covenant.
The Kreglinger’s vs. New Patagonia Meat etc. C0., (1914) A.C. 25
The dissenting opinions of Lords Shand and Lindley, quoted above, had an influence in
Kreglinger’s case. The facts were: A firm of wool-brokers lent 10,000 pounds to a Company
which carried on business as meat preservers, the agreement being that the Company might
pay off the loan at any time by giving a month’s notice. The loan was not secured by an
ordinary mortgage but by an analogous security called a floating charge. (This form of
security is a charge upon the property of the Company, but it does not prevent the Company
from dealing with its property in the ordinary course of the business). It was further agreed
between the parties that for a period of five years from the date of the loan, the Company
should not sell sheep skins to any person other than the lenders, so long as the mortgagees
were willing to pay the best price offered by any other person. It was also agreed that the
mortgagees would not demand repayment before five years had elapsed. The loan was repaid
within two and a half years. The point that fell to be decided by, the House of Lord was :
(1) whether the option on the sheep skins continued to exist in favour of the mortgagees after
repayment of the loan, or (2) whether it was void as a clog on, or repugnant, to the equity of
redemption. It was held that the mortgagees were entitled to an injunction restraining the
mortgagor from selling sheep: skins during the remainder of the five years period to any
person other than the mortgagees. Lord Haldane, L.C. and Lord Parker both came to the
conclusion that the option to purchase was valid because it was not a term of the mortgage at
all. Lord Parker observe:
“There is now no rule in equity which precludes a mortgagee. . .from stipulating from any
collateral advantage, provided, such collateral advantage is not either (i) unfair and
unconscionable; or (ii) in the nature of a penalty clogging the equity of redemption, or (iii)
inconsistent with the legal or equitable right to freedom”.
In English Law, the tendency seems to be to follow Kreglinger’s case and treat the earlier
authorities distinguishable.
In India, however, the Kreglinger’s case has not generally been followed, Thus in Ambu Nair
vs. Kelu Nair (1930) 53 Mad. 805. The Madras High Court pointed out that the relaxation of
the rule of equity in Kreglinger’s case does not affect the construction of a statutory
enactment such as Section 60 and the right of redemption cannot be extinguished otherwise
than by act of parties which must necessarily be subsequent to and dependant of the
mortgage or by a decree of the court. This case has been criticized on the ground that
collateral benefits do not affect the construction of Section 60 unless they are of such a
nature that they are oppressive or hinder the right of redemption. However, it is settled law
in India that the collateral benefit, whether it affects the land or not, cannot extend beyond
the period of redemption.
6. Penalty in Case of default: An agreement which amounts to penalty in case of non-
payment of debt is a clog on redemption. Such agreement cannot be given effect.
Accordingly, any stipulation which may be-oppressive, by way of punishment to
mortgagor if he fails to pay the loan on due date, is invalid as being clog on equity of
redemption. In Sarfarj Singh vs. Udwiit Singh AIR 1925 Oudh. 30, the stipulation in a
mortgage provided that in case of default in payment of loan on due date, the
mortgagor was liable to pay one nurra of rice for every one rupee of debt. The Oudh
Chief Court held that the stipulation was clog as being so unreasonable that it
amounted to penalty in default. Whether the terms and conditions are penalty or
merely -enhanced interest, is to be ascertained by the courts on the basis of facts and
surrounding circumstances; Stipulation which provides merely for an enhanced rate of
interest in case of non-payment of debt on due date, is not a clog on equity of
redemption.
But where the interest is already a compound interest (enhanced rate -of interest) and the
stipulation provides for still higher interest in default of payment, the stipulation is penalty
and therefore a clog. It cannot be enforced, against the mortgagor.
Exercise of the right of redemption: A mortgagor may exercise his right of redemption
in any of the following cases:
(a) By paying or tendering the mortgage money to the mortgagee :The payment of
the mortgage may be paid directly to the mortgagee or his agent. Tendering means making
unconditional offer for the payment of debt in such manner that mortgagee gets the money.
When there are two or more joint mortgagee payment of mortgage-money to only one of the
mortgagees does not discharge the debt against the remaining mortgagees.
The mortgagor has a right to redeem the mortgage at any time after the principal money has
become due.
(b) By depositing the mortgage money in the Court : The second mode of redemption
is deposit of mortgage money in the Court. As soon as it is deposited in the Court, the Court
shall cause a notice to mortgagee that such a deposit has been made.
(c) By filing a suit for redemption : The mortgagor may file a suit for redemption in a
Court of law. Such a suit would lie only after the right of redemption accrue to him i.e. after
the principal money has become due. The suit must be filed during the subsistence of
mortgagor’s right of redemption.
Effect of Redemption: After redemption the mortgagor becomes entitled to the following
rights:
(a) He will claim back the mortgage deed and all the documents relating to mortgage if they
are in possession of the mortgagee. The mortgagee is bound to return not only the mortgage
deed but all such documents which are in his possession or power.
(b) He is entitled to get back the possession of the property. Since usufructuary mortgage
requires delivery of possession of the mortgage property, the effect of redemption in such
case would be to compel the mortgagee to give back the possession to him and the mortgagee
will be bound to deliver the possession.
(c) He is entitled to compel the mortgagee to retransfer the mortgaged property. Such a right
is available in an English mortgage; as such a mortgagor binds himself to transfer property,
which was transferred to the mortgagor. Thus in English mortgage the mortgagor on
redemption acquires the right to compel mortgagee to retransfer the property absolutely to
him.
Who can sue for redemption?
Section 91 provides that besides mortgagor following other persons are entitled to redeem
the mortgage:
1. Any person (other than the mortgagee of the interest sought to be redeemed) who has
any interest in, or charge upon the mortgaged property or upon the right of
redemption.
2. Any surety for the payment of the mortgage debt or, any part thereof.
3. Any creditor of mortgagor who, in a suit for an administration of his estate has
obtained a decree for sale of the mortgaged property.
Subrogation
Subrogation means substitution. It is the right of a person to stand in the place of creditor.
When a mortgagee transfers his mortgage-debt, his assignee become vested with all his
rights, i.e. his assignee is substituted or subrogated in the place of the mortgagee. In order to
be entitled to subrogation, a person must pay of the entire amount of a prior mortgage,
because subrogation takes place by redemption.
Sec. 92 makes it very clear that the doctrine of subrogation cannot be invoked unless the
prior mortgage is discharged as a-whole. The principle of this rule is that there cannot be
subrogation without redemption. Therefore a partial payment of the mortgage debt cannot
give rise to a claim for a partial subrogation.
“ In Bissewar Prasad vs. Lala Sharma Singh (1910) 6 Cal. L. 134, the nature and scope of the
doctrine of subrogation was explained in the following words:
“the doctrine of subrogation is a doctrine of equity in jurisprudence. It does not depend upon
the privity of contract, expressed or implied, except in so far as equity may be supposed to be
imported into transaction and thus raise a contract by implication. It is founded on the facts
and circumstances of each particular case and as the principle of natural justice.”
Kinds of Subrogation: Subrogation is of two kinds :
(i) Legal Subrogation
(ii) Conventional Subrogation
(i) Legal Subrogation : Legal Subrogation takes place by operation of law. Any person-
(except the mortgagor) who has an interest in the mortgage property or in the equity of
redemption is entitled to- be subrogated in place of mortgagee. Such persons have legal or
statutory right of being substituted in place of mortgagee for purposes of redemption,
foreclosure of sale.
Legal Subrogation may occur in four ways:
(i) A subsequent mortgagee may redeem a prior mortgage.
(ii) A co-mortgagor may redeem his mortgage
(iii) The mortgagor’s surety may redeem the mortgage.
(iv)The purchaser of the equity of redemption may redeem the mortgage.
2. Conventional Subrogation :Conventional Subrogation is also sometimes called

subrogation by agreement. Conventional subrogation takes place when a person being
stranger to mortgagee, advances money to the mortgagor under an agreement that he
would be subrogated to the rights of mortgagee. An agreement is express or implied
that he would be subrogated to the rights and remedies of the mortgagee who is paid
off. The provision regarding conventional subrogation requires that such agreement
must be in writing and registered.
The last paragraph of Sec. 92 provides that the doctrine of subrogation cannot be applied
unless the prior mortgage is discharged as whole. In case of partial redemption there is no
subrogation. In order to avoid confusion and complication in respect of apportionment of
claims, which may arise due to partial subrogation, it is necessary that redemption and
subrogation both must be of the entire mortgage. Thus, subrogation does not take place
unless the whole debt is discharged.
LIABILITIES OF MORTGAGOR
The liabilities of mortgagor are incorporated in Sec. 65 and 66. Under section 65 the
liabilities arise out of covenants whereas, under section 66 there is only one liability which
does not arise out of contract. Liabilities of mortgagor are as under :
(i) Liability to guarantee his title in the mortgaged property.
(ii) Liability to defend his title in the mortgaged property in case it is in danger.
(iii)Liability to make payments of public charges e.g. revenue, taxes etc. if the property is in
his possession.
(iv)Liability to pay rents if the mortgaged property is leasehold and mortgagor is a lessee.
(v) Liability to discharge prior encumbrances on the mortgaged property, if any.
(vi) Liability not to commit waste on the mortgaged property. This liability does not arise out
of covenant.
RIGHTS OF MORTGAGEE
The rights of mortgagee are laid down in section 67 to 73 of this Act. Mortgagee’s rights are
given below
(i) Right to foreclosure or sale of the mortgaged property in default of non-payment of debt.
(ii) Right to sue mortgagor for the necessity of mortgage money.
(iii) Right to exercise power of sale given under the mortgage-deed.
(iv) Right to get a receiver appointed.
(v) Right to accession to mortgaged property.
(vi) Right to have the benefit of renewed lease if mortgage property is leasehold.
(vii)Right to spend money in preserving the property, defending mortgagor‘s title or in

renewal of lease if the property is in his possession.
(viii)Right to receive proceeds of revenue sale (or compensation on acquisition) of the

mortgaged property.
RIGHT OF FORECLOSURE
Right of foreclosure is the most important topic in the mortgage so we will discuss it, in
detail-Foreclosure means closing or withdrawing the mortgagor‘s right of redemption.
Foreclosure is a legal.term which means that equitable relief given to mortgagor against the
forfeiture of the security is withdrawn.
This right implies that when the time fixed for repayment of the mortgage money has
expired, and the mortgagor‘s right to redeem has become complete, and he has failed to avail
himself thereof, the mortgagee has the right to institute a suit for a decree that the mortgagor
be absolutely debarred of his right to redeem the property. It must be remembered that the
right to redeem and right to foreclose are co-extensive.
The general principle as to redemption and foreclosure is that in the absence of any
stipulation, express or implied, to the contrary, the right to redeem and the right to foreclose
are co-extensive and that where there is a stipulation to pay a mortgage debt within say, ten
years, the mortgagor cannot redeem at an earlier date.
It may be noted that the right of redemption cannot be modified by agreement between the
parties, but such is not the case with the right of foreclosure.
Mode of Foreclosure : Sec 67 provides following two remedies to a mortgagee :
(i) Foreclosure, and
(ii) Sale
The above two remedies are available to mortgagee, however, which can be exercised
depends upon the mode of mortgage.
In Simple Mortgage:
A simple mortgagee cannot foreclose. His remedy is to bring a suit for sale of the mortgaged
property in order to realize the mortgage-debt. It may be noted that a simple mortgagee may
also sue on the personal covenant and obtain a simple money decree against the mortgagor.
Both remedies are independent of each other because they arise out of different causes of
action.
In usufructuary mortgage:
A usufructuary mortgagee is transferee of a right of possession only and he retains

