Property Law Exam Notes

(Compiled from various sources)

Section 3. Interpretation clause.
In this Act, unless there is something repugnant in the subject or context,
immoveable property does not include standing timber, growing crops or grass;
instrument means a non-testamentary instrument;
1[attested, in relation to an instrument, means and shall be deemed always to have meant attested
by two or more witnesses each of whom has seen the executant sign or affix his mark to the
instrument, or has seen some other person sign the instrument in the presence and by the direction
of the executant, or has received from the executant a personal acknowledgement of his signature or
mark, or of the signature of such other person, and each of whom has signed the instrument in the
presence of the executant; but it shall not be necessary that more than one of such witnesses shall
have been present at the same time, and no particular form of attestation shall be necessary;]
registered means registered in 2[3[any part of the territories] to which this Act extends] under the
law4 for the time being in force regulating the registration of documents;
attached to the earth means
(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is
attached;
5[actionable claim means a claim to any debt, other than a debt secured by mortgage of
immoveable property or by hypothecation or pledge of moveable property, or to any beneficial
interest in moveable property not in the possession, either actual or constructive, of the claimant,
which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial
interest be existent, accruing, conditional or contingent;]
6[a person is said to have notice of a fact when he actually knows that fact, or when, but for wilful
abstention from an enquiry or search which he ought to have made, or gross negligence, he would
have known it.
Explanation I.Where any transaction relating to immoveable property is required by law to be and
has been effected by a registered instrument, any person acquiring such property or any part of, or
share or interest in, such property shall be deemed to have notice of such instrument as from the
date of registration or, where the property is not all situated in one sub-district, or where the
registered instrument has been registered under sub-section (2) of section 30 of the Indian
Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such
registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the
property which is being acquired, or of the property wherein a share or interest is being acquired, is
situated:]
Property Law Exam Notes
Provided that
(1) the instrument has been registered and its registration completed in the manner prescribed by
the Indian Registration Act, 1908 (16 of 1908), and the rules made thereunder,
(2) the instrument or memorandum has been duly entered or filed, as the case may be, in books
kept under section 51 of that Act, and
(3) the particulars regarding the transaction to which the instrument relates have been correctly
entered in the indexes kept under section 55 of that Act.
Explanation II.Any person acquiring any immovable property or any share or interest in any such
property shall be deemed to have notice of the title, if any, of any person who is for the time being in
actual possession thereof.
Explanation III.A person shall be deemed to have had notice of any fact if his agent acquires
notice thereof whilst acting on his behalf in the course of business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with
notice thereof as against any person who was a party to or otherwise cognizant of the fraud.
COMMENTS
Constructive notice of the suit agreement
The defendants failed to make necessary inquiry in respect of possession of the suit land by going
to the site or from neighbouring land owners. Therefore, it has been held that constructive notice of
the suit agreement shall have to be imputed to defendants in view of actual possession of the suit
land being with the plaintiffs; Murlidhar Bapuji Valve v. Yallappa Lalu Chaugle, AIR 1994 Bom 358.
Meaning of word "Immovable"
The word "immovable" means permanent, fixed, not liable to be removed and the property must be
attached to immovable property permanently; Shree Arcee Steel P. Ltd. v. Bharat Overseas Bank
Ltd., AIR 2005 Kant 287.
1. Movable/Immovable Property ( Sec 3 )
Concept of property;
The term property has not been defined in the Act. When Section 6 of the Act says property of any
kind it implies every possible interest or right that can be possessed and is a subject of ownership.
It can be tangible or intangible. It can be a physical object or something abstract. Property of
different kinds is dealt with differently. The movable property is dealt with under the Sales of Goods
Act, 1930 while the major chunk of the Transfer of Property Act, 1882 deals with immovable
property. Section 3 of the Transfer of the Property Act, 1882 is called the Interpretation clause for it
explains the following terms.
Movable and Immovable property definitions
DEFINITION OF IMMOVABLE PROPERTY
Immovable property is a species of property. Whenever we speak about immovable property, we
always use the ready reference of attached to the earth. Whether a thing is permanently attached
to the earth, whether it is capable of separation or not and what is the intention behind the
construction or promoted growth of the property are a few of the points that need to be looked into.
The definition of immovable property as per the Transfer of Property Act is a negative definition. The
Section 3 reads that immovable property does not include standing timber, growing crops or grass.
Standing timber refers to trees that are fit for usage in building or repairs. Growing crop includes all
such vegetables, etc that are solely grown only for their produce. Grass is referred to as fodder.
Section 3(26) of the GENERAL CLAUSES ACT, 1897 is not an exhaustive definition. It says that
Immovable property shall include land, benefits arising out of land and things attached to the earth,
or permanently fastened to anything attached to the earth. It specifies the following as immovable
property.
a) LAND. It encompasses the upper as well as the lower surface of the earth. Any interest in the
same will be treated as that of immovable property. It would include wells, streams etc.
b) BENEFITS ARISING OUT OF LAND. This category includes everything dealing with rights and
interests in land as defined above. Right to collect rent or zamindari rights are two examples.
c) THINGS ATTACHED TO EARTH. The nature of attachment is important.
This clause is explained with reference to the following three points:
a) Things rooted in the earth like trees, shrubs but not including standing timber, growing crops and
grass. Jamun trees are treated as immovable properties.
b) Things embedded in the earth like buildings, minerals etc. By embedded we refer to things that
have their foundations laid well below the surface of the earth. An anchor of a ship is not immovable
property in its normal usage.
c) Things that have been permanently fastened to anything embedded in the earth for the purpose of
permanent enjoyment. For example, ceiling fans, doors and windows. If the objects that have been
attached are merely transitory or not permanent and do not contribute to the value and purpose of
the thing attached to, they are not immovable properties.
To determine whether a fixture is permanent or not, the following points need to be considered:
a) Mode of Annexation: Temporary, standing on its own weight or dug in to the earth, etc.
b) Purpose or Object of Annexation:
Trade fixtures are to be treated in association with the business and not the land as the fixtures are
attached in connection with the business. Such fixtures are to be treated as accessory to the
business and not as annexation. The position is different if the person attaching the fixtures in a
business place is the owner himself.
When it is a machinery in the factory, the court has to see the object and purpose of such
installation. The beneficial enjoyment of the machinery itself, the degree and the manner of
attachment or annexation on to the earth are other points for consideration.
The Section 2(9) of the INDIAN REGISTRATION ACT, 1908 gives out the physical aspects of
property in the definition present in the said Act. The definition under the Act is as follows,
Immovable Property includes land, buildings, hereditary allowances, rights of ways, lights, ferries,
fisheries or any other benefit arising out of land and things attached to the earth but not standing
timber, standing crops or grass.
CONCLUSION OF VARIOUS DEFINITIONS OF IMMOVABLE PROPERTY
All the definitions read together can give us a clear idea what is included or excluded from being an
immovable property. They do not define immovable property per Se. A clear idea can be obtained by
creating a common definition by mixing these three.
Immovable Property means lands, benefits arising of the lands and the things attached to the earth
or permanently fastened to anything attached to the earth. Other than the physical aspect, every
benefit arising from and every interest in the property is also included in the definition. It excludes
three things, namely, standing timber, growing crops and grass.
STANDING TIMBER, GROWING CROPS AND GRASS
Whether a tree is timber or not depends on the category of the tree and the common purpose of
such category. All the statutory definitions have excluded standing timber, growing crops and grass
from the purview of an immovable property. Here the intention is of great importance. If the
transaction is the immediate, the objects will be movable. But if the contract regarding such objects
extends to many a year or if the owner of the trees is interested in further vegetative growth, then
they will be treated as immovable property. The transfer of trees standing on land does not amount
to the transfer of the land also.
For example, mangoes are treated as movable property for the intention is to pluck them seasonally
and sell them. On the other hand, when a person has a right to fish from a particular lake, it is a
benefit arising of an immovable property, namely, the lake. Hence, it will be an immovable property.
MARSHALL vs. GREEN It was held that if only a right to cut and enjoy the tress as timber was
sold, it is an interest in a movable property. If such a right is to extend over many years, it will be
treated as an interest in immovable property.
The real test if whether a property is immovable or immovable is the intention behind the transfer and
the transferability of the property. For example, generally a mango tree will be treated as an
immovable property but it will be treated as movable property if it is to be cut and used to build a
house.
Movable and Immovable property differences
MOVABLE PROPERTY
It can be transferred from one place to another.
Registration is optional as per the Indian Registration Act, 1908.
The Sales and Central Sales taxes are applied,

IMMOVABLE PROPERTY
It cannot be transferred without causing extensive damage to the property. The damage relates to
the nature of the
property
Registration is compulsory under the Indian Registration Act, 1908 if the value of the property is
more than Rs. 100.
The property needs to be registered at the Sub-Registrars office.
The appropriate stamp duty and the registration fee have to be paid.
WHAT IS INCLUDED IN IMMOVABLE PROPERTY WHAT IS NOT INCLUDED IN IMMOVABLE
PROPERTY
What is included
1) A right to collect rent from an immovable property;
2) A right to receive future rents and profits of land;
3) A tenancy right;
4) Coal mines;
5) A borewell that has been fastened in a permanent way to the earth;
6) Hereditary Offices; and
7) Right to use water of a perennial stream.
What is not included
1) A right to worship;
2) A copyright;
3) The interest of a partner in a partnership firm;
4) A right to get maintenance;
5) A right to obtain the specific performance of an agreement to sell;
6) Government promissory notes; and
7) A machinery that is not permanently attached to the earth and can be shifted from one place to
another.
