TPA- Parallel law to family law (Section 4)

Salient features:
- Not exhaustive
- “Transfer of property by act of parties”- Preamble.
- Property could be transferred in different ways.

1. Act of parties mean by living parties. TP Act deals with these transfers only. Property
could be transferred by operation of law too.
2. TP Act primarily deals with immovable property. But there are provisions which deal
with movable property as well. Section 39 deals with both, while Section 38 deal with
Immovable property.
Specialised transfer:
1) Sale (Immovable)
2) Mortgage (Immovable)
3) Lease (Immovable)
4) Exchange (of both)
5) Gift (both)
6) Actionable claim (this is not a transfer of property by itself)
Government grants are not governed by TP Act. They are governed by Government Grants
Act.
Parliament and State both have power to transfer land other than agricultural land given in
Concurrent List.
Agricultural land State List
Section 2- Saving clause
TP Act repealed certain laws, but other laws which haven’t been repealed are still enforced.
Schedule is provided in the Act (to shed light on which all laws were repealed by TPA).
S. 2 (b) incidents of any contract
A has a right against B to buy his property against others or in preference to others. This is a
pre-emption.
“Constitution of property” means essential nature of property which cannot be changed.
What the law serves is substantive aspects, and not procedural ones.
-What procedure should one follow in order to preserve rights?
Present law is prospective in nature. You have to follow the present law and not any previous
law.
Section 2 (d) Section 57 and Chapter IV of the Act- transfer by operation of law/ decree of
court.
*Muslim law- Chapter 2 of this Act shall not affect it. The law does apply to Muslims, but in
case of inconsistency, Muslim law will prevail. Other chapters apply to Muslims irrespective
of inconsistency. In case of Gift, Muslim law of Hiba applies.
**Briefly randomly mentioned Section 14 (Rule against Perpetuity) and then said that Family
waqf rule will prevail if there is an inconsistency.
Section 3- Definitions
Meaning of “Property”:
Wider understanding- Includes both personal and proprietary right
Narrow understanding- Proprietary right only
Thing in respect of which one has right- also under Narrow sense of property
Property as a bundle of rights.
3 interests:
1) Right of ownership
2) Right of possession (right to enjoy property)
3) Right of alienation (right to transfer)
All three are absolute rights.
In case of pledge, (movable property), pledgee gets special interest while general interest
remains with the pledger. It is not an absolute right with the pledgee (absolute right not
transferred).
In case of mortgage, there is a transfer of interest with regard to immovable property.
Point of difference between mortgage and pledge: Mortgage is covered by TPA, while
pledge is not.

*Property has to be understood in light of the concept of bundle of rights. If bundle of rights
is transferred ie. Absolute interest transferred- exchange, gift, sale. Here ownership is
transferred.
If limited interest is transferred- lease, mortgage.
Juri in re propria (Rights in propria)= rights in one’s own property
Right in aliena = right in another’s property
Movable property is not defined under S. 3 of TPA. It only gives a negative definition of
immovable property. Thus standing timber, growing crops and grass are ___.
S. 2 (7) of SoGA says actionable claims and money are not goods. However, they are still
movable property. Actionable claims are governed by TP Act. Goods include stocks and
shares, crops, grass and things attached to or forming part of land which are agreed to be
severed before sale or under contract of sale.
Immovable property is subjected to greater mandatory formalities, governed by TPA. Simply
delivering possession is not enough. For immovable property, in general, there must be a
written attested document, registered etc (other formal requirements). Only after this is title
transferred.
All of the above are not required for movable property. Only delivery of possession and
intention to transfer are sufficient.
Stamp Act- Immovable Property
Movable property ×
Limitation period: For movable property, it is 3 years. For immovable property, it is 12
years.
According to Section 3 (26) of the General Clauses Act, immovable property includes land
and all those things that are part and parcel of the land (Thus, everything below and above the
land, like water bodies etc. Also inclusive of benefits arising out of land, things attached to
the earth or permanently fastened to the earth.
1. Attached to earth
2. Embedded in earth
3. Attached to what is embedded in earth
4. Fastened to earth
5. Rooted in earth
Benefits arising out of land right of way, right to ferry, right to fish and the like.
When you sell a pond, you sell fish, water and all of it is immovable property.
Crops are grown for the purpose of harvesting (have to complete this)
Shanta Bai v. State of Bombay (refer to pictures on group)

Things attached to building: Not all are immovable property. Doors, windows are immovable
property. When you sell a house, you don’t separately mention that you are selling doors,
windows. But other ornaments and attachments are movable, usually. The idea is that
anything which is part and parcel of land is immovable property. If something is immovable,
stamp duty must be paid.
Doctrine of Fixture in England
Whenever anything is planted on land, that becomes part of land and is thus immovable
property. Anything embedded in land or built on it becomes part of it. Owner of land owns it.
Exceptions:
1) Contrary contract- Parties can contract otherwise.
2) Trade- If a person brings something to another’s land, it is still the former’s property.
Tests to determine whether something has become fixture:
 1) Intention with what intention has something been attached to another thing- is the
intention to make it permanent? This is the most important test.
2) Mode of attachment How easily it can be removed and consequences of its
detachment
3) Who has attached if landlord has, then you presume that the attachment is
permanent. If tenant, then presumption is that it is not part and parcel of the land.
Anchors holding bridge- Immovable
Anchors holding ships- Movable
Duncan Industries Ltd v. State of UP (2000)
Fertilizer business had to be transferred by A to Duncan Industries (B). An agreement was
signed in 1993.
In 1994, Conveyance Deed was executed by A in favour of B. On the land, there were plants
and machineries. The deed said these had already been transferred. These were excluded to
lower valuation and attract less stamp duty. Presented before sub-Registrar and an objection
was raised. Stamp duty was imposed and there was a penalty of more than 37 crore. Appeal
to HC- agreed with sub Registrar and declared plants and machineries as immovable
property.
SC now had to decided character of plants and machineries. If immovable, then the exclusion
was not permissible.
P&Ms were permanently attached by the owner, with no intention to dismantle. Even though
it was said that delivery of possession was done, they were not detached. Can part of property
be movable in this way?
SC applied the three tests and found P&Ms to be immovable property. Hence, it was wrong
to exclude them from the conveyance deed.
Bamdev Panigrahi v. Monorama Raj (1974)
In 1957, Kumar Touring Talkies- a cinema business started. A obtained license for 1 year and
got land on mortgage from a Raja of Mandasa. A constructed a temporary structure and
bought a cinema projector and started business. A obtained B for management. B colluded
with Raja to obtain mortgage in his own name.
In May 1961, A asked B to tender accounts. B denied in June 1961. A died after health issues
in 1965.
In 1966, A’s widow brought a suit saying she was owner of KTT and thus the projector,
diesel oil, engine etc should be returned to her.
Cause of action arose in 1961. Character of property had to be determined to calculate period
of limitation.
Intention of attachment was looked at. It was a touring talkies business. Thus, it was not
intended to be a permanent structure at one place. Mere installation does not make property
immovable. Thus, character of property here was movable.
Three steps of Transfer of Immovable Property
 1) Execution
2) Attestation
3) Registration
When a person transfers property by way of a document, such document is an instrument. It
does not include testamentary instruments.
Execution- Say an instrument has certain stipulations. It is executed only when the transferor
authenticates it in some way (signature, thumbprint etc.)
Attestation [S. 3(3)]- Must be done by two or more witnesses. Personal acknowledgement
has to be given. A person must have seen the transferor sign the document.
Attesting witnesses must attest in presence of executant. Law does not prescribe format of the
same.
Before 1926, different High Courts had different views on whether attestation can be done by
personal acknowledgement only.
Bombay and Allahabad HCs said that PA is sufficient.
Madras and Calcutta HCs agreed with the English position that personal acknowledgement is
not sufficient and both witnesses must be present.
Privy Council in Shammu Patel v. Abdul Qadar took the view of the Madras and Calcutta
HCs (English position).
Afterwards, this provision was added to relax the conditions.
Who can attest?
- One who is competent to contract
This includes:
- Scribe (who drafted the instrument)
- Relatives
- Friends
- Registrar who registers the document
Note: A party to the transaction cannot become attesting witness, but a party interested in the
transaction can.
Kumar Harish Chandra Singh Das v. Bandshidhar Mohanty (1966)
….
Purpose of Attestation
1) Witnesses testify that it was X who executed (authenticity of execution is ensured).
2) X executed with free consent, without coercion or pressure.