possession unless the debt is paid off from usufruct. He cannot, therefore, sue either for sale
or for foreclosure.
In a mortgage by conditional sale:
In a mortgage by conditional sale, the mortgagee works itself out into a sale in the event of
default in payment. Accordingly, the appropriate remedy in this mortgage is to deprive the
mortgagor of the right of redemption so that he might not be able to redeem the mortgaged
property. .
In an English Mortgage:
Before the Amending Act of 1929, an English mortgagee could sue either for forclosure or for
sale. But now he can only bring a suit for sale of the mortgaged property.
In a mortgage by deposit of title-deeds:
A mortgage by deposit of title deeds stands on the same footing as simple mortgage and the
mortgagee’s right is thus limited to one for a decree for sale.
In an anomalous mortgage:
In an anomalous mortgage, the right of the mortgagee depends upon the terms of the deed
and he may have both or only one of two relief of foreclosure or sale.
Where mortgagor is trustee for the mortgagee [67(b)]:
This clause prohibits a mortgagor, who holds the mortgagees right as trustee from instituting
a suit for foreclosure, and thus becoming in effect a trustee of his own property. The proper
remedy in such a case is a sale.
Mortgage for public works [67(c)]:
This clause prohibits a mortgagee of railway canal or other public utility undertaking from
instituting a suit for foreclosure of sale. The appropriate remedy in such a ease is the
appointment of a receiver of the mortgaged property charged with the duty of realizing the
earning of the undertaking as a going concern.
Partial foreclosure of sale:
The last paragraph of Section 67 is an illustration of the rule of indivisibility of mortgage. The
rule isthat one of the several mortgagees cannot foreclose or sell in respect of his share unless
several mortgageeshave, with consent of the mortgagor, severed their interests under the
mortgage. The reason for this ruleis to protect the mortgagor from being harassed by a
multiplicity of suits where the severance of interestsof the mortgagee has taken place without
the consent of the mortgagor. Accordingly all the co-mortgageemust join together and file
one suit in respect of the whole mortgage-money.
DIFFERENCE BETWEEN FORECLOSURE AND SALE

1. Foreclosure is allowed only in the case of mortgage by conditional sale and an
anomalous mortgage,-if under its terms, the mortgagee is entitled to foreclose. A suit
for sale can be brought in the case of a simple mortgage. (an equitable mortgage) in
English, mortgage (in which the mortgagor makes a personal covenant to pay the
mortgage-money on a certain date), and in anomalous mortgage, (if a power of sale can
be implied from the terms of the mortgage).
2. Foreclosure is possible only by a suit. Sale is possible either out of Court or by a suit.
3. Foreclosure absolutely discharge the mortgage-debt. The mortgagee cannot, thereafter,
proceed against the mortgagor on the personal covenant. In the case of sale, the
mortgagee can recover the balance amount if the sale-proceeds are not sufficient to
satisfy the mortgagee-debt.
LIABILITIES OF MORTGAGEE
The liabilities of mortgagee are given in Section 76. His liabilities arise only where he is in
possession of the mortgaged property. The duties of mortgagee in possession of property are
as under.
(i) Liability to manage the property with ordinary prudence.
(ii) Liability to collect rents and profits with due diligence.
(iii)Liability to pay the government-dues in case there is no contract to the contrary.
(iv) Liability to spend money for necessary repairs of the mortgaged property.
(v) Liability not to commit waste on the mortgaged property.
(vi) Liability to apply the insurance money, if received, to re-instate the mortgaged property.
(vii) Liability to debit to himself the interest which, from time, becomes due to him and in
case of any surplus, in reduction of the mortgage money.
(viii)Liability to account for the gross receipts in case he retains possession after the
mortgagor tenders or deposits the mortgage money in court.
MARSHALLING (SECTION 81)
Doctrine of Marshalling is defined under 81 of Transfer of Property Act. Marshalling means

arranging things. It is a right of Puisne (Subsequent) mortgagee to demand from a prior
mortgagee that he should Satisfy his debt first out of the property not mortgage to former.
The right arises when the owner of two or more properties mortgages them to one person
and then mortgages one or more of them to another person. The subsequent mortgagee is
entitled, unless there is a contract to the contrary, to have the prior mortgage-debt satisfied
out of the property or properties not mortgaged to him, so far as the same will extend, but
not so as to prejudice the rights to the prior mortgagee or any other person who has for
consideration, acquired an interest in any of the properties. Further, the exercise of this right
does not depend on the later mortgagee having notice of the prior mortgage.
The principle of the doctrine of Marshalling has been thus stated in the leading English case
Aldrish vs. Cooper (8 Ves. 382) : “if there are two creditors who have taken securities for
their respective debts, and the security of the one is confined to both, and the security of
other is confined to one of those funds, the Court will arrange or marshal the assets, so as to
throw the person who has two funds liable to his demand on that which is not liable to be
debt of the second creditor, i.e., it shall not depend upon the will of-one creditor to
disappoint another.”
Marshalling applies only when-
1. There is a common debtor.

2. Two or more properties of the debtor have been first mortgaged to one person and
subsequently one (or more) of the some properties is (or are) mortgaged to another
person.
3. It does not prejudice (i) the prior mortgagee or (ii) third party claming as purchaser;
and
4. There is no contract to the contrary.
So we can understand above application with an illustrative example-A mortgages properties

X and Y to B. Later, he mortgages X to C. C obtains a sale-decree for X and purchases it
himself. B then obtains an order for sale on his mortgage. Under these circumstances, C is
entitled to require B to bring Y to sale first and realize his security as far as possible out of Y.
The principle of marshalling does not apply-
So as to prejudice the prior mortgagee. If the property not mortgaged to the subsequent
mortgagee is not sufficient to satisfy him (the first mortgagee) he can proceed against
the other property as well.
So as to prejudice the interest of a third person who has, for consideration, acquired an
interest in any of the properties. Thus, when property is not comprised in the security
of the second mortgagee, who can exercise the right of marshalling. It is mortgaged to
or purchased by, third party, a subsequent mortgagee cannot marshal to the prejudice
of third party C
Unless the same person is liable to both the creditor and is also the owner of the
properties.
Unless the first mortgagee has equal rights over the two properties mortgaged to him.
Thus he has a charge on a property but on the other hand he has a right of set off, there
can be no marshalling, as the securities are not equal.
Where only a portion of the property already mortgaged is subsequently mortgaged to
another person i.e. it is not considered as different fragment of the same property to
constitute different properties.
CONTRIBUTION (SECTION 82)
Doctrine of Contribution : Marshalling settles the right of competing mortgages while

‘Contribution’ settles the right of mortgagors of several properties or several shares in one
property. Marshalling requires that the creditor who has the means of satisfying his debt out
of several funds shall so exercise his right as not to take from another creditor the funds
which forms his security only. According to the principle underlying this section, a property,
which is equally liable with the other property to pay a debt, must not escape only on the
ground that the creditor has been paid out of that other property. It follows, therefore, that
such of the mortgaged properties as have been sold for the realization of mortgage money
and have thus contributed to the mortgage-debt are not liable to a claim for contribution;
and that such a claim can only be advanced by the owners of those properties which have
contributed more than their reteable share of the debt, and against those portions of the
mortgaged property only which have not contributed to the mortgaged debt and have
benefited by the sale of the property of the claimants for contribution.
Illustration
Three brother A, B and C mortgaged their joint property first to D, and then to E. A, B and C
affected a partition of the property into three shares. D brought a suit for sale on his
mortgage and realized the amount by the sale of A’s share. A obtained a decree for
contribution against the share of B and C. Thereafter B and C redeemed the puisne mortgage
to E and claimed contribution from A. Held, that they had no right to contribution as A‘s
share had been sold to satisfy the prior mortgage debt.
The first paragraph enacts the general rule that if several properties whether of one or
several owners are mortgaged for one debt they shall contribute rate-ably to its discharge,
after deducting from each property the value of any prior encumbrance to which it may be
subject. As the mortgage debt is indivisible, the mortgagee may realize the whole debt out of
only one parcel of the property mortgaged and in that case it is only fair that the other should
be liable to contribute.
The Privy Council in Kamra Singh is vs. Chaturbhuj Singh. 1934 ALJ 462: 38 GWN 575
observed that the suit for contribution is maintainable when the whole of the mortgage debt
has been paid out of the parts of the mortgaged property and it is not necessary that the
whole of the debt is paid out of the properties of the plaintiff alone.
The second paragraph is an illustration of the first and assumes that payment of the prior
encumbrance has been made in which case the amount of the encumbrance is deducted from
the value of that property in ascertaining its rateable contribution.
Illustration :
Property X is mortgaged for Rs. 200 to A; properties X and Y are mortgaged for Rs. 400 to B.
Then if X and Y are each worth Rs. 500 and are sold, X to C and Y to D, the contribution of C
and D to the mortgage of Rs. 400 is in the ratio of3OO to 500. and C is liable for Rs. 150 and
D for Rs. 250 As a consequence of this rule the person who has paid in excess of his share or
who has discharged the whole debt for Rs. 400 from C’s property, would be entitled to
recover Rs. 250 from D by a suit for contribution.
Redeem Up Forcelose Down
Section 94 gives a mesne mortgagee the right of foreclose to subsequent mortgagees and also
to the mortgagor himself. An intermediate mortgagee can enforce this right against all the
mortgagees posterior (subsequent) to him and ultimately against mortgagor. Mortgagee’s
right is counterpart of his right to redeem prior mortgagees under section 9l(a). Any mesne
mortgagee is entitled to redeem the prior mortgagees until he reaches the first mortgagees
before him and can foreclose all the mortgagee after him. Redemption by a mesne mortgagee
is upwards (prior) and foreclosure is downwards (subsequent). Section 91(a) and 94 taken
together, the rights of mesne mortgagee -in respect of redemption and foreclosure of
mortgage is very well expressed in the doctrine of redeem up or foreclose down.
Mesne mortgagee’s rights to redeem up and foreclose down may occur only in case of
successive mortgages. When a property is mortgaged one after the other to several
mortgagees, there may be a mortgagee who stands in between two or more mortgagees. One
or more mortgagees are prior to or above him and some are subsequent or below him. Such
mesne or intermediate mortgagee can always redeem the prior mortgagees but, cannot
redeem his subsequent or later mortgagee except by consent. On the other hand, this mesne
mortgagee cannot enforce foreclosure against prior mortgagee. He is entitled to enforce right
of redemption upwards and foreclosure downwards. The rule may be explained with the help
of following illustration.
Illustration :
(i) A mortgages X to B Redeem
(ii) A mortgages X to C Mesne mortgage
(m)A mortgages X to D Foreclose

In this illustration since C stand in between two mortgagees B and D. Therefore C is entitled
to redeem B. Similarly D is also a later mortgagee. D can also redeem C or B or both. But C
cannot redeem D. Similarly B cannot redeem C or D.
On the other hand, C can foreclose mortgagee D who is posterior (below or later) to him.
Similarly B can foreclose C and D who are below B. The rule is that in case of successive
mortgages, the latter can always redeem the earlier but the earlier cannot redeem later
except by consent. As regards foreclosure, the rule is that earlier can foreclose against latter
but the later cannot foreclose earlier. Charges (Ss. 100 & 101)
When immovable property of one person is made security for the payment of money to
another person, and the transaction does not amount to mortgage, a charge is said to be
created on the property. (This can take place either by act of parties or by operation of law).
All the provisions, which apply to a simple mortgage, also apply to a charge.
The above principle does not, however, apply to the charge of a trustee on the trust-property,
for expenses properly incurred by him in executing the trust.
It is also to be noted that a charge cannot be enforced against property in the hands of a
person who is a transferee for consideration, without notice of the charge.
No merger in certain eases (Sec. 101):
A mortgagee of immovable property.-(or any transferee from him) can purchase that
property, without causing the mortgage to be merged as between himself and any subsequent
mortgagee of the same property.
Summary
(The same rules apply to a person having a charge on immovable property) Also, a
subsequent mortgagee (or charge-holder) cannot foreclose or sell such property without
redeeming the prior mortgage or charge.
Distinguish between Mortgage and Charge
Mortgage Charge
A mortgage is security for the payment of A charge is a security for the payment of any
a debt. money.
A mortgage may be a security for the Not so, in the case of a charge.
performance of an act giving rise to a
pecuniary
liability.
A mortgagee may contain a covenant to There is no covenant to pay in the case of

pay. charge.
A mortgage involves a transfer of an A charge does not transfer any interest the
interest in specific immovable property. mm property.
A mortgage arises only by an act of A charge can arise (i) by act of parties, or(ii)
parties. by operation of law.
A mortgage gives rise to a right in Rem. A charge does not create any right in rem
A mortgagee can follow his security in the A charge holder cannot do so.
hand
of a third person.
A mortgagee can follow a bona tide A charge-holder cannot do so.

