TPA – Introduction and Important

Definitions
The Transfer of Property Act came into existence in 1882. Before that the transfer
of immovable property were governed by principles of English law and equity. Preamble
of Act sets out the objectives of legislation. The purpose if Act is to defined and ‘certain’ parts
of the Law of transfer of property. Scope of this Act is limited. It applies only to transfer by
the act of parties not by operation of law. Also this Act deals with a transfer of property inter
vivos, i.e., a transfer between living persons. It contains transfer of both movable and
immovable property but a major portion of the enactment is applicable to the transfers of
immovable properties only. The Act is not exhaustive.

Statutory Definitions (Section 3)

Immovable Property

Definition in Section 3 is not exhaustive. It says only that ‘immovable property’ does not
include standing timber growing crops or grass. Definition of immovable property in Section
3(26) of General Clauses Act, 1897, is also not exhaustive. It defines immovable property as
it shall include land, benefits to arises out of land, and things attached to earth. Thus we find
that while Transfer of property excludes certain things. General Clauses Act, includes certain
things under the head ‘immovable property’. By combing both definitions, we may say that,
the term includes land, benefits to arises out of lands, and things attached to the earth, except
standing timber, growing crops and grass.

(A)Land: It means a determinate portion of the earths surface, which may be covered by
water, the column of surface above the surface, the ground beneath the surface. All the
objects which are on or under the surface in its natural State are included in the term land.
Also all objects placed by human agency on or under the surface with the intention of
permanent annexation are immovable property, e.g., Building, wall, fences.

(B) Benefits to arise out of land: Apart from physical point of view, every benefits arise
out of land is also regarded as immovable property. Registration Act also includes as

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immovable property benefits to arise out of land, hereditary allowances, right of way, lights,
ferries and fisheries. In Anand Behera v. State of Orissa, AIR 1956 SC 17, the right to catch
away fish from chilka lake, over a number of years, was held to be an equivalent of profits a
pendre in England and a benfits to arise out of land in India. Similarly, a right to collect a rent
and profits of immovable property, right to collect dues from a fair or heat or market on a
land are immovable property.

(C)Things attached to earth: Section 3 of transfer of property defines the expression

‘attached to earth’ as including (1) things rooted in the earth, (2) things embedded in the
earth, (3) things attached to what is so embedded, and (4) chattel attached to earth or
building.

(1) Things rooted in earth include trees and shrubs, except standing timber, growing crops
and grasses (Section 3, TPA). Whether tress regarded as movable or immovable depends
upon the circumstances of the case. If the intention is that trees should continue to have the
benefit of further sustenance or nutriment by the soil (land), e.g., enjoining their fruits, then
such tree is immovable property. But if the intention is to out them down sooner or later for
the purpose utilising the wood for building or other industrial purpose, they would be timber
and of accordingly be regarded as movable property (Shantabai v. State of Bombay, AIR 1958
SC 532) determining whether the tree is movable or immovable, the intention if party is
important if the parties intend that the tree should continue to have the benefit of further
nutriment to be afforded by soil, the tree is immovable property. But if intention is to
withdraw the tree from land, and the land is providing it only as a warehouse, it is to be
treated as movable property.

(2)Things embedded in earth: It includes such things as house, buildings, etc., however
certain things like an anchor imbedded in the land to hold a ship is not a immovable
property’ to determine whether such things are movable or immovable property,
depends upon circumstances of each case and there are two main conditions to indicate
intention:

 the degree or mode of annexation, e.g. tie-up seats fastened to the floor of cinema halls
are immovable property on brick-work and timber and tepestries;

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  the object of annexation, for, e.g., Blocks of stone placed one on the top of other
without any mater or cement for the purpose of forming a dry wall, will become part
of land, so immovable property, but not the stones deposited in the builder’s yard.

(3) Things attached to what is so embedded must be for the permanent beneficial
enjoyment of the to which it is attached, as section says for, e.g., door and windows of a house
are immovable property to be permanent, like electric fans or widow blinds, they are
movable property.

(4)Chattel attached to earth or building if a chattel, i.e., movable property is attached to earth
or building, if is immovable property. The degree, manner, extent and strength of attachment
are the main features to be regarded in determining the question. Standing timber, growing
crops and grasses are regarded as severable from land and they are regarded as movable
property. However if they and the land on which they stand is sold, such standing timber,
growing crops or grasses will pass to purchases.

(d) Standing timber: The word standing timber includes Babool Tree, Shisham, Nimb, Papal
Banyan, Teak, Bamboo, etc. The fruit berating tree like Mango, Mahua, Jackfruit, Jamun, etc.,
are not standing timber, and they are immovable properties ( Fatimabibi v. Arrfana Begum,
AIR 1980 All 394). But if intention is to cut them down sooner or later for the purpose
utilising them as timber, and not to use them for the purpose of enjoying their fruits, they are
regarded as movable property. (T.A. Sankunni v. B.J. Philips, AIR 1972 Mad 272).

(e) Growing crops: Growing crops includes creepers like pan, angoor, etc., millets (Wheat,
Sugarcane, etc.), Veg like Lauki, Kaddo, etc. These crops don’t have any own independent
existence beyond their final produce.

(f) Grasses: It can only be used as fodder, and no other use is possible. Therefore it is
movable. But a contract to cut grass will be an interest in chattel, so is immovable property.
The following has been judicially recognised as immovable property:

(1) Right to collect rent of immovable property.

(2) Right to dues from a fair on a piece of land.

(3) A right of fisheries.

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(4) A right of terry.

(5) A right of way.

(6) Hereditary offices.

(7) The interest of a mortgagee in immovable property.

Minerals: Upon transfer of immovable property, things not only rooted to it, but also
anything found deep down below the property goes along with the transfer. All minerals
below the land sole are immovable property.

Movable Property

Transfer of property does not define movable property. In General Clauses Act, it is defined
as “Property of every description except immovable property”. Some examples are right of
worship, royalty, machinery not attached to earth which can be shifted, a decree for arrear
of rent, etc.

Attestation

Attestation has been defined in Section 3 of Transfer of Property Act as under:—

”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’s sign the instrument in the presence
and by the direction of the executant a personal acknowledgment 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 that one of such witnesses
shall have been present at the same time, and no particular form of attestation shall be
necessary.

To ‘attest’ means to sign and witness any fact of execution by the executant. It means that a
person has signed the document by way of testimony of the fact that he saw it executed.

Following are the essential requisites of a valid attestation-

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 1. There must be two or more attesting witness.
2. Each witness must see—(a) the executant sign or affix his mark (thumb impression)
to the instrument; (b) or, see some other person sign the instrument in the presence,
and by the direction, of the executant; (c) or, receive from the executant a personal
acknowledgment of his signature or mark or of the signature of such other person.
3. Each witness must sign the instrument in the presence of executant.
4. Each witness must sign only after the executant is complete.
5. It is not necessary that more than one of such witnesses should be present at the same
time.
6. No particular form of attestation is necessary.
7. Attestor Should be sui generis, i.e., capable of entering into contract.
8. The witness should have put his signature animo attestandi (intention to attest).
9. A. person who is a party to transfer cannot attest it as a witness. The object of
attestation is to protect the executant form being required to execute a document by
other party thereto by force, fraud, or undue influence, a party to the transaction
cannot laid down in Kumar Harish Chandra v Banshidhar Mahanty, AIR 1965 SC 1738

Effect of invalid attestation it makes the deed of transfer of property involved, and therefore
no property invalid and therefore no property passes under it. The document cannot be
enforced in the court of law.

Notice

A person is said to have a notice of a fact when he actually knows that fact, or when, but for
willful abstention from an inquiry or search which he ought to have made, or gross
negligence, he would have known it (Section 3).

Section 3 of Transfer of Property Act enumerates three kinds of notices—

(a) Actual or express notice

(b) Constructive or implies notice

(c) Imputed notice.

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Actual notice: A person is said to have actual notice/express notice of a fact if he actually
knows it. It must be definite information given in the course of negotiations by person
interested in the property. A person is not bound to attend vague rumors.