Meaning of "things attached to earth"
Concept of "Doctrine of fixtures"
A fixture is something fixed. In Transfer of Property Act, a fixture is a chattel which is affixed to the
soil or land. But a chattel by merely being affixed to the land will not become an immovable property.
There are two things which has to be considered for arriving at the point whether a chattel is an
immovable property. This can be called the doctrine of fixtures.
(1) Mode of annexation
If the chattel remains on the land by its own weight and is not affixed to the land there is a
presumption that it is only a movable property. Here the criteria is the intention to make whether it a
fixture or not. If the intention was to make it part of the land it is treated as a fixture.
If the chattel is fixed to the land by means of nails or such things the presumption is that it is a
fixture and become an immovable property.
(2) The Purpose for Annexing
The tenure of beneficial enjoyment of the land is a necessary criterion to hold whether the chattel is
an immovable property.
If the purpose of annexation is the permanent beneficial enjoyment of the land the presumption is
that it is a fixture.
(1) Shantabai vs St of Bom, AIR 1958 SC 532: (1959) SCR 265
[ A right to enter upon the land of anothr & carry a part of the produce is an instance of profits a
pendre i.e. benefit arising out of land, & thrfr a grant in immovable property.]
Facts n Issue:- Lease doc - 12n a 1/2 yrs executed by a Zamindar in the favour of his wife. 'right to
cut & appropriate wood frm the Zamindar's forest(estate fr a consideration of Rs 26,000. A rt ws
confrrd upon her to cut & take bamboo, fuel wood & teak but thr ws prohibition fr cutting teak plants
under the height of one and a half feet - the moment the teak trees reaches tht girth they cud be
felled but within 12 years - when the MP abolition of proprietary rights (estate, mahals, alienated
lands) Act, 1950 ws passed, all proprietary rights in the land became vested in the State & she ws
stopped fr cutting any more trees. She filed a petition in the court contending tht as the right granted
to her ws a right in standing timber (movable property), she ws entitled to compensation. - Issue ws
whtr it is trnsfr of movable or immovable property. Trees r rgdd as immovable property becoz it is
benefit tht arises out of the land & also becoz they are attached to the earth. But standing timber is
movable property
Obsrvtn & Decision - exclusion of TP Act is only fr standing timber & nt of timber trees - standing
timber must be a tree tht is in a state fit for use fr building or industrial purposes, & lukd upon as a
timber even though it is still standing. If nt, it is still a tree becoz unlike timber, it will continue to
draw sustenance frm the soil. But the amt of nourishment it takes, if felled at a reasonably early
date, it is so neglible & to be ignored. - Prsnt case duration of the grant is 12 yrs, it is evident tht
trees tht will be fit fr cutting 12 yrs hence will nt be fit fr felling new. thrfr it is nt a mere sale of the
trees as wood. it is more. it is nt just a wish to cut a tree but also to derive a profit frm the soil itself,
in the shape of the nourishment in the soil tht goes into the tree & makes it grow till it is of a size &
age fit fr felling as timber & if already of tht size, in order to enable it to continue to live till the
petitioner choose to fell it. - grnt ws nt only fr standing timber but also fr trees tht were to fell
gradually as they grow to attain reqd height ( & these trees r immovable property ) . Moreover in
case of standing timber, it is left to petitioner's choice to fell them - tht means they are nt to be
converted into timber at a reasonably early date & tht the intention is tht they shld continue to live, in
othr words, they r to be rgdd as trees & nt as timber tht is standing & is abt to be cut & used fr
purposes fr which timber is meant. It is clear becoz the right ws spread fr a period of 12 yrs & the
intent ws nt to cut the trees at a reasonably early time period - thfr lease doc is nt a trnsfr of trees as
wood(movable) but a trnsfr of benefit arising out of immovable property - right to fell trees fr a term of
years, so tht the transferee derives a benefit frm further growth of trees.
(2) St of Orrisa vs Titaghur Paper Mills Company Ltd, AIR 1985 SC 1293: (1985) Supp SCC 280
[ The contract shld be examined as a whole with reference to all its terms & all the rights conferred
by it & nt wid ref to only a few terms or with just one of the rights flowing thr frm - 'bamboo contract'
(right to cut & remove bamboos with several ancillary rights) is related to immovable property as a
benefit to arise out of land & did nt relate to a contract of movable property. ]
Facts n Issue - In this case a contract of the petitioner company with State of Orissa fr the purpose
of felling, cutting & removing bamboos frm forest areas fr the purpose of converting the bamboos in
paper pulp, or fr the purposes connected with the manufacture of paper, etc have been held to be
profit a pendre or benefits arising frm land, & thus an immovable property.
Court overruled St of MP vs Orient paper mills
Othr cases which court relied on:- Ananda Behera vs St of Orissa - right to fish -> right in immovable
property
(3) Bamdev Panigrahi vs Monorama Raj, AIR 1974 AP 226
[ Cinema equipments like projector, diesel engine etc, installed on the tenanted land temporarily,
and nt attached to the earth, but also nt permanently fastened to anything to the earth, are movable
properties. ] touring talkie installed on land - nt attached to earth but ws on a temporary shed on the
land - name 'touring talkies shows tht aim & intent of installation ws fr temporary period
(4) Duncans Industries Lts vs St of UP, (2000) 1 SCC 633
Whether a machinery embedded in the earth can be treated as moveable or immovable property
depends on the intention of the parties which embedded the machinery & also the intention of the
parties who intend alienating tht machinery]
Trnsfr of fertilizer plant - machinery trnfrd as movable property - escaped stamp duty - HC obsrvd &
SC confirmed tht machinery relating to manufacture of fertilizer in a sale of fertilizer plant is
immovable property
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2. Attestation ( Sec 3 )
Importance of Attestation;
The Transfer of Property Act, 1882, hereinafter referred to as TPA, lays down the law to regulate the
transfer of property between living persons.
[1] The TPA regulates transfer of property by providing for certain kinds of transfers-sale, mortgage,
lease, exchange, gift and also provides for attestation of the instruments, by which these transfers
take place. To attest is to bear witness to a fact.
[2] By providing for attestation, the TPA seeks to ensure that witness is borne to the fact that the
transfer instrument is signed without any element of force, fraud or undue influence.
[3] The TPA while making a provision for attestation, makes attestation mandatory only in case of
certain kinds of transfers-gifts and mortgages, to the exclusion of all other kinds of transfers.
To attest is to bear witness to a fact.
[4] To attest an instrument is to bear witness to the fact of verity of that instrument.
[5] Thus, under the TPA, which provides for various kinds of transfers, to attest a transfer instrument,
is to bear witness to the fact of variety of the transfer instrument, which is being executed by the
transferor in favour of the transferee. Section 3 of the TPA, defines attestation in its verb form
attested.
Section 3, the part of which defines attested, reads as follows
Attested, in relation to an instrument, means and shall be always deemed to have meant, attested
by two or more witnesses each of whom has seen the executant sign or affix his mark on the
instrument, or has seen some other person sign the instrument in his presence and by direction of
the executant, or has received from the executant personal acknowledgement of his signature or
mark, or of signature of such other persons, and each of whom, has signed the instrument in the
presence of the executant, but it shall not be necessary that more than one of such witnesses shall
be present at the same time, and no particular form of attestation shall be necessary.
Section 3 in laying down the meaning of attestation, enumerates three conditions for a valid
attestation under the TPA
-Firstly, there must be at least two attesting witnesses.
-Secondly, each of the attesting witnesses must see the transferor (or executant) sign the
instrument or affix his mark or see some other person sign the instrument or affix his mark under the
direction of the transferor, otherwise each of the witnesses must at least receive a personal
acknowledgement, from the transferor, that the signature or the mark is his.
-Thirdly, the attesting witness must attest with an intention of bearing witness to the instrument
being signed and with no other intention. [6] Not following the above three conditions would make
the attestation invalid and an instrument invalidly attested, cannot be executed in a Court of Law.
[7] Since, attestation is done in order to bear witness to the fact of verity of the transfer instrument,
which is being executed by the transferor in favour of the transferee, it naturally follows that the
transferor, the transferee, or any other person, who is party to the instrument, cannot be an attesting
witness to the transfer instrument.
In Harish Chandra v. Bansidhar Mohanty,[8] a mortgage instrument was executed by the appellant in
favour of the second respondent, but it was the first respondent who had advanced the money and
had also attested the mortgage instrument.
[9] On the first respondent filing a suit to enforce the mortgage, it was contended that the first
respondent was a party to the instrument and hence, the attestation is invalid. The Supreme Court,
while holding that attestation by a party to the instrument would make the attestation invalid, ruled
that in the present case, the first respondent is not a party to the instrument but is a party to the
transaction and being so, can attest the mortgage instrument.
[10 ] Thus, for a valid attestation, it is necessary that any person, other than a person who is party
to the instrument, is the attesting witness.
Object :
The object of attestation in the TPA, was held out by the Supreme Court, again in, Harish Chandra v.
Bansidhar Mohanty.
[11] In arriving at its decision that a party to a transaction, as opposed to a party to an instrument
can be an attesting witness, the Supreme Court, stated the object of providing for attestation in the
TPA is to protect the executant from being required to execute a document by the other party
thereto by force, fraud, or undue influence.
[12] Thus, the purpose, with which attestation, has been provided for in the TPA, is to ensure that
the transfer of property takes place voluntarily i.e. without any element-whether fraud, fraud or undue
element vitiating the free consent of the transferor. As such, providing for attestation, the TPA
seeks to ensure that witness is borne to the fact of verity of the transfer instrument in the sense of it
being signed by the transferor voluntarily.