purchaser
for value without notice.
The defence of bona fide purchase The defence of bona fide purchase without
without notice notice is a good defence against a charge.
cannot be set up against a mortgagee.
CHARGES
Section 100 of T.P. Act defines charge. According to this section, charge is defined as-
“Where immovable property of one person is by act of parties or operation of law made for
the payment of money to another, and the transaction does not amount to the mortgage, the
latter person is said to have a charge on the property; and all the provisions hereinafter
contained which apply to a simple mortgage shall, so far as may be, apply to such charge.
Nothing in this section applies to the charge of a trustee on the trust property; for expenses
properly incurred in the execution of his trust, and save as otherwise expressly provided by
any law for the time being in force, no charge shall be enforced against any property in the
hands of a person to whom such property has been transferred for consideration and without
notice of the charge.”
“Charge” when immovable property of one person .,is made security for the payment of
money to another and the transaction does not amount to mortgage, the latter person is said
to have a charge on the property. Thus charge is always on immovable property in order to
secure payment of money. If the payment is not made by the person who is liable for such
payment, it is made out of the property, charged for this purpose.
A charge may look like a mortgage. But in essence it is not mortgage. Mortgage is wider than
a charge. In every mortgage there is a charge, but every charge is not a mortgage. A charge
does not involve a transfer of an interest in property.
Charge and Mortgage Distinction Between : The difference between a charge and
mortgage has been explained in Section 58. In a Patna case, Das, J., said— “The charge only
gives right to payment out of particular fund or particular property without transferring that
fund or property; a mortgage is in essence a transfer of an interest in specific immovable
property”. A Mortgage is a jus in rem, a charge is a jus ad rem and the practical distinction is
that a mortgage is good against subsequent transferees and a charge is only good against
subsequent transferees with notice.
In the case of a mortgage as well as in a charge, the property of another person made security
for a loan or debt; but whereas a mortgage is a transfer of an interest in a property, a charge
does not involve the transfer of any interest in property.
Security for the Payment of Money : In order to create a charge, it is not necessary to
employ any technical or any particular form of words. All that is required is that there must
be clear intention to make a particular property a security for the payment of money. Where
the property is not intended to serve as security there can be neither a mortgage nor a
charge.
Property Must be Specified : It is not necessary that the properties charged should be
described with that amount of definiteness as is necessary in case of mortgage. There should
be some expression to signify what properties exactly are to be charged. A general
description of the property would be sufficient if from the facts and circumstances the
property to be charged can be ascertained. Where the description given is too vague and
indefinite, the charge will be void as uncertainty.
Kinds of Charge : There are two kinds of charges, viz., A
1) Charges created by act of parties.
2) Charges arising by operation of law

1) Charge Created by Act of Parties : For creating a charge on immovable property, no
particular form of words are needed. However, the deed must disclose an intention to create
charge on the property or fund.
An agreement which gives immovable property as security for the satisfaction of a debt, or
for the payment of maintenance allowance in perpetuity, without transferring any interest in
the property or an agreement by which an owner of a share in a village receives in lieu of his
share a lump sum out of income, constitutes a charge on the property and is not a mortgage.
A charge created by will or a compromise decree is a charge created by act of parties. But a
charge created by award of the arbitrator is outside the scope of section 100 of Transfer of
Property Act
2) Charge by Operation of Law : The words “by operation of law” are more extensive
than the word “by law” and a charge created by operation of law includes a charge directly
created by the provisions of an act as well as other charges created indirectly a legal
consequence of certain conditions.
Extinction of Charge : A charge may be extinguished in the same manner as a simple

mortgage. Thus, it is extinguished by-
1. Act of parties
2. Novation;
Merger
No Merger in Case of Subsequent Encumbrance : Any mortgagee of, or person having

a charge upon, immovable property, or any transferee from such mortgagee or charge-
holder, may purchase or otherwise acquire the rights in the property of the mortgagor or
owner, as the case may be, without thereby causing the mortgage or charge to be merged as
between himself and any subsequent mortgage of, or person having a subsequent charge
upon, the same property; and no such subsequent mortgage or charge-holder shall be
entitled to foreclose or sell such property without redeeming the prior mortgage or charge, or
otherwise than subject thereto.
Extinction of Mortgage Security : A mortgage security can be extinguished by any of the

following ways-
1) By a decree of foreclosure, or by a decree for sale after the sale is confirmed (Section 60).
2) By payment of the mortgage debt by the mortgagor or by a person under covenant to pay
such a payment extinguishes the mortgage and does not operate as an assignment (Section
92);
when the mortgage debt is paid by one of the several co-mortgagors it is extinguished as to
his share and assigned to him as the shares of the other co-mortgagors (Section 95); when
the mortgage debt is paid out by puisne mortgagee the mortgage is not extinguished but
assigned to the puisne mortgagee (Section 92); when the mortgage debt is paid by the
purchaser of equity of redemption, the question of extinction of the mortgage depends upon
the existence of a subsequent encumbrance. (Section 92).
3) By merger.
4) By novation.
Service or Tender on or to Agent (Section 102) : Where the person on or to whom any
notice or tender is to be served or made under this Chapter does not reside in the distinct in
which the mortgaged property or some part thereof is situated, service or tender on or to an
agent holding a general power of attorney from such person or otherwise duly authorized to
accept such service or tender shall be deemed sufficient.
Where no person or agent on whom such notice should be served can be found or is known
to the person required to serve the notice, the latter person may apply to any court in which a
suit might be brought for redemption of the mortgage property, and such court shall direct in
what manner such notice shall be served, and any notice served in compliance with such
direction shall be deemed sufficient-
Provided that, in the case of a notice required by Section 83, in the case of a deposit the
application shall be made to the Court in which the deposit has been made.
Where no person or agent to whom such tender should be made can be found or is known to
the person desiring to make the tender, the latter person may deposit in any Court in which a
suit might be brought for redemption of the mortgaged property the amount sought to be
tendered, and such deposit shall have the effect of a tender of such amount.
Notice, etc., to or by Person Incompetent to Contract : Where, under the provisions

of this Chapter, a notice is to be served on or by, or a tender or deposit made, or accepted or
taken out of Court by, any person incompetent to contract, such notice may be served on or
by or tender or deposit made, accepted or taken, by the legal curator of the property of such
person; but where there is no such curator, and it is requisite or desirable in the interests of
such person that a notice, should be served or a tender or deposit made under the provisions
of this Chapter, application may be made to any Court in which a suit might be brought for
the redemption of the mortgage to appoint a guardian ad litem for the purpose of serving or
receiving service of such notice or making or accepting such tender, or making or taking out
of Court such deposit, and for the performance of all consequential acts which could or ought
to be done by such person if he were competent to contract— and the provisions of Order
XXXII in the First Schedule to the Code of Civil Procedure, 1908 (5 of 190$) shall, so far as
may be, apply such application and to the parties thereto and to the guardian appointed
thereunder.
A tender under .Section 60 or a notice under Section 69 or 83 cannot be made or served on a

guardian ad litem until such a person is actually appointed. The words “incompetent to
contract” must be read in light of Sections 11 and 12 of the Contract Act.
Power to Make Rules (Section 104) : The High Court may, from time to time, make
rules consistent with this Act for carrying out, in itself and in the Courts of Civil Judicature
subject to its superintendence, the provisions contained in this Chapter.
This section does not make it obligatory for the High Court to make rules. No rule
inconsistent with Civil Procedure Code can be made under this section and a rule which is
inconsistent with this Act would be ultra vires. The rule-making power is limited to things in
Chapter iv of the Transfer of Property Act.
PAHUJA LAW ACADEMY

Pre Questions
1. What is true in relation to ‘right of redemption’:
(a) It is a statutory right which cannot be fettered by any condition or agreement between the
parties.
(b) it is a natural incident of a mortgage; it cannot be detached from the mortgage (‘Once a
mortgage always a mortgage’).
(c) Any condition contained in mortgage-deed, which obstructs the right of redemption, will
be considered as a clog or fetter on redemption, and will be null and void.
2. ‘Right of redemption is a statutory right which cannot be fettered by any condition or

agreement between the parties. This was laid down in:
(a) Raghunath Singh v Mst. Hansraj
(b) Noakes v Rice.
(c) Kapoor v Kapoor.

(d) Subhash v Ganga Prasad.
3. ‘Once a mortgage always a mortgage’. This was held in:
(a) Noakes & Co. v Rice.
(b) Kreglingers case.
(c) Subbash v Ganga Prasad.
4. Which of the following is an example of ‘clog’ on redemption:
(a) Possession to be always remaining with the mortgagee.
(b) Hard terms of mortgage.
(c) Taking of interest on high rates.
5. Which of the following is a ‘clog’ on redemption:
(a) Condition of sale in default.
(b) Restraint on alienation.
(c) Stipulation barring mortgagors right of redemption; after certain period.
6. ‘A long term of mortgage is not necessarily a clog on redemption’. It was held in:
(a) Gangadhar v Shankar Lal
(b) Subhash v Ganga Prasad
(c) K. J. Nathan v maruthi Rao
(d) Pratap Bahadur v Gajadhar
7. The ‘Doctrine of Consolidation’ which is based on the maxim ‘He who seeks equity
must do equity’ is laid down in which section of the T.P. Act:
(a) Sec. 61.
(b) Sec. 62.

(c) Sec. 63.
(d) Sec. 64.
8. A mortgagor who has executed two or more mortgages in favour of the same
mortgagee, in absence of l a contract to the contrary:
(a) Is bound to redeem all such mortgages together.
(b) Is not entitled to redeem any one such mortgage separately.
(c) Is bound to redeem at least two such mortgages together:
(d) Be entitled to redeem any one such mortgage separately, or any two or more of such
mortgages together.
9. A suit to obtain a decree that a mortgagor shall be absolutely debarred of his right to
redeem the property is called a suit for:
(a) Foreclosure.
(b) Redemption
(c) Marshalling.
(d) Apportionment.
10. The right of foreclosure which is available to a mortgagee is mentioned in which section
of the T. P. Act:
(a) Sec. 66.
(b) Sec. 67.
(c) Sec. 68.
(d) Sec. 69.
11. The right of foreclosure is when available:
(a) After the mortgage-money has become due.
(b) Before redemption.
(c) Before the mortgage-money has been paid or deposited in the court.

12. Remedy of ‘foreclosure’ is available in which one of the following mortgages?
(a) Usufructuary mortgage.
(b) Simple mortgage.
(c) Mortgage by conditional sale.
(d) English mortgage.
13. Which is correct answer in the following?
(a) Sec. 60 of T.P. Act is enforceable on mortgage decrees.
(b) Sale or purchase agreements are saleable properties and liable for attachment.
(c) ‘Hereditary profession’ is liable for attachment.
(d) Motor pump which is used in irrigation is liable for attachment.
14. Mark the incorrect matching:
(a) Renewal of mortgaged lease: Sec. 64.
(b) Liabilities of the mortgagor: Sec. 65.
(c) Right to appointment of receiver: Sec. 69A.
15. Right to appointment of receiver under the T. P. Act is available to:
(a) Mortgagor.
(b) Mortgagee.
(c) Neither mortgagor nor mortgagee.
(d) Court.
16. A mortgagee has a right to .sale without the intervention of court under Sec.______
T.P. Act:
(a) Sec 60.
(b) Sec 69.
(c) Sec 62.