Note- Attesting witnesses do not testify with regard to veracity of content.

REGISTRATION
Registration is an official record of a document. It involves a seal, sign etc.
Date of registration is date when sub-Registrar puts seal and signs the document.
If the document is registered at one place, it is valid throughout the country. Registration
governed by Registration Act, 1908.
(S. 17- for which documents are required and S. 18- when documents’ registration is
optional.

“Actionable claim”- movable property (intangible), but not a good.

Actionable claim means:
i) Claim to an unsecured debt. If A borrows 1 lakh from B with security pledged to
him. This is secured, and hence not an actionable claim. Action can only be
maintained in court of law if debt is unsecured.
ii) Claim to beneficial interest in movable property not in possession of claimant
(S.130-137 of TPA).

“Notice”- Knowledge of or information pertaining to a fact.

Actual notice- when a person actually has knowledge.
Sometimes, party denies that he had notice. If circumstances are such that he ought to have
known, law assumes he knows. Knowledge is imputed.
Constructive notice is a legal presumption based on caveat emptor. It is based on equity.
Illustration for Notice:
Illustration 1:
Father intends to transfer property to son by way of will and puts a condition that S will have
to pay 20k every month to his sister D (interested party, not party to the transaction) and that
until arrangement is made, property cannot be transferred.
After some months of allowance, S sells to Z. D sues S. Can D claim her right to Z’s
property?
If it is proved that Z had notice of D’s charge over the property, then yes. If D fails to prove
notice (actual/ constructive), then she cannot claim right to the property. Z would be under no
obligation to pay 20k to D. Property will be free of encumbrances/ liabilities. Fact is binding
on Z if notice was there.
Illustration 2:
A enters into contract of sale with B. A enters into contract with C. Contract 1 isn’t executed;
Contract 2 is.
Now, B can i) sue A for breach of contract, or ii) can sue C.
Can B follow the property?
1st possibility- C had notice of the fact that A contracted with B. If so, B can follow the
property.
2nd possibility- C did not have notice. Here, the property will be free of liabilities.
In both cases, two seemingly innocent parties are trying to claim rights against each other.
Doctrine of notice finds mention in Sections 40, 41, 51, 53, 43A of TPA.
 Actual Notice should be based on
i) Definite information/ fact.
ii) Knowledge of parties interested in transaction is relevant.
iii) Knowledge must be with regard to transfer/ transaction in question.
There are five instances of Constructive Notice in S. 3(7) of TPA:
i) When person wilfully abstains from enquiry/ search that he ought to have made. If
he hasn’t done this, the knowledge is still binding on him, even in case he did not
in fact have actual knowledge.
ii) Gross negligence- had the person not been grossly negligent, he would have
knowledge. “Gross” here is very important. Man of ordinary prudence will not
commit this degree of negligence.
In wilful abstention, there is want of bona-fide. There is a bad intention involved.
In gross negligence, there is no bad intention.
Consequences of both are the same.
Say there is a lease between A and B. A is lessor and B is lessee.
A sends something to B. B purposely avoids reading the contents of the letter. B here had
reason to enquire and wilfully abstained from the same. Thus, law presumes knowledge/
notice of the content or information of the letter. B cannot escape liability.
Actual knowledge of deed= Constructive knowledge of contents of the deed.
Say B1, B2 (brothers) inherited property and partitioned it. Partition deed provides that B1
and B2 will have pre-emption over each other’s shares. This transaction is not under TPA.
But then, B2 intends to sell his share to Z. Can B1 exercise pre-emption over property that is
now with Z?
Yes, if Z had notice of the pre-emption. If sale deed mentioned partition, then onus was on Z
to enquire further. Actual knowledge of partition deed would be equal to constructive
knowledge of its contents.
Lloyd’s Bank v. PF Gulzar and Co.
…
iii) Registration
Is registration notice?
From 1908 (Registration Act) to 1929, different HCs took different positions.
Post-1929, this has been settled. Explanation-1 was added.
 If immovable property is transferred by way of registration, registration will be deemed to
be notice and would be binding on the subsequent transferee. It becomes notice from the
date of registration not a prior date.
If a part of the immovable property is situated in a different sub-district, Memorandum of
the instrument has to be filed, and registration acts as notice only from date of such filing.
Condition:
- It applies only to transactions that are required to be registered. (S.17 of Indian
Registration Act)
…..(see if something is to be added here)
But, if a transaction is not required to be registered, but you still get to know about it,
it serves as actual notice.
- It will only serve as notice, if registration is effected in the manner prescribed by the
Indian Registration Act.
- Memorandum must be duly entered in books under Section 51 of IRA.
- Particulars with regard to the transaction must have been correctly entered in indexes
kept under Section 55 of IRA.

iv) Explanation-II
Say if A is transferring property to C, while property is in actual possession of B. C is
acquiring it subject to B’s title in the property. If C does not go and examine who is
residing in or is in possession of the property, it will still be deemed that C had
constructive notice of B’s title. This notice is binding on C.

Dwarkanath case (Karnataka HC)

Owner agreed to sell to tenant. It did not get executed. Later, owner agreed to sell to C,
who knew about the previous agreement. Thus, C’s right was subject to… (take notes)

A agrees to sell to B. A requests to stay in the property while making alternate

accommodation arrangement. A then agreed to sell property to C by way of registered
sale deed. Here, Explanation-II won’t apply because C did not ought to know, and B was
not in actual possession of the property.
Conditions for application:
 Property should be in possession of a person other than the owner/ transferor.
 Possession must be actual, not constructive.
 Actual possessor should be in lawful occupation of the whole/ substantial part of it.

v) Explanation-III
(This is related to S. 229 of the Indian Contract Act, 1872).
If agent gets constructive notice of a fact, principal is deemed to have notice. Agent must
have received it in his capacity as agent, while carrying out the course of business pertaining
to the transaction he has been employed for, and must relate to a material fact.
Whether or not the agent relays the information to the principal is immaterial, except if he
fraudulently conceals it from the principal. For example, if agent colludes with a third-party
to conceal information from the principal.

Section 5- “Transfer of property”

Transfer of property is an act which has to be done by the transferor. Thus, the transferor sets
the process in motion (it is not an automatic process).
Transfer has to be made by a living person who is competent. Thus, it is transfer inter-vivos.
“Living person” includes company, association of individuals (whether incorporated or not).
Section 5 does not affect any law relating to companies or body of individuals.
“Conveyance”- creating a new right/ title/ interest in favour of transferee. Thus, test of
conveyance is whether the transferee had a right etc before the transaction. Only if…
(something, confirm from notes)
“Property”- has to be understood in a very wide sense. It means a thing in respect of which
we have a bundle of rights. Right to possess, own, enjoy, alienate (Absolute rights) by way of
sale, gift, exchange.
If a person deposits something as security (pledge), he only transfers right of possession, not
the full bundle of rights. This is also transfer of property, but only transfer of limited interest.
Tenant gets right to enjoy and possess. This is also transfer of partial interest. For purposes of
S. 5, you can transfer absolute or limited interests/ rights.
(S. 5-37 apply to movable and immovable property, S. 37- 53A apply only to immovable
property).
S. 5 uses “in present” and “in future” in respect of conveyancing, not property. Property
cannot be “in future”.
Side note: You cannot transfer rights in unascertained goods under Sale of Goods Act (also
known as generic goods). They must become ascertained goods (specific goods)- goods
which are identified and agreed upon. Future goods are always unascertained. Only property/
goods that are in existence can be ascertained.
If a seller enters into an agreement to manufacture 100 ceiling fans for the buyer
OR
If builder agrees to build flats and sell to the buyer for an amount
Can we say that they have been transferred?
No. These are agreements to sell. Ownership is not transferred. These are unascertained
goods/ future property. Sale is not yet effected.
Sale= Contract+ Conveyance
*S. 26 of SoGA risk of prima-facie passes with ownership. Owner has to bear the risk
associated with the property. Thus, if sale is complete, the new owner bears the risk. If only
agreement to sell is effected, the new owner does not bear the risk.
If a plot of land is in existence, but you are yet to acquire it, it is not present property for the
purposes of TPA.