Constructive notice: It is a notice which treats a person who ought to have known a fact,
as if he actually knows it. A person has constructive notice of all the facts of which he
would have acquired actual notice had he made those inquiries which he ought reasonably
to have made. Constructive notice has roughly been defined as knowledge which the court
imputes to a person upon a presumption so strong that it cannot be rebutted that the
knowledge must be obtained.

Legal presumption of knowledge arise when—(1) There is willful abstention from an

enquiry or search. It means willful or deliberate abstention to take notice of a fact which a
reasonable man would have taken in the normal cause of life. It is such abstention from
enquiry or search as would show want of bona fides in respect of a particular transaction.

Illustration

(i.) A contracts to sell his house to B. The house is on rent and B knows that the tenants have
been paying the rents to C. B has constructive notice of the right of C to take rents from the
tenants.

(ii) A propose to sell his property to B, who at the same time knows that rents due in respect
of the property are paid by the tenants to a third person X. B will be fixed with notice of the
right of X. [Hunt v. Lack, (1902) 1 Ch 429.]

(iii) A refuses a registered letter, which contains information relating to property which A
propose to purchase. A will be deemed to have notice of the contents of the latter. [Ismail
Khan’ v. Kali Krishna, (1901) 6 Cal WN 134]

(2) Gross negligence: Negligence means carelessness or omission to do such act which a
man of ordinary prudence would do. Doctrine of constructive notice applies when a person,
but his gross negligence would have known the fact. Mere negligence is not penalised. It
should be high degree of neglect. In Hudston v. Vincy, (1921) 1 Ch 98, Eve J. said, “Gross
negligence does not mean mere carelessness, but means carelessness of so aggravated a

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nature as to indicate a attitude of mental indifference to obvious risk.” It can be described as
‘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’.

In Ltoyds Bank Ltd. v. P.E. Guzders and Co. Ltd., (1929) 56 Cal 868, a person A deposited title
deeds of his house in Calcutta with Bank. N to secure the loan he had taken from the bank.
Subsequently, A represented the Bank that intending purchases of the house wanted to see
the title deeds. The bank returned the deeds to A who deposited the deeds with the plaintiff
bank in order to secure a loan. It was held that the Bank N, on account of gross negligence in
parting with the deed has lost its prior rights with respect of the house.

In Imperial Bank of India v. U. Raj Gyaw, (1923) 50 IA 283, a purchases was informed that
the title deeds were in possession of a bank for safe custody and omitted to make any inquiry
from bank It was held that he was guilty of gross negligence and was deemed to have notice
of the rights of the bank which had the custody of the deeds.

Registration as notice: Explanation I to Section 3 provides that ‘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 or any part, or share or interest
in such property shall be deemed to have notice of such instrument as from the date of
registration, ‘Thus any person interested in the transaction which is registered under the
provisions of the Indian Registration Act, 1908 cannot plead that he has no notice of the
transfer made under the deed.

In order that, registration may be treated as constructive notice of its content, following
conditions must be satisfied:

(i) The instrument must be compulsorily registrable.

(ii) All the formalities prescribed under the Registration Act are duly completed in the
manner prescribed.

(3) The instrument and particulars must be correctly entered in the registers.

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After registration, document becomes a public document and the title can be confirmed in
the Registrar’s office.

(4) Actual possession as notice of Title: Explanation II of Section 3 provides that, “any
person acquiring any immovable property or any share or interest in 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. “Thus in order to operate as constructive notice, possession must be
actual, i.e., de facto possession. It amounts to notice of title in another, e.g., A leased a house
and garden to B who takes possession of the properties. A then sells the said properties to C.
C is deemed to have constructive notice of B’s rights over these properties, i.e., C cannot plead
that he had no knowledge (notice) of the fact of B’s possession on the properties [Deniels v.
Davison, (1809) 16 Ves 240].

Imputed notice

Explanation III to Section 3 provides that, “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”

This is based on the maxim Qui facit per alium facit per se, i.e., he who does by another, does
by himself. In Mohori Bibee v. D. Gliosh, (1903) 30 Cal 539, held that although the principle
was absent from Calcutta and did not take part in the transaction personally, his agent in
Calcutta stood in his place for the purposes of the transaction and the acts and knowledge
of the latter were the acts and knowledge of the principal.

Actionable Claim

Section 3 of the Transfer of Property Act, 1882 defines actionable claim as, “it means a claim
Actionable Claim to any debt, another then a debt secured by mortgage of immovable
property or by hypothecation or pledge of movable property or to any beneficial interest in
movable property , not in the possession, either actual or constructive, of the claimant,

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which the civil courts recognise as affording grounds for relief, whether such debt or
beneficial interest be existent, accruing, conditional or contingent.”

Thus according to Section 3, actionable claim means—

 a claim to unsecured debt, or

 a claim to beneficial interest in movable property not in possession of the claimant.

Debt: A debt is an obligation to pay a liquidated sum of money. The amount of money must
be certain, otherwise it is not debt. For an actionable claim, a debt must be unsecured debt,
for secured debts are excluded from the definition of actionable claim, e.g., A owes Rs. 10.00
to B. B’s claim is an actionable claim.

Debits secured by a mortgage of immovable property or by a pledge of movable property are

excluded from the definition of actionable claim, because they are secured debt.

Claim to beneficial interest not in possession of the claimant: Actionable claim includes
a claim to any beneficial interest in movable property, not in the possession of the claimant,
interest or the right of possession of claimant is recognised by the court. (However a claim
for demands, i.e., for an unascertained. sum of money or a claim for mesne profits does not
come within the definition if actionable claim), e.g., A agrees to sell to B bales of cotton
deliverable on a future day B has a beneficial interest in the goods and it is an actionable
claim.

Some instance of actionable claim:

(a) Claim for arrears of rent.

(b) Claim for the money due under insurance policy (Shamdas v. Savitri, AIR 1937 Sind 24)

(c) Claim for the return of earnest money.

(d) A share in partnership.

(e) maintenance allowance payable in future.

(f) fixed deposit in a bank.

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(g) right to the proceeds of business.

(h) Hire-Purchase agreement.

Instances of claims which are not actionable:

(a) A copyright,

(b) Claim for mesne profits,

(c) Secured debt,

(d) Right to get damages,

(e) A debt which has passed into a decree.

Transfer of Actionable Claims

Actionable claims are transferable properties, thus it can be transferred by way of sale,
mortgage, gift or exchange. Section 130 of Transfer of Property Act provides the mode of
effecting the transfer of actionable claims, and its effect. It provides—

 The transfer of an actionable claim whether with or without consideration shall

be effected only by the execution of an instrument m writing signed by the
transferor or his duty unauthorized agent, shall be complete and effectual upon
the execution of such instruments, and thereupon all the rights and remedies of the
transferor, whether by way of damages or otherwise, shall rest in the transferee,
whether such notice of the transfer as is hereinafter provided be given or not:

Provided that every dealing with debt or other actionable claim by the debtor or other
person from or against whom the transferors would, but for such instrument of transfer as
aforesaid, have been entitled to recover or enforce such debt or other actionable claim, shall
(save where the debtor or other person is a party to the transfer or has received express
notice thereof as hereinafter provided) be valid as against such transfer.

(2) The transferee of an actionable claim may, upon the execution of such instrument
of transfer as aforesaid, sue or institute proceedings for the same in his own name without
obtaining the transferor’s consent to such suit or proceeding and without making him

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a party thereto.” Section 131 of the Act provides that the notice should be in writing signed.
It provides:

“Every notice of transfer of an actionable claim shall be in writing signed by the transferor
or his agent duly authorised in this behalf, or in case the transferor refuses to sign, by the
transferee or his agent, and shall state the name and address of the transferee.”

Section 132 of the Act provides the liability of transferee of actionable claim. It reads, “The
transferee of an actionable claim shall take it subject to all the liabilities and equities to which
the transferor was subject in respect thereof at the date of the transfer”. ,

E.g., A transfers to C a debt due to him by B, A being then indebted to B. C sues B for the debt
due by B to A. In such suit it is entitled to set off the debt due by A to him; although C was
unaware of it at the date of such transfer.

