The transfer of property act 1882

Immovable properties
-

The definition of immovable properties it is negative definition, which say

what is not an immoveable property.
Section 3- of Transfer of property Act 1882-immoveable property does not
include standing timber, growing crops or grass.
Section 3- of The General Clauses Act 1897- Immovable propertyLand Benefits to arise out of land- Profit Appendary (Exp- Rent,
fishing rights, right to ferry, lease)
Things attached to the earth or permanently fastened to anything
attached to the earth.- Exp- building, wall, poll.

Definition of Immovable PropertiesSection 3- immovable property shall include land, benefits to arise out of
land, and things attached to the earth, or permanently fastened to
anything attached to the earth, except standing timber, growing crops or
grass, it also include creepers and betel leave.
What is the meaning of Land in TPThere are four meaning of Land in TP1.
2.
3.
4.

Plot of land or plain land.

Land includes space as well.
Things beneath land.
Things above surface or thing on surface.

Case law- Narayan Sa v/s Balagure Swami AIR 1924 Madras 187
Vassal used for destilation of liquor not immovable property.
Standing Timber- Case Law- Shanti Bai v/s State of Bombay AIR 1958 SC
532
In this case SC held that , intention of the owner decide whether a
standing timber a timber or crop.
-

A fruit bearing tree are immovable property, if the owner treat it as

a timber .

which one is immovable property?- 2003-SN

Growing crops? 2003-SN

Q-

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Right to ferry? 2003-SN

Standing timber? 2003-SN
Define immovable property. In which cases things which we know as
movable are treated as immovable property? Is there any test to
decide it-2007-L

AThe definition of Immovable property given in the S.3 of Transfer of Property Act
1882, is not exhaustive, it is the negative definition which exclude the things and
says immovable property does not include standing timber, growing crops or
grass. The definition in the General clauses Act also not exhaustive but it is some
what positive definition which includes land, benefits to arise out of land , and
things attached to the earth.
Things attached to earth, or permanently fastened to anything attached
to earth?
a. Things rooted in the earth- trees and shrubs.
b. Imbedded in the earth- wall or building.
c. Attached to what is so imbedded for permanent beneficial
enjoyment of that which it is attachedPerumal v/s Ramaswami held- oil engine attached to earth and the
attachment to lasts only so long as the engine is used. When it is
not used, it can be detached and shifted to some other place. The
attachment in such case immovable property.
Narayan Sa v/s Balagure Swami AIR 1924 Madras 187 Vassal used
for destilation of liquor not immovable property.
The degree, manner, extent and strength of attachment of the chattel to the earth
or building, are main features to be regarded. Further test is whether, such an
attachment is for the permanent beneficial enjoyment of the immovable property
to which it is attached.
Land- considers in its legal aspect, land includes the following elements:
1.
2.
3.
4.

A determinate portion of the earths surface.

Possibly the column of space above the surface.
The ground beneath the surface.
All objects which are on or under the surface in its natural state- minerals,
lakes, ponds, rivers.
5. All objects placed by human agency on or under the surface, with the
intention of permanent annexation. These become part of the land, and lose
their identity as separate movable building, walls, fences.
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Benefits to arise out of landApart from property being immovable from the physical point of view, every
benefit arising out of it and every interest in such property is also regarded as
immovable property.- hereditary allowances, rights of way, lights, ferries and
fisheries. A debt secured by a mortgage of immovable property is an interest
inland. A right to collect lac from jungle, flash from pond, right to take minerals,
rent from hat or market place.
Things attached to earthS.3 defines the expression attached to the earth- as including1.
2.
3.
4.

Things rooted in the earth,

Things imbedded in the earth,
Things attached to what is so imbedded,
Chattel attached to earth or building.

Things rooted in the earthIncludes like trees and shrubs, but when such trees constitute standing timber they
are not immovable property.
Shantabai v/s State of Bombay- if the intention is to use them for
enjoying their fruits, they will be regarded as immovable property. But if
the intention is to cut them down sooner or later for the purpose of
utilizing the wood they would be timber and regarded as movable
property.
Similarly, growing crops, and grass are regarded as movable property.
Things imbedded in the earthIncludes such things as houses and buildings, there are certain thing which are
imbedded in the land but not a immovable property like anchor imbedded in the
land to hold a ship.
When the article in question is no further attached to the land by its own
weight, it is generally to be considered as movable property. But when in
such a case if the intention is to make the articles as part of the land
The rule is- if the article stands on the earth up to its own weight, it will
not be part of the land but if it is caused to go deeper in the earth by
external agency, then it is part of a land.
Things attached to what is so imbedded3 | Page

Includes like door, window of a house are attached to the house for the
permanent enjoyment of the house, when the intention Is not permanent
enjoyment then it becomes the movable property like fans, blinds.
Chattel attached to earth or buildingIf a chattel, i.e., movable property is attached to earth or building, it is immovable
property.
Perumal naicker v/s Ramaswami Kone- A property is a movable property and
for its beneficial use of enjoyment it is necessary to imbed it or fix it on earth,
through permanently, that is , when it is in use it should not be regarded as
immovable property for that reason.
For example sugar cane machine or oil engine.
Recognized as Immovable properties1.
2.
3.
4.
5.
6.

Right to collect rent of immovable property.

Right to collect dues from a fair on a piece of land.
Right of ferry.
Right of way.
A right of fishery.
A debt secured by mortgage and interest of a mortgage of
immovable property.
7. Hereditary offices.
8. Right to receive future rents and profits of land.
9. The equity of redemption.
10.
Reversion of property of leased.
11.
Right to collect lac from trees.
12.
A factory.
Recognized as movable properties1.
2.
3.
4.
5.
6.
7.
8.

Right to worship.
A royalty.
A decree for sale of immovable property.
A decree for arrears of rent.
A right to recover maintenance allowance.
A machinery which is not permanently attached to the earth.
Government promissory notes.
Standing timber, growing crops, and grass.

Section 5, Transfer of Property

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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 and one or more
other living persons; and "to transfer property" is to perform such act.
When we analyze the above definition- there are few things which comes up
regarding Transfer of property

Transfer is an ACT- Giving and Taking of Rights- Active Act, Visible Act.

Between two or more LIVING PERSON- by which a living person Inter vivosLiving or Natural person and Artificial Person ( Law existence, company).

Conveys- transfer.

Present or future- Future property not allowed.

Property- Property to another person- To himself ( Trust, minor or

guardianship- Rahubar Singh v/s Jai Jnder Bhadur Singh.
Transfer of Property
Act
Practice
Insolvent
Subject matter
Mode of Transfer
There are modes of transfer of property
1. Sale (Immovable Property). Transfer of Complete Rights. Consideration.
2. Mortgage. ( it is of six kind- 1. Possession,2. Enjoyment,3. Subject to
Condition,4. Equitable,5. Symbolic, 6. Constructive.) Limited Rights
Transfer.
3. Gift- ( No consideration)
4. Actionable claim.- Unsecure debt.

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5. Lease (Time force, Rent)

Movable Property= Pledge
Immovable Property= Mortgage.
Machinery= Hypotation.