(d) Sec 63.
17. Which one of the following sections of T.P. Act deals with doctrine of ‘substituted
security’?
(a) Section-68.
(b) Section-70.
(c) Section-71.
(d) Section-73.
18. The principle under which two mortgagees could be united and the intermediate
mortgage could be squeezed out is laid down in Sec. 79, T. P. Act and is known as:
(a) Marshalling.
(b) Tacking.
(c) Contribution.
19. Doctrine of Marshalling (‘It shall not depend upon the will of one creditor to
disappoint another’) has been provided in which of the following sections of the T.P.
Act?
(a) Sections 56 and 81.
(b) Sections 56 and 82.
(c) Sections 56, 81, 82.
(d) Sections 81 and 82.
20. The principle of the doctrine of Marshalling has been explained in which of the
following cases:
(a) Aldrish v Cooper.
(b) Walsh v Lonsdale.
(c) Whitby v Mitchell.
(d) Woods v Townley.

21. Doctrine of Contribution has been provided in which of the following sections of the
T.P. Act?
(a) Sec. 80.
(b) Sec. 84.
(c) Sec. 83.
(d) Sec. 82.
22. Mark the correct statement:
(a) By marshalling, a creditor having several securities is so to exercise his right as not to
injure the right of another creditor on some of those securities.
(b) By contribution all the securities are to contribute equally and the whole liability is not
thrown on one security only.
(c) Both (a) and (b).
(d) Only (a).
23. The ‘doctrine of subrogation’ is provided for in which section of the T. P. Act:
(a) Sec. 91.
(b) Sec. 92.
(c) Sec. 93.
(d) Sec. 94.
24. Legal subrogation may occur in which of the following ways:
(a) A subsequent mortgagee may redeem a prior mortgage.
(b) A co-mortgagor may redeem a mortgage.
(c) The mortgagor’s surety may redeem the mortgage.
25. The rights of a mesne (‘puisne’) mortgagee well summed up in the maxim ‘Redeem up,
foreclose down are laid down in which section of the T. P. Act: –
(a) Sec. 93.

(b) Sec. 94.
(c) Sec. 95.
(d) Sec. 96.
(a) A mortgagee can assign his interest in the mortgaged property (Sub-mortgage).
(b) If a mortgage-deed is not registered, it becomes invalid and the mortgagor cannot sue for
redemption, but he can sue for possession on his offering to repay the loan.
(c) In India, opening the foreclosure’ is allowed.
27. Where an immoveable property of a person is made security for the payment of money
to another and the transaction does not amount to a mortgage, it is called as:
(a) Exchange.
(b) Gift.
(c) Charge.
(d) Lien.
28. Right to retain the possession of the property until the due amount is paid, is also
known as:
(a) Lien.
(b) Charge.
(c) Bailment.
(d) Marshalling.
29. Charge has been defined in which section of the T. P. Act:
(a) Sec. 100.
(b) Sec. 101.
(c) Sec. 102.
(d) Sec. 103.

30. The doctrine of Merger is laid down in which section of the T. P. Act:
(a) Sec. 100.
(b) Sec. 101.
(c) Sec. 102.
(d) Sec. 105.

[EDIT] TPA
MAINS QUESTIONS
1. What is the validity of transfer of property if the there is a pendency of

litigation in the court of competent jurisdiction?
Lis Pendens
Of the original owner
Essentials
Based on the case

Bellany v.s Sabina 1857
Turner LJ
Based on the Maxim:-

“Pendent Lite nitil inniveiter”
Case:- Jaiyaz Hussain v.s Prag Narain 1960 P.C
The transfer will ot be void, but it will be subject to judgment og the court.
Sec-52[Lis-Pendens]
Doctrine Of Lis Pendens :: A Critical Evaluation
INTRODUCTION
The broad principle underlying S. 52 of the Transfer of Property Act is to maintain the status
quo unaffected by the act of any party to the litigation pending its determination-even after
the dismissal of a suit, a purchaser is subject to lis pendens, if an appeal is afterwards filed-if
after the dismissal of a suit and before an appeal is presented, the ‘lis’ continues so as to
prevent the defendant from transferring the property to the prejudice of the plaintiff-no
reason to hold that between the date of dismissal of the suit plainly be impossible that any
action or suit could be brought to a successful termination if alienations pendent lite were
permitted to prevail-The doctrine of lis-pendens is founded in public policy and equity and if
it has to be read meaningfully such a sale until the period of limitation for second appeal is
over will have to be held as covered under S. 52 of the TP Act.[1]
The principle of the maxim pendente lite nihil innovetur is incorporated in this section. The
section provides that during the pendency of any suit in which right to immovable property is
in question, neither party to the litigation can transfer or otherwise deal with such property
so as to affect the rights of the opponent. The Explanation makes it clear that lis shall be
deemed to commence from the date of the presentation of the plaint and to continue until
the suit or proceeding has been disposed of by a final decree or order, and complete
satisfaction or discharge of such decree or order has been obtained.[2]
In Jayaram Mudaliar v. Ayyaswami[3] Supreme court held that the purpose of Section 52 of
the Act is not to defeat any just and equitable claim, but only to subject them to the authority
of the court which is dealing with the property to which claims are put forward. This court in
Hardev Singh v. Gurmail Singh[4] Section 52 of the Act does not declare a pendente lite
transfer by a party to the suit as void or illegal, but only makes the pendente lite purchaser
bound by the decision in the pending litigation. The principle underlying Section 52 is clear.
If during the pendency of any suit in a court of competent jurisdiction which is not collusive,
in which any right of an immovable property is directly and specifically in question, such
property cannot be transferred by any party to the suit so as to affect the rights of any other
party to the suit under any decree that may be made in such suit. If ultimately the title of the
pendente lite transferor is upheld in regard to the transferred property, the transferee’s title
will not be affected. On the other hand, if the title of the pendente lite transferor is
recognized or accepted only in regard to a part of the transferred property, then the
transferee’s title will be saved only in regard to that extent and the transfer in regard to the
remaining portion of the transferred property to which the transferor is found not entitled,
will be invalid and the transferee will not get any right, title or interest in that portion. If the
property transferred pendente lite, is allotted in entirely to some other party or parties or if
the transferor is held to have no right or title in that property, the transferee will not have
any title to the property.
Object of the Doctrine
The object of S. 52 is to subordinate all derivative interests or all interests derived from
parties to a suit by way of transfer of pendente lite to the rights declared by the decree in the
suit and to declare that they shall not be capable of being enforced against the rights acquired
by the decree-holder. A transferee in such circumstances therefore takes the consequence of
the decree which party who made the transfer to him would take as the party to the suit. The
principle of lis pendens embodied in Section 52 being a principle of Public Policy, no
question of good faith or bona fide arises. Such being the position, the transferee from one of
the parties to the suit cannot assert or claim any title or interest adverse to any of the rights
and set interests acquired by another party under the decree in suit, the principle of lis
pendens prevents anything done by the transferee from operating adversely to the interest
declared by the decree.[5]
Lis Pendens
‘Lis’ means an action or a suit. ‘Pendens’ is the present principle of Pendo, meaning
continuing or pending, and the doctrine of lis pendens may be defined as the jurisdiction,
power, or control that courts have, during the pendency of an action over the property
involved therein.[6]
Basis of the Doctrine
The section incorporates the well-known doctrine of lis pendens which, to quote Turner, L.J.,
[7] rests on the foundation. “That it would plainly be impossible that any action or suit could
be brought to a successful termination, if alienations, pendente lite were permitted to
prevail.”The doctrine of restitution which the section incorporates is based on the principle
that the acts of the courts should not be allowed to work injury on the suitors.[8] The
principle contained in this section is based on the English common law maxim ut lite
pendente nihil innovator i.e. during litigation no new rights should be introduced.[9] It
prohibits alienation of property when a dispute relating to the same is pending in a court of
law awaiting disposal by the same.[10]
The rule contained in S. 52 is also called the rule of lis pendens and makes transfers
pendente lite, subject to the decision of the Court. As a principle of equity, justice and good
conscience, this rule applies even where the Act does not apply.
It is a doctrine common to the courts both at law and Equity, and rests…upon this
foundation that it would plainly be impossible that any action or suit could be brought to a
successful termination, if alienation pendente lite were permitted to prevail. The plaintiff
would be liable in every case to be defeated by the defendant’s alienating before the judgment
or decree, and would be driven to commence his proceedings de novo subject again to be
defeated by the same course of proceedings. If any decree or order is passed in such
proceedings, any transfer of rights during inter regnum shall be determined as non est in the
eyes of law.[11]It is based on the principle that the person purchasing property from the
judgment debtor during the pendency of the suit has no independent right to property to
resist, obstruct or object execution of a decree.[12]
Doctrine Of Lis Pendens:A Critical Evaluation