Immovable property – concept and

definition
Definition in Section 3 is not exhaustive. It says only that ‘immovable property’ does not
include standing timber growing crops or grass. Definition of immovable property in Section
3(26) of General Clauses Act, 1897, is also not exhaustive. It defines immovable property as
it shall include land, benefits to arise out of land, and things attached to earth. Thus we find
that while Transfer of property excludes certain things. General Clauses Act, includes certain
things under the head ‘immovable property’. By combing both definitions, we may say that,
the term includes land, benefits to arise out of lands, and things attached to the earth, except
standing timber, growing crops and grass.

(A)Land: It means a determinate portion of the earth’s surface, which may be covered by
water, the column of surface above the surface, the ground beneath the surface. All the
objects which are on or under the surface in its natural State are included in the term land.
Also all objects placed by human agency on or under the surface with the intention of
permanent annexation are immovable property, e.g., Building, wall, fences.

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 (B) Benefits to arise out of land: Apart from physical point of view, every benefits arise
out of land is also regarded as immovable property. Registration Act also includes as
immovable property benefits to arise out of land, hereditary allowances, right of way, lights,
ferries and fisheries. In Anand Behera v. State of Orissa, AIR 1956 SC 17, the right to catch
away fish from chilka lake, over a number of years, was held to be an equivalent of profits a
pendre in England and a benfits to arise out of land in India. Similarly, a right to collect a rent
and profits of immovable property, right to collect dues from a fair or heat or market on a
land are immovable property.

(C)Things attached to earth: Section 3 of transfer of property defines the expression

‘attached to earth’ as including (1) things rooted in the earth, (2) things embedded in the
earth, (3) things attached to what is so embedded, and (4) chattel attached to earth or
building.

(1) Things rooted in earth include trees and shrubs, except standing timber, growing crops
and grasses (Section 3, TPA). Whether tress regarded as movable or immovable depends
upon the circumstances of the case. If the intention is that trees should continue to have the
benefit of further sustenance or nutriment by the soil (land), e.g., enjoining their fruits, then
such tree is immovable property. But if the intention is to oust them down sooner or later
for the purpose utilizing the wood for building or other industrial purpose, they would be
timber and of accordingly be regarded as movable property (Shantabai v. State of Bombay,
AIR 1958 SC 532) determining whether the tree is movable or immovable, the intention if
party is important if the parties intend that the tree should continue to have the benefit of
further nutriment to be afforded by soil, the tree is immovable property. But if intention is
to withdraw the tree from land, and the land is providing it only as a warehouse, it is to be
treated as movable property.

(2)Things embedded in earth: It includes such things as house, buildings, etc., however
certain things like an anchor imbedded in the land to hold a ship is not an immovable
property’ to determine whether such things are movable or immovable property, depends
upon circumstances of each case and there are two main conditions to indicate intention:

 the degree or mode of annexation, e.g. tie-up seats fastened to the floor of cinema halls
are immovable property on brick-work and timber and tapestries;

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  the object of annexation, for, e.g., Blocks of stone placed one on the top of other
without any mater or cement for the purpose of forming a dry wall, will become part
of land, so immovable property, but not the stones deposited in the builder’s yard.

(3) Things attached to what is so embedded must be for the permanent beneficial
enjoyment of the to which it is attached, as section says for, e.g., door and windows of a house
are immovable property to be permanent, like electric fans or window blinds, they are
movable property.

(4)Chattel attached to earth or building if a chattel, i.e., movable property is attached to earth
or building, if is immovable property. The degree, manner, extent and strength of attachment
are the main features to be regarded in determining the question. Standing timber, growing
crops and grasses are regarded as severable from land and they are regarded as movable
property. However if they and the land on which they stand is sold, such standing timber,
growing crops or grasses will pass to purchases.

(d) Standing timber: The word standing timber includes Babool Tree, Shisham, Nimb, Papal
Banyan, Teak, Bamboo, etc. The fruit berating tree like Mango, Mahua, Jackfruit, Jamun, etc.,
are not standing timber, and they are immovable properties ( Fatimabibi v. Arrfana Begum,
AIR 1980 All 394). But if intention is to cut them down sooner or later for the purpose
utilising them as timber, and not to use them for the purpose of enjoying their fruits, they are
regarded as movable property. (T.A. Sankunni v. B.J. Philips, AIR 1972 Mad 272).

(e) Growing crops: Growing crops includes creepers like pan, angoor, etc., millets (Wheat,
Sugarcane, etc.), Veg like Lauki, Kaddo, etc. These crops don’t have any own independent
existence beyond their final produce.

(f) Grasses: It can only be used as fodder, and no other use is possible. Therefore it is
movable. But a contract to cut grass will be an interest in chattel, so is immovable property.
The following has been judicially recognised as immovable property:

(1) Right to collect rent of immovable property.

(2) Right to dues from a fair on a piece of land.

(3) A right of fisheries.

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(4) A right of terry.

(5) A right of way.

(6) Hereditary offices.

(7) The interest of a mortgagee in immovable property.

Minerals: Upon transfer of immovable property, things not only rooted to it, but also
anything found deep down below the property goes along with the transfer. All minerals
below the land sole are immovable property.

Movable Property

Transfer of property does not define movable property. In General Clauses Act, it is defined
as “Property of every description except immovable property”. Some examples are right of
worship, royalty, machinery not attached to earth which can be shifted, a decree for arrear
of rent

Transfer of Property – Meaning and

Types
Section 5 of the Act defines “Transfer of Property” as “In the following sections ‘transfer of
property’ means an act by which a living person conveys property in present or in future, to
one or more other living person, or to himself, and one or more other living persons, and “to
transfer property” is to perform such act.

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.”

The word “property” has not been defined in the Act, but it has a very wide meaning and
includes properties of all descriptions. It includes movable properties such as case, books,

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etc., and includes immovable properties also such as lands or houses. It also includes
intangible properties such as ownership, tenancy, copyrights, etc.

The word ‘transfer’ has also very wide meaning. It may be either transfer of all the right and
interests in the property or transfer of one or more of subordinate right in the property.

The transfer of property may be made to take place with immediate effect or to take
place on a future date; however the property must be in existence at the date of transfer.
There can be no transfer of future property. The expression ‘in present or in future’ governs
the word ‘conveys’ and not the word ‘property’, e.g., A transfers his property to B for life and
then to C. The transfer in favour of B is present (although he gets only life interest) but the
transfer in favour of C is future transfer.

The transfer of property as defined under Section 5, is an act between two living persons.
Thus the conveyance of the property must be from one living person to another living person.
However transferee need not be a competent person like transferor. A transferee may be a
minor, insane or child in mother’s womb.

The word “living person” includes corporations and other association of person. A transfer
can be made by a person to himself, as for instance when a person vests property in trust
and himself becomes the whole trustee.

Kinds of Transfer

The Act contemplates the following kinds of transfers: (1) Sale, (2) Mortgage, (3) Lease (4)
Exchange, and (5) Gift. Sale is an out-and-out transfer of property. In mortgage, there is a
transfer of limited interest in property. A lease is a transfer of a right to enjoy immovable
property for a certain time or in perpetuity. Exchange is like a sale, but differs from it as
regards the consideration. In sale, the consideration is money, while in exchange, the
consideration is another thing. In a gift, there is no consideration.

In Harish Chandra v. Chandra Shekhar, AIR 1977 All 44 , it was held that a realease-deed is a
conveyance, hence a transfer of property. If the release deed states that the releaser was the
owner and it shows an intention to transfer his title and its operative word sufficiently was
the conveyed the title it would amount to transfer.

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Transfer of Property Act, 1882 not amounting to Transfer of Property

As the transfer of property’ means ‘conveying of property’, i.e., creation of new title or
interest in the favour of the transferee, if new title or interest has not created in favour of
transferee , the property cannot be said to be conveyed, thus no transfer of property.