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.
xxxxx
What is transfer? The term "transfer" means a process or an act by which
something is made over to another. It does not however, mean that the making
over of the thing should always be absolute. I may transfer my book to you for a
day. I may also transfer it to you absolutely either by sale, gift or in exchange of
your book. In either case, what is primarily essential is that I have to handover the
book to you, and that act of handing over the book to you is the transfer of the
book.
Analysis of Definition.
1. Transfer of Property has special technical meaning in Transfer of Property Act.
Only 5 conveyances are transfer of property for the Act. Three modes convey
absolute title e.g. sale, gift, exchange. Two convey limited interest e.g.
mortgage and lease.
2. Transfer inter vivos alone are included as Transfer in Transfer of Property Act,
e.g. transfer from living person or persons to living person or persons.
3. Transfer can be present or future but transferor and transferee must be living
person. The only exception is Section 13 of Transfer of Property Act.
4. Living person is wider term than natural human beings. It includes juristic
persons like company and other like associations or body of individuals whether
registered or not registered.
5. Other laws governing transfer to juristic persons etc. are not affected by Transfer
of Property Act.

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SynopsisDefinition

An act by which,
A living person,
Conveys,
In present or future,
Property,
To another living person.

Not a Transfer of Property

-

Family settlement.
Compromise
Partition.
Surrender.
Relinquishment.
Charge.

Transfer of Property
- Release
- Property situated outside India.
An Act- it means it is a process or an activity; it is not a digital
application or not the automatic process. Meaning thereby, something
should be done by the person who wants to transfer his or her property.
Will or Inheritance is the exception of this rule as property transfer
automatically by operation of law.
Living Person- The Act use the word Inter Vivos i.e. transfer between
living person AT THE DATE OF TRANSFER. Operation of law come into
picture in case of Inheritance or wills ( means the death of the transferor)
this sort of transfer ( By operation of law) called TESTAMENTRARY
TRANSFER.
Conveys Doing an act of transfer denote conveys. It means any act the
transferor by which certain new titles or interests are created in favor of
the transferee. In simple language it would be called the ASSURANCE
which is being given by Transferor to the Transferee. Conveys means
anything done or any assurance given by the Transferor to the
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Transferee by virtue of which the transferee gets the new title or interest
is called the conveys.
EmpA -------------------- Make (Sale/Gift/Moorgate etc)
get the new title)

------------

B ( Now

Conveys
In present or In future- The transfer of property may be take place immediately
or in future date, the expression in present or in future governed by Conveys, it
does not govern by the property.
Means the title of property may vested in the transferee immediately with
enjoyment or it enjoyment can be delayed or postpone for future, which can also
comply with certain conditions.
Property- property may be tangible or intangible, property is essentially a bundle
of rights or interest. When a property is transferred it actually the transfer of rights.
All rights in a property denote the ownership or absolute interest.
in Sunil Sidhartbai v/s Commissioner of Income tax, SC held that
in general transfer of property transferred the bundle of right but
in some case it may only be partial of right transfer also happen
example Lease.
In Jugalkishore V/ Ram Cotton Co. Ltd. SC held- the world PRESENT
OR IN FUTURE qualify the word conveys and not the word
property. When a future property is transferred the transferee
does not get that property or interest there in.
To another living person. There should be another person to whom the
property can be transfer, a person can not transfer the property to himself, but in
1929 some amendment has been made and a person can transfer a property to
himself in case he make any settlement in a trust and he become the sole trustee.
Other Rules- Not a Transfer of Property
Family SettlementFamily settlement or Family agreement is not a transfer of property, why because
when it take place the already existing shares of the members of the family are
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defined and separated in order to avoid any possible dispute. In Sadu Madho Das
V/s Pandit Mukund Ram, SC observed the same principle.
Transfer of property
Release- It is a transfer of property, because when larger interest falls into
smallest interest every small interest generate a title for some one or new person.

This Act also applicable on MOVABLE AND IMMOVABLE PROPERTYS ( Part A

Chapter II).

S.6- What Can be Transfer-

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Like the Muslim Law

Prohibited
Category
outside the
TPA

Civil Law

Prohibited Ca tegory of Transfer under TPA - S.6

Some p art gov erned by other personal laws like muslim or H indu Law

Hindu Law - Govern - Religious offerings

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PTS er o r mh i b i t i e
Creih t i ea b dt i e g o
cCyaUt e - a n d C n d a e n n r o
t
bnAU e n n y d
i
Tsoe r tr a h n e s r f e
o
fLSn a . 6 w
eT P A
r.
6
Section -6
General Rule- Every thing Can be Transfer
Exception- Prohibited by S.TPA, any other law in force.

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t ed d
r y
t
r

Section .6 Non Transferable.

Spes Successionis- Mere Chance to Get any thing.
Chance of an Heir apparent.
Chance of getting property under will.
Any othe rpossibility like nature.
Spes-successionis under Muslim Law.
Spes Successionis in Punjab.
English Law.
Mere Right of re entry.
Easement right apart from Dominate Heritage.
Restricted Interest.
Right to Future Maintenance.
Pensions and Stipens.
Transfer opposed to Nature of Interest.
Transfer opposed to nature of interest created thereby.
Transfer where its object or consideration is unlawful.
Transfer made to disqualified transfereee.
Spes Successionis- Expectation of succession ( of gaining something)
Exp- will or inheritance
It includes- - Base You can not transfer mere hope.
Chance of an Heir apparent- succeeding to an estate.
Chance of getting property under will.
Any othe rpossibility like nature.
Right of reversioners u/Hindu Law.
Reversioner was a person who used to inherit the properties of a widow held by her
for life. After the death of widow.
Chance of Legacy- because the will executed only after the death of the testator.
Rights of Future offering. Receiving offering of a temple.
Case lawPunch Tahkur v/s Bindeshwari AIR 1916 Cal 43 Cultauta High Court heldit is mere possibility so it cannot be transfer.
Balmukund v/s Tularam AIR 1928 All 21
It is not the spes succession , it is not a hope or uncertain and not variable to pass
and of conception of law hence transferable.

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Badrinath v/s Punna AIR 1979 SC 13`14 Vashno Devi Tample

It is not a mare possibility it is attached with a duty, and held it is heritable and it is
not depending upon possibility it is coupled with duty and hence transferable.
Spes Succession Condition in English Law
Spes Secceession not transferable but it depend on one conditions,
1. if the transferee has paid the consideration.
2. If everything goes well that contemplated event has been done.
Section 9- Oral Transfer- Mode of Transfer
This section deal with mode of transfer, it says where writing is not necessary the
property may be transferred orally. i.e. without writing any deed.
It means there are two mode of transfer1. Delivery of possession- which generally happened in case of movable
property.
2. Transfer by registration.
In the following condition Registration are compulsory u/s 9 of TPA1.
2.
3.
4.
5.
6.
7.
8.

Gift of an immovable property.

Sale of an immovable property exceeding Rs 100.
Sale of reversion or other intangible property irrespective out of its value.
Leases form year to year or for a term exceeding one year or reserving a
year rent.
Simple mortgage irrespective of its amount.
Other kind of mortgage( except mortgage by deposit of title deeds)
where the sum secured exceeds Rs 100.
Exchange of immovable property ERs 100.
Transfer of actionable claim.