Scope :
The TPA, while it provides for transfers such as sale, mortgage, lease, exchange, gift, makes
attestation mandatory only for certain kinds of transfers by mortgage and gift. Section 59[13] of the
TPA lays down that for every transfer by mortgage to be effected, where the principle amount is Rs.
100/- or upwards, and where the mortgage is not by way of deposit of title deeds, attestation is
mandatory. In case of mortgages, where the principle amount is less than Rs. 100/- a mortgage can
be effected either, by registration and attestation, or mere delivery of property. Hence, for mortgages
where the principle amount is less than Rs. 100/-, attestation is not mandatory. Similarly, Section
123[14] of the TPA, lays down that, for transfer by gift involving immovable property, attestation is
mandatory for the transfer of gift to be effected, a transfer by gift involving movable property can be
effected either by registration and attestation or by mere delivery.
Thus, the TPA makes attestation a mandatory requirement, only in case of transfer by mortgage and
gift; that too, mortgages involving a principal sum of Rs. 100/- or upwards and gifts involving immobile
property, respectively. Under the TPA, where attestation is made mandatory for certain kinds of
transfers by mortgage and gift, attestation is not mandatory at all for other kind of transfers, whatever
principle sum they may involve or whatever property they may effect a transfer of.
Who may be a competent witness; - Anyone apart frm the parties to the transfer of property
mode of attestation; -
attestation by a Pardanasheen woman
(5) Kumar Harish Chandra Singh Deo vs Banisidhar Mohanty, AIR 1965 SC 1738: (1966) 1 SCR 153
No provision of law debars a money lender frm attesting a deed which evidences the transaction whr
under the money ws lent.
3rd person lended the money to the mortgagee but the mortgage deed ws between the mortgagor &
mortgagee. Held 3rd person cud attest the deed even though it ws he who lended the money. SC
obsrvd 3rd person is not a party to the deed but a party to the transaction.
(6) M.L. Abdul Jabbar Sahib vs H. Venkata Sastri, AIR 1969 SC 1147: AIR 1969 SC 1147
This case highlights the importance of valid attestation in matters of trnsfr of property, it is essential
tht the witness put his signature animo attestandi i.e. with intention of attesting.
(7) Padarath Halwai v Ram Narain, AIR 1915, PC 21
[ToP by pardanasheen woman, when the attesting witnesses cud nt see her but cud hear her voice,
the attestation ws held valid.]
Mortgagors were two pardanasheen women who did nt appear bfr the attesting witnesses hence their
face wsn't seen by the attesting witnesses. The issue ws whthr the document ws duly attested by
atleast two witnesses within the meaning of S59A of the TPA,1882.
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3. Notice (Sec 3)
NOTICE
The last paragraph of the section 3 states under what circumstances a person is said to have notice
of a fact. He may himself have actual notice or he may have constructive notice may be imputed to
him when information of the fact has been obtained by his agent in the course of business
transacted by the agent for him.
(a) Express or actual notice. -- An express or actual notice of fact is a notice whereby a person
acquires actual knowledge of the fact. It must be definite information given in the course of
negotiations by a person interested in the property.
(b) Constructive Notice. -- It is a notice which treats a person who ought to have known a fact, as if
he actually does know it. In other words, a person has constructive notice of all facts of which he
would have acquired actual notice had he made those enquiries which he ought reasonably to have
made. The cases of constructive notice into two classes :
(i) Cases in which the party charged has had actual notice that the property in dispute was in some
way affected, and the Court has thereupon bound him with constructive notice of facts and
documents, to a knowledge of which he would have been led by an inquiry after the circumstances
affecting the property had come to his knowledge.
(ii) Cases in which the Court has been satisfied from the evidence before it that the party charged
has designedly abstained from inquiry for the very purpose of avoiding notice A purpose which, if
proved, would clearly show that he had a suspicion of the truth, and a fraudulent determination not to
learn it.
Notice Effect of not making enquiry.-- Property was in possession of tenant. The vendee has not
made any enquiry with the tenant in respect of prior agreement for sale executed in favour of the
tenant. The vendee purchased the property without taking any enquiry though the property was in
possession of the tenant. Held that the vendee would be deemed to have notice of the prior
agreement in view of Section 3 of T.P.Act.
Constructive Notice.-- The explanation in Section 3 of the Transfer of Property Act, which provides for
fixing a party with constructive notice in respect of registered transactions, contains a proviso that in
order to amount to constructive notice, (1) the instrument has been registered and its registration
completed in the manner required by the Registration Act and the Rules made thereunder, (2) the
instrument has been duly entered or filed in books kept under Section 51 of the Act, and (3) The
particulars regarding the transaction to which the instrument relates have been correctly entered in
the indexes kept under Section 55 of the Act.
Constructive notice has roughly been defined as knowledge which the court imputes to a person
upon a presumption so strong that it cannot be allowed to be rebutted that the knowledge must have
been obtained. This legal presumption arises under this section :
(1) In relation to a fact -
(a) when but for wilful abstention from an inquiry which a person ought to have made he would have
known the fact; or
(b) When but for gross negligence he would have known it;
(2) In relation to a document compulsorily registrable;
(3) In relation to actual possession;
(4) In relation to a notice to an agent.
The possession of a small part of a house will not put a purchaser on constructive notice of that
person's rights as to whole house.
In Mohd. Mustaffa v. Haji Mohd. Hissa, it was held that the principle of constructive notice cannot be
extended to a case where the person who claims on the basis of prior agreement is in possession of
only a small fraction of the property. In such a case, it cannot be said that the person who
purchases the property must make an enqiry about the previous contract from the plaintiff or any
other tenant in occupation of a portion of the house.
Wilful abstention from an enquiry or search.
The words wilful abstention are said to be such abstention from inquiry or search as would show
want of bona fide in respect of a particular transaction.
It should be noted that the abstention from inquiry must be with some purpose or design and due to
a desire to avoid an inquiry would lead to ultimate knowledge. This sometimes happens when a
person thinks that he has struck a good bargain and wants to purchase the property quickly lest
other persons might come forward and compete with him.
Gross Negligence
The doctrine of constructive notice also applies when a person, but for his gross negligence, would
have known the fact. Mere negligence is not penalised. It must be gross negligence.
In Nawal Kishore v. The Municipal Board, Agra, The court felt that there was a principle on which
question of constructive notice cold rest, that principle being that all intending purchasers of the
property in municipal areas where the property is subject to a municipal tax which has been made a
charge on the property by statute have a constructive knowledge of the tax and of the possibility of
some arrears being due with the result that it becomes their duty before acquiring the property to
make enquiries as to the amount of tax which is due or which may be due and if they fail to make
this enquiry such failure amounts to a willful abstention or gross negligence within the meaning of
Section 3 of the Transfer of Property Act and notice must be imputed to them.
It is not necessary to show that the person has been guilty to fraud or negligence amounting to
fraud. Fraud is quite different from negligence. The former connotes active dishonesty, the latter
simply implies indolence. Gross negligence is a degree of negligence so gross that a court of
justice may treat it as evidence of fraud, impute a fraudulent motive to it and visit it with the
consequences of fraud, although, morally speaking, the party charged may be perfectly innocent.
Registration as Notice.
The doctrine of constructive notice applies also in case of documents which are required by law to
be registered. Where any transaction relating to immovable property is required by law to be, and
has been, effected by a registered instrument, any person acquiring such property, shall be deemed
to have notice of such instrument from the date of registration.
It must be noted that registration amounts to notice only in those cases where the instrument is
required law to be registered. That is to say where the registration of a transaction is of a transaction
is optional, the fact of registration does not amount to notice.
Finally, it must be noted that the instrument must have been registered in the manner prescribed by
the Indian Registration Act, 1908. If the instrument has been registered in the same registration sub-
district as that in which the property is situate, it operates as notice from the date of registration. If,
however, the property is situate in several sub-districts, or if the registration has been effected in
another district, the registered deed will not operate as notice until memorandum of such registration
has been received and filed by the Sub-Registrar of sub-district in which the property is situate.
Actual Possession as Notice.
Explanation II says that any person acquiring any immovable property shall be deemed to have
notice of the title, if any, of any person who is in actual possession thereof.
In order to operate as constructive notice possession must be actual possession. Thus, if a tenant is
not in the actual occupation of the land, his occupation is not constructive notice.
Where a certain party is not in possession, the presumption under the explanation to Sec. 3, does
not arise, that the person purchasing the property title shall be deemed to have notice of the title, if
any, of any person who is not in actual possession.
Notice to Agent.
Explanation III, of Section 3 which dealt with notice to an agent ran as follows :
A person is said to have notice of fact. When the information of fact is given to, or obtained by, his
agent under the circumstances mentioned in Section 229 of the Indian Contract Act, 1872.
The general principle of the agency law is that an agent stands in the place of the principal for the
purpose of the business in hand, his acts and knowledge being considered as the acts and
knowledge of the principal.
Scope of the Rule.-- The general rule that the knowledge of the agent is the knowledge of the
principal has certain limitations. The notice should have been received by the agent : (i) as an agent,
(ii) during the agency, (iii) in the course of the agency business, (iv) in a matter material to the
agency business.
Exception : Fraudulent concealment of fact by agent.-- The knowledge of an agent will not be
imputed to his principal if the agent fraudulently conceals the facts. It is not sufficient to show that
the agent concealed the fact. It must be shown that the party charging the principal with notice was
party to the fraud or otherwise knew of the fraud.
In Arumilli Surayya v. Pinisetti Venkataramanamma, it was held that Sec. 100 of the Transfer of
Property Act does not apply to auction sales because the transfer within the meaning of the Transfer
of Property Act does not include an auction sale. It was added that the position of a purchaser at an
execution sale is the same as that of the judgment -debtor and his position is somewhat different
from that of a purchaser at the private sale.