1. Partition- As nothing new is obtained by a co-sharer on partition, it is not a transfer

of property. His specific share, which vested in him earlier, is simply separated.
2. – The only right created in a charge is a right to payment out of the property subjected
to charge, thus it is not a transfer. [Gobind Chandra v. Dwarka Nath, (1908) 35 Cal
837]
3. Relinquishment:—It is an extinction of a right and therefore, there is nothing left to
transfer. Thus a relinquishment by a reversioner of his reversionary interest does not
amount to transfer (Barati Lal V. Salik Ram, 38 All 107). But if the person in whose
favour the ‘release’ is executed, gets certain rights by virtue of such release, the
transaction may amount to a transfer [Maniapp pillai v. Periasami, (1975) 1 MU 236].
4. Surrender.—It is not a transfer as it is the manager of a lesser estate with a greater
one [Multhan Lal Saha v. Nagendra Nath Adhikari, (1933) 60 Cal 379].
5. Easement.—The creation of an easement does not amount to a transfer.
6. Will.—Because it operates from the death of the person making it, while the definition
contemplates a transfer by a living person, does not fall within the definition of
transfer.
7. Compromise.—It may or may not amount to transfer. It depends on the facts and
circumstances of each case. In Hussiaa Banu v. Shivanarayan, AIR 1968 MP 307, it was
held that where one of the parties to a settlement gives up a claim to receive a certain
sum of money from the other, in consideration of the latter’s given up the right to
certain property claimed by him, it would amount to a transfer.
8. Family arrangement/settlement.— A family settlement entered into by the parties for
the purpose of putting an end to the disputes among family members does not
amount to transfer, not being an alienation it does not amount to the creation of an
interest.

What may be Transferred

Section 6—”Property of any kind may be transferred, except as otherwise provided by this
Act, or by any other law for the time being in force.”

This section enumerates different kinds of property which cannot be transferred

(Exceptions to Section 6)—-

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 1. Spes Successionis [Section 6(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.”

A mere possibility/chance/expectancy of an, heir succeeding to an estate is excluded from

the category of transferable property, e.g., A a Hindu, dies leaving a widow B and On two C.
C has only a spes successionis, as his succession to the estate is dependant on 2 factors, i.e.,
his surviving the widow B, and B leaving the property intact.

2. Right of Re-entry. [Section 6(b)] “A mere right of a re-entry for breach of a condition
subsequent cannot be transferred to anyone except the owner of the property
affected thereby.

By a Mere given to right of re-entry meant a right to resume possession of-land which has
been given to another person for a certain time. It is usually inserted in lease empowering
the lessor to re-enter up a breach of covenants in the lease.

(a) A grants a lease of a plot of land for 5 years to B with the condition that B shall not dig a
tank on the land. B digs the tank. A relates to transfer C the right of re-entry for the breach of
the condition committed by B. The transfer is invalid.

(b) A grants a lease of plot for 5 years to B. Subsequently A transfers his right of re-entry at
the expiry of 5 years to C. The transfer is valid as at the expiry of lease the right of reentry is
transferred along with the land to .

3. Easement [Section 6(c)]— “ An easement cannot be transferred apart from the

dominant heritage.”

An easement B a right to use, or restrict the use of land of another in some way, for example,
right of way, right of water or light, etc. (Section 3 Easement Act). These right cannot be
transferred without the property which has the benefit of it.

4. Restricted Interest [Section 6(d)].—”An interest in property restricted in its

enjoyment to the owner personally cannot be transferred by him”

E.g., if a house is lent to a man for his personal use, he cannot transfer his right of enjoyment
to another. Similarly a religious office like those of mutawali of a wakf or of mahant of a math
and emoluments attached to priestly office cannot be transferred. ,

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 5. Maintenance [Section 6(dd)].—”A right to future maintenance, in whatsoever
manner arising secured or determined, cannot be transferred.”

A right to future maintenance is only for the personal benefit of the person to whom it is
granted, thus it cannot be transferred.

6. Mere right to sue [Section 6(e)] —”A mere right to sue cannot be transferred.”

A right to sue is personal to the party aggrieved, as for, e.g., damages for the breach of
contract or for tort, claims for past mesne profit for suing an agent for accounts, for pre-
emption, etc. These rights cannot be transferred. But where the right to sue has merged in a
decree, the right under the decree is assignable. Thus, a right to mesne profit or damages
under a decree is assignable.

7. Public office [Section 6(f)].—”A public office cannot be transferred, nor can the
salary of a public officer, whether before or after it has become payable.”

Thus prohibition is based on the ground of public policy as the public office is held for
qualities personal to incumbent.

If the office is not public, it would be transferable, even though the discharge of its duties
should be indirectly beneficial to the public.

8. Pensions [Section 6( g)—“Stipends allowed to military, naval, air force and civil
pensioners of the government and political pensions cannot be transferred, pension
means a periodical allowances or stipend granted not in respect of any right of office
but on account of part services of particular merits. Section 60 of CPC also exempts a
pension from attachmet in execution of degree against the pension holder.
9. Nature of Interests [Section 6(N)]. —”No transfer can be made (1) in so far as it
opposed to the nature of the interest affected thereby, or (2) for an in so far unlawful
object or consideration within the meaning of Section 23 of the Indian Contract Act,
1872, or (3) to a person legally disqualified to be a transferee. “

This clause forbids the transfer of certain things which from their very nature are not
transferable, e.g., res communes (things of which no one in particular is the owner and may
be used by all men),res nullius (things belonging to nobody).Res extra commercium (things
thrown out of commerce)

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Again, any property otherwise transferable becomes non-transferable when the object or
the consideration of the transfer is unlawful (within. the meaning of Section 23, Indian
Contract Act).

Lastly, a transfer cannot be made in favour of a person who is disqualified to be a transferee.

10. Un-transferable interests [Section 6(i)].”Nothing in this section shall be deemed

to authorise a tenant having an un transferable right of occupancy, the farmer of an
estate in respect of which default has been made in paying revenue, on the lessee of
an estate, under the management of a court of wards to assign his interest such as
such tenant farmer or lessee.”

Persons Competent to Transfer

Section 7 of the Act provides that, “Every person competent to contract and entitled to
transferable property, or authorised to dispose of transferable property not his own, is
competent to transfer such property, either wholly or in part and either absolutely or
conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed
by any law for the time being in force.”

Operation of Transfer

Section 8 of the Transfer of Property Act provides transfer of different kinds of property and
their legal incidents. It provides, “Unless different intention is expressed or necessarily
implied, a transfer of property passes for with the transferee all the interest which the
transferor is then capable of passing in the property and in the legal incident thereof.

Such incidents include where the property is land, the easement annexed thereto, the rent
and profits thereof accruing after the transfer and all things attached to the earth;

and, where the property is a house, the easements annexed thereto, the rent thereof accruing
after the transfer, and the locks, keys, bars, doors, windows and all the other things provided
for permanent use therewith; and, where the property is a debt or other actionable claim,
the securities therefor except where they are also for other debts or claims not transferred
to the transferee, but not arrears of interest accrued before the transfer;

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and where the property is money or other property yielding income, the interest or income
thereof accruing after the transfer takes effect.”

Transfer by Persons before they Acquire the Interest

Section 6(a) of the Act provides certain things which are non-transferable (spes sucessionis).
These are as follows—

 the chance of an heir-apparent succeeding to an estate,

 the chance of a relation obtaining a legacy on the death of a kinsman,
 any other mere possibility of a like nature.

(i) Chance of an Heir Apparent

Both Hindu and Muslim law forbids transfer of the expectancy. A mere possibility or
expectancy of a heir succeeding to an estate is excluded from the category of transferable
property. Thus a Hindu reversioner has no right or interest. In presents in the property
which the female owner holds for her life, e.g.:

A dies leaving two widows and a reversionary heir B. The widows set-up a Will which
authorised them to adopt a son. B filed a suit challenging the validity of the Will and in order
to raise money for the litigation transferred his share to C. The court set-aside the Will. On
the death of the widows B entered possession of A’s estate. C sued B but C’s suit was
dismissed as B, at the time of transfer, had spes successionis in A’s estate and, therefore,
could not transfer it.

(ii) Chance of Legacy

The chance of a relation receiving a legacy is a possibility even more remote then the chance
of succession of an heir, and therefore, is not transferable.