 To whom is property transferred?

To one/ more living persons.
A person can only transfer property to himself in a different capacity. Example- if an owner
of property transfers to himself in his capacity as settler of a trust, that is permissible.
Family settlement and Partition
Family settlement means internal arrangement within the family which need not involve
coparceners.
Partition is not transfer of property, because it is not conveyancing. That is, no new right/
interest is created. It is just determination of an already existing right. Partition presupposes
antecedent (existing right).
The same applies to family arrangement (?- confirm once)
Ramdev Food Products v. Arvindbhai
MoU in family- held not to be transfer of property. Court usually does not interfere in family
arrangements.
Second case
Since it is not a transfer of property, partition is not subject to TPA requirements.

COMPROMISE
Parties have conflicting claims, and instead of going to court, parties enter into a
compromise.
A and B have a common courtyard. A has 60% share and B has 40%, according to a
compromise deed. This is not a transfer of property, since there is no transfer of right.
CHARGE
Say A promises to pay B 1000/- for 5 years. As security, A says a flat he owns has 10,000/-
rent and will create charge of 1000/’ in favour of B out of that.
Since B does not have right over the flat, it is not a transfer of property.
SURRENDER
When smaller interest merges into larger interest with no enlargement of larger interest.
Say if tenant gives up his interest to landlord before determination of lease, it is surrender.
But this is not transfer of property.
RELEASE
Larger interest merges with smaller interest resulting in enlargement of smaller interest.
This is a transfer of property for party with the smaller interest.
RELINQUISHMENT
If a person renounces the world, he is not the transferor/ creator of new interest for his heirs.
Thus, it is not a transfer of property.
Section 6
-Enshrines basic principles of what may be transferred.
Law prefers alienation to accumulation.
Any kind of property is transferrable (general rule) subject to exceptions:
i) Those given in TP Act
ii) Those given in other laws such as Hindu law, Muslim law, CPC etc.
Exceptions under TPA:
a) Spec- successionis
- Expectation of succession. It is not present property.
i) Chance of heir apparent succeeding to an estate
S is the heir of F. S may become the heir of F. During the lifetime of F, S is only the heir-
apparent. If S dies before F, he cannot become the heir.
Conditions-
1) S should survive F
2) F should not have transferred or willed the property to someone else.
ii) Chance of a relation obtaining a legacy on death of kinsman/ testator
Say A writes a will in favour of B. Chance of succession is still a “chance.” A mere chance of
succession under will cannot be transferred. If B, during A’s lifetime, transfers 50% of the
property to Z, and Z and A have a dispute. They go to court. Court will have to determine
whether property is transferrable. Since it was not, the transfer is void-ab-initio.
iii) Any other mere possibility of like nature (includes right to future offering)
A buys a lottery ticket, and transfers 50% of what he stands to win. If dispute goes to court, it
will not be enforced, since this was transfer of a mere possibility, which cannot be done.
b) Right of re-entry
Say a property, while being transferred, is subject to negative covenants (list of don’ts).
Example- a lease. If any of the conditions are violated, lessor gets right of re-entry. A mere
right of re-entry cannot be transferred.
Say in the above example lessor agrees with Z to transfer his right of re-entry if lessee (B)
violates a condition. OR
During 3rd year of the lease, A transfers to Z right of ownership/ mortgage. Subsequently, B
violated a covenant. Here, Z can resume right of re-entry, since this is not a transfer of a mere
right of re-entry, which would have been prohibited by S. 6 (6).
c) Easement
Owner of immovable property (A) is dominant owner and immovable property is dominant
heritage.
For beneficial enjoyment of his own property, he has right over another’s property. This right
is called easement.
The other property is servient property.
Example of easement- Right of way.
Purpose- without this, dominant owner will not be able to enjoy his dominant heritage.
Easement cannot be separated from the dominant heritage.
Easement can only be transferred along with the dominant heritage. If dominant heritage is
transferred (lease, sale, gift etc), easement is also transferred with it, regardless of duration.
d) Restricted interest
Interest restricted in enjoyment to ownership. Only owner can exercise such interest. Such
interest cannot be transferred to another person. Example- religious offices like muthiwali,
certain priests etc.
e) Mere right to sue
Further classified into:
1) Right to sue for liquidated damages/ fixed amount of money (actionable claim and
thus transferrable)
2) Right to sue for unliquidated damages (not actionable and cannot be transferred)
Mere right to sue only includes the latter.
If a contract does not have a clause for unliquidated damages and it is mere right to sue, it
cannot be transferred. But, if it more than a mere right to sue, it can be transferred. Example-
if there is a right to sue wr.t a property, but later property is transferred to a third party, it is
more than a mere right to sue and can be transferred.
Mesne profits mere right to claim mesne profits cannot be transferred. Once claim becomes
a decree, it is property and this is transferrable.
f) Public office/ salary of public officer
Such transfer will be against public policy. Public officer possesses qualifications and has
gone through a proper process of appointment/ selection.
 g) Stipends allowed to military etc and political pensions
Section 7 (add from Aniket’s notes)..

Section 8- Operation of transfer

A person transferring interest may retain part of it by expressly mentioning it, or by necessary
implication. If neither are there, principle is that all interests are transferred. Including legal
incidents.
General principle- Law prefers alienation to accumulation. Thus, restrictions on transferee
to further transfer are minimal.
Property may be transferred with or without condition (may be conditional/ unconditional)
If conditional, conditions have to pass test of reasonability. If they do not, they are invalid
conditions.
Broadly, 2 kinds of conditions:
1) Condition precedent- precedes transfer
Condition precedent is a prerequisite to the main transfer. Thus, main transfer won’t take
effect if condition precedent is not fulfilled.
Say A makes gift to B, if B marries C. The marriage is CP.
If B does not marry- refuses to marry
If B cannot marry- impossibility
If B fails to marry
Reason for non-fulfilment does not matter.

2) Condition subsequent- follows the transfer

Subsequent to transfer, transferee must fulfil such a condition. If he fails, there will be a
consequence.
A makes gift to B, and says that within a year of the gift, B must marry C. If condition is not
fulfilled by B within a year, transfer comes to an end and becomes void. There may also be
other consequences.
Therefore, there is a distinction between law’s treatment of CP and CS.
-Should the approach of law be strict or liberal when it comes to the fulfilment of both
conditions?
 Since law prefers alienation to accumulation, fulfilment of CS should be held to a stricter
standard than that of CP. (Refer S. 26 and 29)
Section 10- Condition restraining further alienation by transferee
If transferor places a CS (absolute restraint) on further transfer by transferee, such condition/
limitation is void. Thus, the transfer would be valid.
Transferee can ignore it and act in contravention of the condition.
However, if restraint is partial, condition is valid.
Note: Absolute includes substantial.
Exceptions:
i) in case of lease, if it is for the benfit of lessor/ anyone claiming under him
ii) to protect interest of women from being exploited by unscrupulous husbands etc
Some specific kinds of restraints and their respective validity:
 Restraints on transfer for a particular amount of time
Invalid, unless legitimate interest of the transferor is to be protected. Example- sale with right
to re-purchase. With such a restriction, property becomes unalienable.
 Restraint directing control over consideration/ money
A sells to B with condition that further sale must happen at a certain consideration. This is hit
by S. 10.
 Restraint wrt persons/ transferee
A sells to B and says that it can further be transferred only to a certain persons/ groups of
individuals. This is an absolute/ substantial restraint and hit by S. 10. But, if there is a
condition that says the property is to be sold to a particular community only, this is partial
restraint, and it is not hit by S. 10.
 Restraint wrt purpose/ use of property
Example- further transfer must be for religious purpose. This is invalid; hit by S. 10.
But, if a shop is transferred and there is a justified partial restraint that it must be sold/
transferred further for a community’s purposes, it is valid.