Section 10 Conditional Transfer

Conditional transfer if allowed.
There are two form of Conditions1. Use related conditions.
2. Further transfer of property- alienation.
Application of S.1013 | P a g e

Does not apply on

1. Mortgage
2. Lease

Why it is exception of general rule of S.10,

because it is itself a conditional nature

Applicable on following1. Sale.

2. Gift.
3. Actionable claim.
Nature of AlienationOnly the CONDITIONS would be void not the transfer.
General Rule- Right of disposing of property is the essential right of ownership.
S.10 put a check on absolute restraint of alienation, and made the condition void.
But there are two exception of this general rule
1. Lease.
2. Married woman.
In both the cases the absolute restrain of alienation can be made.
S.10 are based on the rule of equity, that property should no be made inalienable
permanently. There for the provision s of this section may be applied also to those
transfers which are not govern by this Act for example Punjab which is out of the
purview of this act but the principle of alienation is applicable all the transfer in
Punjab if the transfer against the principle of alienation.

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Section 7- person competent to transfer

Any body can transfer who are
Competent to transfer.
1. Attained the age of majority.
2. Soundness of mind.
3. There should be no other legal bar.
Entitle to Transfer.
1. Entitle.
2. Authorized.
3. Competent.
Competent to inter into a contract.
Entitle to transfer ( must be ownership)
Nemo dept quat non habit- You can transfer only those which you have.
Section 8- Operation of transfer
To understand the section 8 we have to understand what happen in transfer, we
transfer the interest or rights actually.
By transferring property, we also transfer some incident, which may or may not be
express in writing.
Example of legal incident areLegal incident is easement rights.
Property
Land

Legal Incident
Easement , rent,and profits and all
things attached to the earth.
House
Easement the rent accruing after the
transfer, locks, keys,bars, doors and
other things.
Machinery attached to earth
Movable parts of machinery
Debt
Securities (right to resort to some
property for the satisfaction of the debt
Money or other property yielding income Interest or income accruing after the
transfer takes effect.

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Section-10- Condition restraining alienation- Void the Condition not the

Transfer.
Where property is transferred subject to a condition or limitation
ABSOLUTELY RESTRAINING the transferee or any person claiming under him form
parting with or disposing of his interest in the property, the condition or limitation
is void, except in the case of lease where the condition is for the benefit of the
lessor or those claiming under him .
Provided that property may be transferred to or for the benefit of a women (not
being a Hindu, Muhammadan or Buddhist), so that she shall not have power during
her marriage to transfer or charge the same or her beneficial interest therein.

Conditional Transfer
Absolute restraint
Partial restraint
Restaint on alienation in compromises
Applicability of S.10

Exception
1. Married woman
2. Lease
CRUX

OF

S.10

-CONDITION TRANSFER - VALID OR NOT

-TYPE OF CONDITIONS
1. USE RELATED
2. FURTHER TRANSFER OF PROPERTY - called Alienation
OBJECT

PROPERTY

SHOULD BE TRANSFER FROM ONE TO ANOTHER FOR THE HEALTH OF

NATIONAL WEALTH

RIGHT OF DISPOSAL IS ONE OF THE ESSENTIAL FEATURE OF OWNERSHIP, AND IT IS

THE RIGHT OF OWNER

THE TRANSFER WOULD NOT VOID BUT THE

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Condition would void

Ingredients Conditions which absolutely restraint the alienation

Partial restraint is valid and enforceable- Muhammad Raza V Abbas Bandi
Bibi- condition restraint the transfer outside the family.
S10 applies only when there is absolute transfer of ownership like
Sale, Gift, Actionable Claim
I t does not applies on Mortgage or Lease.
Compromise- is outside the preview of S5 Transfer of property so S10
does not apply on Compromise.
Mata Prasad V Nageshar Sahai- Dispute over succeeding the properties
of the deceased between his widow and nephew. It was compromise
between them that widow shall hold the possession of the property for
her life while admitting the title of the nephew but nephew was
restrained from transferring the property during the life of the widow.
Same in Laxmama V State of Karnataka- Held Grant by Govt is not fall
within the meaning of S5 so it can be restraint.

ExceptionLease- It applies to permanent or temporary lease.

Married woman- to safeguard the right of married women.

Section 11- Restriction repugnant to interest created- Section 11 r/w S17

Crux- Right to use in a particular Manner- is void.
Exception1. Necessity of Beneficiary Enjoyment of property adjacent to property. (Which
has been established in Tulk v Moxhay 1848,41 ER 1143- and call the
RESTRICTIVE COVENANTS)
2. The condition has been imposed by the transferor himself.
S-10
FURTHER TRANSFER
LIMITED AND ABSOLUTE

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S11

MODE OF USE
ONLY ABSOLUTE

SECTION 13-

TRANSFER FOR BENEFIT OF UNBORN PERSON

Section 13- transfer for benefit of unborn person

Q- Although the TPA deals with the transfer intervolves yet an interest
may be created in favour of persons yet unborn. Examine the above rule
and state the exceptions, if any, to this rule the TPA.
Intervolves transfer of property only come within the scope of the TPA.
Explain this dictum. Is there any exception to this dictum? Is so explain it
in details.
Do you agree with the view that an interest can be created for the
benefit of an unborn person. If so, subject to what conditions.
To remember1. General rule of TPA.
2. Transfer to an unborn person.
3. Transfer for the benefit of an unborn person.
1. No Direct Transfer ( Trust creation)
2. Prior Interest ( Illustration )
3. Absolute Interest ( Illustration) and Case Law Girijesh Dutt v/s Delta
Din
General rule of TPA is transfer vivos that is transfer of property between living
person at the date of transfer, but section 13 of this act provide the conditions
where a interests can be created for unborn person or a person who is not exist at
the date of transfer subject to certain conditions which is also authenticated by
Indian Trust Act S.5
Transfer to an unborn personAn unborn person means , a person who is not in existence even in the mothers
womb. Property can be transfer to a child in mothers womb (en ventre sa mere).
But property can not be transfer to a person who is not in existence means who is
not even his mother womb. Accordingly S.5 of this act provide that transfer of
property between two living person.
Transfer for the benefit of an unborn person
S.13 provide property can be transfer for the benefit of un unborn person subject
to following conditions:
1. No direct transfer:
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2. Prior interest
3. Absolute interest

NO DIRECT TRANSFERNo transfer can be made directly to an unborn person. Such transfer can be made
by the machinery of trust. Reason behind if a transfer were made directly to an
unborn person, there would be an abeyance of ownership form the date of
transfer till the coming into existence of the unborn person which is void
according to English Common Law.
PRIOR INTEREST
In case the trust is not created , the estate must vest in some person between the
date of the transfer and the coming into existence of the unborn person. In other
words, the interest in favour of an unborn person must always be preceded by a
prior interest in favour of a living person.
Illustrations
I.
A transfer his house to X for life and thereafter to UB (unborn) who is an
unborn son of A.
The transfer of house in favour of UB is valid, here since UB is not in
existence at the date of the transfer, A could not transfer the houser directly
to him. So, A had to make a direct transfer of life interest in favour of X who
is a living person at the date of the transfer. After the death of X the interest
of the house shall pass on to UB who is the ultimate beneficiary.
ABSOLUTE INTEREST
The entire property must be transferred to the unborn person. It is not permissible
to confer a life-interest on an unborn person. in English Law it is possible to give
an estate to an unborn person for life. But this aspect of Enlish Law was subject ot
a restriction called the rule against double possibilities.
Illustration
I.
A transfer his property to X for his life and thereafter to UB for life X is a
living person at the date of the transfer.
UB is not into existence at the date of transfer so the transfer of life interest
of X is valid. But the transfer of life interest of UB is void because although
the transfer in favour of UB is preceded by a life interest to X but UB himself
has not been given an absolute interest. The result is, therefore that X shall
hold the property during his life but after his death it shall not pass on the
UB but shall revert back to A or ( if A is dead that time) to As legal heirs.
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Reason- giving life interest or creating life estate in favour of a

person means giving him only the RIGHT OF ENJOYMENT AND
POSSESSION. HE HAS TO PRESERVE THE PROPERTY LIKE A TURSTEE
DURING HIS LIFE TIME ON BEHALF OF UNBORN.