(iii)Other Possibilities of Like Nature

Such possibilities which belongs to the same category as the chance of an heir apparent or
the chance of a relation obtaining a legacy, e.g. The possibility of winning a lottery or a prize
in a certain competition cannot be transferred. A good illustration of this category is the ‘next

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cast in a fisherman’s net’. No one can guarantee that any fish will be caught, and the
fisherman himself has no interest in the fish until they are caught in his net.

Transfer by Unauthorised Person (Doctrine of feeding empty grant by estoppel)

A person who has no title or interest in an immovable property, cannot transfer that
property. Transfer by such person is a transfer by unauthorised person. Section 43 of the Ac
provides the effect when such unauthorised person subsequently acquires interest in
property transferred.

Section 43. Transfer by unauthorised persons who subsequently acquires interest property
transferred-where a person fraudulently or erroneously represents that he is authorised to
transfer certain immovable 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 reported 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 B’s dying A as heir obtains
Z, C not having rescinded the contract of sale, may require A to deliver Z to him.

The general rule of nemo dat quod non habet (no one can give to another, what he himself
does not have) has been relaxed through this section. The principle of this section is based
partly on the English doctrine of estoppel by deed and partly on the equitable doctrine that
a person who has promised more than he can perform must make good his promise when
he acquires the power of performance.

For application of this section requisites must be satisfied—

 There must be fraudulent or erroneous representation of ownership by the

transferor.
 Transfer must be by the wrong owner.

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  Transferee must act on that false representation, in good faith.
 Transfer is for the consideration.
 Transfer subsequently acquires some interest in that property which he professed to
transfer.
 The contract of transfer still subsists.

Subsequently acquired interest does not pass automatically to transferee but only when he
claims the right in such property.

The exception to this section (Second paragraph of Section 43) protects the rights of the
record transferee in good faith and for consideration who has no notice of the option in
favour of the first transferee.

Section 6(a) and Section 43 compared

Section 6(a) and Section 43 seems to conflict each other. Where Section 6(a) deals with spes-
successionis and sender mere possibility/expectancy of a heir succeeding to an estate as an
un-transferable property, through Section 43, such transfer can be made effective if
transferor subsequently acquires those property and other conditions satisfied.

In Jamma Masjid v. K. Deviah, AIR 1962 SC 847 Supreme Court explained the relationship
between two sections. Court said that Section 6(a) and Section 43 relate to two different
subjects and that there is no necessary conflict between them. Section 6(a) would apply
where there is a transfer of a mere spes successionis and the party knowing that the
transferor has no more right than that of a mere expectant heir Section 43 applies where an
erroneous representation is made by the transferor to the transferee that he is the full owner
of property and authorised to transfer it.

Supreme Court held that Section 6(a) enacts a rule of substantive law while Section 43 enacts
a rule of estoppel which is one of evidence. Thus, these two provisions operate on different
fields and under different conditions and there is no ground for reading a conflict between
or cutting one b reference to the other. Each of them can be given full effect on their down the
ambit of their own terms in their respective spheres.

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Restraints on Transfer – Section 10
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 of limitation
is void. Except in the case of lease where this 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
woman (not being a Hindu, Mohammedan or Buddhist) so that she shall not have p transfer
or charge the same for her beneficial interest therein”.

This is based on the general rule of jurisprudence “alienatio rei prae fertur juri
accrescendi” that is to say that alienation is favoured by law rather than accumulation. This
is general economic principal that there should be free circulation and disposition of
property. An absolute restart is repugnant to the nature of the estate and is an exception to
the very essence of the grant.

This section lays down that where property is transferred subject to a condition absolutely
restraining the transferee from parting with his interest in the property, the condition is
void. Thus, if a transfers his property to B with a condition that B shall never sell it, or shall
sell it only to a particular person, the condition is void, and B any sell or not as he pleases.
Here the sections Olovs that only the condition (restraining alienation) is void and not the
transfer itself.

In Rosher v. Rosher, (1884) 26 Ch D 801, a person A made a gift of house to B with a

condition that if B sold during the life-time of A’s wife, she should have an option to purchase
it for Its. 10,000. The value of the house was Rs. 10,00,000. This was held to be a effect an
absolute restraint and void.

When a property is transferred absolutely it must be transferred with all its legal incidents.
Section 8 of the set also provides that unless different intention is expressed (or implied), a
transfer of property passes forthwith to the transferee all the interest which the transferor
is then capable of passing in the property and in the legal incidents thereof.

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Absolute and Partial Restriction

The conditions or limitation on alienation may d be either absolute or partial. Absolute

restraints are declared void under Section 10, however partial restraints may be allowed.

Whether a condition amounts to a total or partial depends upon the substance, i.e., the real
effect of the condition and not the form of words laying down the condition. An absolute
restraint is one that takes away the power of alienation completely or substantially, whereas,
partial restraint is one that imposes some restriction on the power of alienation but the tram
is substantially free to alienate property in various ways. In Renand v. Tourangeaon, (1867).
LR 2 PC 4, it was held that a condition that transferee shall not transfer the property for a
period of twenty years is an absolute restriction and thus void. If it were a condition that
transferee shall not transfer the property for a period of 3 years, it would be a partial
restraint and thus valid.

Illustrations

(i) A condition that transferee shall not transfer the property by way of gift, is a partial
restraint and thus valid.

(ii) A condition that transferee shall not transfer the property family/or to a particular
person only, is a partial restraint and thus valid.

On the other hand, if a transferor A transferred a filed to transferred B, with a condition that
if he sold it he must sell to C (A particular person) and nobody else. The restriction was held
to be absolute and thus void.

(iii) A stipulation in a sale-deed that the vendee could sell-back the property to the vendor
only, and to no one else, is more than a mere partial restraint, and thus invalid.

(iv) A compromise by way of settlement of family disputes has been held to be valid,
although it involves an agreement in restraint of alienation.

In Mata Prasad v. Nageshera Sahal, (1925) 47 All 884, a dispute relating to succession
between a widow and the nephew was compromised on terms that the widow was to retain

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possession for life while the title of the nephew was admitted with a condition restraining
him from alienating during her life-time. The compromise was held to be valid.

Exceptions:
1. Lease: When the condition is for the benefit of the lessor or those claiming under him, it will
be valid. Thus a condition in lease that the lessee should not sublet or assign is valid. The logic
behind this exception is that landlord should be free to choose the person who shall be in
possession of his land.
2. Marriage woman: A condition restraining alienation may be imposed when the property is
transferred to a married woman is not a Hindu Mohammedan or a Buddhist.
Restriction on Free Enjoyment of Property

Section 11. Restriction repugnant to interest created “where, on a transfer of property, an

interest therein is created absolute in favour of any person, but the terms of 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. .,

Where any such direction has been made in respect of one piece of immovable property for
the purpose of securing the beneficial enjoyment of another piece of such property, nothing
in this section shall be deemed to affect any right which the transferor may have to enforce
such direction or any remedy which he may have in respect of a breach thereof.”

Thus a transferee of property who takes an absolute interest cannot be restrained in his
enjoyment or disposition of it by any condition inserted in the transfer.

Section 11 provides that any condition restraining the enjoyment of the property which is
transferred absolutely is void. When a property is transferred absolutely, it must be
transferred with all its legal incidents. If any condition or limitation is imposed in the deed
of conveyance, that would be repugnant to Section 11 of the T.P. Act; Smt. Manjusha Devi v.
Suinit Chandra Mukherejee, AIR 1972 Cal 310.

The following restrictions are void according to Section 11 of T.P. Act—

(i) A makes an absolute gift of a house to B with a condition that the gift will be forfeited if B
does not reside in it.

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(ii) The transferee should always let the land at a definite rents or cultivate it in a particular
manner.

Section 11 is practically a corollary to Section 10. The distinction between Section10 and 11
is that under Section 10, the restriction is directed against the transfer of the interest while
under Section 11, the restriction is directed against free enjoyment. Section 10 is applicable
to all transfer whether limited or absolute, whereas Section 11 will not apply unless the
transfer absolute, and the restriction is imposed by the terms of the transfer.