(8) Ahmedabad Municipal Corporation vs Haji Abdul Gafur Haji Hussenbhai, AIR 1975 SC 1201;
(1971) 1 SCC 757
The question of constructive notice depends upon facts & circumstances of each case. thr is no
presumption of contructive notice with regd to muncipal taxes. Prop of a person who became
insolvent vested in the Official Reciever of the Court - Recvr recvd bill pertaining to taxes frm
muncipality - rcvr sought courts permission to sell the property to pay the taxes, which ws grntd to
him - lapse of 5 yrs - auction -purchaser purchased property w/o actual notice of the municipal
charge - due inquiry frm purchasers behalf on acc of the pending taxes - no info given to purchaser
by rcvr - issue cud the purchaser be held to have constructive notice of the fact tht arrears might be
due - SC overruled the decision in Naval Kishore vs Muncipal Board of Agra in which it ws held tht all
the intending purchasers(in muncipal area whr proprty is subject to muncipal tax) have a duty to
enquire abt the amt of tax due (past arrears) & if they fail to do so, constructive notice shall be
imputed to them - ccourt cited the decision in Roop Chand Jain's case whr it ws held tht no
intending purchaser is bound to presume tht taxes upon the property were nt paid in the ordinary
course, in the absence of special intimation by the muncipality (eg press notification) -
circumstances by which a deeming fiction is imputed to a party are based on wilful absentation or
gross negligence - while former suggests conscious & deliberate absentation latter implies high
degree of neglect - prsnt case muncipality ws far more negligient than the plaintiff - question is nt
whtr a person hd means of obtaining knowledge, but whtr as a reasonable man he ought to have
made it i.e. in the given circumstances thr ws a duty to find out. In prsnt case plaintiff cudnt have
reasonably have thought tht the muncipality hd nt cared to secure the payment of taxes due & thus
bound to enquire abt the matter - he did enquire abt the rent tht ws collectd by the rcvr - hence
reasonable assumption tht payment of taxes frm rental income wud be paid by rcvr to the
muncipality
(9) Md Mustafa vs Haji Md. Isa, AIR 1987 Pat 5
Principle of constructive notice does nt apply in cases whr the person who claims on basis of prior
agreement is in possession of a small portion of the property -
(Plaintiff)Tenant ws occupying 1/7th of the property - occupied by many tenants - claimed prior
agreement - asked fr decree for specific performance - claimed defndnt took full consideration amt fr
the prop also executed a registered sales deed - claimed defndnt asked all tenants to pay - SC
obsrvd tht 1/7th possession of land - 6 more tenants - plaintiff cannot be said to be in possession of
the land
(10) H.N. Narayanaswamy Naidu vs Deveeramma, AIR 1981 Kant 93
[Principle of notice & constructive notice is applicable when the plaintiff ws in actual possession of
the property & carried out major repairs at his costs.] - conditional sale - money to be returned after
6 years & within 6months thereafter - subsequently the vendors were in need of money, they further
executed an agreement tht they wud release the agreement of re-conveyance - it is fr tht purpose tht
plaintiff calling upon them to execute the registered release deed as assured - mother-son(def)
resold the reconveyance right to another party (def3) - issue in this case is whtr def3 a bonafide
purchaser fr value w/o notice of the right to get the reconveyance fr the def1 & def2 -
(11) Ram Niwas vs Bano, AIR 2000 SC 2921: (2000) 6 SCC 685
The principle of constructive notice is applicable whn the plaintiff ws in actual possession of the
property, the word notice is of wider import than the word knowledge - a person may nt have actual
knowledge of a fact but he may have notice of it.
tenant takes suit shop on rent - later agrees to buy it fr 9200 pays 3200 as consideration amount
and agrees to pay the rest on execution of the sale deed - later resp1 to 4 buy the shop fr 20000 -
tenant files suit of sp performance resp 1 to 5(vendor & purchasers) - purchasers deny the genuiness
of the agreement to sell - S19 of Specific Relief Act provides catergories of persons against whom
the sp perfrmance of a contract may be enfrcd - among them is included under S19(b) any transferee
claiming under the vendor by a title arising subsequently to the contract of which sp pefrmnce is
sought - however a transferee fr value, who hs paid his money in gud faith & w/o notice of the original
contact, is exclded frm the purview of the said clause
- to fall within the excluded clause a transferee must show tht
(i) he hs purchased for value the property (which is the subject matter of the suit)
(ii) he hs paid the money to the vendor in gud faith
(iii) he hd no notice of the earlier contract fr sale (sp perfrmnce of which is sought against him)
SC obsrvd tht both TC & HC dealt with the question of purchasers knowledge of the fact - but said
the issue in question here is not knowledge but Notice(which is wider than the scope of knowledge) -
Apex court held tht purchasers will be deemed to have notice of earlier 'agreement to sell', shld it be
found to be true & valid
-----------------------------------
4. Meaning of Transfer of Property (Sec 5)
Section 5. Transfer of property defined.
In the following sections transfer of property means an act by which a living person conveys
property, in present or in future, to one or more other living persons, or to himself, 1[or to himself]
and one or more other living persons; and to transfer property is to perform such act.
1[In this section living person includes a company or association or body of individuals, whether
incorporated or not, but nothing herein contained shall affect any law for the time being in force
relating to transfer of property to or by companies, associations or bodies of individuals.]
COMMENTS
Right to Property
Right to obtain shares of a company is a property and the donees right to such shares cannot be
thwarted only because such shares in the name of the donee was not entered into the register of the
company; Vasudev Ram Chandra Shelat v. P.J. Thakkar, (1974) 2 SCC 323.
Meaning of 'Transfer of Property' under the Act;
TRANSFER OF PROPERTY
Transfer of Property has been defined in S. 5 of the Transfer of Property Act meaning 'an act by
which a living person conveys property, in present or in future to one or more other living persons and
to transfer property is to perform such act'.
'Living person' has been defined to include a company or association or body of individuals whether
incorporated or not, but nothing herein contained shall effect any law for the time being in force
relating to the transfer of property to or by companies, associations or bodies of individuals.
Property
The Legislature has not attempted to define the word 'property', but it is used n this Act in its widest
and most generic legal sense. Section 6 says that 'property of any kind may be transferred', etc.
thus an actionable claim is property; and so is a right to a reconveyance of land.
It is used in this dual sense of the thing and the right of the thing in S. 54 which contrasts, 'tangible
immovable property' with 'a reversion or other intangible thing'. Property includes rights such as trade
marks, copyrights, patents and personal rights capable of transfer or transmission such as debt. A
share in the company is a movable property freely alienable in absence of any express restrictions
under the Articles of Association of the company. The shares are, therefore, transferable like any
other movable property and the vendee of the shares cannot be denied the registration of the shares
purchased by him on a ground other than stated in the Article.
The words 'in present or in future' in S. 5 qualify the word 'conveys' and not the word 'property'. A
transfer of property not in existence operates as a contract to be performed in the future which is
specifically enforceable as soon as the property comes into existence. Where the operative portion
of the sale-deed recorded that all rights and privileges in the concerning the property either in present
or accruing in future as vesting in the vendor were the subject matter of the sale and that the vendor
retained no right of any kind, it was held that even the right of the vendor of reconveyance of the
property was transferred by the sale-deed.
Interests in Property
As ownership consists of a bundle of rights, the various rights and interests may be vested in
different persons. Absolute ownership is an aggregate of component rights such as the right of
possession, the right of enjoying the usufruct of the land, and as on. These subordinate rights, the
aggregate of which make up absolute ownership, are called in this Act interests in Property. A
transfer of property is either a transfer of absolute ownership or a transfer of one or more of these
subordinate rights.
Transfer
The word 'transfer' is defined with reference to the word 'convey'. This word in English Law is its
narrower and more usual sense refer to the transfer of an estate in land; but it is sometimes used in
a much wider sense to include any form of an assurance inter vivous. Transfer must have an interest
in the property. He cannot sever himself from it and yet convey it. A lease comes within the meaning
of the word 'transfer'.
The definition of transfer of property in this section does not exclude property situated outside India
or the territories to which the Act applies. It matters not that the property is situated outside India, or
in the territories where the Act does not apply; for it the transfer is effected where the Act is in force,
the rights of the parties are to be determined by the court under the Act leaving it to the party to
prove that by the lex rei sitae, ie by the law of the land where the property is situated, the
transaction in invalid or defective.
A transfer is not necessarily contractual, and included a deed of appointment. The section does not
require that the 'living person' who conveys should necessarily be the same person as he who owns,
or owned, the property conveyed by some living person; under the section, there may be a transfer
by a person exercising powers over the property of another.
Partition of joint Hindu family or Deed of partition of joint family property
A partition is not actually a transfer of property.
The Privy Council in Girja Bai v. Sadashiv Dhundiraj, held that, partition does not give a coparcener a
title or create a title in him; it only enables him to obtain what is his own in a definite and specific
form for purpose of disposition independent of the wishes of his former co-sharers. A partition effects
a change in the mode of enjoyment of property but is not an act of conveying property from one living
person to another. Partition is not a transfer. It is only renouncement of existing rights in common
properties in consideration is only renouncement of existing rights in common properties in
consideration of getting exclusive right and possession over the specific plots. Partition is only a
process of mutual renunciation by which common unspecified rights in larger extents are converted
into exclusive right over specific plots.