Section 12- to be read with Section 31

 Condition making interest determinable on insolvency or attempted alienation.
It is an exception to the general rule given in Section 31.
Section 31- Interest created by way of transfer, and a condition subsequent is super-
added that an uncertain event must happen/ not happen.
Example- if an uncertain event happens, the interest ceases.
The event may or may not be in control of the parties. Recall S. 31 of Indian Contract Act-
contingent contracts.
S. 31 to be read with S. 32- The event must be lawful and must not be impossible to do.
An unlawful condition subsequent will be unenforceable.
The general rule is given in S. 31.
Section 12 provides an exception.
Two types of conditions are invalid:
i. If transferee attempts to alienate property further
ii. If transferee is adjudicated insolvent.
Such conditions are void. However, it is important to remember that here, the condition is
void, not the transfer; it does not interfere with the rights of the transferee. The transfer
remains valid.
Object behind S. 12:
Right of alienation cannot be fettered so easily. Transferee’s rights are protected.
Also, to protect interest of creditors. Example- say a property is sold, and a condition of
insolvency is made. Such condition will be invalid.
Say transferee needs money and a loan is taken with the property as security. So, the creditor
can always realise the loan amount by way of the property. Such a condition in the sale deed
would curtail creditor’s rights as well.

Exception to S.12 (Exception to exception)- While letting a property, lessor can put a
condition as mentioned above. Here, such condition would be valid.
Section 11- Restriction repugnant to interest created.
A transfers property to B and puts a direction that the interest created has to be enjoyed in a
particular manner, such direction is void.
But, this provision only applies when interest is transferred absolutely ie.- when the entire
bundle of rights is transferred, like sale or gift.
S. 11 has to be read with S. 40.
Object of S. 11- when you transfer absolute ownership, you cannot restrict the transferee
from using it in a particular manner/ enjoy it in some specific way.
Generally such conditions are void.
Exception: If one part of immovable property is transferred, and retains another part of the
same property, transferor can put a condition on use of the part that he is transferring, with a
view to avoid restriction of enjoyment of transferor’s interest.
Distinction between general principle of S. 11 and Exception under S. 11:
In the exception, transferor retains a part of the property. No such retention in case of a
transfer under the general principle.
Section 40 read with Section 11
A third-person, even if he does not have interest in the property, for more beneficial
enjoyment of his own immovable property, can impose restriction which will apply to
transferee and subsequent transferee.
Conditions for application to subsequent transferees:
1) Subsequent transfer should be for consideration/ value.
2) Subsequent transferee should have notice of the restriction.
If ST is a gratuitous transferee, he/ she may not be given notice of the restriction and it will
still be enforceable.
Notice can be actual or constructive.
COVENANTS
Covenants running with the land are an exception to Privity of contract (according to which
only parties can enforce against each other).
If benefit arising out of contract is annexed to ownership of immovable property, it can apply
to subsequent transferees (subject to the two aforementioned conditions).
Example- B says that he will ensure that whenever he builds on his land, he will leave 2/3
feet idle. This will extend to subsequent transferees subject to the specified conditions.
Covenants are an undertaking to do/ not to do something.
A puts a condition on B. Here, A is the covenantee and B is the covenantor.
Positive and Negative Covenants
1) Positive Covenants
Require party against whom it is to be enforced to do something. Requires some financial
expenditure on part of said party.
2) Negative Covenants
Require party not to do something. No expenditure required.
Section 11 includes both Positive and Negative covenants which are binding on parties to the
contract.
Unlike positive covenants, negative covenants run with land, provided subsequent transferee
has notice.
Zoroastrian Cooperative Housing Ltd. V. District Registrar Cooperative Societies (2005)
Around 1926, Bombay Coop Societies Act applied to Gujarat.
A group of people bought land and made by-laws for making a cooperative society, in line
with the Act.
By-laws placed a restriction on members that property could only be transferred to Parsis.
One person wanted to build a common space and sell it to a non-Parsi association.
Other members took objection and filed a case against him.
It reached the HC, which said that the condition was void (since it was solely based on
religion), and hit by S. 10.
*relevant Consti provisions- Articles 19 (1)(c), 15, 21.
With regard to Section 10, the Supreme Court held the condition to be a partial restraint and
hence valid. Injunction was obtained against the member.
Tulk v. Moxhay (1843)
A transferred ornamental garden to B, but restrained part of the property. There were
conditions with regard to maintenance of the garden.
After many subsequent transfers (B to C, C to D, D to E and so on), it reached Z.
Z knew of the condition but wanted to change some things in the garden.
Court had to decide validity of the covenant and its applicability. It was held to be negative. Z
had knowledge as well. Thus, the condition was enforceable against Z.
Difference between S. 10 and S. 11
S. 10- restriction on alienation. Absolute- Void; Partial- Valid
S.11- restriction on use/ enjoyment. Absolute- Void
**Take notes for 28/01/20
Section 13- Transfer of property for benefit of unborn person
To be read with S. 20 (upon birth, a person acquires interest)
Ways to give interest to unborn-
1) Create prior life interest before property goes to unborn
2) Transfer absolute interest
Unborn should take birth before cessation of life interest.
A transfers to B for life, who transfers to C for life, and then to unborn. This is a valid
transfers.
Example 1: In 1990, A transfers to B for life. 1st life interest (B) comes to an end in 2000 (B
dies). C dies in 2005 and unborn is born in 1998. As per S. 20, unborn acquires interest upon
birth. But since there are prior life interests, he cannot enjoy it upon his birth.
Unborn will enjoy, use etc in 2005, that is, after cessation of prior life interest.
“for life” means some part is retained and that part is vested in the unborn. Whole interest is
only enjoyed by the unborn after 2005 after cessation of prior life interest.
Example 2: Transfer from A to B to C (who is unborn). Years are same as above. Unborn
takes birth in 2008 though.
According to S. 20, he will acquire vested interest upon birth. What happens to the property?
Since birth doesn’t happen before cessation of prior life interest, no interest is vested in the
unborn, and property will revert to A, the original transferor.
Example 3: A to B to C (same years and unborn takes birth in 1998). Unborn dies in 1999.
What happens to the transfer?
Property will devolve to heirs of the child. Right to use and enjoy will go to heirs only in
2005, when C dies.
S.20 mentions “unless a contrary intention appears.” So, transferor can shift, through
stipulation in deed, time on which interest is vested.
*Right of enjoyment can also be changed, but within a limit.
Example 4: A to B to C and then to unborn. B dies in 2000, and C dies in 1999. Transfer
made in 1990, and unborn is born in 1998. Here, unborn’s vested interest is acquired in 1998.
Girjesh Dutt v. Data Din (1934)
A transferred property to B for life and a stipulation was made- that after B, two male
descendants get absolute interest. If no males, then to daughter of B without power of
alienation.
If B dies without issue, then to Z absolutely. B died without issue. Z claimed entitlement to
the property.
(S. 16 is relevant- if previous transaction fails, this transaction also fails).
In this case, transfer to B’s daughter fails because it is hit by S. 13 (the transfer is of limited
interest). Thus, the previous transaction to Z also fails. It is hit by S. 16.
Transfer was only valid till the transfer if property to B’s male descendants, since it is
absolute in nature.
English law allows transfer of limited interest to first unborn child. But Indian law only
allows transfer of absolute interest.
Add notes for 31/01/20.
***Exceptions to S.14- S. 15, S. 16, S.17, S.18
Section 18- Transfer in perpetuity for benefit of public
Restrictions in Sections 14, 16, 17 don’t apply if a transfer is made for benefit of public
(religion, knowledge etc.) or any other object beneficial to mankind.
Even though it violates said Sections, transfer is valid in such cases.
Randomly mentioned: by itself, entering into mere contract is not transfer of property. Thus,
rule against perpetuity does not apply.
Ram Baran Prasad v. Ram Mohit Hazra (1967)
Two brothers A and B partitioned property and conferred pre-emption on each other (1st offer
of sale must be to each other). A offered B, then sold to C. B sold to D. C sold to X (A to C to
X).
D sold to Y (B to D to Y).
X said that when Y got the property, he had knowledge of right of pre-emption and hence X
claimed the property. D and Y contended that this type of right is hit by S. 14. Trial Court
decided that the right of pre-emption was binding on D and Y and it is not hit by Section 14.
Current position S. 14 does not apply to right of pre-emption and personal arrangements.
Section 14 also does not apply to charge, since it is not transfer of property.
***Always read Section 14 with S. 114, and S. 13 with S. 113***
Section 16- If prior interest fails, subsequent interest dependent on prior interest also
fails.
“intended to take effect after/ upon failure of such interest”
Take this for example:
Property transferred from A to B to C. So, transfer to C is to take place after/ upon failure of
transfer to B.
If A to B fails, property reverts back to A.
Failure of interest should be by reason of S. 13 or S. 14.
1) Property transferred by A to B for life and then to C (unborn), absolutely
2) Property transferred by A to B for life (B is unborn) and then to C absolutely
In the second situation, C will not receive interest in the property because transfer from A to
B fails (it is void).
3) Property transferred by A to B for life and then to C (who is unborn), when he turns
21, and if he fails to attain the age of 21, then property goes to D.
If B dies childless, will D get the property?
B to C upon 21 is hit by S. 14 (beyond permissible limit of the provision). This fails and
hence D’s interest also fails.
***Under English law, permissible limit is life interest + 21 years. Condition is not related to
majority/ minority.
Even if condition says 25, it is substituted by 21 due to Doctrine of Cypress. Transfer will not
become void, unlike in India.
Section 15- Transfer to class of persons, some of whom come under Sections 13 and 14.
When transfer is made to a class of persons.
Say there is a class of 4 members (simultaneous, not one after another).
A to B for life and then to all unborn children of B. If A to B is hit by S. 13 or S. 14,
subsequent transfer is hit by S. 16.
Say B has 4 children. Stipulation is that the first child gets the property at 22 years of age,
second child has life interest and the rest are to get the property absolutely.
Condition involving first child- hit by Section 14
Condition involving second child- hit by Section 13
Condition involving the rest of the children- valid due to Section 15.
Pre-1929, transfer would have failed for all children, because Section 15 had not been
amended yet. Now, transfer is valid for the third and fourth children.
Note: Refer to Section 115 of the Indian Succession Act, 1925.
Section 17- Direction for accumulation
Elementary difference between Sections 17 and 14 is that while S. 14 is only for absolute
interest and for use and enjoyment of property, S. 17 is for accumulation and not for absolute
interest.
S. 17 is a prima-facie exception to S. 11.
Property is transferred from A to B and there is a direction that income from the property is
accumulated.
But such accumulation can only be during life of the transferor, or 18 years from the date of
transfer, whichever is longer of the two.
If it mentions 20 years, accumulation can only happen till 18 years from the date of transfer.
There are three exceptions to this:
a) Payment of debt
b) Raising portions
c) Preservation of property
If direction is made for any of these three, such direction will be valid regardless of duration.