The basic ingredients of the doctrine of lis pendens are:[13]
(i) A litigation should be pending in a court of competent jurisdiction;
(ii) The suit must be relating to a specific immovable property;
(iii) The suit should not be collusive;
(iv) The suit should relate to a right in this specific property;
(v) Property should not be transferred or otherwise dealt with;
(vi) By any party to the suit;
(vii) So as to affect the rights of any party thereto;
(viii) Till the final disposal of the case.
APPLICATION OF SECTION 52
For the application of the Section 52 the following conditions have to be satisfied:
A suit or a proceeding in which any right to immovable property is directly and specifically in
question, must be pending;
The suit or the proceeding shall not be a collusive one;
Such property during the pendency of such a suit or proceeding cannot be transferred or
otherwise dealt with by any party to the suit or proceeding so as to affect the right of any
other party thereto under any decree or order which may be passed therein except under the
authority of Court.[14]
For invoking the doctrine of lis pendens under S. 52 T.P. Act, the question whether the
subsequent transferee was a party to the suit or not is not material.[15] Where the entire
plots were in dispute, the transferee of even one third share in the plots was held bound by
the result of the litigation in respect of all the plots then in dispute.[16] Section 52 imposes a
prohibition on transfer or otherwise dealing with any property during the pendency of a suit
provided the conditions laid down in the Section are satisfied.[17]
Any transfer of suit property or any dealing with such property during the pendency of the
suit is prohibited except under the authority of the court, if such transfer or otherwise
dealing with the property by any party to the suit or proceedings under any order or decree
which may be passed in the said suit or proceeding.[18]There is statutory bar on alienation
by the parties to the proceedings in respect of the suit property. If anybody wants to alienate,
he can do so only with the permission of the Court. The intention of the legislature is that no
party to the litigation can defeat the claim of other in case he succeeds in the litigation.[19]
The doctrine of lis pendens embodied in Section 52 is intended to prevent a party to a suit
from making an assignment inconsistent with the rights which may be established in the suit
and which might require a further party to be impleaded to make effectual the Court’s
decree. The effect of Section 52 is not to wipe out a sale pendente lite altogether but to
subordinate it to the rights based on the decree in the suit.[20]
NON-APPLICABILITY OF DOCTRINE
It is not the law that the doctrine of lis pendens would be applicable in every case. Rather
there are many instances where this doctrine does not apply. Following are the instances:
(a) A private sale by a mortgagee in exercise of power conferred by mortgage deed is not
affected by the doctrine of lis pendens embodied in the section and the sale is valid, though
made during the pendency of a redemption suit filed by the mortgagor.[21]
(b) To cases of review.
(c) When the transferor alone is affected.[22]
(d) To an order passed against an intervenor in execution proceedings as the proper remedy
in such cases is a suit under O. 21, r. 63 of the Code of Civil Procedure, 1908.
(e) To a friendly suit.[23]
(f) Where the proceedings are collusive.[24]
(g) To yearly leases and such other acts as are either the necessary or the ordinary
reasonable incidents of an interim beneficial enjoyment.[25]
(h) To a transfer pending suit by a person who is not a party to such suit.[26]
(i) To personal property other than the chattel interests in land.[27]
(j) To the interval that lapses between dismissal of a suit and a fresh suit on the same cause
of action.
(k) Where the parties to the transfer are ranged on the same side.[28]
(l) To transfer affected by order of the court in which suit or proceedings is pending.[29]
(m) Where there is misdescription of the property in the plaint.[30]
(n) Where alienations are not inconsistent with the rights which may be established by the
decree in the suit.[31]
(o) The doctrine of lis pendens does not apply to the case of a person who, during the
pendency of a mortgage suit obtains a mortgage of the property, in consideration for money
paid by him and used by the mortgagor to pay off the suit mortgage.[32]
CRITICAL EVALUATION
Status of the transfer
The language of the section is prohibitive in nature. Section 52 uses the phrase ‘the property
cannot be transferred or otherwise dealt with’. At the same time, the transfer pendente lite is
not void,[33] but is only subject to the outcome of the litigation.[34]The transfer is thus
voidable at the instance of the affected party,[35] except to the extent that it may conflict
with rights decreed under the decree held to be valid and operative as between the parties.
[36] The transferee only takes the title of the transferor subject to the result of pending
legislation.[37] The rule does not annul the conveyance but only renders it subservient to the
rights of the parties to the action, as determined by the decree.[38] The doctrine does not
defeat any just and equitable claim, but only subjects them to the authority of the court
dealing with the property to which claims are put forward.[39] The Apex Court has held[40]
“The effect of Section 52 is not to wipe it(transfer) out altogether but to subordinate it to the
rights based on the decree in the suit. As between the parties to the transaction, however, it
was perfectly valid and operated to vest the title of the transferor in the transferee.”
Right of alienee pendente lite to be pleaded as a party to the lis
The predominant view is that a transferee pendent lite cannot seek impleadment when
transfer was affected during the pendency of appeal without the permission of the court[41]
and with full knowledge that the status quo order was in existence.[42] The petitioner in the
suit would be dominus litus, and if he wants to take a calculated risk, the court may not
exercise its discretion to implead him,[43] and he cannot contend that he has any
independent right over the suit property over and above the right of the seller who is a party
to the lis.[44] The reason being that a person who violates the law can never be treated as
holding a legal enforceable right[45] and thus a resistance at the instance of a transferee of
judgment debtor during the pendency of the proceedings cannot be said to be resistance or
obstruction by a person in his own right and he is therefore not entitled to get his claim
adjudicated.[46] The Apex Court has explained the position in the following words:[47]
Where a party does not ask for leave, he takes the obvious risk that the suit may not be
properly conducted by the plaintiff on record; yet he will be bound by the result of the
litigation even though he is not represented at the hearing unless it is shown that the
litigation was not properly conducted by the original party or he colluded with the adversary.
On the other hand, some High Courts[48] have expressed the opinion that after affecting a
transfer of the property, the transferor would invariably not pursue the litigation as
vigorously as he might have been doing previously. Since he obtains consideration, his
interest in the litigation and also the property would diminish. He may even collude with the
other party and the interest of the alienee would be adversely affected. Since due to the
application of doctrine of lis pendens, the interests of the party to the lis are already
protected, no harm would be done to him if the alienee is impleaded as a party. Rather in the
interests of justice, both the parties should be given a fair chance at the trial. Thus the Orissa
High Court held that a transferee pendent lite can be impleaded as a party to litigation.[49]
Right of any other party under the decree
The doctrine does not apply merely to actual transfers or rights which are the subject matter
of litigation but to other dealings with it ‘by any party to the suit or proceedings, so as to
affect the right of any other party thereto.[50] ‘Any other party’ means a person between
whom and the party alienating there is an issue for decision, which might be prejudiced by
the alienation.
The rule of lis pendens is enacted for the benefit of the third party, and not for the party
making the transfer.[51] This statutory right is given to the party to the suit other than the
alienating party, to have an alienation set aside so far as it is necessary for the protection of
his own rights.[52]
Recommendation by Supreme Court
The Supreme Court also gave its recommendations to the Law Commission of India and
the Parliament recommending change in law in the following terms[53]:
It is necessary to refer to the hardship, loss, anxiety and unnecessary litigation caused on
account of absence of a mechanism for prospective purchasers to verify whether a property is
subject to any pending suit or a decree or attachment. At present, a prospective purchaser
can easily find out about any existing encumbrance over a property either by inspection of
the Registration Registers or by securing a certificate relating to encumbrances (that is
copies of entries in the Registration Registers) from the jurisdictional Sub-Registrar under
Section 57 of the Registration Act, 1908. But a prospective purchaser has no way of
ascertaining whether there is any suit or proceeding pending in respect of the property, if the
person offering the property for sale does not disclose it or deliberately suppresses the
information. As a result, after parting with the consideration (which is many a time the life
time savings), the purchaser gets a shock of his life when he comes to know that the property
purchased by him is subject to litigation, and that it may drag on for decades and ultimately
deny him title to the property. The pendente lite purchaser will have to wait for the litigation
to come to an end or he may have to take over the responsibility of conducting the litigation
if the transferor loses interest after the sale. The purchaser may also face objections to his
being impleaded as a party to the pending litigation on the ground that being a lis pendens
purchaser, he is not a necessary party. All these inconveniences, risks, hardships and misery
could be avoided and the property litigations could be reduced to a considerable extent, if
there is some satisfactory and reliable method by which a prospective purchaser can
ascertain whether any suit is pending (or whether the property is subject to any decree or
attachment) before he decides to purchase the property.
It is of some interest that a solution has been found to this problem in the States of
Maharashtra by an appropriate local amendment to section 52 of the Act, by Bombay Act 4 of
1939. Section 52, as applicable in the Maharashtra and Gujarat, It is wished that the Law
Commission and the Parliament considers such amendment or other suitable amendment to
cover the existing void in
title verification or due diligence procedures. Provision can also be made for compulsory
registration of such notices in respect of decrees and in regard to attachments of immoveable
properties.[5]
CONCLUSION
The right contemplated under Section 52 no doubt can be used both as a sword and a shield,
depending on such facts as to (i) what rights or interest is transferred, (ii) who the affected
party is, (iii)how and in what manner, the transfer is likely to ‘affect’ any party to the pending
‘proceedings’. It can be used as a shield in a subsequent or the same proceeding between the
same parties. Any person who would like to use it as sword, must however, first establish his
right to do so when, in any subsequent proceeding an objection is taken to his claim to do so.
Indeed if the transfer was not avoided by any of the parties to the earlier proceeding likely to
be affected by such transfer, the transferee is not prevented from claiming that the right to
avoid the transfer was lost and that nothing survived to be enforced.
In order that a transfer may be void as hit by the provisions of Section 52, it has to be
established that it has affected the rights of any other party to the suit. If a party challenges a
transfer on the basis of doctrine of lis pendens, it has to establish that the transfer was made
with a view to affecting and defeating the rights of the plaintiff under a decree or order which
may be passed in the case and that it has been defeated. By this doctrine, it is intended to
strike at attempts by the parties to a suit to curtail the jurisdiction of the Court by private
dealings which my remove the subject-matter of litigation from the power of the court to
decide a pending dispute and frustrate its decree.
[EDIT] TPA
PAHUJA LAW ACADEMY
MAINS QUESTIONS
1. What do you understand by lease? What is difference between lease & licence?
2. A leased out certain property to B for rent for a period of 5 years with a condition that
he would be entitled to take the possession of the property, in case rent was not paid by
the lessee for a continuous period of three months. There being default on the part of
the lessee, A issued a notice terminating the lease, in terms of the written agreement
between the parties and asking B to vacate the premises and deliver the possession of
the same. A, thereafter, files a suit for direction to the lessee to deliver vacant
possession of the premises along with other relief.” B, the lessee disputes the claim of A
since the requirements of Section 106 of the Transfer of Property Act, 1882 were not
complied with by the lessor. Decide.
3. A lets a house to B and reserves power to revoke the lease if; in the opinion of a
specified surveyor, B should make a use of it detrimental to its value. Afterwards, A
thinking that such a use has been made, lets the house to C. decide, whether the
transfer to C is valid and under what conditions.
A lets a house to B for five years. B under lets the house to C at a monthly rent of Rs.
2000.00. The five years expire, but C continues in possession of the house and pays the rent
to A. Decide upon the status of C as lessee
LEASE OF IMMOVABLE PROPERTY
Chapter V of T.P. Act, 1882 deals with leases of immovable property. It contains Section 105
to Section 117. Section 105 defines lease.
Definition of Lease: According to Section 105 of this Act- “A lease of immovable property
is a transfer of a right to enjoy property, made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or promised, or of money, a share of crops,
service or any other thing of value, to be rendered periodically or on specified occasions to
the transferor by the transferee, who accepts the transfer on such terms.
“Lessor”, “Lessee”, “Premium” and “Rent” Defined : The transferor is called the
lessor, the transferee is called the lessee, the price is called the premium and the money,
share, service or other thing to be so rendered is called the rent.
This chapter of leases applies to all leases except agricultural leases. Although, the Transfer
of Property Act does not apply to agricultural leases the definition of lease under Section 105
applies to these also.
A lease is the outcome of the rightful separation of ownership and possession. Before the
lease the owner had the right to enjoy possession of the land but the lease he excludes
himself during its currency from that right. A lease is, therefore, not a mere contract, but is a
transfer of an interest in land. It creates a right in rem. The transferee must have been put in
possession of the demised property. A licensee has no right in the property, not to speak of
any right to the exclusive possession of the property and animus of possession always
remains with the licensor, the licensee gets possession only with the consent of the licensor
and is liable to vacate when so asked.
Essentials of Lease : The following are the essentials of lease-
1) Parties – Lessor and lessee.
2) Property-immovable.
3)Period – Any period, day, week, month or year or perpetual.
4) Premium -Money or any other valuable.
5) Partial transfer i.e., Demise or transfer of only right to enjoy.
A lease being a transfer of an ‘interest’ in immovable property’, it is a transfer of property

within the meaning of Section 5. A lease like a sale and a mortgage is a transfer of an interest
in specific immovable property but that interest extends only to the enjoyment of the
property.
A lease conveys only a limited estate in the property to the transferee. Such estate is called a
leasehold and the estate remaining in the lessor called a reversion. It is called leasehold
because it is held by the transferee only till lease stands.
A valid lease cannot be granted by a person not in possession of the land leased. The transfer
of bare right of possession without the right to the usufruct IS not a lease. There must be a
transfer of the exclusive right of possession of the leased property in order to constitute a
lease.
ln order to prove tenancy or sub tenancy two ingredients must be established-
1) The tenant must have exclusive right of possession or interest in the premises in question,
that the right must be in lieu of payment of some compensation or rent
2) The essential of lease is that the right to enjoy the property must be transferred for a
certain time, express or implied or in perpetuity.
The interest of the lease transfers only from the date of execution. The period need not be
fixed at the time of making the lease, its duration may accordingly be determined either by
express limitation or by reference to some event which will on its happening fix its exact
length.
A permanent lease can, likewise, be created by express words or by implication. Where no