Exception

The second paragraph of Section 11 provides the exception to the general rule contained in
first paragraph. According to it, the transferor may impose conditions restraining the
enjoyment of land if such conditions are for the benefit of his (transferor’s) adjoining land.”
Tulk v. Moxhay, 2 Phill 774.

Illustrations:

(1) A owns two properties X and Y, and sells X to B. A imposes restriction on B that he shall
for the more beneficial enjoyment of Y, keep open a portion of X enjoyment of Y, keep open
a portion of X adjoining Y and not build on it. The restriction is valid and enforceable against
B.

(2) A owns two properties X and Y and sells X to B and imposes a condition on B that B shall
lay out money in building and repairing a drain passing over X adjoining Y. The restriction is
valid and enforceable.

(3) A makes an absolute gift of a house to B, and directs that B shall not raise it higher, so as
to obstruct the passage of light and air to A’s adjoining house, the direction will be valid.

Section 12. Condition making interest determinable on insolvency or

attempted alienation

When property is transferred subject to a conditions or limitation making any interest

therein, reserved or give to or for the benefit of any person, to cease on his becoming

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insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is
void.

Nothing in this section applies to a condition is lease for the benefit of the lessor or those
claiming under him.” This section provides that a condition that the grantee shall cease to
have any right on becoming insolvent or that the shall cease to have any interest on
attempting to alienate property, is void.

The principle behind this provision is that it would be unjust that the grantee should enjoy
and possess all the incidents of ownership of property and yet be deprived who have
made advances on the strengths of the property should be prevented of the right of
alienation incident to such ownership; and it is equally unjust aiming, that the creditor who
may have made advances on the strength of the property should be prevented from having
recourse to the property transferred for satisfaction of their debts on account of clause in
the transfer, which none but the grantor and the grantee may know nothing about.

The exception to this section provides that nothing in this section applies to a condition in a
lease for the benefit of the lessor or those claiming under him.

Doctrine of Lis Pendens

When there is a litigation between two person in regard to some immovable property and
one of them transfer the subject-matter of the litigation, a conflict may arise between the
right of the transferee and the rights of the parties as declared by the decree of the court.
Section 52 of the Transfer of Property Act,1882 provides the doctrine of lis pendens, i.e.,
‘pending litigation.’

Section 52 Transfer of Property pending suit relating thereto – During the pendency in
any court having authority within the limits of India excluding the State of Jammu and
Kashmir or established beyond the limits of the Central Government, of any suit or
proceeding which is not collusive and in which any right to immovable 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 to affect the right of any other party thereto under any

Page 27 of 41
decree or order which may be made therein, except under the authority of the court and on
such terms as it may impose.

Explanation- For the purpose 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 is 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.”

The doctrine of lis pendens is expressed in the well-known maxim; ‘pendente lite nihil
innovature’which means ‘during pendency of any suit regarding title of a property, any new
interest in respect of that property should not be created. The effect of the applicability of
the doctrine is that it does not annul the conveyance, but only renders it subservient to the
rights of the parties to the litigation. The transferee will be bound by the result of the suit or
proceeding, whether or not he had notice of the suit or proceeding.

The principle is explained in Bellamy v. Sabine, (1857) 1 Dec. & 566, where Turner, L.S said,
it that doctrine rests upon this foundation that, it would plainly be impossible that any action
or suit could be brought to a successful termination if alienations pendente lite were to
allowed prevail. The plaintiff would be liable in every case to be defeated by the defendants,
alienating before the judgment or decree and would be driven to commence his
proceeding de novo subject again to the same course of proceeding.”

The doctrine is based upon expediency and it is immaterial whether the transferee pendente
lite had or had not notice of the suit. This doctrine had been fully expounded by the Privy
Council in Faiyaz Hussain Khan v. Prag Narain, (1907) 29 All 339 PC where their lordship
quote with approval the observations of Lord Justice Turner is Bellamy’s case.

The rule of Lis pendens is based on the necessity for final adjudication. It aims at the
prevention of multiplicity of suits or proceedings. For applicability of the- doctrine, folios°
conditions must be fulfilled:

 There must be pendency of a suit or proceeding.

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  The suit or proceeding must be pending in a competent court.
 The suit or proceeding must not be collusive.
 A right to immovable property must be directly and specifically in question in that
suit or proceeding.
 The property in dispute must be transferred or otherwise dealt with by any party to
the litigation.
 The alienation must effect the right of the other party.

Pendency of a Suit/Competent Court

Explanation to Section 52 provided that the pendency of a suit or proceeding beings from the
date of the presentation of the plaint or institution of the proceeding in court of competent
jurisdiction. In case the plaint is presented in a wrong court, and a transfer takes place during
such pendency, the doctrine of lis pendens would not be applicable.

In Mahendra Nath v. Parineswar, (1921) 60 IC 439, it was held that if the plaint is
insufficiently stamped and is rejected and then represented after making good the
deficiency, a transfer between the two dates of presentation would not subject to lis pendens.

The pendency of the suit continue until the suit or proceeding has been disposed of by a find
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 (Explanation).

Bona Fide Litigation

The suit or proceeding must not be collusive. A collusive suit is one in which there is a
fraudulent secret understanding between the plaintiff and the defendant that the suit would
not be contested with a view to defeat the right of transferee of either parties.

Right to Property must be in Dispute Right

Right of an immovable property must be directly and specifically in issue in the suit or
proceeding, e.g., a suit on mortgage, for partition for specific performance of a contract to
transfer immovable property, etc.

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Transfer by a Party to the Litigation

The property must be transferred or otherwise dealt with by any of the parties to the suit or
proceeding. Doctrine of lis pendens cannot extend to person whose title is paramount to that
of the parties to the suit, e.g., M grants a lease to N of certain land. N files a suit for ejectment
against O who is in wrongful possession of the land. During the pendency of suit, M sells the
land to P. The doctrine of lis does not apply to this sale by M to P.

Transfer must Effect the Other Party

In Sripal Snigh v Naresh, (1925) Pat 239, it was held that the doctrine is not applicable where
in the right of the transfer alone are affected and not other party to the suit.

Exception

Section provides that it is open to court to permit any party to the suit to transfer the
property to on terms which it may think fit to impose.

In Amarnath v. Deputy Director of Consolidation, AIR 1985 All 169 it was held
that party is said to be party to the suit, if the decision or judgement is likelt to affect the
share of such a party and the decision would be binding on him too. Thus A,B,C, are brother
;C is residing in a distant town while A and B are residing together. A files a suit for partition
and does not implead C or his father X. Though X and C are not parties to the suit, yet the
subject matter of suit is the same, and neither X nor C legally and validly transfer or alienate
his share to a third party. In such case the ultimate decree is likely to affect the shares of X
and C too. Thus, there may be case where a party may not be locked in a civil suit or
proceeding; yet such a party may be affected by the judgment/decree is such a suit.

In Fayaz Husain Khan v. Prag Narain, (1907) 29 All 339, a mortgage sued to enforce his
mortgage, but before the summons were served, the mortgagor effected a subsequent
mortgage. The prior mortgagee continued his suit and obtained a sale order from the court,
without making the subsequent mortgagee, a party to the suit. It was hold that the sale
extinguished the subsequent mortgagee’s right to redeem the prior mortgagee.

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Doctrine of Part Performance
The doctrine of part performance is inserted in the Transfer of Property Act, 1882, by Act 20
of 1929, section 16. This is an equitable doctrine. This is based on the principle that, equity
treats the subject-matter of a contract as to its effects in the same manner as if the act
contemplated in the contract has been fully executed, from the moment the agreement has
been made, though all formalities of the contract have not been yet completed.