In V. N. Sarin v. Ajit Kr. Poplai court observed that 'the true effect of partition is that each coparcener
gets a specific property in lieu of his undivided right in respect of the totality of the property of the
family'. The Supreme Court in that case was considering the provisions of Rent Control Act and did
not express any opinion on the correctness of certain decisions holding that a partition is a transfer
within the meaning of S. 53. The correct view, it is submitted, is that a partition is not a transfer and
therefore, strictly not governed by the Act, but that many of the provisions of the Act may govern
partition as embodying rules of justice, equity and good conscience.
Partition of property does not amount to 'transfer' as contemplated by S.5. Doctrine of part
performance therefore does apply to partition. Partition is really a process, in and by which a joint
enjoyment is transformed into a enjoyment severally. Each one of the co-sharers had an antecedent
title and, therefore, no conveyance is involved in the process, as the conferment of a new title is not
necessary. The doctrine of part performance does not apply to an unregistered deed of partition.
A partition is possible between two co-owners who may not have absolute or equal rights, but are
limited owners. A document executed in settlement of disputes between two persons who are
entitled to the same properties and who agree to divide the properties amongst themselves is a
partition, and not a settlement.
Where a joint family property is subject to mortgage, there is no transfer of ownership and the
coparceners, being its lawful owners, are competent of allot the mortgaged property in an oral
partition to any of the coparceners. The coparceners to whom the mortgaged property is allotted,
becomes its absolute owner and is entitled to redeem the mortgage. Consequently, where the right
to redeem is transferred by that coparcaener, the transferee is also entitled to redeem the mortgage.
Property, subject to mortgage can be allotted in an oral partition to a coparcener, particularly when
such oral partition is not going to interfere with the scheme of the mortgage.
Living Person Will
These words exclude transfers by will, for a will operates from the death of the testator. Transfer of
share or interest in a co-operative society to the nominee of its member operating on his death would
also be excluded like transfer by will. When the beneficiary is not a living person, the expression
used is the creation of an interest in an unborn person.
The words 'living person' include a juristic person such as a coportation. A court is not a juristic
person.
In present or in future
A transfer of property may take place not only in present, but also in the future, but the property
must be existence. The words 'in present or in future' qualify the word 'conveys', and not the word
'property'. A transfer of property that is not in existence operates as a contract to be performed in the
future which may be specifically enforced as soon as the property comes into existence.
Transfer intervivos; - Transfer between living persons ( both juristic & natural people )
Living person distinguished from Juristic person;
The term 'juristic person' includes a firm, corporation, union, association, or other organization
capable of suing and being sued in a court of law."
A juristic person is a bearer of rights and duties that is not a natural person (that is, not a human
being) but which is given legal personality by the law is a juristic person - for example, a company.
Juristic persons are entities other than human beings on which the law bestows legal subjectivity.
This does not mean that they assume the guise of natural persons, but that the law for the sake of
economic or social expediency recognises a thing or community or group of persons as having legal
personality and therefore the capacity to be the bearer of rights and duties and the ability to
participate in the life of the law in its own name. They are called juristic persons because it is the
law that accords them the status, in certain respects at least, of persons: they are artificial persons
created by the law.
God is a juristic person - property transferred to God governed by relevant religious or charitable
endowment Acts
Natural Person
A natural person is a human being.
He has characteristics of the power of Thought speech and choice.
A natural person is a real and living person.
Slaves were also natural persons.
The layman does not recognize idiot, company, corporation, idol etc. as persons.
The only natural persons are human beings.
He is also a legal person.
Natural persons perform their functions and also perform the function of legal persons.
Man is the only natural person.
There is no such division in natural person.
Natural person can live for a limited period. i.e. he cannot live more than 100 years.
Legal Person
Legal person is being, real or imaginary.
A legal person is any being whom the law regards as capable of rights or duties.
Legal persons are also termed fictitious, juristic, artificial or moral.
In older law, slaves were not recognized as persons.
In law, idiots, dead men, unborn persons, corporations, companies, idols, etc. are treated as legal
persons.
There are several categories of legal persons recognized by law.
Although all legal personality involves personification, the converse is not true.
The legal persons perform their functions through natural persons only.
There are different varieties of legal persons, viz. Corporations, Companies, Universities,
President, Societies, Municipalities,
Gramapanchayats, etc.
There are two classes of corporations corporation sole and corporation aggregate.
Legal person can live more than 100 years. Example: (a) the post of American President is a
corporation, which was created some three hundred years ago, and still it is continuing. (b) East
India Company was established in sixteenth century in London, and now still is in existence.
Status of partition of JF property; - Partition is not a transfer of property - because nothing new is
obtained by co-sharer on partition - his specific share vested in him earlier is simply separated
(12) V.N. Sarin vs Ajit Kumar Poplai, AIR 1966, SC 432: (1966) 1 SCR 349
On Paritition a coparcener gives eviction notice to tenant who ws inducted befr partition - tenants
contests on the same on the basis that the landlord acquired the premises through transfer - hence
it comes u/s 14(6) of Delhi Rent Control Act which doesn't entitle landlord to demand possession till
5yrs - SC held tht a partition is not transfer of property but wud only signify the surrender of a portion
of a jt right in exchange fr a similar right frm the other co-sharer or co-sharers hence S 14(6) DRCA
doesn't apply here
(13) Kenneth Solomon vs Dan Singh Bawa, AIR 1986 Del 1
[Bequeathing of tenancy rights by a tenant under his Will to his heirs amounts to 'parting with
possession' though such parting of possession does not amt to transfer within the meaning of Sec 5
TP Act] - dispute related to tenancy rights of the tenant which he had bequeathed under his Will in
favour of his heirs - on the death the beneficiaries under the Will took possession of the tenanted
premises as the contract of the lease was still subsisting. The landlord filed a suit fr eviction on the
ground tht this transfer of the premises amounted to violation of the provisions of the Delhi RCA, as
the tenant hd parted with the possession of the premises in dispute without the permission of the
landlord - Issue ws whtr a person parts with possession of the property(u/ DRCA) thrgh a devise of
Will & nt whtr such parting amts to trnsfr within meaning of S5 TPA - Obsrvn & Decision - The
lessee by her act of bequeathing the tenancy rights by means of the Will in favor of the appellant had
parted with possession. Thus a violation of the lease agreement hd taken place - the landlord ws thrfr
entitled to claim eviction
(14) Mohar Singh vs Devi Charan, AIR 1988 SC 1365: (1988) 3 SCC 63
Though partition of a JF Property does nt amt to a trnsfr within meaning of S5 TPA, S109 TPA is
applicable to partition on the principle of justice, equity & good conscience - Partition of JFP(part of
which ws tenanted) bw two co-owners - one co-owner filed a suit fr eviction on grnds of bonafide need
- prescribed authority ordered release of premises & made an order granting possession - Appeal to
HC - it ws contended tht landlord cannot seek to split the integrity & unity of the tenancy coz it is
impermissible in law- HC accptd the argument - Appeal to SC - held tht S109 provides statutory
excptn to the above rule and enables an asignee of a part of the reversion to exercise all rights of the
landlord in respect of the opinion -
(15) N. Ramaiah vs Nagaraj S, AIR 2001 Kant. 395 (A will does not amt to trnsfr within meaning of
S5 TPA )
Issues
- whtr bequest of a prop under a Will is a trnsfr of property
- whtr direction to a party to maintain status quo in rgd to a property, prohibits him frm making a
testamentary disposition(via Will) & whether a Will made during the operation of an order of status
quo regarding a property is void & non est in so far as the bequest relating to such property. - claim
over property by A named in will & B succeeding as legal heir - A files suit of temporary injunction
against B to stop frm alienation - Judge passes status quo - B dies bequeathing the property to C in
her Will - TC Judge holds tht Will is against the status quo order - HC reversed TC Judge contention
- held will does nt amt to transfer as per TPA and is governed by testamentary succession laws
-----------------------------------------
5. What kind of Property can be transferred ( Sec 6(a) and 43 )
Transfer of "Spes Successionis";
Section 6(a). What may be transferred.
Property of any kind may be transferred, except as otherwise provided by this Act or by any other
law for the time being in force,
(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a
legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be
transferred;
Illustration
A has a wife B and a daughter C. C in consideration of Rs. 1,000 paid to her by A, executes a
release of her right to share in the inheritance to A's property. A dies and C claims her one-third
share in the inheritance. B resists the claim and sets up the release signed by C. The release is no
defence, for it is a transfer of a spes successions, and C is entitled to her one-third share but is
bound to bring into account the Rs. 1,000 received from her father.
Chance of an heir apparent.
A mere possibility of an heir succeeding to an estate is excluded from the category of transferable
property. The prohibition enacted in this clause is based on public policy, namely, that if these
transfers were allowed speculators would purchase the chance of succession from possible heirs
and there would be increase in speculative litigations.
Sec. 6(a), however, prohibits the transfer of a bare chance of a person to get a property. After the
death of the husband, for example, if two widows inherit their husband's properties together, the
transfer of bare chance of the surviving widow taking the entire estate as the next heir of her husband
on the death of the co-widow of her present interest in the properties inherited by her together with
the incidental right of survivorship. Such widows could validly partition the properties and allot
separate partitions to each and, incidental to such an allotment, could agree to relinquish her right of
survivorship in the protion allotted to the other.
Doctrine of "Feeding the grant by estoppel";
Section 43. Transfer by unauthorised person who subsequently acquires interest in property
transferred.
Where a person 1[fraudulently or] erroneously represents that he is authorised to transfer certain
immoveable property and professes to transfer such property for consideration, such transfer shall,
at the option of the transferee, operate on any interest which the transferor may acquire in such
property at any time during which the contract of transfer subsists.
Nothing in this section shall impair the right of transferees in good faith for consideration without
notice of the existence of the said option.