words are used to import tenancy, the conduct of the parties and the circumstances of the
case may show that the lease is a permanent one. A continued long possession of the lease-
hold property though by itself is insufficient to prove permanency as the only presumption
from the long possession is a yearly tenancy, and where the origin of the tenancy is known, ‘it
has been held that long possession coupled with payment of a regular rent does not prove the
permanency unless a custom to the contrary is proved.
What a lease required is a transferor and a transferee and a transfer of immovable property
on the terms and conditions mentioned in Section 105. A person cannot grant a lease to
outcast his own interest.
A lease by minor is void but a lease granted by the guardian of minor in excess of the
authority is not void and may be ratified after attaining majority. It is well-settled that
tenancy right are heritable and devolve upon all the heir is of the deceased irrespective of the
question as to whether some of them are in occupation of the-demised premises or not.
Duration of Certain Leases in Absence of Written Contract or Local Usage :
1) In the absence of a contract or local law or usage to the contrary, a lease of immovable
property for agricultural or manufacturing purposes shall be deemed to be a lease from year
to year, terminable, on the part of either lessor or lessee, by six months notice; and a lease of
immovable property for any other purpose shall be deemed to be a lease from month to
month, terminable, on the part of either lessor or lessee, by fifteen days notice.
2) Notwithstanding anything contained in any” other law for the time being in force, the
period mentioned in sub-section (1) shall commence from the date of receipt of notice.
3) A notice under sub-section (1) shall not be deemed to be invalid merely because the
period mentioned therein falls short of the period specified under that sub-section, where a
suit or proceeding is filled after the expiry of the period mentioned in that sub-section.
4) Every notice under sub-section (1) must be in writing, signed by or on behalf of the person
giving it, and either be sent by post to the party who is intended to be bound by it or be
tendered or delivered personally to such party, or to one of his family or servants at his
residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the
property.
This section enacts a rule for duration of leases in cases not governed by local law, contract or
usage. This section applies to a case where no period is agreed between the parties. The
presumption under this section is that the lease is from year to year, month to month
according to the nature of the property, and is terminable by six months notice or fifteen
days’ notice, as the case may be. Where a lease is executed for agricultural or manufacturing
purposes, it is deemed to be a lease from year to year.
The expression ‘manufacturing purpose’ has not been defined in the Act, but the Supreme
Court has considered the question and has laid down the principles and tests for
determination, of what can be said to be “manufacturing purpose” within the meaning of the
Act.
In the case of Idandas v Anant Ram, the Supreme Court laid down the following test for
determining whether a lease is for purpose of “manufacturing purpose” within the meaning
of Section 106 of the act. The tests are-
1) that it must be proved that a certain commodity was produced;
2) that the process of production must involve either labour or machinery;
3) that the end product which comes into existence after the manufacturing process is
complete, should have different name and should be put to a different use .
A notice to be valid under Section 106 must definitely and unequivocally terminate the
tenancy of the tenant after the expiry of the notice. What is necessary is that a notice to quit
should indicate in substance and with the reasonable clarity the intention on the part of the
person giving it to determine existing tenancy at a certain time.
In Budh Sen v Rahiman, the Allahabad High Court, while holding the notice valid, observed
that if an intention to terminate the tenancy can be clearly discerned by construing the words
used in the notice as a whole, the mere fact that the expression that the tenancy was being
terminated is not used, would not render the notice invalid.
In the case of Dipak Kumar Ghosh v Mira Sen the Supreme Court held that notice to quit
must not be vague and uncertain; all that is required is that there must be a clear indication
in the notice to quit of the tenant’s intention to vacate the premises.
Duration in the Notice : In the case of periodic leases, the common law rule as to‘ quit is
that a reasonable notice must be given to determine the tenancy. In the case of yearly a half-
year’s notice to quit at the end of same year of the tenancy has from early times been held to
be sufficient. In the case of other periodic tenancy reasonable notice appears to be notice
equal to the length of the period, so that a month’s notice is sufficient to determine a monthly
tenancy.
The section fixes six months for yearly and fifteen days for monthly tenancies created by
implied demise. The month is reckoned according to the calendar by which the tenancy is
regulated.
Section 106 provides, inter alia, that in the absence of a contract between the parties, a lease
of immovable property for manufacturing purposes shall be deemed to be a lease from year
to year terminable by six months’ notice. Where from the findings of a case it is clear that the
lease in question was not from year to year or for a period exceeding one year, even though
the lease may be for a manufacturing purpose, since the lease is not from year to year.
The notice must terminate the tenancy at the end of the year or the month of the period of
the lease. It should expire on the last day of that period, otherwise it is invalid. Thus, if the
tenancy is a monthly tenancy beginning with the first day of each month, a notice by the
tenant on the 7th of June that he would leave in a month’s time is invalid, for although it
gives more than 15 days’ notice it did not terminate the tenancy at the end of the month.
Notice toquit may be given by the lessor or by the lessee.
Service of Notice to Quit : Notice to quit may be served (1) personally, or (2) by post, or
(3) at residence, or (4) being affixed to the property demised. A notice to quit is necessary
under this section before a suit for ejectment can be brought only where the defendant is a
tenant of the plaintiff.
Lease How Made : Section 107 deals with how a lease may be made. A lease of immovable
property from year to year, or for any term exceeding one year; or reserving a yearly rent,
can be made only by a registered instrument.
All other leases of immovable property may be made either by a registered instrument or by
oral agreement accompanied by‘ delivery of possession.
Where a lease of immovable property is made by a registered instrument, such instrument

or, where there are more instruments than one, each such instrument shall be executed by
both the lessor and the lessee-
Provided that the State Government may, from time to time, by notification in the Official
Gazette, direct that leases of immovable property, other than leases from year to year, or for
any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be
made by unregistered instrument or by oral agreement without delivery of possession.
Where the Act applies, no lease can be created except in one of the manners specified by this
section mere acceptance of rent cannot create tenancy.
Fact of life tenancy must be supported by some evidence; mere fact that rent has been paid is
not sufficient in this regard.
In the case of Rajendra Pratap Singh v Rameshwar Prasad, it was held that a lease of
immovable property for the time exceeding one year credited a registered instrument, cannot
be said to be invalid merely because the said instrument was not signed by both the lessor
and lessee.
It has been held that in view of Section 107 T.P. Act and Section 17 of the Registration act, a
lease for year to year requires registration and in absence of registration, the document
cannot be admitted in evidence.
Section 107 of the Transfer of Property Act, 1882 provides that a lease of immovable property
from year to year, or for any term exceeding one year or reserving a yearly rent, can be made
only by a registered document. It further provides that all other leases of immovable
property must be either by a registered instrument or by oral agreement accompanied by
delivery of possession.
Liabilities of Lessee : The rights and the liabilities under this section are made subject to a
contract or local usage to the contrary. The first three clauses of Section 108 specify the
liabilities of the lessor. The liabilities of the lessor are only three, namely-
1) duty to- disclose any material defect in property with reference to its intended use;
2) duty to put the lessee in possession at his request; and
3) covenant for quiet enjoyment.
1) Duty of Disclosure : According to clause (1)(a) of Section 108. The lessor must disclose
to the lessee only those defects which are material with reference to its intended use by the
lessee, and at the same time which cannot be discovered with ordinary care. It extends only
to those defects of which lessor is aware.
This section does not declare that the omission to disclose material defects must be
fraudulent [Section 55(1)]. But still it seems the omission may be “a good ground for avoiding
the lease on the basis of constructive fraud” [Section 18(2), Indian Contract Act]. The lessee
may also-sue for damages sustained by him as a result of the omission.
2) Duty to give Possession : This clause imposes a statutory obligation on the lessor to
deliver possession to the lessee. What amounts to delivery of possession in any particular
case depends on the nature of the property leased.
Duty of a lessor to deliver possession of the leased premises to the lessee arises only when the
lessee makes a request to that effect. This obligation is absolute. If the lessee is not put in
Possession of the entire land leased to him, there is a breach of the covenant, and his cause of
action arises from the date of the lease, or on a future date if so agreed to by the parties to the
contract.
3) Covenant for Quiet Enjoyment : According to clause (1)(c) of Section 108, it is a

provision importing a covenant for quiet enjoyment. The lessor should see that not only
possession is delivered to the lessee but also that the lessee is not disturbed in his possession
by himself or anybody else claiming under him during the continuance of the lease. This
clause secures the lessee the benefit of an unqualified covenant for quiet enjoyment.
The rule is now firmly settled that like the express covenant the implied covenant protects
the lessee against all disturbances by the lessor whether lawful or not, save under a right of
re-entry, but as against other persons it protects the lessee only against lawful disturbance.
The covenant for quiet enjoyment would operate even if the lessee fails to perform any of the
conditions of the lease, unless, of course, any such condition is expressly made a condition
precedent.
Rights of the Lessee [Clauses (e) to (j)] : Clauses (e) to (j) of Section 108 (2) relate both
to the rights and liabilities of a lessee. The following are the rights of the lessee-
1) Right to avoid the lease in case of any destruction by fire, tempest, etc. ,
2) Right-to repair the property when lessor fails to do so and to deduct the cost of repairs
from rent.
3) Right to make such payments which are obligatory on the lessor and to deduct that
amount from rent.
4) Right to remove the fixtures made by him during tenancy.
5) Right to have the benefit of crops growing on the land sown or planted by him.
6) Right to assign his interest in the leased property.
1) To Avoid the Lease in Case of Destruction Etc. : According to clause (2)(e) of

Section 108, a lessee is not responsible for the consequences of fire unless he had definitely
taken that burden upon his shoulders by his covenant or unless negligence is proved against
him. The lease does not become ipso facto void but becomes voidable at the option of the
tenant and on that option being exercised it becomes void.
lt is necessary that the destruction must be due to natural causes. Provided that the loss or
destruction is not due to lessee or his agents wrongful act or default. ln a case where the
property leased is not destroyed or substantially or permanently unfit, the lessee is not
entitled to avoid the lease A notice under this clause avoiding the lease on the ground of
destruction of leasehold property by irresistible force takes effect immediately on service.
Section 106 has no application to such a notice.
2) To Repair in Default of the Lessor : According to clause (2)(f) of Section 108, there is
no general rule of law that a lessor is bound to keep the demised A property in good repair or
to expend any money on the property. Neither under this clause nor under clause (m)- it is
competent for the. lessee or the lessor as the ease may be, to compel rebuilding or re
construction
The lessee can deduct from rent expenses of only those repairs which the landlord was bound
to execute either by an express stipulation in the lessee or on account of local usage; but the
lessee must first give notice to the lessor to do the repairs before he can make the repairs
himself. The Act imposes no obligation on the landlord to repair.
3) Deduction of Taxes : According to clause (2)(g) of section 108, generally a tenant is not
entitled to claim adjustment of all payments made by him on behalf of the landlord even
though he is interested in such payment, against rent payable by him. A tenant may sue the
landlord for re-imbursement of the money which he had to pay in order to save his own
interest and may recover the money so paid. Such adjustment cannot be made by the tenant
alone without the concurrence of the landlord Where as notice is necessary in cases of
repairs, no notice to the lessor is necessary under this clause.
4) Removal of Fixtures : According to clause (2)(h) of Section 108, a lessee under this
clause is entitled to remove any trees or fixtures planted or set up by him on the leased
property. But while removing the fixtures he must see that the property is left in the same
condition in which he has received it.
5) To Remove the Crops : According to clause (2)(i) of Section 108, a lessee has a right to
remove the corps after the termination of the lease on any count excepting by his own default
and for the purpose, he is entitled to have a free ingress to an egress from the property. This
clause applied to leases of uncertain duration such as a lease from year to year or terminable
on the happening of some event.
6) Right of Transfer: According to clause (2)(j) of Section 108. A lessee can assign his
interest in any lawful manner. Such interest being itself an immovable property can as such
be validly assigned. For instance he can validly transfer by sub-lease even a part of his
interest in the property. It is open to lessor to incorporate any such condition in the lease by
agreement with the lessee will thereby be prevented from dealing with his interest altogether.
Liabilities of the Lessee : Clause (k) to (q) of Section 108 (2) prescribe the liabilities of a
lessee. They are-
duty of disclose a fact materially increasing the value of the lease-hold;