GIRIJESH DUTT V/S DELTA DIN

Held that the gift in favour of unborn daughter was invalid u/s 13
because the gift was of limited interest and subject to prior interest
in favour of B.

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RULE AGAINST PERPETUITY- SECTION 14

Q- what do you know about the rule against perpetuity? What are the
exceptions to this rule? Explain the difference between Indian and
English Law on this point.
To remember1. Object of Law.
2. Transfer in Perpetuity ( condition void restrain of alienation).
3. By creating future remote interest ( incorporates the rule against
perpetuity)
4. Ingredients of Rule against perpetuity
5. Maximum remoteness of vesting ( 18 years or 21 when court
appoint)
6. Ultimate beneficiary in the mothers womb.
7. Scope and object of rule against perpetuity8. Rule Against Perpetuity under English and India Law.
9. Exceptions to the rule Against Perpetuity
10.
Transfer for the benefit of public11.
Personal Agreement
Object of Law- The object of law is no property should not be tied up or
inalienable for an indefinite period or forever. Frequent disposition of property is in
the interest of the society and also necessary for its more beneficial enjoyment.
The rule against perpetuity protects the object of Law that property should be in
motion.
Transfer in Perpetuity
In any disposition, perpetuity may arise in two ways:
1. Taking away transferees power of alienation
2. By creating future remote interest
Section 10 provides the protection against the first rule that a condition restraining
the transferees power of alienation is void.
Section 14 A disposition that tends to create future remote interest has been
prohibited, which incorporates the rule against perpetuity.
Ingredients of Rule Against Perpetuity Section 14
1. There is a transfer of property
2. The transfer is for the ultimate benefit of an unborn person who is given
absolute interest
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3. The vesting of interest in favour of ultimate beneficiary is preceded by life or

limited interest of living person/s
4. The ultimate beneficiary must come into existence before the death of the
last preceding living person
5. Vesting of interest in favour of ultimate beneficiary may be postponed only
up to the life or lives of living persons pus minority of ultimate beneficiary,
but not beyond that.
The extent of perpetuity period
u/s 14 the maximum permissible remoteness of vesting is
Life of the last preceding interest + Minority of the ultimate beneficiary
Minority in India terminate at the age of 18 years, when the minor is under
supervision of Court then at the age of 21 years.
Ultimate beneficiary in mothers womb
Life of the preceding interest + period of gestation of ultimate beneficiary +
minority of the ultimate beneficiary.
Where the ultimate beneficiary in the mothers whom when the last person dies
(preceding beneficiary) the property vests immediately in him while he is still in
the mothers whom. Therefore the exact period from which the minority runs is the
date when the ultimate beneficiary conceived. The gestation period is in which the
ultimate beneficiary remains in mothers womb after date of conceived and before
he is born alive.
Scope and object of rule against perpetuityThe rule against perpetuity is not concern with the followinga) Contracts as such or
b) Contractual rights and obligation as such
In Walsh v/s Secretary of State for India- heldA contract to pay money to a person, his heirs or legal representative upon a
future contingency which may happen beyond the period prescribed would be
perfectly valid.

In English Law a contract for purchase of real property is regarded as

creating an equitable interest, and if, in the absence of a time , it is
possible that the option for repurchase might be exercised beyond the
prescribed period fixed by the perpetuity rule, the covenant is regarded
as altogether void.
Rule Against Perpetuity under English and India Law.
English law allow 21 years in gross after life or lives in being while Indian Law allow
only the period of minority after a life or lives in being but in case court appoint the
guardian the minority age postpone to 21 years.
22 | P a g e

Exceptions to the rule Against Perpetuity

There is two exception of this rule
a) Transfer for the benefit of public- A/c to S18 of TPA, if the property is
transferred for the benefit of pubic in the advancement or religion,
knowledge, commerce, health, or safety or any other ob
b) ject the transfer is not void under the rule against perpetuity.
c)
d) - In Ram baran v/s Ram mohit SC held- that a mere contract for sale
of an immovable property does not create any interest in immobile
property and therefore the rule cannot apply to such contract.
Similarly in Shebaits of a temple under an agreement, appointed pujaris out
of a particular family to perform religious services in the temple, the
agreement is valid because the Court held that being a personal agreement,
it was not hit by rule against perpetuity it was held in Jafar Chandra v/s
Kailash
Similarly Mortgage and Lease not fall under the rule of perpetuity.
Situation Under Hindu and Muslim Law
Section 14 or this rule against perpetuity is made apply cable on Hindu after 1929,
but this provision is not applicable to Muslim Law but a gift to remote and unborn
generations was held void although exception has been made in case of wakfs.

23 | P a g e

RULE AGAINST ACCUMULATION SECTION 17- IT IS EXCEPTION OF

S11
ACCUMMULATION= PROFITS OR INCOME ARISING OUT OF THE PROPERTY, it can
be whole or in part
Section 11 says conditions which restrains the enjoyment of property which is
absolutely transferred is void, Section 17 is the exception of this rule , the
application of S11 applies only absolute transferred, but section 17 applies
all kinds of transferred.
it means S17 postpone the beneficial enjoyment of a property, such postponement
is discouraged by law just as postponement of vesting of interest has been that
discouraged under the rule against perpetuities .
Under section 17 direction for the accumulation of income is allowed but not
beyond a certain period. The maximum permissible lime /period upto which income
of the property may be accumulated is:
a) Life of the transferee or,
b) A period of 18 years, whichever is a longer period
So a direction of postponement of beneficiary enjoyment or in other word which
makes accumulation of income beyond this period of maximum permissible limit is
void.
Illustration
A transfer his properties to B for life with a direction that the income of the said
properties shall accumulated during As life and shall be given also to C. The
direction for the accumulation of income is valid , upto life of B
A transfers a property to B for life and thereafter to Bs such son who first attains
the age of 25 years with a direction for accumulation of income till Bs first son
attains 25 years . The direction of the accumulation of such income is void, reason
it is beyond the permissible limit ( life or 18 years).
A transfers property to B in 1960 with a direction for the accumulation of its
benefits upto 1990. A dies in 1985 thus the transferor lives for 25 years which is
more than 18 years . The direction for accumulation is valid upto 1985 ( for 25
years) because it is the longer period.
Exception
1. Payment of Debts- the period of accumulation can be exceed in case of
payment of bebts. For example A makes a gift of his house to B with a
24 | P a g e

direction that form the rents of the house B shall pay Rs 500 per months
towards the satisfaction of a debt of Rs on Lac incurred by A. The direction of
the accumulation of income is valid even it continues after the life of A or
expiry of period of 18 years.
2. Raising portions- Portion ordinarily means a part or share which points to
the arising of something our of something less for the benefit of some
children or class of children.
3. Preservation of Property- for the maintenance of property/ preservation
of property, it is allowed.