Illustration
A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z, representing that
A is authorised to transfer the same. Of these fields Z does not belong to A, it having been retained
by B on the partition; but on Bs dying A as heir obtains Z. C, not having rescinded the contract of
sale, may require A to deliver Z to him.
Status of bonafide transferee for consideration and without notice
(16) Jumma Masjid, Mercara vs Kodimaniandra Deviah, AIR 1962 SC 847: 1962 Supp (1) SCR 554
Sec 6(a) & S43 relates to two different subjects & tht there is no neccessary conflict between them.
Issue whtr ToP for consideration by person representing present interest(whras actually it ws only
specs successionis) is within the protection of S43? Widow contended tht till she ws alive, no one
else hd right to possess the property - meanwhile she died - at this Jumma Masjid intervened &
contended tht the properties vested in them as the widow hd made a gift of that property to the
appellants (Juma Masjid) - Appellants contndd tht rspondnts vendor hd only a specs successionis
during the life time of the widow & thrfr the transfr is void u/s 6(a) - SC held tht even in case of spes
successionis, the transfrer is precluded frm questioning the validity of the trnsfr if he later on
acquires an interest in the property -
(17) Kartar Singh vs Harbans Kaur (1994) 4 SCC 730
The transferee cannot acquire a valid title to the property when he is deemed to have
knowledge(actual or constructive) of the defect in title of the transferor, Sec 6(a) as well as S43 will
not apply in such a case. Mother alienates minors property - minor on attaining majority filed a suit
to the effect that this sale ws nt binding on him & ws void - TC held sale to be void - befr Son cud
take possession of the property he died, mother class I heir succeeded to the property - trnsfree
claimed benefir u/s 43 TPA - HC refused to grant remedy - APpeal to SC - obsrvd fr S43 two
conditions (i) fraudulent or errorneous representation (ii) Transferor acquired an interest in the
property
Transfer held to be void - Transferee ws aware of the title of the mother on the property
------------------------------------------
6. Conditional Transfer ( Secs 10 and 11)
Section 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 or limitation is void, except in the case of a lease where the condition is for the benefit of
the lessor or those claiming under him: provided that property may be transferred to or for the benefit
of a women (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during
her marriage to transfer or charge the same or her beneficial interest therein.
--
Section 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 the transfer direct that such interest shall be applied or enjoyed by him in a particular
manner, he shall be entitled to receive and dispose of such interest as if there were no such
direction.
1[Where any such direction has been made in respect of one piece of immoveable 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.]
Section 40. Burden of obligation imposing restriction on use of land.
Where, for the more beneficial enjoyment of his own immoveable property, a third person has,
independently of any interest in the immoveable property of another or of any easement thereon, a
right to restrain the enjoyment 1[in a particular manner of the latter property], or
Or of obligation annexed to ownership but not amounting to interest or easement.Where a third
person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership
of immoveable property, but not amounting to an interest therein or easement thereon,
such right or obligation 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 or obligation, not against such property in his hands.
Illustration
A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur to C, who
has notice of the contract. B may enforce the contract against C to the same extent as against A.
--
Transfer subject to a condition or limitation;
Absolute and partial restraints on transfer;
Exception in case of lease and married women;
Restrictions repugnant to interests created;
General principles;
Restrictions for beneficial enjoyment of one's own land;
Positive and negative covenants
(18) Rosher v Rosher (1884) 26 Ch D 801
The test to determine whether a restraint is absolute or only partial, depends upon the effect & not
on the form of words laying down the condition - selling a property at 1/5th of its value (irrespective of
whatever be the mkt value) is equivalent to a restraint upon at all
(19) Muhammad Raza vs Abbas Bandi Bibi, (1932) I.A. 236
transfr made with the restriction tht property to be sold only within the family & nt outside - held
whthr such a condition ws inconsistent with an othrwise absolute estate tht it must be regdd as
repugnant? - court held terms of restriction to alienation ws partial & tht such partial restriction ws
neither repugnant to law nor to justice, equity & gud conscience - court obsrvd family arrangements
are specially favored in the courts of equity - held tht trnsfree hd no power to alienate to the
appellants(strangers) & upon her death, the respondents(legal heirs) wud be entitled to the property
(21) Zorastrian Co-Operative Housing Society Ltd vs District Registrar, Co-op Societies(Urban)
(2005) 5 SCC 632
A condition imposed in the byelaws tht the property cannot be sold to a non-Parsi is valid. When a
person accepts membership of a co-coperative housing society by submitting to its byelaws &
secures an allotment of a plot of land/building & places on himself a qualified restriction in his right
to transfer the property by stipulating tht the same wud 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
an 'absolute restraint' on alienation offending S10 TPA.
(23) Tulk vs Moxhay (1848) 2 Ch. 774
Square - land belonging to X in btw alienated to E with condition of no contruction - aftr subsequent
alienations - land went to Y who wanted to construct a building. - X files suit against Y - Court rules
in favor of X
- Covenants bw trnsferor & original trnsfree are always enforcable
- Negative covenants are binding upon the subsequent transferee with notice
Rule in this case forms an exception to S11 TPA & in incorporated in 1st para of S40 TPA.
-------------------------------------------
7. Transfer for the benefit of unborn persons ( Secs 13-18)
Section 13. Transfer for benefit of unborn person.
Where, on a transfer of property, an interest therein is created for the benefit of a person not in
existence at the date of the transfer, subject to a prior interest created by the same transfer, the
interest created for the benefit of such person shall not take effect, unless it extends to the whole of
the remaining interest of the transferor in the property.
Illustration
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, for the eldest son of the intended marriage for life,
and after his death for As second son. The interest so created for the benefit of the eldest son does
not take effect, because it does not extend to the whole of As remaining interest in the property.
Section 14. Rule against perpetuity.
No transfer of property can operate to create an interest which is to take effect after the life-time of
one or more persons living at the date of such transfer, and the minority of some person who shall be
in existence at the expiration of that period, and to whom, if he attains full age, the interest created
is to belong.
COMMENTS
A covenant for pre-emption does not offend the rule against perpetuities and cannot be considered
void in law; Ram Baran v. Ram Mohit, AIR 1967 SC 747.
Section 15. Transfer to class some of whom come under sections 13 and 14.
If, on a transfer of property, an interest therein is created for the benefit of a class of persons with
regard to some of whom such interest fails by reason of any of the rules contained in sections 13
and 14, such interest fails 1[in regard to those persons only and not in regard to the whole class].
COMMENTS
It has been held by the Supreme Court that although no interest could be created in favour of an
unborn person but if gift was made to a class of series of person some of whom were in existence
and some were not, it was valid with regard to the former and invalid as to the latter; Raj Bajrang
Bahadur Singh v. Thakurain Bakhtraj Kuer, (1953) SCR 232.
Section 16. Transfer to take effect on failure of prior interest.
1[16. Transfer to take effect on failure of prior interest.Where, by reason of any of the rules
contained in sections 13 and 14, an interest created for the benefit of a person or of a class of
persons fails in regard to such person or the whole of such class, any interest created in the same
transaction and intended to take effect after or upon failure of such prior interest also fails.
Section 17. Direction for accumulation.
(1) Where the terms of a transfer of property direct that the income arising from the property shall be
accumulated either wholly or in part during a period longer than
(a) the life of the transferor, or
(b) a period of eighteen years from the date of transfer,
such direction shall, save as hereinafter provided, be void to the extent to which the period during
which the accumulation is directed exceeds the longer of the aforesaid periods, and at the end of
such last-mentioned period the property and the income thereof shall be disposed of as if the period
during which the accumulation has been directed to be made had elapsed.
(2) This section shall not affect any direction for accumulation for the purpose of
(i) the payment of the debts of the transferor or any other person taking any interest under the
transferor; or
(ii) the provision of portions for children or remoter issue of the transferor or of any other person
taking any interest under the transfer; or
(iii) the preservation or maintenance of the property transferred,
and such direction may be made accordingly.
Section 18. Transfer in perpetuity for benefit of public.
The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of property for the
benefit of the public in the advancement of religion, knowledge, commerce, health, safety or any
other object beneficial to mankind.