Section 19- Vested Interest

Transfers classified based on quantum- Absolute and Partial
Another way of classification- when does interest vest?
i) Vested Interest
Transfer is not completed immediately. It is complete when transferee’s interest vests
eventually and he/ she receives title.
Vested interest is received subsequent to transfer unless there is a contrary intention.
ii) Contingent Interest
In contingent transfer, transferee gets interest upon the happening/ non-happening of an
event.
Illustration 1: A transfers to B. No time fixed for transfer to take effect (no contrary
intention). So, it is presumed that interest is to pass immediately.
Illustration 2: A transfers to B and transfer will take effect forthwith. This is more explicit-
transfer to take effect immediately. This is a vested interest (don’t entirely understand this
example)
Illustration 3: Transfer to happen on happening of event of a ‘must’ / certain nature.
A transfers fund payable to B on 10th February. So, the vested interest is transferred
immediately. 10th February is an event of must nature. Say if B dies on 8th February, it will
devolve upon his legal heirs on 10th February.
Vested interest is not defeated by death of transferee before he obtains possession.

1) If enjoyment is interest is postponed, interest is still vested.

2) Where a prior interest is reserved for some other person, interest is still vested.
Example- A transfers to B for life and then to C (living at the time). Looking at
Section 20, interest is vested.
3) Income arising from the property is directed to be accumulated, then too interest is
vested immediately upon transfer (similar to Section 17)
4) Conditional limitation (similar to Section 28) if a condition is superadded when A
makes gift to B, and says that if B doesn’t travel to a foreign country within a year,
interest shall pass to another person. Interest is vested immediately upon transfer. This
is a condition subsequent for B and a condition precedent for C (also, vested interest
for B and contingent interest for C).
Section 21- Contingent Interest
Interest in favour of B is created, but is to take effect only on happening/ non-happening of an
uncertain event. It becomes vested upon happening of the event, and if it does not happen, it
ceases. A gifts property to B, provided that B marries in a year. If it happens, it is vested
interest. If it does not happen, it ceases.
If event becomes impossible, contingent interest dies with him and it will not devolve upon
his legal heirs. This is a condition precedent.
Vested interest is immediate right of present enjoyment or present right of future enjoyment.
Nature could be either of these. It is a fixed interest.
Nature of Contingent Interest- future possible right/ possibility. It will take effect in the
future, dependent on a contingency.
Vested Interest Contingent Interest
Title is complete and perfect Title is incomplete and imperfect
Accrues at the time of transfer Accrues only upon the happening/ non-
happening of an event
Nature of vested interest is transferable and Nature of contingent interest is transferable
heritable but not heritable
It can be attached (See S. 60 of CPC). That It cannot be attached
is, it can be sold in the execution of a
decree.