duty to pay rent;
duty to keep and restore the property in a good condition;
duty to give notice to the lessor of any proceeding to recover the property or any
encroachment upon it if he comes to know of it;
duty to use the property reasonably;
duty to not to erect any permanent structure without the lessor’s consent except for
agricultural purposes; and
duty to restore possession to the lessor on the determination of the lease.
Duty to Disclose :According to Section 108 (2)(k). The lessor should disclose a fact
materially in increasing the value of the lease hold. The failure to disclose here,
however, is not fraud. Therefore, the lessor on such failure cannot sue to set aside the
lease. His only remedy is to sue for damages.
Duty to Pay Rent : According to Section 108 (2)(l). A duty to pay rent is a necessary
incident of every lease and the amount to be paid as such is usually stated in the lease.
Such duty begins not from the date of the execution of the lease but from the date the
lessor puts the lessee in possession, and the lessee must pay it without any demand
from the lessor.
Duty to Keep and Restore the Property In Repair : According to Section 108 (2)
(m). Clause(m) casts on the tenant a liability of a limited nature in the matter of the
repair of the demised premises.
Unless there is contract to the contrary in every lease, it is implied that a lessee is to maintain
the property in the same condition in which he received it and to restore the same to the
lessor on the termination. of the lease. This duty may involve repairs to the property and the
lessee is bound to do them.
Duty to Inform on the Title Being Jeopardy : According to Section 108 (2)(n).
This clause puts a duty upon the lessee to give notice to the lessor so that the lessor may
protect his interest. A lessee is further bound to inform the lessor, when he becomes
aware, of any proceeding to recover the property or any part thereof or of any
encroachment made upon or any interference with the latter’s right concerning such
property.
Duty to Use the Property Reasonably : According to Section 108 (2)(o). Leased
property as a person of ordinary prudence would use them if they were his own. He
must not use or permit another to use the property for a purpose other than that for”
which it was leased. Where a professional man who-takes a house for residential
purpose, but carries on some professional work in the house during the spare time,
Section 108(0) does not prevent him to do so.
Duty not to Erect Permanent Structures : According to Section 108 (2)(p), the
clause prohibits a lessee from erecting any permanent structures on the leased property
except with consent of the lessor. If he does, then this becomes a ground for ejectment.
If the property be agricultural, he can erect structures of agricultural purposes and no
consent of the landlord is necessary.
In judging whether the structures were permanent or not the following factors should be
taken into consideration—
1. a) intention of the party who put up the structure;

2. b) this intention was to be gathered from the mode and degree of annexation;
3. c) if the structure cannot be removed without doing irreparable damage to the demised
premises then that would be certainly one of the circumstances to be considered while
deciding the question of intention. Likewise, dimensions of the structure; and
4. d) its removability had to be taken into consideration. But these were not the sole tests;
5. e) the purpose of erecting the structure is another relevant factor;
6. f) the nature of the materials used for the structure; and
7. g) lastly, the durability of the structure. These were characterised as the broad tests.
Duty to Restore. Possession : According to Section 108 (2)(q). This clause enacts
the well settled rule that tenant must on the expiration or on the determination of his
tenancy deliver up to his landlord possession of the demised property. It is one of the
obligations of a contract of tenancy that the tenant will, on determination of the
tenancy, put the landlord in possession of the property demised unless possession is
delivered to the landlord before the expiry of the period of the requisite notice, the
tenant continues to hold premises during he period as tenant.
Exclusion of Day on Which Term Commences (Section 110) :Where the time
limited by a lease of immovable property is expressed as commencing from a particular day,
in computing that time such day shall be excluded. Where no day of commencement is
named, the time so limited begins from the making of the lease.
Duration of Lease for a Year : Where the time so limited is a year or a number of years,
in the absence of an express agreement to the contrary, the lease shall last during the whole
anniversary of the day from which such time commences.
Option to Determine Lease : Where the time so limited is expressed to be terminable

before its expiration, and the lease omits to mention at whose option it is so terminable, the
lessee, and not the lessor, shall have such option.
Determination of Lease : According to Section 111 of T.P. Act, a lease of immovable

property may be determined by any of the following methods-
1) by efflux of the time limited thereby;
2) where such time is limited conditionally on the happening of some event—by the
happening of such event;
3) where the interest of the lessor in the property terminates on, or his power to dispose of
the same extends only to, the happening of any event—by the happening of such event;
4) in case the interests of the lessee and the lessor in the whole of the property become vested
at the same time in one person in the same right;
5) by express surrender; that is to say, in case the lessee yields up his interest under the lease
to the lessor, by mutual agreement between them;
6) by implied surrender;
7) by forfeiture; that is to say, (1) in case the lessee breaks an express condition which
provides that, on breach thereof, the lessor may re-enter; or (2) in case the lessee renounces
his character as such by setting up a title in a third person or by claiming title in himself; or
(3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter
on the happening of such event; and in any of these cases the lessor or his transferee gives
notice in writing to the lessee of his intention to determine the lease;
8) on the expiration of a notice to determine the lease, or to quit, or of intention to quit, the
property leased, duly given by one party to the other.
1) Determination by Efflux of Time : According to Section 111 clause (a) a lease may be
determined by end of time. This clause hardly needs any explanation. A lease created for a
certain time naturally determines on the last day of the term without any formality such as
notice on either side. Such a lease does not terminate if the parties die during the term, the
reason being that the interest transferred on a lease is a heritable interest.
The lessee cannot dispute the title of the lessor as a ground for refusing to give up possession
at the expiry of the lease; for if he has been let into possession by the lessor, he cannot deny
the title under which he entered without first surrendering possession. if the lessee has not
surrendered possession, the estoppel continues even after the termination of the tenancy.
Where the lease is fixed for twenty year and there is expiry of lease by efflux of time, creation
of new tenancy cannot be inferred by mere increase in rent by landlord because of increase in
taxes. The landlord is entitled to decree for possession and also for mesne profits from the
date of expiry of lease.
2) Conditional Term : According to Section 111 clause (b), if the term of a lease is
conditional on the happening of a certain event, the lease determines when the event
happens and if any part of the term otherwise fixed remains unexpired, it is of no
consequence. A lease for life determines on the death of lessee. A lease for-the duration of
war determines when peace is declared. Service tenancy under which tenant holds land on
condition that if he refused to render service lease will determine, may fall within the clause.
3) Termination of Lessor’s Interest : According to Section 111 clause (c), operates

where the lessor has only a limited interest or power to grant a lease, and the lease is
determined with that interest. For example- A lease granted by a mortgagee in possession
and extending beyond the term of the mortgage determines on redemption. Such a lease is
not automatically determined, but the mortgagor is entitled to exercise his right to determine
the lease.
4) Determination by Merger : According to Section 111 clause (d), the leasehold is the
lesser estate, for it is carved out of the estate of the owner, which is the reversion. The lesser
estate is merged, that is sunk or drowned in the greater, and the lease is determined, for it
sinks into reversion. The interest of the lessor and the lessee in the whole of the property
should become vested at the same time in one person in the same right. It is necessary that
the interests of lessor and lessee in whole of the property become vested in the same person
and in the same way.
5) Determination by Surrender : According to Section 111 clause (e), the lessee may with
the consent of the lessor expressly surrender or yield up his entire interest in the lease to the
lessor. Delivery of possession is essential for this purpose unless there is an agreement to
surrender at some time in future. In case of an express surrender, no formality is needed.
The lessee must express his intention to surrender, and the lessor must agree to it, and the
delivery of possession must immediately follow. A mere relinquishment or abandonment by
the lessee of holding without acceptance on the part of the lessor is not a surrender.
6) Determination by Implied Surrender : Section 111(f) of the Transfer of Property Act

provides for the determination of a lease of immovable property by implied surrender.
Implied surrender or surrender by operation of law occurs-
1. a) by the creation of a new relationship, or

2. b) by relinquishment of possession.
There is an implied surrender if the lessor grants a new lease to his lessee to take effect
during the continuance of the existing lease. When during the continuance of the lease, a
lessee executes afresh lease, this operates in law as surrender of the original lease.
Relinquishment of possession operates as an implied surrender, if there is (1) a yielding up

by the lessee, and (2) an acceptance of possession by the lessor. There must be a taking of
possession, not necessarily a physical taking but something amounting to a virtual taking of
possession.
7)Determination by Forfeiture : According to Section 111 clause (g), forfeiture is another

mode in which a lease is determined, and the case where a lease can be forfeited as stated in
the clause are-
1. a) in case the lessee breaks an express condition which provides that on breach thereof
the lessor may re-enter;
2. b) in case the lessee renounces his character as such by setting up a title in third person
or by claiming title in himself; and
3. c) where the lessee is adjudicated an insolvent and the lease provides that the lessor
may re-enter on the happening of such event.
8) Determination by Notice to quit : According to Section 111 clause (a) deals with
determination of case by notice. This is the last mode in which a lease is terminated when a
notice to quit or to determine the lease expires. Such notice is necessary only in cases of
periodic tenancy such as a tenancy from year to year or from month to month under Section
106. Where the term is fixed, the lease would determine by efflux of time under clause (a) of
the section. Where the tenancy is permanent no question of determining it ever arise. Where
it is a tenancy-at-will, it is determinable at the will of either party by the tenant giving up
possession, or by a demand for possession-by the landlord, or by the death of either party. A
tenancy-at-sufferance does not need any determination and the landlord can straightway sue
the tenant for eviction.
The question as to what constitutes a valid notice for the purpose of determining a tenancy is
to be decided with reference to Section 106 and decided cases —
1) Though it is not necessary to state any ground for the notice-to quit, the notice must
expressly convey the intention to terminate the tenancy as a whole.
2) The notice must specify the date on which the tenancy should expire.
Waiver of Forfeiture : According to Section 112, a forfeiture under Section 111, clause (g),
is waived by acceptance of rent which has become due since the forfeiture, or by distress for
such rent, or by –any other act on the part of the lessor showing an intention to‘ treat the
lease as subsisting—
Provided that the lessor is aware that the forfeiture has been incurred—
Provided also that, where rent is accepted after the institution of a suit to eject the lessee on
the ground of forfeiture, such acceptance is not a waiver.
The concept of waiver is in essence based on agreement of landlord to waive the forfeiture.
The Courts always lean against forfeiture. A lessor is not bound to forfeit the lease even if he
gets an opportunity for it under any of the sub-clauses of Section 111. The forfeiture is meant
entirely for his benefit and it is for to enforce it or to abandon it. lf he elects to enforce it, he
must give a notice in writing to the lessee of his intention to determine the lease.
This section specifies three ways for waiving a forfeiture—
1) by acceptance of rent accrued due since forfeiture; or
2) by distress for such rent; or ,

3) by any other act on the part of the lessor showing an intention to treat the lease as
subsisting.
Waiver of Notice to Quit : A notice given under Section 111, clause (h), is waived, with the
express or implied consent of the person to whom it is given, by any act on the part of the
person giving it showing an intention to treat the lease as subsisting.
illustrations-
1. a) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice
expires. B. tenders and A accepts, rent which has become due in respect of the property
since the expiration of the notice. The notice is waived.
2. b) A, the lessor, gives B, the lessee, notice to quit the property leased. The notice
expires, and B remains in possession. A gives to B as lessee a second notice to quit. The
first notice is waived.
The section will not apply when the landlord claims to treat the tenant as a tenant from year
to year but he latter asserts a permanent tenancy. A waiver is an intentional relinquishment
of a known right. There can be no waiver unless the person against whom the waiver is
claimed had full knowledge of his rights and facts enabling him to take effectual action for
the enforcement.
Section 113 consists of two parts-
1. a) The express or implied consent of the person to whom notice is given;