Creation of prior interests and absolute interests in favour of unborn persons;
Rule against perpetuity; A -> Property -> B
Rule of possible and actual events;
Transfer to a class;
Transfer when prior interest fails; S16
Directions for accumulation of income;
Exceptions
(24) Ram Newaz vs Nankoo, AIR 1926 All 283
While examining the trnsfr of prop u/s 14 TPA courts look at the possible events acc to the terms of
the deed & nt the actual events on the date of the trnsfr - in deciding the question of remoteness,
regard must be had to the possible & nt to the actual events - ram charan sold his agri land minus 2
Bighas but the sale deed hd a condition tht a part of the property(2 bigha) ws to remain with him, his
son and his lineal desc who hd no power to alienate his property - if none of the lineal desc were to
be alive then the 2 bighas to go to the vendees or his heirs - after the death of ram charan issueless
son a dispute arose betw the vendees & the reversioners of ram charan - deed of ram charan created
a life estate favor of himself & his son & also their unborn descendents - this ws in violation of S13
as only absolute interest in the property can be trnsfrd fr the benefit of an unborn person(only one
level of unborn person) - PC applied the test tht in deciding the question of remote rgd must hd to the
actually happens - court exmnd terms of the deed tht in according to the condn tht the land must hv
remained in hands of Ram Charan fr 100s of years - such conditiion rendered void by law and the
reserved land decreed to reversioners of Ram Newaz
(25) Ram Baran vs Ram Mohit, AIR 1967 SC 744: (1967) 1 SCR 293
Rule against perpetuity applies only to trnsfr of property & nt to agreeement/contracts
2 bros - jointly owned - made a covenant tht if any one of them wntd to dispose the prop the 1st right
to buy the prop shall be of the other bro (pre emption right created in favor of both) - one bro sold his
share to 3rd person on bros refusal to buy the same - other brothr sold his share w/o offering it to his
brother - transferee went wantd to sell it further - bro moved court against tranfree - pre emption
clause - trnsfree contended tht pre-emption clause hit by rule against perpetuity - SC agreed w/ TC
& HC - ruled tht pre-emption clause not hit by rule against perpetuity
(26) R Kempraj vs Burton Son & Co, AIR 1970 SC 1872: (1969) 2 SCC 594
The rule against perpetuity does not apply to a lease - lease 10yrs provided fr an option to leasee to
renew the same fr further 10yrs as desired on the same terms - leasee befr expiry of 10yrs wntd to
renew lease - lessor did nt comply - leasee filed suit fr performance of agreement in lease for renewal
- Issue ws whthr clause fr renewal of lease can be regarded as creating an interest in property &
thus hit by rule against perpetuity and hence is void? - Court obsrvd tht rule against perpetuity is
founded on the principle tht the liberty of alienation shall nt be exercised to its own destruction - A
perpetuity(creation of remote interest in future) is a limitation which places the property for ever out of
reach of the exercise of power of alienation - owing to sec 105 TPA a lease is a transfr of right to
enjoy property fr a certian time or in perpetuity - even then interest remains in the lessor, the
reversioner - thus the lease is prsnt case is nt hit by rule of perpetuity - clause relating to renewal of
lease does not create right in property thrfr does fall within the ambit of S14 TPA
---------------------------------------------
8. Vested and Contingent Interests ( Secs 19 and 21 )
Section 19. Vested interest.
Where, on a transfer of property, an interest therein is created in favour of a person without
specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or
on the happening of an event which must happen, such interest is vested, unless a contrary intention
appears from the terms of the transfer.
A vested interest is not defeated by the death of the transferee before he obtains possession.
Explanation.An intention that an interest shall not be vested is not to be inferred merely from a
provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same
property is given or reserved to some other person, or whereby income arising from the property is
directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular
event shall happen the interest shall pass to another person.
Section 21. Contingent interest.
Where, on a transfer of property, an interest therein is created in favour of a person to take effect
only on the happening of a specified uncertain event, or if a specified uncertain event shall not
happen, such person thereby acquires a contingent interest in the property. Such interest becomes
a vested interest, in the former case, on the happening of the event, in the latter, when the happening
of the event becomes impossible.
Exception.Where, under a transfer of property, a person becomes entitled to an interest therein
upon attaining a particular age, and the transferor also gives to him absolutely the income to arise
from such interest before he reaches that age, or directs the income or so much thereof as may be
necessary to be applied for his benefit, such interest is not contingent.
Definition of and distinction between vested and contingent interests
(27) Rajesh Kanta Roy vs Shanti Debi, AIR 1957 SC 255: 1957 SCR 77
principle to decide whtr interest taken by beneficiaries undr trust is whtr vested or contingent - owner
makes elder son trustee fr entire property - made a provision fr the property to be divided in fvr of two
sons - but the interest which either of them to get ws made subject to happ of 2 events - (i)
discharge of all debts of the settler (ii) at the death of the settler the trust coming to an end
Issue - whtr interest created by the trust deed ws vested or contingent
Death of settler ws nt an uncertain event
Discharge of death ws an uncertain event
Court obsrvd tht it is now well settled tht such a devise(payment of debts) confers an immediate
vested interest - the words of apparent, postponement, being considered only as creating a charge -
the question is really one of intention to be gathered by a comprehensive view of all terms of the
document
Court dilineated the scheme of the trust deed as
(i) Specified lots were earmarked fr each of his two sons
(ii) Present income out of those lots were to be appld fr the discharge of debts
(iii) Any surplus which remained were to go to the very person to whom the lot ws to belong
(iv) in the event of any of the two sons dying befr the termination of the trust his interest ws to
devolve on his heirs
SC said these arrangements taken together indicate tht wht ws postponed ws nt the vesting of
property in the lot themselves but tht the enjoyment of the income throf - the enjoyment of income
ws burdened with certian monthly payments (to sons) & with the obligation to discharge debts thr
frm notionally prorata - All of which taken together constitute the application of income fr the benefit
of the sons.
Decision is a vested interest thus attachable under a courts decree
---------------------------------------------
9. Transfer during pendency of litigation ( Sec 52)
52. Transfer of property pending suit relating thereto.
- During the 1[pendency]
- in any Court having authority 2[ 3[within the limits of India excluding the State of Jammu and
Kashmir] or established beyond such limits] by 4[the Central Government] 5[* * *]
- of 6[any] suit or proceedings which is not collusive and
- in which any right to immoveable property is directly and specifically in question,
- the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so
as to affect the rights of any other party thereto under any decree or order which may be made
therein,
- except under the authority of the Court and on such terms as it may impose.
7[Explanation.For the purposes of this section, the pendency of a suit or proceeding shall be
deemed to commence from the date of the presentation of the plaint or the institution of the
proceeding in a Court of competent jurisdiction, 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, or has become unobtainable by reason of the expiration of any period of
limitation prescribed for the execution thereof by any law for the time being in force.]
COMMENTS
(i) This section comes into existence from the point of the institution of the suit and continues to
survive till the satisfaction of the decree. The petitioners were as much bound by the decree and
judgement dated 16th August, 1973 and their transferor; Abdul Aziz v. District Judge, AIR 1994 All
167.
(ii) The effect of doctrine of his pendens as embodied in section 52 of Transfer of Property Act is not
to annul all voluntary transfers effected by the parties to a suit but only to render it subservient to the
rights of the parties thereto under the decree or order which may be made in that suit. Its effect is
only to make the decree passed in the suit binding on the transferee if he happens to be third party
person even if he is not a party to it. The transfer will remain valid subject, however to the result of
the suit; K.A. Khader v. Rajamma John Madathil, AIR 1994 Ker 122.
Concept of "Lis Pendens";
Lis - An action or a suit, Pendens - Pending
Meaning of proceedings;
Collusive suits;
Commencements and conclusion of suits;
Specific rights in specific immovable property -
Voluntary and Involuntary alienations - Even Involuntary alienations are subject to lis pendens
(28) Jayaram Mudaliar vs Ayyaswamy, AIR 1973 SC 569: (1972) 2 SCC 200
Private sale of a family property by a Karta, pending a suit fr partition instituted by a member is hit
by S52 & does nt bind the family. The purpose of S52 TPA is nt to defeat any just & 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. Pre-existing liabilities of the Karta alone have no priority over the rights of
other members of the Joint Family
(29) Supreme General Films Exchange Ltd vs Maharaja Sir Brijnath Singhji Deo, AIR 1975 SC 1810:
(1975) 2 SCC 530
A lease of immovable property is affected by the doctrine of lis pendens as it created new rights
during the pendency of the litigation.
---------------------------------------------
10. Mortgage (Ss 58-60, 100)
Section 58. Mortgage, mortgagor, mortgagee, mortgage-money and mortgage-deed defined.

(a) A mortgage is the transfer of an interest in specific immoveable property for the purpose of
securing the payment of money advanced or to be advanced by way of loan, an existing or future
debt, or the performance of an engagement which may give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of
which payment is secured for the time being are called the mortgage-money, and the instrument (if
any) by which the transfer is effected is called a mortgage-deed.
(b) Simple mortgage.Where, without delivering possession of the mortgaged property, the
mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly,
that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to
cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be
necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the
mortgagee a simple mortgagee.
(c) Mortgage by conditional sale.Where, the mortgagor ostensibly sells the mortgaged property
on condition that on default of payment of the mortgage-money on a certain date the sale shall
become absolute, or
on condition that on such payment being made the sale shall become void, or
on condition that on such payment being made the buyer shall transfer the property to the seller,
the transaction is called mortgage by conditional sale and the mortgagee a mortgagee by conditional
sale:
1[Provided that no such transaction shall be deemed to be a mortgage, unless the condition is
embodied in the document which effects or purports to effect the sale.]
d) Usufructuary mortgage.Where the mortgagor delivers possession 1[or expressly or by
implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and
authorises him to retain such possession until payment of the mortgage-money, and to receive the
rents and profits accruing from the property 2[or any part of such rents and profits and to appropriate
the same] in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest 3[or]
partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and
the mortgagee an usufructuary mortgagee.
(e) English mortgage.Where 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
proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed,
the transaction is called an English mortgage.
4[(f) Mortgage by deposit of title-deeds.Where a person in any of the following towns, namely, the
towns of Calcutta, Madras, 5[and Bombay], 6[* * *] and in any other town7 which the 8[State
Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to
a creditor or his agent documents of title to immoveable property, with intent to create a security
thereon, the transaction is called a mortgage by deposit of title-deeds.
(g) Anomalous mortgage.A mortgage which is not a simple mortgage, a mortgage by conditional
sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within
the meaning of this section is called an anomalous mortgage.]
COMMENTS
Usufructuary mortgage
(i) The mortgagor had borrowed Rs. 1000 from the mortgagee and the possession of the building was
handed over to the mortgagor. The mortgage money was to be repaid within a period of six months
and in case of default the mortgagee had the right to bring the property to sale and realise the
amount. The document therefore which was described as usufructuary mortgage was held to be
anomalous mortgage and not usufructuary mortgage as it had character of a simple mortgage too as
mortgagee was given the right to sell the property to realise the mortgaged amount; Hathika v.
Puthiyapurayil Padmanathan, AIR 1994 Ker 141.