Section 53A of the Transfer of Property Act embodies the doctrine of part — Performance
which reads as under:—
“Where any person contract to transfer for consideration any immovable property by
writing signed by him or on his behalf from which the terms necessary to constitute the
transfer can be ascertained with reasonable certainty, and the transferee has in part
performance of the contract, taken possession of the property or any part thereof, or the
transferee, being already in possession, continues in possession in part performance of the
contract and has done at in furtherance of the contract, and the transfer has performed or is
willing to perform his part of the contract, then notwithstanding that the contract, though
requires being registered, has not been registered, or, where there is an instrument of
transfer, that the transfer has not been completed in the manner prescribed therefor by the
law for the time being in force, the transferor or any person claiming under him shall be
debarred from enforcing against the transferee and person claiming under him any right in
respect of the property of which the transferee has taken or continued in possession, other
than a right expressly provided by the terms of the contract:
Provided that nothing in this section shall affect the rights of a transferee for consideration
who has no notice of the contract or of the part performance thereof.”
For application of this doctrine of part-performance, it must be shown that there is a contract
to transfer for consideration immovable property. The contract must be for consideration in
Writing and singed by the transferor, if there is no agreement or a void agreement, the
doctrine cannot be applied.
Further, the transfer should have taken possession of the property (or a part thereof), or if
he being already in possession should continue in possession and should have done some
act in furtherance of the contract.

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In Sunil Kumar Sarkar v. Aghor Kr. Basu, AIR 1989 Gau 39, court laid down the pre-requisites
for invoking the equitable doctrine of part performance, which are as follows:
(a) there must be a contract to transfer for consideration immovable property in writing
singed by the person sought to be bound by it and from which the terms necessary to
Constitute the transfer’ be ascertained with reasonable certainty.
(b) It must be shown that the transferee, has in part performance of the contract, either taken
possession of the property or any party thereof, or the transferee being already in
possession, continues in possession and had done some act in furtherance of the contract;
and
(c) the transferee has performed or is willing to perform his part of the contract.
When these conditions are fulfilled the transferee is entitled to claim, under this section, that
he should not be dispossessed or evicted from the property.
Exception to Section 53A — This section provides an exception that the rule laid down in
this section has no application or affect the right of a subsequent transferee for consideration
who has no notice of contract or of the part-performance thereof.
The doctrine can, however, be availed of against a gratuitous transferee (without
consideration) and also a transferee for value if he has notice of the contract or of its part-
performance.
Present Position of Section 53A
After enactment of Registration and Other Related Laws (Amendment) Act, 2001 (Act No.48
of 2001) w.e.f. 24-9-2001, the present position of Section 53A is zero. Now Section 53A of
Transfer of Property Act, is amended, and the words “the contract, though required to be
registered has not been registered” has been omitted from Section 53A. Thus, now
registration of deed of transfer of immovable property is compulsory. If there is any other
defect except registration, the help of the doctrine of part-performance can be taken but
registration of sale deed is must, after amendment, a document (whether possession in part-
performance is given or not) must be registered it if is compulsorily registrable under
Section 17 of the Registration Act, 1908 or under Transfer of Property Act.
It could said that now the protection of Section 53A has lost its importance.

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Right of Redemption
Doctrine of redemption is not a new doctrine. Its origin can be traced from Anglo-Saxon and
Roman law. The practice of securing land for payment of money in English law dates back to
Anglo-Saxon England when interest loans were illegal. Borrower conveyed estate to lender
in consideration of a loan and lender reconvened estate to borrower on redemption. Section
60 and 91 of the Transfer of Property Act 1882 deals the redemption and who may redeem
or institute a suit for redemption.

In simple words redemption means the return or repossession of property offered as

security upon payment of mortgage debt or a charge. Right of Redemption means right of
mortgagor against mortgagee to redeem mortgaged-property. Under Transfer of Property
Act, at any time after principal money has become due when mortgage-money is paid or
tendered at a proper time and place, mortgagor has following right against mortgagee:

1. Delivery of Mortgage-deed

Mortgagor possesses right to require mortgagee to deliver to mortgagor mortgage-deed and

all those documents, which are relating to mortgaged-property and which are in possession
or power of mortgagee.

2. Delivery of Mortgaged-property

Mortgagor possesses right to require mortgagee to deliver possession of mortgaged-

property to mortgagor when mortgagee is in possession of mortgaged property.

3. Re-transfer of Mortgaged-property

Mortgagor possesses right to require mortgagee to re-transfer mortgaged property to

mortgagor or to such third person as mortgagor directs. However, such re-transfer is done
at cost of mortgagor.

4. Extinguishment of Mortgagee’s Interest

Mortgagor possesses right to require mortgagee to execute and to have registered on

acknowledgement in writing that any right in derogation of mortgagor’s interest, which has

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been transferred to mortgagee, has been extinguished. However, such a know judgment
should be registered in that case where mortgage has been effected by a registered
instrument.

CLOG ON REDEMPTION

Clog on equity of redemption means anything which debars a mortgagor from his exercise
to redeem. Where an obligation continues during the term of the mortgage and beyond,
which renders the property mortgaged less available in the hands of its owner apart from
the realization of the mortgage debt, it is a clog on the equity of redemption.

Clog on the equity of redemption is a restriction on the exercise of the right to redeem. A
mortgagor has under section 60 (which does not mention the words in the absence of a
contract to the contrary) a right to redeem the mortgaged property at any time after the
mortgage money has become payable. A mortgage is a transfer of an interest in specific
immovable property as a security for the payment of debt or the discharge of some other
obligation for which it is given. The security is redeemable on the payment or discharge of
such debt or obligation. Any provisions inserted in the mortgage deed to prevent redemption
on payment of the mortgage money in performance of the debtor’s obligation for which the
security was given is what is meant by clog or fetter on the equity of redemption and is
therefore, void. The mortgagor cannot even be contract at the time of mortgage given up his
right of redemption to fetter it in any way. Anything that debars him from exercising his right
to redeem is called clog on the equity of redemption. It follows from this “once a mortgage is
always a mortgage.”

View of lord Macnaghten

Redemption is of the very nature and essence of a mortgage as mortgages are regarded in
equity. It is inherent, in the thing itself, and it is, I think, as firmly settled now as it was in
former times that equity not permit any device or contrivance designed or calculated to
prevent or impede redemption. It follows as a necessary consequence that where the money
secured by a mortgage of land is paid off, the land itself and the owner of the land in the use
and enjoyment of it must be as free and unfettered to all intents and purposes as if the land
had never been made subject of the security.

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View of lord Davey

The principle is this that a mortgage must not be converted into something else, and when
once your come to the conclusion that a stipulation for the benefit of the mortgagee is part
of the mortgage transaction, it is but part of his security and necessarily comes to an end on
payment of the loan.

Instances of clogs on the equity of Redemption

 Mortgagor will have no right of redemption

The condition that the mortgagor will not have any right of redemption is a clog as it defeats
the equity of redemption.

 Mortgagor shall not alienate property

A stipulation that the mortgagor shall not alienate the property pending the mortgage is
incapable of enforcement.

 Redeeming the mortgage by paying money from his own pocket

A, mortgages his property to B and the time of mortgage contracts with B that A shall not
alienate the property during the mortgage and will redeem the mortgage by paying the
money from his own pocket and not by money raised by sale or mortgage of a property. This
is a clog on redemption and is unenforceable.

 Converting a mortgage into sale on default of payment

A condition converting a mortgage into a sale on default of payment is invalid as a clog on

redemption.

Instances not amounting to clog

 Condition of Sale

A condition of sale is clog if it is part and parcel of the mortgage transaction. Abut subsequent
to the mortgage, the mortgagee may stipulate for the purchase of property from the
mortgagor.

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  Long term for redemption

A long term for redemption is necessarily not a clog, e.g. a provision in the mortgage deed
that the mortgage agree to certain terms as part of the contract of the mortgage and these
terms are fair and advantageous to both the parties and are not inconsistent with or
repayment to the contract itself, such a condition would not necessarily be construed as a
clog on right of redemption.

SALE OF IMMOVABLE PROPERTY

SALE OF IMMOVABLE PROPERTY

Section 54 of the price Transfer of Property Act defines “Sale” as “sale is a transfer of
ownership in exchange for a price paid or promised or part-paid and part-promised.

Sale how made – Such transfer, in case of tangible immovable property of the value of one
hundred rupees and upwards or in the case of revision or other intangible things, can be
made only by registered instrument.

In the case of tangible immovable property of a value less than one hundred rupees, such
transfer may be made either by a registered instrument of by delivery of the property.

Delivery of tangible immovable property takes place when the seller place the buyer or such
person as he directs, in possession of the property.”

