Property Law – session I

PROVISIONS DEALT ARE SECTION 22, 23,24 AND 25

Introduction
• Transfer of Property – Definition

• Modes of transfer – Voluntary and Involuntary

• In India Voluntary Transfer is done by way of mortgage, sale, lease or exchange(for consideration)
and by gift and will(without consideration).

• Involuntary Transfer – Court attaching a property

• Voluntary Transfer may be conditional or Absolute

Transfer – ‘Praesenti’ or ‘de futuro’
• Based on the Condition specified the transfer is interest over the property is decided.

•There are two kinds of interest over property

• Vested Interest

• Contingent Interest

•The possession on these two cases varies with happening or non-happening of event mentioned.
Difference
VESTED INTEREST CONTINGENT INTEREST

• Section 19
• Possession on happening of specified certain
event
• Interest over the property is said to be vested
on the happening of a specified certain event
• Alienable and also heritable
• Section 21
• Possession on happening or not happening of
specified uncertain event
• Interest over the property is known as
contingent and upon happening or not
happening of specified uncertain event the
contingent interest becomes vested interest
• Alienable but not heritable
Section 22
• Transfer to members of a class who attain a particular age

o This provision talks about the class of contingent transferees who attains
particular age

o And is applicable only to the people in that class who attains that particular age

o For class refer section 15 – Interest fails in regard to those persons who doesn’t
attain the age mentioned not in regard to whole class

o Exception to section 21 does not apply – the income arising out of such
property is not contingent in nature.
Section 23
• Transfer contingent on happening of specified uncertain event
o The contingent interest will fail and cannot vest unless the event occurs before or at the
time of termination of prior interest
o E.g. A transfers B Rs. 1000 if India becomes a developed nation before the death Dr. A. P.
J. Abdul Kalam
o Here, Prior interest – Death of Dr. A. P. J. Abdul Kalam
Contingent interest – Developed nation
o Assume he was alive while entering the sale and died 1 month after that, then the transfer
said to be ceased
 Section 24
• Transfer to such of certain persons as survive at some period not specified

o Consider the previous example, but here A transfers Rs. 1000 to B and C if the same
happens

o Assume, the event took place but B dies in-between, then the survivor C will have
interest over Rs. 1000

• The law is trying to give clarity regarding contingent transfer with the help of these provisions
Section 25
• Conditional transfer – 3 types
• Condition Precedent – Before transfer ( goto London before)
• Condition Subsequent – After transfer ( goto London within 2 years)

• Condition Collateral – Condition fulfilled with transfer side by side

(A lease house to B, as long as B stays with A)

• Section 25 is about condition precedent – Void condition Precedent

1. Impossible to perform – A transfers B Rs. 1000 if he runs 100km in 1 hour.

2. Unlawful ( Against law – Acts and omission specified in IPC )

i. Forbidden by law (IPC)

ii. Defeats the provision of law (Asking women to marry without divorce)

iii. Fraudulent (Involves fraud)

iv. Involves any injury to person or property (Firing house)

v. Opposed to public policy ( A transfers B Rs. 1000 if she deserts her husband for him)
Section 29
• Fulfilment of condition subsequent
• With this provision the law is making it very clear that the subsequent conditions be strictly
fulfilled (even if it has more than one condition specified)
• Otherwise the interest will be divested (he will no longer have interest over the property)
• The subsequent condition should be clear and must also be fulfilled. Ignorance, illness or
neglect cannot be taken as plea for non-compliance.

• Illustration - A transfers a garden to B with condition not to cutdown a particular tree if he

does then the garden shall belong to C. B cuts down other trees leaving that particular tree but
at some point of time he cuts that tree, so the property now belongs to C.
Section 31
• Condition that transfer shall cease to have effect in case specified uncertain event happens or does not
happen
• This provision is similar to section 29 but the difference is that the property will revert back
to the transferor.
• Law states that condition should be valid and not vague. If the condition is void, it will not
terminate the interest.

• Illustration - A transfers a garden to B for his life with a proviso that, in case B cuts down a
certain wood, the transfer shall cease to have any effect. B cuts down the wood. He loses his
life-interest in the farm.
 Section 32 and Section 33
• Section 32 - Condition must not be invalid
• This provision makes clear the condition subsequent and adding condition providing for
termination should be valid and not void. If not the interest shall cease. This provision applies
to section 25, 28, 29 and 31 and subject to the section 12 (insolvency - void)

• Section 33 - Transfer conditional on performance of act, no time being specified for performance
• Here the provision states that an act should be performed subsequently to have interest when
there is no time limitation. So, one can perform an act anytime based on the condition.
• Illustration – A gift is made to A on condition that unless he joins army the gift shall go to B.
A joins church and thereby renders it impossible that he may join army and fulfill the
condition. B is entitled to get the property.
Section 38
• Transfer by person authorized only under certain circumstances to transfer
• The provision talks about the transfer where the transferor has limited power of transfer with
respect to immovable property.
• The guardian of minor’s property, the karta of JHF and widow are persons who have limited
authority of transfer (This provision has limited application so it doesn’t applies to Section 41
and 64, whose authority of transfer is also limited).

• The justification is not necessary but reason to believe that the transferee has acted in good
faith with reasonable care or based on the necessity of the transferor transfer has taken place
to be there.
• The transfer should be with no mala fide intention or any collusion between the parties.
• Illustration – A, a Hindu widow held the property of her husband as ‘widows’s limited estate’
under old Hindu law which she can transfer only for legal necessity. She sold the property to B
alleging that the income arising out of that property is insufficient for her maintenance. B
satisfied himself by reasonable enquiry that income of the property was not sufficient for A’s
maintenance and the sale was necessary. Acting in good faith B purchased the property. As
between B on one part and A and her collateral heirs on the other part, a necessity for the sale be
deemed to have existed and the transfer by A to B is valid.

• Collateral heirs of the husband are those persons who were entitles to inherit the property held
by the widow A.
Section 40
• Burden of obligation imposing restriction on use of land
• The provision has two part, 1st part being restrictive covenant and 2nd part being the contractual
obligations annexed to ownership.

• Section 11 speaks about the covenant and its kinds only whereas the section 40 speaks about
negative covenant and its enforcement against the subsequent transferees.
• The restrictive covenant of this provision is based on the case law Tulk v. Moxhay, where it was
held that the negative covenant is enforceable since the transferee was with notice.

• Through the various case laws it was made clear that the notice may be constructive or active,
transfer is for value with notice or gratuitous transfer, the restrictive covenant is enforceable and
the burden lies on the transferee to prove that he had no notice.
• The contractual obligation mentioned in this provision is more of easement and preemptive right
which are based on the principle of equity.
• Illustration - A contracts to sell Sultanpur to B. While the contract is still in force he sells
Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the same
extent as against A.
• Since there is a contract of sale between A and B, it creates an obligation to sell the property to B
rather than C, though the sale contract doesn’t create interest over the property it creates an
obligation.

• Thus it can be enforced not only against the vendor but also against the volunteer, purchaser for
consideration with notice and on the gratuitous transferee.
Section 41
• Transfer by 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.
• So the there is test laid down by the SC in the case law Jaya dayal Poddar v/s Bibi Hazara
– the parameters to ascertain the Ostensible owner are -
✓ Source of purchase money, who paid the price.
✓ Nature of possession after purchase.
✓ Motive of giving benami color to the transaction. 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.
• Effect of Transaction 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 for a Benamidar / Ostensible owner, the real owner cannot recover,
provided other conditions are fulfilled

• Illustration - 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.
• Essential Conditions of section 41 –

• 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 mala fide intentions.