(ii) Where a mortgagee is continuing in possession of suit land as mortgagee for a continuous period
of not less than fifty years, mere increase in the mortgage money, induction of a co-mortgagee, non-
defining of their shares, would not alter the situation; Narayana Pillai Raghavan Pillai v. Narayani
Amma Ponnamma, AIR 1992 SC 146.
Section 59: Mortgage when to be by assurance
Where the principal money secured is one hundred rupees or upwards, a mortgage 2 [other than a
mortgage by deposit of title-deeds] can be effected only by a registered instrument signed by the
mortgagor and attested by at least two witnesses.
Where the principal money secured is less than one hundred rupees, a mortgage may be effected
either by 3 [a registered instrument] signed and attested as aforesaid, or (except in the case of a
simple mortgage) by delivery of the property.
Section 59A: References to mortgagors and mortgagees to include persons deriving title from them
Unless otherwise expresslyprovided, references in this Chapter to mortgagors and mortgagees shall
bedeemed to include references to persons deriving title from them respectively.
Section 60. Right of mortgagor to redeem.
At any time after the principal money has become 1[due], the mortgagor has a right, on payment or
tender, at a proper time and place, of the mortgage-money, to require the mortgagee (a) to deliver
2[to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which
are in the possession or power of the mortgagee], (b) where the mortgagee is in possession of the
mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the
mortgagor either to re-transfer the mortgaged property to him or to such third person as he may
direct, or to execute and (where the mortgage has been effected by a registered instrument) to have
registered an acknowledgement in writing that any right in derogation of his interest transferred to the
mortgagee has been extinguished:
Provided that the right conferred by this section has not been extinguished by act of the parties or by
3[decree] of a Court.
The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit
for redemption.
Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time
fixed for payment of the principal money has been allowed to pass or no such time has been fixed,
the mortgagee shall be entitled to reasonable notice before payment or tender of such money.
COMMENTS
Extinguishment of mortgage right
When a mortgagee acquires a portion of the equity of redemption, the mortgage is not extinguished
completely. There can be only a pro tanto extinguishment of the mortgage right to the extent of the
mortgagee acquiring the mortgagors interest and so far as the other sharer of the equity of
redemption is concerned, the mortgage will subsist; Madhavan Nair v. Ramankutty Menon, AIR 1994
Ker 75.
Section 100. Charges.
Where immoveable property of one person is by act of parties or operation of law made security for
the payment of money to another, and the transaction does not amount to a mortgage, the latter
person is said to have a charge on the property; and all the provisions hereinbefore contained
1[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, 2[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].
--
Definitions of Mortgage;
Kinds of Mortgages;
Mode of execution of mortgages;
Redemption and Foreclosure of mortgages;
Clog on equity of redemption;
Distinction between mortgage and charge;
(33) Ganga Dhar vs Shankar Lal, AIR 1958 SC 70
A long term is nt neccessarily a clog on redemption. The question is essentially one of fact & hs to
be decided on the circumstances of each case. - mortgage 85 yrs + within 6 months - SC held
85yrs fine . mortgagor ws nt under any financial embarrasment & mortgagee did nt act in unfair
manner in his position as lender - but 6 months condition is nt valid - and it will continue to be a
mortgage even after that
(34) Pomal Kanji Govindji vs Vrajlal Karsandas Purohit, AIR 1989 SC 436: (1989) 1 SCC 1935:
(1989) 1 SCC 458
The maxim 'Once a Mortgage, always a Mortgage & avoidance of provisions obstructing redemption
as "clogs on redemption" are expressions of this judicial protection - its a settled law in England & in
India tht a mortgage cannot be made altogether irredeemable or redemption made illusory - 99 yrs
mortgage (anomalous mortgage) - no payment possible befr 99 yrs - no periodical payment possible
- mortgager hd right to demolish structure and create new buildings - suit fr possession befr 99 yrs -
court held in favor - said given condition ws clog on redemption
(35) Shivdev Singh vs Sucha Singh, AIR (2000) SC 1935: (2000) 4 SCC 326
The doctrine of clog on the equity of redemption hs to be moulded in modern conditions; the rule
against a clog on the equity of redemption empowered the courts to relive a party frm this bargain -
Rs 7000 - mortgage 99yrs - usufructs fr 26yrs - sum meagre - appellants took undue adv of
mortgagor's financial condition
---------------------------------------------
12. Gift(Ss 122-126)
Section 122. Gift defined.
Gift is the transfer of certain existing moveable or immoveable property made voluntarily and without
consideration, by one person, called the donor, to another, called the donee, and accepted by or on
behalf of the donee.
Acceptance when to be made.Such acceptance must be made during the lifetime of the donor and
while he is still capable of giving.
If the donee dies before acceptance, the gift is void.
COMMENTS
Validity of gift
Gift deed executed by defendant in favour of plaintiff with respect of property of her deceased
husband. Defendant was not legally wedded wife of deceased. She being concubine was not entitled
to inherit property. Gift deed executed by her is not valid; P. Jayaramaiah v. Aragonda Munemma,
AIR 2005 AP 26.
Section 123. Transfer how effected.For the purpose of making a gift of immoveable property, the
transfer must be effected by a registered instrument signed by or on behalf of the donor, and
attested by at least two witnesses.
For the purpose of making a gift of moveable property, the transfer may be effected either by a
registered instrument signed as aforesaid or by delivery.
Such delivery may be made in the same way as goods sold may be delivered.
COMMENTS
Unregistered gift of immovable property
Under section 123 a gift of immoveable property cannot pass any title to the donee if it is not
registered. Any oral gift of immoveable property cannot be made in view of the provision of section
123 of the Act, mere delivery of possession without written instrument cannot confer any title; R.N.
Dawar v. Ganga Ram Saran Dhama, AIR 1993 Del 19.
Section 124. Gift of existing and future property.
A gift comprising both existing and future property is void as to the latter.
Section 125. Gift to several of whom one does not accept.
A gift of a thing to two or more donees, of whom one does not accept it, is void as to the interest
which he would have taken had he accepted
Section 126. When gift may be suspended or revoked.
The donor and donee may agree that on the happening of any specified event which does not depend
on the will of the donor a gift shall be suspended or revoked; but a gift which the parties agree shall
be revocable wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may
be.
A gift may also be revoked in any of the cases (save want or failure of consideration) in which, if it
were a contract, it might be rescinded.
Save as aforesaid, a gift cannot be revoked.
Nothing contained in this section shall be deemed to affect the rights of transferees for consideration
without notice.
Illustrations
(a) A gives a field to B, reserving to himself, with Bs assent, the right to take back the field in case
B and his descendants die before A. B dies without descendants in As lifetime. A may take back
the field.
(b) A gives a lakh of rupees to B, reserving to himself, with Bs assent, the right to take back at
pleasure Rs. 10,000 out of the lakh. The gift holds goods as to Rs. 90,000, but is void as to Rs.
10,000, which continue to belong to A.
Definition of gift;
Gifts are a kind of transfer of property in Transfer of Property Act(hereinafter referred as the Act) in
India. Section 122 of the Act defines Gift. This is the transfer of property made voluntarily. There will
be no consideration for the transfer.
Who are the Parties of Gift?
The parties in gift are known as donor and donee. The person who transfers the property by way of
gift to another is known as donor. The person in whose favour property is transferred by gift is known
as donee.
Elements of Gift
- There must be transfer of ownership of the property
- The transfer must be of an existing property - nt future - corporeal or incorporeal - if gift comprises
both future * existing prop then its void wrt future property - though transfer may be in future - prop
must exist at time of date of gift - shld be a transferable prop
- Both movable and immovable property can be transferred.
- The transfer must be voluntarily.
- The transfer must be gratutious or without consideration.
- The property must be accepted by or on behalf of the person to whom it is transferred.
- donor must be competent - minor cannt make gift, trustee cannot make gift out of trust property
unless authorized by terms of the trust
Mode of execution of gift;
Trnsfr Immovable property must be registered - movable property (registration optional)
Suspension and revocation of Gifts: Only under two conditions
- Revocation by an agreement
- Revocation on grnds of undue influence, fraud etc
(42) Tila Bewa vs Mana Bewa, AIR 1962 Ori 130
m-i-l gift to d-i-l -> gift deed contained an alleged condition tht donee ws to look after and serve the
donor - the donee left the donor & remarried - the donor cancelled the gift - the court held tht to look
after the donor ws only the donor's pious wish & nt a condition, non fulfilment of which cud enable
the donor to revoke or cancel the gift -
Court obsvrd - A gift subj to the condition tht donee shld maintain the donor(or meet funeral
expenses) cannot be revoked u/s 126 TPA fr failure of the donee to do so, firstly becoz thr is no
agreement bw the parties tht the gift cud be revoked, secondly this shld nt depend on the will of the
donor again the failure of the donee to maintain the donor is nt a contingency which shld defeat the
gift; all tht can be said in donee's default is lack of consideration - S 126 thus provides against the
revocation of a document of gift fr failure of consideration
(43) Kartari vs Kewal Krishan AIR 1972 HP 117
Gift deed executed by an old widow under undue influence & fraud is void - male collaterals take old
lady to Una in absence of her daughter on pretext of treatment - get a gift deed signed by her of all
her property - also take possession of the property- contend tht old lady wntd property to be in
possession of her husband's heirs - court rejected contention as this ws nt mentioned in the gift
deed - held transaction appears suspicious - mere fact tht beneficaries had taken a leading part in
the execution of the gift deed & this by itself is sufficient to prove tht they dominated the will of the
donor & exercised undue influence in obtaining an unfair adv over the natural heir, the daughter of the
heir, of the entire properties.