25 | P a g e

VESTED INTEREST- S19 ( it is advisable S.19 r/w s.28) and 21

There is two point of view of transfer
1. Quantum of right
2. Time of transfer

ATPRSVCIQ
pbiomemu
msPtena
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olPweendit
hw
Duodgin
ct
atfVegmnc
deRnttn
rinteo
tgnRf
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-h
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it
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-

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ie

Symptoms of Vested Rights / Test of Vested Rights

1. When no time specified as to when it will take effects ( Test- Silence
of documents or absence of date of vesting the rights)
26 | P a g e

2. If transferor specifically mentioned the date of vesting of interests/

rights take effects.
3. It is to take effect upon happening of an event which must happen
or bound to happen or certain nature of future event. For example
any future date, any person death, any age, or things are bound to
happen.
Following condition which appears not vested but actually it is vested the
rights.
1. Postponement of enjoyment of rights ( vesting happen immediately but the
enjoyment of rights postpone)
2. Prior interests- Creation of prior interest. Like interested created for unborn person.
3. Direction for accumulation.
4. Conditional limitation. It is the English Law concept, which authenticated in India
under S28 of TPA
For exampleA gifts his house to B with a condition B takes possession of house within 6 months
if he fail to take possession A transfer the possession of house to H.
Here B s vested right is within 6 months

POSTPONMENT OF ENJOYMENT
Postponement of enjoyment of property does not mean that the interest of the transferee
is not vested. In a transfer of property, the primary thing is the transfer of interest of title.
Possession of property is secondary.
For ExampleA transfers his property to B to be given to B on Bs attaining the age of 20 years, the
interest of property is vested although the enjoyment of property has been postpone.
However, if B Dies before attaing the age of 20 years the possession and enjoyment of the
property shall go to Bs representatives or legal heirs together with title which B already
had and died having it.
The postponement of property may be postponed till any future date or future event which
is of MUST nature and is bound to happen.
PRIOR INTEREST
Where a prior interest is created in the same transfer there is postponement of the
enjoyment of property. The vesting interest is not postponed.
A transfers property to B for life and then to C the interest of C is vested interest.

27 | P a g e

Here C has a vested interest immediately with the transfer was made but his right of
enjoyment is postponed till the life of B, because the death is the future event and must in
nature.

DIRECTION FOR ACCUMULATION OF INCOME (U/S 17)

Direction for accumulation of income is valid provided its within the period prescribed in
S17 .Where the property is transferred with such direction the interest of the transferee is
nevertheless vested. In this case also the right of enjoyment has been postponed not the
vesting.
In KOKILAMBAL V/S RAMAN KOLILAMBAL There was a deed of family settlement in which the settler created a limited interest (right
to received the income form rents). The property of the settler was to vest in the settlee
only on death of settler.
SC HeldThe family settlement does not create a vested interest in favour of the settlee
and settle cannot be absolute owner during the life of settlor. Therefore the
settlee cannot succeed the property on the settlors death.
CONDITIONAL LIMITATION
It is the concept of English Law, means upon happen of a particular event the interest
vested in a person shall pass on to another person, S28 of TPA authenticated in India.
A condition limitation does not prevent the vesting of the interest. Rather it is implied that
the interest which had already been vested may be divested and my vest somewhere else.
A transfer his house to B with a condition that if B doest not take possession of this house
within 6 months form the date of the transfer, the house shall belong to C.
The interest of B is a vested interest although it is vested only for these 6 moth and if he
possess the house within 6 month the vesting would be permanent.
NATURE OF VESTED INTEREST

Present fixed right- when a interest is vested, it becomes the property of the
transferee and is u/s 6 transferable by him even before he has obtained possession.
If the transferee dies, his interest vested in hi legal representatives whether or not
he has obtained possession.
Basis
Right of
Enjoyment

28 | P a g e

Vested
Immediate rights

Contingent
Merely a future possible rights

accrues
Nature of Event

Heritability
Nature of Title
Effect of Interest
Transferability

Attachment &
Sale in
Execution of
Decreed

No such condition (happening

or non happening of future
event)
It is heritable right
Perfect immediately
Immediately form the date of
Transfer
Transferable

Capable of being attached or

sold in Execution of Decreed

Condition ( on happening or non

happening of future event )
Not a heritable right
Imperfect, Perfect on happening
of or non happening of event
Condition precedent, which must
in nature
Transferable, may be defeated
by reason of non fulfillment of
the condition precedent.
Not Capable.

Transferable and heritable - vested interest is transferable and heritable,

as it is present and fixed right. And it is heritable in a sense when
transferee dies having vested interest in a property his interest vests in
his legal heirs, whether or not he has obtained possession.

DIFFERENCE BETWEEN CONTINGENT AND SPES SUCCESSIONIS

The thin line between Spes Successions and Contingent is DEGREE OF POSSIBILITIES.
Spes Succession
>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>>
>> Degree ( Remote)
Contingent >>>>>>>>>Degree (Proxy)
In Spes succession is naked or mere future possibility interest, therefore S6 recognized it
as a non transferable interest.
While Contingent is less probability, and it is recognized u/ 6 as a transferable interest.

29 | P a g e

Section 25 Conditional Transfer

The legal effect of transfer is very according to the nature of condition attached.
Conditions are of three kinds

ECAK
wtohn
lin5d
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to
oc
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CSPn
oued
lsct
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lues
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Ah
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i h f t o h u i s s e h t o o s u Bb
o e i t B hw
w i a l l i c t n h o o n a t d v C i ti s o i o i n t n d w i B t i i t o h h
ef
a hy v e e a m r i s n a t r t o r h i e e U s S h t A o o s C u
e
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ee
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Object of S25- To eliminate the following conditions- if following are the condition then
the transferred would be void.

Impossible conditions
Unlawful / forbidden by law
Impossible performance.
Opposed to public policy
Fraudulent conditions

30 | P a g e

S28- conditional limitation

It is a English Law concept, interest may be created in favour of a person with a
condition that if an uncertain event doe4s not happen the interest shall pass on to
another person. thus a condition limitation is a condition of defeasance which
terminates the interest of one person and invest another person with it. Means
conditional limitation is one containing a condition DIVESTS an estate that has
vested an vested in ANOTHER PERSON.
A gift his house to B with a condition that he will marry to C if he will not then the
house is to go to C.
Here C is the Ulterior transfer and it takes effect in case the prior transfer viz form
A to B fails.