A transfers fund to B, payable on 10th March. This is present interest, enjoyable in the future.
Thus, it is a vested interest.
A transfers fun to B, provided B survives C. This is a contingent interest.
Here, if B survives C, the interest becomes vested.
Difference between Contingent Interest and Section 6 (a) of TPA (spec successionis)
Both are future possible interests, but contingent interest is transferrable.
For contingent interest, there are just two possibilities- happening and non- happening.
In cases under S. 6(a), there are various possibilities. For example- the heir-apparent must
survive the prepositus, there must not be a will made etc.
In contingent interest, transferee does not get more interest than transferor.
Rajesh Kanta Roy v. Shanti Debi (1957)
Father had three sons. He executed a trust with these conditions for termination- i) death of
settler, and ii) discharge of debt.
S1 (Rajesh) was made trustee. Father thought of different situations.
During the continuation of trust, father, S1, and S2 were to receive some amount from the
trust property.
If S1 and S2 died, their legal heirs were to inherit, and after termination of the trust, heirs
would get the trust property.
S3 died before the trust was made. He had a widow (Shanti Devi). There were some disputes
in the family and that is why S3 did not get any rights.
There was a compromise which Shanti Devi could enforce as decree of the court. She wanted
to do so in respect of the trust property. She could only do so if the interest was a vested
interest, and not if it was a contingent interest.
Supreme Court had to decide nature of the interest. Approach of the court in construing the
deed should be with a bias towards the possibility of the interest being vested, unless a
contrary intention appears. Law prefers vesting to divesting (we can substantiate this with
reference to S. 26 and S. 29).
In this case, there was an element of devolution. The interest was vested in title and
postponed in enjoyment. It was a present right for future enjoyment. Since heritability is
present, it was a vested interest.
Kokilambal v. N. Raman (2005)
There was a husband-wife pair who was childless. They had great affection for the husband’s
sister’s son and wanted to adopt him. But the husband died. The wife executed a settlement
deed through which she reserved rights for herself and gave some to V (nephew). These
rights included right to rent, surplus after repairs etc. W could also alienate the property along
with V. V also died while W was alive.
W revoked the settlement and executed another, in favour of the wife’s brother’s daughter
(niece) and the niece’s husband. V’s brother challenged this, saying it is not proper and that
as legal heir, the property belonged to him.
For this, it had to be proved that V had vested interest.
The Trial Court and High Court decided it was vested interest, while the Supreme Court
decided it was contingent interest.
Exception to Section 21- A transfers property to B, who will enjoy it if he turns 10, and
absolute right to income arising in that time is also given to B.
(Add notes for 07/02/20)
Section 28- Ulterior transfer on happening/ non-happening of specified event
This is an example of conditional limitation. It is similar to the 4th case under Section 19.
A transfers property to B. If specified uncertain event happens or does not happen, interest
will go to C.
Here, there is a condition subsequent for B, and condition precedent for C. It is a rule of
defisance.
Upon happening of the event, interest divests from one and vests in another.
Section 27- Conditional Transfer
Prior disposition Transfer by A to B
Ulterior disposition Transfer by B to C
If prior disposition fails, ulterior disposition takes place. This is also called the Rule of
Acceleration.
If A  B is hit by S. 14, and ulterior disposition is to C, what happens to transfer is favour of
C?
Ulterior disposition fails because S. 16 prevails in this case. S. 27 will not apply at all.
S. 27 applies when prior disposition is otherwise valid.
Say there is transfer by A to B in the form of lease. B is to execute it within 6 months. If B
fails, the ulterior disposition in favour of C will take effect.
If in the first month, B dies, then ulterior disposition takes place. It gets accelerated. C need
not wait for 6 months to receive the property.
If the intention is such that ulterior disposition takes effect only if prior disposition fails in a
particular manner, ulterior disposition shall not take effect unless prior disposition fails in that
particular manner.
A transfers to B subject to a condition that B survives C. If B does not survive C, then
property goes to D. B dies during the lifetime of C. Ulterior disposition in favour of D takes
effect.
B and C travel together and die. Here, it is difficult to prove who died first. Since it has not
happened in the manner prescribed by A, ulterior disposition will not take effect.
 If prior disposition is impossible, ulterior disposition is invalid.
But, according to Section 30, ulterior disposition can be invalid and prior disposition’s
validity will not be affected.
Transfer by B to C based on a condition which is invalid. Here, transfer from A to B will still
be valid, since it is not affected by the ulterior disposition as per Section 30. The transfer will
be valid up to when the property reaches B.
Section 33
A transfers to B on a condition. B makes it impossible, or postpones fulfilment of the
condition. Here, condition is broken by B.
Condition: B is to join employment. The employer deems only unmarried people eligible. B
is to get property only upon joining it. B gets married. It makes fulfilment of the condition
impossible. Thus, the condition is broken.
If it is a condition precedent, then there is no transfer to B.
Section 34
It applies to both- Conditions precedent and conditions subsequent.
1) Transfer by A to B on a condition precedent’s fulfilment
2) Transfer by A to B. It takes effect. If B fails to fulfil a condition, it goes to C.
Say B completes it within six months. In 1), a legal heir would directly benefit from its non-
fulfilment, and in 2), C will.
If such person prevents/ causes delay (of say 2 months), justice will be done if B is given
time to make up for the loss (as per S. 34 of TPA). Here, B would ideally get 2 additional
months for the same.
If B fails even then, in 1), transfer will not take effect in favour of B.
In 2), B will be divested of interest, and C will be vested with interest in the property.
Second part of S. 34:
If no time is specified (say condition is that B joins public service), then:
If B is confined by a directly- benefitting party, the condition is deemed to have been fulfilled
as against the person who has directly benefitted.
Transfer by A to B. If B fails, then to C (no time specified).
If C causes delay or impossibility, the condition is deemed fulfilled as against C. This means
that for C, B has fulfilled the condition and the property remains with B.
DOCTRINE OF ELECTION
Section 35
Incorporates principle based on equity.
A person who is not the owner of a property, can still make arrangement to transfer the
property.
Use the word “profess”- because such person cannot actually make transfer.
C is the owner of a property. It is purported/ professed to be transferred by A to B.
Value of the property- 1 lakh.
By the same transaction, A confers some benefit to C. Here, law gives C a right- he can either
elect to confirm or dissent from the transaction.
First possibility- C confirms the transaction. Then, B becomes the owner and his title cannot
be challenged because A did not have power to transfer.
Second possibility- C dissents from the transaction. Then, C has to relinquish/ forego the
benefits. C retains his property.
A is the transferor. C is the elector-owner (owner put to election).
C cannot retain both the benefits.
In confirmation- he accepts the benefit
In dissent- he retains property and foregoes the benefit
Choice is between inconsistent, alternative options/ rights.
Both must be in the same transaction. But they need not be by the same instrument.
One cannot take under and against the same right.
One cannot blow hot and cold at the same time.
Note: Section 35 applies to movable property, immovable property, all deeds, wills etc. It is a
general principle/ provision.
Doctrine of election revolves around the owner.
Election must be done within reasonable time. If you are silent, then after two years, it is
assumed that you have accepted the benefit.
Transferor can determine time in which the owner must elect.
If owner dissents, benefits revert to the transferor.
B (transferee) has recourse in this situation. He needs to be compensated by A. Value of
compensation= value of the property which was to be transferred.
This has to be done in all cases, where transfer is for consideration.
In case of gratuitous transfer, say A dies before C elects. The representatives of A must
compensate B.
- Knowledge/ intention with which A transfers is irrelevant for Section 35. It does not matter
if A thinks he is the actual owner or not.
- Election which C is put to between property and benefit is only when they are in lieu of
each other (direct benefit).
If C has indirect benefit- say A instead of giving first to C, gives it to C’s spouse. Here C
cannot be put to election.
-Elector-owner (C) may receive benefit in one capacity and dissent in another capacity.
Example- guardian and owner, trustee and owner etc. In the said case, C cannot be put to
election. Election only applies when C does these in the same capacity.
Ramayyar Mahalaxmi v.
A lady had limited interest over property P. She gifted the property to X. Then she made a
will and transferred all the properties except P to B. B wanted the gifted property and
disputed the transfer. Could B be put to election?
There were two transactions here (will and gift deed). Thus, there was no question of election
and B could retain the property under the will.
Mohd Afsal v. Ghulam Kasim
Nawab of town Tank had two sons (S1 and S2). He transferred two vilages to S2. After death
of Nawab, Nawabship was transferred by government to S1 (eldest son) by some instrument.
By the same instrument, some allowance of Nawab was given to S2. S2 cannot be put to
election, because there are two different transactions. S2 received benefit from two different
sources.
Point to remember: By the same transaction, if C is to receive benefits other than in lieu of
the property, he may retain them. No election is needed.
If C expressly accepts/ dissents, consequence is clear. Where transfer is gratuitous, and before
C elects, A dies or is no longer in position to make a transfer, B must be compensated. If C
does not do anything, law presumes acceptance in certain cases:
-C accepts benefit with knowledge that he is under duty to elect/ circumstances are such that
it would affect decision-making of any reasonable man.
Say C receives benefit of 1,20,000 (different from acceptance, see Section 42 of SoGA) and
pays some out of this to a creditor. This means he has accepted. It is treated as a waiver of
right to enquire. Transaction is confirmed.
- Say C receives benefit and for two years, does not dissent.
- C does not do an act, effect of which is that people affected by or interested in the property
cannot be restored to pre- act position. Thus, the act amounts to acceptance. Say benefit is a
mine and mine is extracted. It would be impossible to restore an interested/ affected party to
their pre-act position.
Something about substitute gift (check with Aniket)
If B dies after C dissents, representatives can claim compensation. The right devolves.
*Within two years, we have to adjust for duration for which C was disabled, as long as
disability continues. Example- mental condition during second year (all of second year).
Here, period will be- 1st year+ 3rd year. However, is there is a competent authority for the
purpose, they can accept on C’s behalf.
 On 01/01/2018, professed transfer is made. No election by the time one year has passed.
The representative of A can request C to elect within reasonable time (say till 10/02/2019). If
C does not do anything till 11/02/2019, it is presumed that C has accepted.
Under English law, if C dissents, he/ she becomes Refractory/ Rebullians done.
He need not relinquish benefit (can retain both property and benefit). But, unlike Indian law,
C has to compensate, not A (transferor).
How you confer benefit is dependent on construction of the deed.
By sale deed, property is transferred to B. Deed says that in lieu of property, 1.5 lakh
(benefit) is given to C. Also, A transfers a piece of land to C, which belonged to A. Here, C
can retain A’s property. One of two benefits can be retained, since it is not in lieu of the
property.
APPORTIONMENT
Section 36- Apportionment by time
Section 37- Apportionment by state
Apportionment refers to distribution of asset/ property in a certain proportion.
A sells property to B. So, A transfers all legal incidents also (see S. 8 of TPA). Sometimes,
the property may yield incomes/ periodical instalments).
How should this income be distributed?
Say tenant pays 30,000 per month. Property is sold by A to B. The contract may provide for
distribution. Even local usage may apply for distribution.
If neither of the above two is present/ applicable, Section 36 applies.
Rule as per S. 36:
Income to apportioned between A and B on day-to-day basis. If transfer takes place on 10/04,
rent from 01/04 to 10/04 will be received by the transferor. 10/-4- 30/04 will go to the
transferee B. None of this affects the tenant who has a duty to keep paying rent on time.
(Add notes for first class of 14/02)
Section 41- Transfer by Ostensible Owner
Property is transferred by ostensible owner. Under some circumstances, real owner cannot
dispute the transfer.
Ostensible owner is an apparent owner. He/ she is held out to the world as the owner of a
property.
Where property is bought in one person’s name, and consideration is paid by someone else,
this is a Benami transaction and is different from the kinds of transactions governed by S. 41.
This subtle distinction has been misused in the past. Thus, the Law Commission of India
recommended changes. In 1988, the Benami Transactions Act was passed.
Section 42 is subject to the Benami Transactions Act.
Benami transactions are governed by BTA, not S. 41. Those transactions falling outside BTA
are under S. 41.
So, post-1988, scope of S. 42 has been narrowed.