Essentials of a Valid Sale

According to Section 54, following are the essentials of a valid sale—

i. the parties, i.e., the seller and the purchase, must be competent. They are also called vendor
and vendee, respectively. They must be competent to contract, i.e., must of sound mind and
have attained the age of majority. The seller must also have right to sell the property and
purchase may be any person not disqualified to purchase a property under any law enforced
in India.

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ii. There must be a subject-matter of sale. Transfer of Property Act deals with sale of
immovable property. The transfer of ownership of immovable property is dealt with under
this Act while sale of movable are dealt with under the Sale of Goods Act, 1930.

Immovable property may be either tangible, such as land, house, things attaches to earth,
etc., or it may be intangible immovable property, such as right of ferry or fisheries, or right
to a mortgage debt etc. But the immovable property must be in existence on the date of
execution of sale.

iii. Price or money consideration—Price is an essential ingredient of a sale. A sale is a transfer

of ownership in exchange of money. Payment of price is not necessary for completion of
the transfer but its reference is necessary. It may be paid at the time of execution or
promised to pay or same part of it may paid at the time of execution and rest may be
promised to be paid in future.

iv. Conveyance—In sale, property must be transferred from seller to purchaser. According
to Section 54 there must be a registered conveyance in the case of—

(a) tangible immovable property of the value of Rs. 100 and upwards; or

(b) a reversion of an intangible thing of any value.

In case of tangible immovable property of a value less than Rs. 100, there must either be,

(a) a registered conveyance, or

(b) delivery of property.

Sale and Contract for Sale

Section 54 of the Act defines ‘sale’ as a transfer of ownership in exchange for a price Paid or
promised or part paid and part promised.

Section 54 also defines ‘contract for sale’ as, “a contract for the sale of immovable property
B a contract that a sale of such property shall take place on terms settled between the
parties,”

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Thus a sale may be preceded by a contract for sale. A contract for sale is merely a document
creating a right to obtain another document namely, a duly executed sale deed. On the Other
hand, a sale of immovable property is a transfer of ownership.

A sale passes an absolute interest in the property to the purchaser, but a contract for sale
does not of itself create any interest in, or charge upon the property in favour of the buyer.
It does not convey any little to the purchaser.

A sale must be registered, if it deals with the conveyance of tangible immovable property of
the value of Rs. 100 or more, or a reversion or any intangible things.

A contract for sale need not be registered at all.

Sale and Exchange

According to Section 54 of the Act, a sale is a transfer of ownership in a property in exchange

for a price. On the other hand exchange is a transfer of ownership in property in exchange of
ownership of another property. Section 118 of the Act defines exchange as, “when two
persons mutually transfer the ownership of one thing for the ownership of another, neither
thing or both thing being money only, the transaction is called exchange.

Thus in both, there is transfer of absolute interest in the property, but real difference is that
in sale, the consideration is money, whereas in exchange, it is another property or anything
of value.

Sale and Gift

In both sale and gift, there is transfer of ownership of an immovable property. However the
difference between the two is that where in sale, the ownership is transferred in exchange
for a price, in gift, the immovable property is transferred with any consideration.

In sale, if the valuation of immovable property is Rs. 100 or more, than it is to be effected
only by registered instrument. But in case of a gift of an immovable property, it must be made
only by registered instrument irrespective of the valuation of the property.

RIGHTS AND DUTIES OF SELLER AND BUYER (SECTION 55)

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Sellers Duties and Rights

1. Sellers duties before sale—

(a) the seller is bound to disclose to the buyer any material defect in the property or title,
of which seller is, and buyer is not aware, and which buyer could not with ordinary case
discover. [Section 55(1)(a)]

(b) The seller is bound to the buyer on his request for examination of all documents of title
relating to the property which are in the seller’s possession or power. [Section 55(1) (b)]

(c) the seller is bound to answer to the best of his information all relevant question put it
him by him by the buyer in respect to the property or the title there. [Section 55(1) (2)]

(d) The seller’s next duty is to execute the conveyance. He is bound on payment or tender of
the amount due in respect of the price, to execute a proper conveyance of the property when
the buyer tenders it to him for execution at proper time of place. [Section 55 (1) (d)]

(e) Seller is bound to take case of the property and documents of title. Between the date of
contract of sale and the delivery of the property, he is bound to take as much case of the
property and all documents of title relating thereto which are in his possession as an owner
of ordinary prudence would take of such property and documents. [Section 55(1) (c)]

(f) It is the seller’s duty before the completion of sale to pay all the outgoings. Before
completing of sale, the seller continues to the owner of the property, thus the Government
dues, etc., are to be paid by him. [Section 55(1)(g)]

2. Seller duty after sale—

(a) After completion of the sale, it is the seller’s duty to gave possession to the buyer. The
seller is bound to give, on being so required, the buyer or such person as he directs, such
possession of the property as its nature admits. [Section 55(1)(f)1

(b) It is the seller duty to covenant for title. Section 55(2) of the Act provides that—

“The seller’s be deemed to contract with the buyer that the interest which the seller
professes to transfer to the buyer subsist and that he has power to transfer the same. (This

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is also known as implied covenant for title): Provided that, where the sale is made by a
person in a fiduciary character, he shall be deemed to contract with the buyer that the seller
has done no act whereby the property is encumbered or whereby he is hindered from
transferring it.

The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the
interest of the transferee as such, and may be enforced by every person in whom that interest
is for the whole or any part thereof from time to time vested.”

(c) It is the seller duty to deliver title-deeds on receipt of the price. Section 55(3) of the Act
provides that, where the whole of the purchase-money has been paid to the seller, he is also
bound to deliver to the buyer all documents of title relating to the property which is in the
seller’s possession or power. However, he proviso to Section 55(3) lays down that:

 Where the seller retains that part of the property with him, which of greatest value
and, such property is included in the documents, the seller is entitled to retain all the
documents with him.
 Where the whole of such property is sold to several buyers the persons who purchase
the largest part of the property would be entitled to retain all the documents.
3. Seller’s Right before Sale—Section 55(4)(a) provides that ‘the seller is entitled to
the rents and profits of the property till the ownership thereof passes to the buyer’.
‘Thus, before completion of the sale, the seller is entitled to all the rents, profits or
another benefit. interests of the property’.
4. Seller’s Right after Sale—If after completion of sale, the price or any part of it
remain unpaid, the seller acquires a lien or charge on property. Accordingly to Section
55(4)(b) if price remains unpaid, the seller cannot refuse delivery of possession for
can claim back the possession if already given to buyer, but he (seller) is given a right
to recover unpaid purchase money from and out of the property.

Buyer’s Duties and Rights

1. Buyers duties before sale—

(a) Before completion of sale, it is the duty of the buyer to disclose, facts which materially
increases the value of property, Section 55(5)(a) of the Act provides that, “the buyer is bound
to disclose to the seller any fact as to the nature or extent of the seller’s interest in the
property of which the buyer is aware, but of which he has reason to believe that the seller is
not aware, and which materially increases the value of such interest.

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(b) The buyer is bound to pay or tender the purchase money to seller [Section 55(5)(b)].

2. Buyer’s Duties after Sale—(a) where the ownership of the property has passed to
the buyer, the buyer is bound to bear any loss arising from the destruction, injury or
decrease in value of the property not caused by the seller. [Section 55(5) (c)].

(b) According to Section 55(5) (d) after the completion of sale, the buyer is liable to pay the
outgoings, e.g., Government dues, rents, revenue or taxes, as the buyer becomes the owner
of the property.

3. Buyer’s Right before Sale—

Section 55(6)(a) of Act provides that the buyer is entitled to (unless he has improperly
declined to accept delivery of property):

 A charge on the property for the purchase money properly paid by him in anticipation
not the delivery.
 (ii) Interest on such purchase money.
 The earnest, and cost awarded to him in a suit to compel specific performance of the
contract or to obtain a decree for its recession in case he properly declines to accept
delivery.
4. Buyer’s Right after sale—After sale, the buyer is entitled to the benefits of any
improvement in, or increase in value of, the property, and to the rents and profits
thereof, [Section 55(6)(a)].

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