2. b) The act of the person giving notice showing the intention to treat the lease as
subsisting.
in order to constitute a waiver, both the parts must concurrently operate.
Relief Against Forfeiture for Non-Payment of Rent : According to Section 114, when
a lease of immovable property has determined by forfeiture for non-payment of rent, and the
lessor sues to eject the lessee, if,-at the hearing of the suit, the lessee pays or tenders to the
lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives
such security as the Court thinks sufficient for making such payment within fifteen days, the
Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against
the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had
not occurred.
Relief Against Forfeiture in Certain Other Cases : Where a lease of immovable

property has determined by forfeiture for a breach of an express condition which provides
that on breach thereof the lessor may re-enter, no suit for ejectment shall lie unless and until
the lessor has served on the lessee a notice in writing-
1. a) specifying the particular breach complained of; and
2. b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and the
lessee fails, within a reasonable time from the date of the service of the notice, to
remedy the breach, if it is capable of remedy.
Nothing in this section shall apply to an express condition against the assigning,
underletting, parting with the possession, or disposing, of the property leased, or to an
express condition relating to forfeiture in case of non-payment of rent.
This section merely defines form under which notice under section 111(b) is to be issued in
cases where breach of condition is capable of being remedied and single notice is sufficient.
The section which was inserted by the Amending Act, 20 of 1929 provides for relief against
forfeiture in certain other cases besides non-payment of rent, e.g., for breach of covenant to
repair or for breach of covenant to insure.
The section does-not apply to a breach of covenant to pay rent for that falls under Section
114. The section also does not apply to forfeiture for disclaimer. The Section 114-A was added
by the Amendment Act of 1929. Section.114-A is general and is designed to cover all cases in
which notice is required under Section 111(9). The principle of the section applies to
agricultural, property.
Effect of Surrender and Forfeiture on Under-Leases : According to Section 115, the

surrender, express or implied, of a lease of immovable property does not prejudice an under-
lease of the property or any part thereof previously granted by the lessee, on terms and
conditions substantially the same (except as regards the amount of rent) as those of original
lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent
payable by, and the contracts binding on, the under-lessee shall be respectively payable to
and enforceable by the lessor.
The forfeiture of such a lease annuls all such under-leases, except where such forfeiture has
been procured by the lessor in fraud of the under-lessees, or relief against the forfeiture is
granted under Section 114.
A lessee cannot give to a sub-tenant what he does not possess himself. This section merely
brings under-lessees into direct contract with lessor except, where the surrender is made for
the purpose of obtaining a new lease.
Effect of Holding Over : According to Section 115, if a lessee or under-lessee of property

remains in possession thereof after the determination of the lease granted to the lessee, and
the lessor or his legal representative accepts rent from the lessee or under-lessee, or
otherwise assents to his continuing in possession, the lease is, in the absence of an agreement
to the contrary, renewed from year to year or from month to month, according to the
purpose for which the. property is leased, as specified in Section 106.
ilIustrations-
100. a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs.
100. The five years expire, but C continues in possession of the house and pays the rent
to A. Cs lease renewed from month to month.
101. b) A lets a farm to for the life of C. C dies, but B continues in possession with A’s assent.
B’s lease is renewed from year to year.
Section 116, Transfer of Property Act deals with the effect of holding over. If a lessee or
under-lessee remains in possession after determination of the lease or his legal
representative accepts rent or otherwise assents to his continuing in possession, in the
absence of an agreement to the contrary, the lease is renewed from year to year or month to
month according to the purpose for which the property is leased as specified in Section 106-
1) hat in absence of agreement to the contrary, lease is renewed as to all terms , except
duration of lease, and
2) ‘That duration of renewed lease is from year to year orb from the effect of holding over
month to month according to purpose for which property is leased as specified in Section
106.
Acceptance of the rent by the landlord after the expiry of the lease is treated to be an assent.
By reason of Section 116, the possession of a tenant after cessation of the tenancy is
protected. Such possession is juridical.
According to Section 116 there should be an offer on the part of the lessee to take a renewed
or fresh lease evidenced by the lessee’s continuing in possession and the definite assent of
the landlord evidenced by receipt of rent otherwise.
Where the contract of tenancy has expired but the tenant continues in possession by way of
statutory protection, it cannot be said to be an offer on the part of the tenant to take a
renewed or fresh lease simply by continuing in possession.
Doctrine and the Section : In Ganga Dutt v Kartik Chandra Dass, the Supreme Court
considered the principle underlying Section 116 and ruled that where a contractual tenancy
has expired by efflux of time or by determination by notice to quit and the tenant continues
in possession of the premises, acceptance of rent from the tenant by the landlord after the
expiration of determination of the contractual tenancy will not afford ground» for holding
that the landlord has assented to a new contractual tenancy.
Where a tenant merely holds over without the consent of the landlord there is no tenancy of
any kind at all. If in such a case, the tenant continues in possession without landlord’s
consent he becomes what in English law is called a tenant-by-sufferance. This is no tenancy
at all in the strict sense and requires no notice to determine it.
Tenancy-at-Will : A tenancy-at-will is determinable at the will either/of the landlord or the
tenant. A tenancy-at-will arises by implication of law in cases of permissive occupation when
a person is in possession of premises with the consent of the owner, or it may arise expressly
by an agreement to let for an indefinite term for a compensation accruing from day to day -so
long as both parties please.
Exemption of Leases for Agricultural Purposes (Section 117) : None of the

provisions of this Chapter, apply to leases for agricultural purposes, except in so far as the
State Government may by notification published in the Official Gazette, declare all or any of
such provisions to be so applicable in the case of all or any of such leases, together with, or
subject to, those of the local law, if any, for the time being in force.
Such notification shall not effect until the expiry of six months from the date of its
publication.
PAHUJA LAW ACADEMY
PRE QUESTIONS
1. A lease of immovable property is a transfer of a tight to enjoy such property for a
certain time or in perpetuity in consideration of ________ to be rendered
periodically:
(a) A price or premium.
(b) Money, share of crops, service, or any other thing of value (Rent).
(c) Both (a) and (b).
(d) Only (b).
2. The transferor in the lease of immovable property is called as;
(a) Lessor.
(b) Vendor.
(c) Bailor.
(d) Donor.
3. The transferee in the lease of immovable “property is called as:

(a) Vendee.
(b) Bailee.
(c) Lessee.
(d) Donee.
4. Which section of the T. P. Act defines ‘lease’ of immoveable property:
(a) Sec 105.
(b) Sec 106.
(c) Sec 104.
(d) Sec 103.
5. Mark the incorrect statement in relation to lease:
(a) The duration of lease should be specific or for perpetuity.
(b) A lease could be given to oneself.
(c) The subject matter of lease must be immovable property
(d) The lessee must accept the transfer.
6. Under Section 105 of the Transfer of Property Act, 1882, which one of the following is
not an essential element of a lease?
(a) A right to enjoy the movable property.
(b) Duration of such enjoyment.
(c) Consideration paid or promised by way of price.
(d) The acceptance of the transfer by the transferee.
7. Mark the incorrect statement in relation to lease:
(a) Sec. 105 is inapplicable to leases relating to agricultural land and Rent control Act.
(b) The leased property should not be used in such a way so as to change its character.
(c) In a lease, complete possession is given to a party.
(d) In a lease, there is not a partial but a complete transfer.

8. In absence of contract or local law or usage to the contrary, a lease of immoveable
property shall be deemed to be:
(a) Month to month.
(b) Bimonthly.
(c) Year to year.
(d) Biannual.
9. A lease of immovable property from year to year, can be made by:
(a) Oral agreement.
(b) Oral agreement accompanied by delivery of possession.
(c) Simple instrument.
(d) Only by a registered instrument.
10. A lease of immovable property from year to year or exceeding one year can be made:
(a) Only before Notary.
(b) Valid if executed before Magistrate.
(c) Agreement made by parties will be effective.
(d) Only by a registered instrument.
11. Where a lease of immovable property is made by a registered instrument, such

instrument shall be executed:
(a) By lessor only.
(b) By lessee only.
(c) By either of the two.
(d) By both the lessor and the lessee.
12. Mark the incorrect matching:
(a) Rights and liabilities of lessor and lessee: Sec. 108.
(b) Determination or termination of lease: Sec. 111-113.

(c) Holding over (Tenancy-at-will): Sec. 116.
13. A lease of immovable property from year to year is terminable, on the part of either
lessor or lessee, by:
(a) One month.
(b) Six months.
(c) Three months.
(d) Sixty days. (notice expiring with the end of a year of the tenancy.)
14. Termination of lease of immovable property shall be in the following manner:
(a) By oral intimation.
(b) By written notice.
(c) By sending agent.
(d) By telephonic intimation.
15. In which of the following cases, ha lease of immovable property does not determine?
(a) By efflux of time limited thereby.
(b) By express or implied surrender.
(c) On the service of a notice to quit.
(d) By forfeiture.
16. ‘A’, the lessor gives ‘B’ the lessee, notice to quit the property leased. The notice expires.
‘B’ tenders and ‘A’ accepts rent which became due in respect “of the property since the
expiration of the notice. The notice is:
(a) Valid.
(b) Waived.
(c) Void.
(d) Voidable.
17. ‘A’ the lessor gives ‘B’ the lessee, notice to quit the property leased. The notice expires,
and ‘B’ remains in possession. ‘A’ give to ‘B’ as lessee» a second» notice to quit. The
first notice is:
(a) Irregular.
(b) Valid.
(c) Void.
(d) Waived.

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TRANSFER OF PROPERTY ACT (STUDY PLAN)

PAHUJA LAW ACADEMY

TRANSFER OF PROPERTY ACT

2. Distinguish between movable and immovable property..

3. Define explain expression “Immovable property” under Transfer of property Act.

4. What do you mean by (Profit a prendre) Explain through case law. .

5. Explain the doctrine of fixture. .

TRANSFER OF PROPERTY ACT

• Act ‘4’ of 1882

• Came into force on 1st July 1882

Property ——- (land)

• Signed by Lord Rippon

• Transfer of property is a subject in “concurrent list” of 7th schedule of Constitution of India

FOR understanding PREAMBLE

[LEGAL- means something enforceable by law]Legal title comprises of Bundle of Rights

• Right to enjoyment etc.

• By referring English Law on real properties

• Customary Laws &

• Justice, equity, good conscience and fair play.

T.P. Act 1882 is supplemental to:-

• Indian Registration Act 1908

• Indian Contract Act 1872

Living persons—for the purpose of this Act

Includes—[i.e. inclusive definition]

Let us understand basic scheme of the Act if helps

• To understand the structure of Act

• To comprehend the concept of the Act.

—one or more living persons or

—himself and one or more living persons

living persons for purposes of this act includes :-

• body of individual either incorporated or not

Evident from the above definition

Thus, as per section 7

Persons competent to transfer are :-

• persons competent to contract and

• entitled to transferable property or authorize to dispose of transferable property not his

5. Attached to the earth

7. A person is said to have notice.

-Immovable property does not include

• Growing crop and

S- 3(26) of General Clauses Act, 1897 – “immovable property” shall include

2) benefits arising out of land (profit a prendre) &

3) Things attached to the earth

Attached to earth has been defined in para V of section 3 of TP Act

Is in peri materia with “Profits a prendre” in English law

Prendre means TO TAKE (a French verb)

Ananda behera vs. State of Orissa:

(AIR 1956 SC 17)

Shanta bai vs. State of Bombay

State of Orissa vs. Titaghur paper mills company limited

Things attached to earth:–

Is in peri meteria with “doctrine of fixture”–

• Things rooted in earth

• Things imbedded in earth or

• Intention, object and purpose of the party attaching the property

On the basis intention, duration and purpose

Bamdev Panigrahi vs. Manorama Raj

(AIR 1974 AP 226)

Touring talkie case.