Motivation for Benami transactions:
i) Tax evasion
ii) Money-laundering
and other similar schemes.
BTA was amended in 2016 to improve its effectiveness. Its current name is Benami Property
Transactions Act.
Earlier, it consisted of 7 Sections. Now, it consists of 71 Sections.
Entering into Benami transactions is an offence which carries rigorous punishment of up to 7
years. Benami transactions- property is held in another person’s name.
Benamidar- in whose name the property is bought. Definition has been expanded.
Exceptions include:
 Holding property as karta
 Person with fiduciary relationship with others for their benefit
 Brother, wife etc (close relatives)
(Please refer to slides for this, there were tons of points regarding Benami transactions in
general and he was running at an insurmountable speed)
Section 41- if ostensible owner has become ostensible owner by valid consent (see S. 14 of
Indian Contract Act, 1872) of real owner and ostensible owner transfers property to B.
B acts in good faith and ensures that ostensible owner has power to transfer (essentially, a
situation where ostensible owner doesn’t know that he is not the real owner).
Then, real owner cannot later dispute the transfer and its validity.
How to determine who is ostensible owner?
Jayapal v. ___ Hazra
Ostensible owner has all indication of ownership for the outside world.
Relevant factors:
 Who provided consideration
 Who is in possession of property
 Who is in possession of title
 Conduct of parties after transfer
(Again, please refer to slides for this)
Based on S. 115 of Indian Evidence Act, it is presumed that real owner gave consent.
This is an example of conflict of rights.
Say A owns property (he is the real owner). He allows B to manage it and projects B as
owner to the world. B’s name is mentioned in revenue records.
B transfers to C, who is a bona-fide transferee for consideration.
Does C had protection of S. 41?
Yes.
Rule of S. 41 is based on Ramkumar Coondoo v. Macqueen (1872). The case was decided
much before the enactment of TPA.
Facts:
Alexander had a mistress- Kunnu Bibi. He bought a property in her name. She managed the
property. Money was provided by Alexander. Kunnu Bibi sold property to C. Ramkumar
Coondoo was son of C. Kunnu Bibi died. Her daughter Macqueen (Alexander and Kunnu
Bibi’s daughter challenged transfer to C, after Alexander had also died.
She claimed that since Alexander had left a will, she was entitled to the property. It was just
held in the name of Kunnu Bibi, while real owner was Alexander, and thus the transfer was
valid.
Calcutta High Court decided that Kunnu Bibi was owner for purposes of transfer.
Case went to Privy Council, which decided that while Alexander provided money, Kunnu
Bibi was represented as owner and she had control and management of the property. Transfer
to C was held to be valid.
Shafiqullah v. Samiullah (1929)
After the death of father F, property came in possession of an illegitimate child, whose name
was also mutated into revenue records. Thus, property was in his control. Then the real heir
of F brought a suit claiming it as his property.
Illegitimate child mortgaged the property to M. Question was regarding validity of the
mortgage.
The illegitimate son did not have consent of the real owner. Also, transfer happened after the
suit was brought.
Court said that the mortgagee could not take benefit of S. 41.
Additionally, the suit served as notice to the mortgagee. So, the transaction was not in good
faith.
Section 42
Benefit under Section 42 is available also to subsequent transferees/
Property transferred by A to B and A reserves the right of revoking the transfer subject to a
condition.
If A then makes a transfer in favour of C, this transfer serves as revocation of first transfer,
provided it is for consideration.
Conflict is between B and C.
Say first transfer was lease, that could be terminated at instance of A or subject to a condition
that if property is used to its detriment or is damaged (to the satisfaction of R, who is
qualified to examine and pass a verdict regarding whether or not the condition has been
violated) and A receives certification from R, and A leases to C, the first lease is deemed to
have been revoked.
Section 43- Transfer by unauthorised person who subsequently acquires interest in property
transferred.
“professes to transfer”- purporting to transfer to another
A does not have authority to transfer, but still transfers to B for consideration.
Subsequently, A does acquire interest in the property. Section 43 says that if contract is not
rescinded, A must transfer property to B.
It is based on principles of equity. It regards that as done that ought to be done.
If a person promises to do more than he is capable of doing, law compels him to do it when
he becomes so capable.
The provision is based on “feeding the grant”. A contracts with B to transfer property
(interest is granted). Subsequently, A gets authority to grant this interest. So, A feeds the
grant by estoppel in this situation.
Note: Section 43 does not apply to gratuitous transfers.
A- Transferor- professes to transfer and enters into contract for consideration. The transferee
relies on this representation and believes it to be true.
If transferee knows from the beginning that transferor could not transfer, S. 43 does not
apply. Misrepresentation must actually mislead the transferee.
In the Dharmadas Ghose case, it was held that there is no estoppel if truth is known to
parties to the contract.
Situations where S. 43 is applicable:
1) Transferor from the beginning has no title but contracts to transfer property anyway.
2) Transferor has limited interest (life interest). Property is transferred by A to b for life
and then to C absolutely. B cannot alienate the property. Here, Section 43 can apply.
3) Transferor’s interest/ title is imperfect (but curable). Title is essentially defective. But,
court has decided eventually that the title has now become perfect. Here too, S. 43
applies.
** Section 43 does not apply where transfer/ agreement is void from the beginning (on
account of being opposed to public policy, contrary to law etc)
Say a 15 year old represents that he is an adult and enter into contract of transfer of property.
Subsequently, he acquires interest on account of majority. He cannot claim protection of S.
43 since agreement was void from the beginning.
It is also important to note that for purposes of S. 43, misrepresentation is with regard to title/
authority, not capacity to transfer.
The words “fraudulently or” were inserted in 1929. Earlier, only “erroneously” (wrongful
belief).
Now, it could be with/ without intention. S. 43 applies to both. Neither of these is a defence.
Representation can be written/ oral and express/ implied.
Contracts under S. 43 are voidable.
Transferee has options. Refer S. 75 of Indian Contract Act for the same.
Transferee can rescind the contract (different from repudiation) and claim compensation.
Subsequently, the transferor acquires interest in the property. Now, what option does the
transferee have?
If contract is rescinded already, S.43 will not apply. Contract is “unmade”.
If contract is subsisting, S. 43 will apply.
Narayan Chandra v. Dipali Mukherjee (2002)
Contract of transfer. Transferee knew that transferor did not have title, bit subsequently he
got title. Later, S. 43 could not be invoked by the transferee.
Rustom Ali v. Abdul Jabbar (1923)
There was a Muslim couple (husband and wife). Husband had obligation to pay dower to the
wife. Husband agreed to transfer property to wife, which belonged to husband’s sister.
Husband’s sister, however, sold it to R. Subsequently, husband bough the property from R.
Wife wanted to enforce dower agreement. She could claim benefit of Section 43.
Illustration:
Say father and son have an arrangement concerning two properties (P1 and P2). P2 is retained
and P1 is given to the son. S professes to transfer both properties to B.
P1- no doubt with regard to ownership
P2- son could not transfer.
Subsequently, father died and son got P2 as legal heir. Now, B wants to invoke S. 43.
It can be done.
 Application of S. 43 is personal in character, meaning it is enforceable against transferor
only.
Situation 1: Property transferred by A to B (all conditions of S. 43 fulfilled). After death of
A’s father (to whom it belonged), it was found that property had been willed to A’s wife or
A’s son. Can B enforce transfer in his favour?
No, because A’s father and others are strangers to the contract. S. 43 can only be enforced
against the transferor.
Situation 2: Y promises to transfer P1, P2 and P3. P3 belonged to someone else. After this,
Y gets and equivalent property to P3 (P4). Could the transferee enforce the contract against
P4?
No, because S. 43 is personal in nature. It can only be enforced against the very property
professed to be transferred.
In Situation 1, transferee can rescind the contract and claim damages. But, rescission has
limitations, for example- it must happen within reasonable time (see S. 27 of the Specific
Relief Act).
S. 43, Para 2
A- transferor
B- transferee who is misled by A.
There is a distinction between Indian and English law on this point. Under the latter, as soon
as the transferor gets the right, the interest that A wanted to pass, gets passed. So, B need not
exercise their option. It automatically comes to B. Example- on 1st January, transfer takes
place. On 15th January, transferor gets the right and this is automatically passed to the
transferee. No need for the transferee to claim it.
Under Indian law, B has an option, B need not compel A to enforce the transfer in his favour.
B can choose to claim damages instead.
Implication of this A got right on 15th January and B got to know about this on 20th
January. B decided to compel transfer on 25th January.
Say in the meantime, A transferred the property to X for consideration. X is a bona-fide
transferee who does not know about the existence of the option (no notice). So, even if B
wants to compel the transfer on 25th January, he is without remedy (save maybe to claim
damages).
Under English law, such a situation never arises.
Conditions for application:
1) Contract must be subsisting. This is a requirement under both Indian law and English
law.
2) Transferee must be willing to compel transfer.
3) Property should still be with transferor ( A should not have made over the property to
a third-party).
Side-note: For purposes of S. 43, cause of action (in order to calculate limitation period)
arises on the day transferee gets to know about the misrepresentation, or gets to know that
fraud was committed, whatever the case may be.
Kartar Singh v. Harbans Kaur (1994)
In 1961, Harbans Kaur executed a sale deed and transferred her property+ her son’s property.
Deed mentioned the fact that she was selling her share and minor son’s share in the capacity
of guardian to X.
In 1975, minor came of age and rescinded the contract. It was a rightful rescission. So,
property was to be given to the son. But, he died before this could happen. Thus, as Class-1
heir, the mother received the property. The buyer (X) wanted to enforce the deed against
Harbans Kaur under S. 43.
S. 43 does not directly mention a duty on part of the transferee to inquire. But, there is still a
general duty. There is a difference in degree of said duty between S. 41 and S. 43. In S.41, it
is of a higher degree and if it is not fulfilled, no benefit can accrue.
The degree is lower in S.43, but the transferee cannot claim that there is no duty at all.
In the present case, according to the court, there was a starting point of enquiry. X should
have inquired further. X knew that it was not the mother’s property. He had constructive
notice and was not misled.
Also, the contract was no longer in subsistence, since the son has rescinded it upon coming of
age.
Other than the difference in degree of duty to inquire, there is another difference between S.
41 and S. 43.
S. 41 mentions estoppel against the real owner, while S. 43 is estoppel against the transferor.
Also, the two provisions apply in different circumstances.
Jumma Masjid Mercara v. Kodimandiara
There was a Hindu Undivided Family (HUF), B1, B2 and B3 were brothers. HUF mortgaged
property to X and X was to return it after 20 years. B3 died unmarried. B1 and B2 also passed
away, and soon enough, only widows were left behind (W1 and W2). W1 also died.
Al brothers were childless. They had a sister, who had 3 grandchildren. Property was to go to
them as reversioners. While W2 was alive, G1, G2 and G3 effected a sale deed in favour of a
buyer. It did not mention that W2 was still alive. Buyer claimed possession.
W2 contested that she was still alive and inherited the property. Matter was still in the appeal
stage when W2 died. So it was now that G1, G2 and G3 actually received the property. The
buyer invoked S. 43.
At thus stage, Jumma Masjid intervened on these grounds:
 W2 during her lifetime gifted the property to Jumma Masjid (he said this point is not
relevant)
 G1 relinquished his share of the property. He transferred his share to Jumma Masjid
for a consideration of 300 rupees. It was on this that Jumma Masjid claimed the
property.
 Buyer is not entitled to the property, since this situation is hit by S. 6 (a) of TPA. It
was a mere spec-successionis, since reversioners were heirs-apparent while W2 was
alive. So the transfer is void and the transfer in favour of Jumma Masjid takes effect.
Can the ambit of S. 43 be cut by S. 6 (a)?
Can S. 43 only apply to situations falling outside the ambit of S. 6 (a)?
In the case, the buyer could claim the transfer. S. 43 cannot be cut down by S. 6 (a). it can
only be subject to exception given in Paragraph 2 of S. 43. Otherwise, S. 43 is absolute and
unqualified.
Distinction between S. 6 (a) and S. 43:
S. 6 (a) S. 43
It enacts a rule of substantive law. It enacts a rule of estoppel.
Applies to both movable and immovable Applies only to immovable property.
property.
Applies to gratuitous transfers as well as Applies only to transfers for consideration.
transfers for consideration.
When both parties know that only spec- There is a misrepresentation which is relied
successionis is being transferred. Also, the upon by the transferee. Transferee does not
transfer is void-ab-initio. know the nature. No possibility of
constructive notice. It is a voidable contract
at the option of the transferee. Under S. 43,
the transferee can compel the transfer.