31 | P a g e

DOCTRINE OF,ELECTION WHEN

NECESSARY S-35
Q- Critically examine the doctrine of Election, difference between English
and Indian Law.
The foundation of Election is that a person taking the benefit of an
instrument must also bear the burden.
Election means choosing between two inconsistent or alternative rights . Under
any instrument if two rights are conferred on a person in such a manner that one
right is lieu of the other, he is bound to elect only one of them.
In Beepathumma v/s Kadambolithaya SC held that A person cannot take
under and against the same instrument.
A offer Rs 100 to B in lieu of transfer his house, B can elect only one, either he can
retain the money and transfer his house or deny the money, he can not enjoy the
both.
This doctrine is based on equitable principle under which a person may not be
allowed to approve that of an instrument which is beneficial to him and disapprove
its that part which goes against him. Means no one can approbate and reprobate at
the same time. In other words where a person takes some benefit under a deed or
instrument he must also bear it s burden.
In Cooper v/s Cooper, Held that the Doctrine of Election, applies on every
instrument and every type of property movable or immovable.
Application of Election

When a person professes to transfer a property not his own

In lieu of the property the transferor confers certain benefits to the owner of
the property
Transfer of benefit and confer of benefit to be part of the same property

When a person professes to transfer a property not his own

Professes means to purports or make contract, for a property which is not his own
but he can make contract for the same.
A may profess to transfer a property B, which is owned by C, and also confers a
benefit Rs 1000 to C.
Here A is not transferring the Cs Property to B but simply profess or contract a
property which he does not own.
32 | P a g e

Knowledge of the fact that transferor has no authority to transfer the property is
immaterial for applicability of the rule of election.
Benefit confer on the owner of the property
Doctrine says owner must condensate or confers the benefit for his ownership on
the property.
The word Ownership is a wide connotation, it include a person having vested
interest, or contingent interest and also a person who has ever reversionary or
remote interest in the property.
Part of the same transition
This Doctrine only applicable when transfer and benefit a part form the same
transition. Means the benefit and transition are interdependent and inseparable
they form part of the same transition.
OWNERS DUTY
Owner are duty bound to either accept or reject the offer benefits
He has two act in a same capacity means he may accept the benefit in one
capacity and reject the other part of instrument in the same capacity not vise
versa.
Mode of Election
it can be express or implied
owner can express his intention in clear and specific word, once the election has
done it is final and conclusive.
Election is implied when the owner of property having aware of his duty to elect
and accept the benefits. When owner has enjoyed the benefit for two years without
doing any act of refusal or dissent of the transation. When the owner of the
property exhausts or consume the benefits.
Requisition to Elect
This is the special procedure for expediting election, after the expiry of one year, if
the owner of property does not elect, neither confirm his dissents the transation, it
deem to elect in favour of transferee.
Suspension of Election- The election may suspend till the time there are any
legal disability.
Election against transfer- if there is dissent form the professed transferred, the
transferor forfeits his benefit confer to owner.
Difference between English & Indian Law
The thin line between English and India law is the residues (balance).
A professed to gift a House worth Rs 800 to B which belongs to C, and he offers
benefits to C Rs 1000, before election C dies. According to Indian law the residue
33 | P a g e

(Rs 200) would go to A (transferor), while in English law goes to C, as a

compensation.

34 | P a g e

S41- Transfer by Ostensible ownerDoctrine of Holding Out

Q- who is ostensible owner? What is the effect of the transfer made by
him? Explain the law realting to transfer by ostensible owner.
Explain the doctrine of holding out as given u/s 41 .
Explain the circumstances in which a transferee from an ostensible owner
should prove to sustain his claim against the real owner.
Does the transfer of property Act make any exception to the general rule
that a person cannot confer a better title to the property than he has in
it? Is so, how do you justify the exception?
Ostensible Owner- a person is not the real owner of the property, while he
appeared to be the real one it may be found that although his name appears in the
record and he also possesses the property but he never intended to own it. It is
difficult to ascertain who is the real owner and who is ostensible owner as the
ostensible owner possess all the characteristic of real owner, the main difference is
the INTENTION TO HOLD THE PROPERTY OR PURCHASE THE PROPERTY IS
NOTE THERE.
Test of Ostensible Owner
In UOI v/s Mokesh Builders & Finance SC explain the Ostensible owner the
real test is as to what is the source of the purchase money, the motive
behind giving the benami color , possession of the property and as to
who is enjoying the benefits of the property.
Thus a person who hold the property act as a Agent, guardian of the property, it
does not mean he is the owner of the property. In simple language he called the
Benamidar
In Jaya dayal Poddar v/s Bibi Hazara SC laid down the parameters to
ascertain the Ostensible owner.
Source of purchase money, who paid the price.
Nature of possession after purchase.
Motive of giving benami colour to the transation. Why the property
purchased in the name of another person.
Relationship between the parties, they are related to each other or
they are stranger.
Conduct of parties in dealing with the property
Custody of the title deed.
35 | P a g e

.
Effect of Transation made by Ostensible owner
The general rule of TPA is one who is not the real owner cannot transfer, but this
section is the exception of this rule subject to fulfillments of conditions laid down in
the section.
If a person purchases form a Benamidar / Ostensible owner, the real owner
cannont recover, provided other conditions are fulfilled
A purchased a property on her B, and B acted as his agent or care taker of the
property, B Mortgage the property to C. It was held that Silence of A on mortgage
created by B made B as ostensible owner and hence A cannot deny the mortgage.
Ingredients of S41
Consent of true Owner.
It is one of the important condition, that apparent ownership must have been
created or permitted by the real owner of the property, either by express or
implied consent.
Reasonable Care
it is also important that the transferee before taking effect of any transition he
made reasonable care which a ordinary man do and enquiries to ascertain the
transferor had the power to transfer.
Good Faith
The last condition is the transfer must be in a good faith there should not be any
malafied intentions.
Protection of Bona fide purchaser when disputed land.

36 | P a g e

Section 52- transfer of property

pending suit relating theretoDoctrine of Les Pendens
Q explain the doctrine of les pendens, and its essentials. What is the
effect of this doctrine? Explain its exception, if any. Can the doctrine of lis
pendens afact the property sold in an auction ordered by the court.
Les= Litigation
Pendens= Pending
It applies only on immovable properties
Thus it means pending litigation, it express in the maxim- pendente tie nihil
innovature. Means during pendency of litigation nothing new should be introduced.
This doctrine prohibit any creation of new title or transfer of property during
pendency of litigation, which means this doctrine is prohibited in nature.
Basis of DoctrineThe basis of doctrine is necessary rather than actual or constructive notice,
because constructive notice is the presumption of law that under such
circumstances the transferee knowledge of such les pendency.
It is the duty of the transferee he must enquire about the les pendency of the
property.
Having being the actual or constructive notice the transferee r made any
transation related to les pendent property it treated the abuse of court of law. And
it is in the interest of public policy, there for it is necessity
Essentials of les Pendens.

There is a pendency of a suit or proceeding

The suit or proceeding must be pending in a court of competent jurisdiction
A right to immovable property is directly and specifically involved in the suit

37 | P a g e

The suit or proceeding must not be collusive

The property in dispute must be transferred or otherwise dealt with by any
party to suit
The transfer must affect the rights of the other party to litigation

Right to immovable property is directly and specifically Involved- mere

representation of immovable property in the plaint is not enough right in
respect of immovable property must in questioned. For ex- A suit is pending
before the court of law between a landlord and tenant regarding rent, and if the
during the proceeding the landlord transfer the property it would not violate the
Doctrine of Les Pendens as the right on immovable property is not questioned.
Following are the suit regard in this section
1.
2.
3.
4.

A suit for partition

A suit on mortgage
A suit for pre-emption
Easement suit

Suit most not be collusive In nature- means there should not be mala fide
intention, means there is no dispute just for the mala fide intention it evolve.
ExceptionA transfer during the pendency of a suit may be sanctioned by the court in which
the suit is pending, provided the order must not obtain fraudulently.
Effect Transfer by Court Order / Involuntary / by Operation of Law
Transferin Samarendra Nath Sinha V/s Krishna Kumar Nag- SC Held
the doctrine of les pendens applies where the sale is made by the order of the
court.
Effect of DoctrineThe transferee is bound by the order of court

38 | P a g e

S53- fraudulent transfer

Q-Explain doctrine of fraudulent transfer. What are the exceptions?
Every owner of property has right to transfer his property as he likes, but the
transfer must be made with bona fide intention. When any transfer made with the
intention to defeating the interest of creditor or interest of any subsequent
transferee.
Nature
When the transfer is made with fraudulent intention, the object of transfer is mala
fide in the eye of equity and justice though it is valid in law. It is not void but
voidable.
But S53(1) does not apply where the transfer is in itself void. This section makes a
valid transfer void at the option of creditor after the property had already vested in
transferee.
The suit under this section must accept the validity of the transfer first and then
proceed to get it invalidated. If its proves to be fraudulent.
Essential Conditions of Fraudulent Transfers.
1. There is a transfer of immovable property
2. The transfer if fraudulent
There is a transfer of immovable property - The doctrine applies only when
there is a transfer of property within the meaning of S5. Relinquishment is not
transfer of property. Dissolution of partnership is also not regarded as a transfer
under this section.
A deed of wakf executed with the object of making the property inalienable and
beyond the reach of creditor was held a transfer within the meaning of this section.
Partition- Partition also not cover under transfer so this section does not apply on
it.
Sham, Benami transation are also out of the purview of this section as the sham
transfer means fictitious transfer, which is not real a fake transfer.
The transfer is fraudulent- this section applies only when there is fraudulent
transfer.
Intent to defeat or delay- the transfer made with the intention to defeating or
delaying the interest of creditor, the only interest of creditor in the debtor s
39 | P a g e

property is that he can recover his money form that property in case the debtor
fails to repay it personally.
Preference to one creditorif there are several creditor, and transfer in favour of one creditor does not amout
to an intention to defeat or delay in other creaditor.
Exp- A , who has taken load from B, C and D, and transfers certain property in
favour of B, it does not mean he is with intent to delay with other creditor.
Transfer is voidable by creditorsThe option remain with creditor to make the transation void, if he deem fit to
continue the transfer the transfer remain valid till.
Burden of proof- the burden of proof lies with creditors.
Transferee in good faith- This section also protect the right of transferee if he
acted in a good faith.

40 | P a g e

S53-A Part Performance

Q- Explain, what are the essentials, explain the scope of defense and
protection available to the transferee. Nature and scope.
What are the rights of a subsequent transferee for value are protected by
S 53 A, as against the right of former transferee who has taken
possession in furtherance of the contract.
Doctrine of part performance is an equitable doctrine, it based on the Maxim
equity looks on that as done which ought to have been done.
Means equity treats the subject matter of a contract as to its effects in the same
manner as if the act contemplated in the contract had been fully executed, form
the movement the agreement has been made , though all the legal formalities for
example registration of contract have not been yet completed.
This doctrine protect the transferee who has done his part or willing to perform his
part, he can not be distitle on the basis of the legal formalities has not been done.
For example
A sale his house to B, and get the consideration against the house and B also takes
the possession of the house a sale deed has been made but it not being registered.
A again Sale his house to C, and C get it registered, and now C try to eject B. Here
law would not help to B, but equity would help him.
Part performance before 1929
Before 1929, English equity of part performance was neither certain nor uniform, In
Mohamman Musa v/s Aghore kumar Gangualy, Privy Council applied this
doctrine in the matter of Razinama of Land distribution.
But in Arrif v/s Jadunath, PC, change his opinion and held the equity of
part performance can not be overruled of Indian Registration Act.
Scope in India
It is an enacted law in India, but it is not an application of English Equity, it is
almost same as PC laid down in Mohammad Musa case, with certain restrictions, in
two aspects
1. English equity also protect the interest of such defendant who has taken
possession on the basis of oral agreement, while in S53 A, the Agreement
must be in writing.
41 | P a g e

2. EQ, also gives a right of action against the evictor but S53A, gives no such
rights.
Essentials
1. Written contract for the transfer of immovable property ( Transfer
for consideration, for Movable property, and must be valid
contract)
2. Transferee takes possession of the property under the contract (
the possession must be in furtherance of contract, some act in
furtherance of contract, taking possession is not only the method of
part performance of contract. If the transferee is already in possession of
the property then, after the contract of transfer, he has to do some
further act in part performance of that contract. In order to attached
S53A)
3. The transferee either performed his part or willing to perform.

Nature of transferee rights

No title or interest in property

The section doe not confer any interest or title, just protect the right of
transferee form ejection if the property in his possession.
It is a statutory bar on the transferor that he cannot dispossess the
transferee if he possess the property

Passive equity no right of action

section does not give to the transferee any rights of action. It provides merely a
right of defense. It is shield not a sword

Right of subsequent transferee for value

Section protect the interest of subsequent transferee for value without notice of
previous transferees right of part performance.
A own a land and contract to sale to B, the contract is unregistered and in part
performance B possessed the land, the transferor and or any other person cannot
dispossess B form that land.
But when A sale this land to C, and C dully registered the sale deed, C has a right
to dispossess to B form such land, if C has not knowledge of Bs part performance.

42 | P a g e

43 | P a g e

Sale of immovable properties- S

54,55,56
Q- define sale. Essentials of valid sale? how it is made? Are the hire
purchase agreement amount to sale?
Distinguish between

Sale and gift

Sale and exchange

Sale
S-54-Sale is the transfer of ownership, in exchange of price paid, or promises to
paid or part paid or part promise.
When sale made Prior owner distitle and new owner gets the title of the
property
Constituent Transfer of ownership- In sale there must be transfer of absolute
ownership, means ownership with liability.
Money consideration- when ownership is transfer in money consideration
its call sale, the adequacy of consideration is immaterialize. The price may
be paid full, part, immediately or in future.
Essential of Valid Sale

Two parties seller and purchaser

Competent parties
Subject matter i.e. property in existence.
Money consideration, price of the property
The conveyance/ contract made in accordace with existing law

Mode of Sale
Registration of Sale Deed
How sale made- Sale relating only with tangible immovable property, if the value of
property above Rs 100, it must be registered, in case of value of tangible
immovable property less then Rs 100 such transfer may be made either by
registered instrument or transfer of property.
Delivery of property
Deliver of tangible immovable property takes place when buyers takes the
possession of the property.
44 | P a g e

45 | P a g e

Difference between contract OF SALE, & contract FOR SALE

Basis
Rule

Contract OF SALE
Contract + Transfer +
consideration
Immediate / Present
contract shall take palace
if terms settled between
the parties, it may be
noted that in every sale
there is a preceding
contract for sale, upon the
execution of this ,
preceding contract the
sale happened between
the parties. Thus sale
complete in furtherance of
his very contract.
Immediate/ simultaneous
activity

Contract FOR SALE

Contract for future sale

Type
Position in India

Sale deed
Establish law

Remedy

Protected by Law ( In
India)

Agreement for Agreement

Not establish law, it is the
concept of English law
Not protect by Law ( only
Doctrine of Equity u/s 54
applicable to transferee)

Right of Purchaser

Establish Right
It can restrain or set aside
the execution of a sale
deed of the same land to
another person.