JOINT OWNERSHIP
Types of Ownership:
 Joint Tenancy/ Co-tenancy
“Tenant” here means someone who has occupation/ possession. It does not refer only to
tenant in a landlord-tenant relationship.
In joint-tenancy, there is a benefit of survivorship (jus accrescendi). Say A, B and C are co-
tenants. If A dies, his share will go to the surviving co-tenants.
Under co-tenancy, there are four types of unities:
1) Unity of possession
A, B and C are entitled to every part of the house and the whole house.
2) Unity of interest
 A, B and C have the same interest in the property.
3) Unity of title
A, B and C derive title from the same instrument.
4) Unity of time
A, B and C have title from the same date/ time.

 Tenancy-in-common
Here, tenants have only unity of possession. No benefit of survivorship. They do not know
their exact share if they do not enforce partition.
 Tenancy by entirety
Husband and wife were considered one entity under English law and one could not sell
property without the consent of the other.
Section 44- Transfer by on co-owner
A joint-owner can transfer his share/ interest (fully or partially) to a transferee.
Impact of this: Transferee gets the same rights that the transferor had. Example- joint
possession, part-enjoyment, common enjoyment etc.
Liabilities also pass to the transferee. Example- if the property is mortgaged.
Transferee can also enforce partition.
Exception to S.44: An undivided family and dwelling house.
If a share is transferred to a non-family member, he will not have joint-possession or
common/ part-enjoyment. Essentially, he will not exactly be stepping into the shoes of the
transferor. However, he can still enforce partition.
Object behind this exception is to ensure peace within the household occupied by an
undivided family.