Time

Part performance

46 | P a g e

Future
Some time parties are not
in a position to execute
the Sale Deed at present
but they intend that sale
would take place between
them in future. In order to
have the evidence of their
intention that the property
would sold the contracting
party only and not
anybody else.
Postponed / future/ delay

Not establish right

It cannot be apply to
restrain or set aside the
execution of a sale deed
of the same land to
another person.
Equity protect the
interest of purchaserfollowing is the right of
purchaser:
He may file a suit u/
Specific
Performance Act
1963 against
vendor.

Nature

Expressed and implied

Effect

It provides the established

interest / ownership on
the property, he there is
dully executed sale deed.

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He may compel the

vendor to execute
the sale deed in his
favour
If the purchaser
paid some money to
the vendor he may
acquire the charge
upon the property
for the money which
he had paid, and he
is entitle to get it
pay back

Nothing
It is merely a document
creating a right to obtain
another documents
namely , dully a executed
sale deed.
S54 clearly says that a
contract for sale does not
itself , create any interest
or charge on the property.
No title or interest in
respect of the property is
therefore created in
favour of purchaser on the
basis of such contract.
Under English LawCreates an equitable
ownership in favour of the
purchaser and the vendor
holds property for him as
a trustee.
Under India Law
Doctrine of equitable
interest is not recognized
in India, so neither Legal
Estate nor the Equitable
Este in favour of the
transferee.

In Laclman Nepak v/s

Nadam Kayalu Syama
held
It is well settled law in
India that existence of any
agreement for sale does
not of itself create any
interest in or charge upon
such property.
Even if the purchaser
paid the consideration
and had taken the
possession of the
property on the basis
of such contract, he
cannot get ownership
unless a sale deed is
dully executed in his
favour.

HIRE PURCHASE AGREEMENTAMOUNT TO SALE OR NOT?

Hire purchase agreement is not amount to Sale, because the ownership of
the property is not transferred to the transferee on the basis of such agreements.
Normally parties are under an agreement, in which purchaser take the possession
of the property and agreed to pay the price against the property in future
installment.
Here there is contract, possession and price but on the following reason its not
amount to sale:

The installments are not the price paid in future.

In the same time the purchaser has the option to refuse the sale
The seller has also right to terminate the sale.
There is no absolute transfer of ownership

Basis
Considerati
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Sale
Ownership is

Exchange
Ownership is

Gift
Ownership is

on

transfer for price

Interest
Mode

Absolute
Registration of Sale
Deed

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transfer of
ownership of
some other
property
Transfer of
ownership of
money in return
is also the
exchange not the
Sale
Absolute
No registration
require

transfer without
consideration

Absolute
Registration
Required

S55- Rights and Obligation of Buyers

and Seller
Before the Sale
Seller Rights

Sellers Duty

1. To get the
1. Disclosure of
rent and
material defect
profits of the
in the property
property till
if any.
he possess
2. Produce of title
the
deed of the
ownership.
property.
3. Answer relevant
questions,
asked by buyer.
4. Care of property
and title deed
as its own, like
a normal
prudence
person care.
5. Payments of
outgoing till
date of sale.

Buyers Rights

Buyers Duty

1.Buyers charges- In
case the sale does
not take place due to
any reason, buyers
has a right to take
back his payment
made in advance
with interest.

1.Duty of disclosure,
if the seller is
ignorant about his
own right in property.
It is the duty of the
buyer to disclose the
seller that some
material fact can
increase the cost of
the property in future.
2.Payment of price. To
pay the agreed
payment/ price for the
property in the contract
of sale.

After Sale
Seller Rights
1.Sallers Lien or
charge-

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Sellers Duty

1. Giving
possession of the
property
2. Convent for title.
3. Delivery of the
title deed.

Buyers Rights
Buyers Duty
1.Bear the loss to
1. Enjoy all the
rights arising out of property.
2.To pay the out
the property
goings on property.

Sellers Lien or Charge S55(4)(b)

if after completion of sale, if the price or any part of it remains unpaid, the seller
acquires a lien or charge on the property.
Means when the ownership is transfer to the buyer after completion of sale, and
the seller remain unpaid; the seller can nighters neither refuse the delivery of
possession nor can claim back the possession of the property.
Therefore u/s 55(4) (b) the seller has given a right to recover the unpaid purchase
money form out of the property. This is called the statutory charge of the seller for
unpaid seller.
In other, word this is the only remedy left with the seller to recover of the balance
purchase money.
There is creation of a right of payment out of the property; it may be created by
the act of the parties or by operation of law.
Since under this right the seller is not entitled to retain the possession of the
property this charge is said to be the non-possession lie.
For the recovery of unpaid purchase money the seller shall enforce his charge u/s
100 by a suit against buyer for sale of the property. But such a charge can not be
enforced against any subsequent buyer, and not after the expiry of 12 years of the
date of sale.
In Bhag mal v/s Shriromani Gurdwara held, where the property has been
sold to several purchaser, the seller has a charge on the whole property
for unpaid price without having any regard as to the proportion of money
to be paid by each purchaser.
Interest on Unpaid Price. The seller is also entitle to claim not only the unpaid
part of the purchase money but also interest on such amount but not from the date
of transfer of ownership but form the date on which the possession was delivered.
Transfer of Seller charge- a charge created in favour of the vendor is an
unsecured debt, therefore it is a Actionable Claim, and transferable.
Exclusion of the Charge- can be possible by contract between the parties.
Seller Unpaid Price / Lie under English Law
Under English law the seller acquire lie on property under the principle of equity.
When the contract of sale is constituted the seller gives to the buyer an equitable
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estate even before the completion of sale, in return he also acquire the lie on the
property from the date of contract, subject to price unpaid. In India contract of sale
does not given any interest in the property, the charge is created only after the
conveyance. In India the charge is created by Law not by equity.

Marshalling- S56

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S58- Mortgages
S58(a) Transferring LIMITED INTEREST of property for taking Loans.
Where a loan is secured against any immovable property is called Mortgage, and
when it secured against any movable property its called pledge.
It is a security against loan on the basis of any immovable property
Mortgagee= Who gives loan against property.
Mortgagor= Who Takes Loans against property.
Loan under mortgage= Mortgage money.
Instrument/ Deed of Transfer of Interest= mortgage Deed
Essential of Mortgage
1. There must be transfer of Limited Interest
2. Interest transferred against any specific immovable property.
3. Purpose of transfer must be to secure payment of any debt, or performance
of an engagement which may give rise to a pecuniary liability.

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