Doctrine of accumulation is a way to restrain the enjoyment of property.

According to Section 17(1), if the conditions of the transfer of property

direct the income that arises out of the property to be accumulated either
wholly or in part for a period of time that is longer than the lifetime of
transferor or for a period of 18 years shall be considered to be void. These
conditions are alternative and not a combination, such as the lifetime of
transferor and 18 years. This Section sets limits for the direction of
accumulation such as lifetime of transferor and as well as a time period of
18 years. This principle is derived from Theluson v. Woodford[1]. However,
the registration of documents is compulsory as mentioned under Section 17.
[2]
The enactment of Section 10 to 17 of TOPA is for free alienation and
circulation of property.[3]A direction for the accumulation with gift is not
considered to be profoundly wrong, it is said to be a failure in case it is
offending an independent rule of Hindu Law[4]. In instances of religious
endowment, direction of accumulation shall not be held illegal when the
direction is not made for the advantage either for the settlor or for the family
members or when the object is reasonable without the opposition by public
policy.[5]
Section 17 is enacted on the terms based in English law, which are now
combined in Sections 164-166 of the Law of Property Act, 1925[6]that are
reenacted with certain changes[7]. The purpose of invalid provision is to
make the accumulation void if it surpasses two statutory limits. However, the
accumulation disobeying the period as per the statute is void only to that
extent.
Under the Mahomedan Law, the provision for accumulation will make sure
that it is for the advantage of the charitable purpose and shall not transgress
the rule of perpetuities. The validation of the object of wakf comes from the
presentation of Fateha that includes the involvement of expenditure.[8]The
direction of accumulation of income in wakf is considered to a valid one.[9]
In instances, where the direct for accumulation of income is exceeding the
time period specified, and nonetheless authorizes the transferee to disregard
the time period but without causing any defect to the transfer, then Section 17
will make this valid. If the time period varies in few cases, then maximum
amount of time to be permitted will be based on the facts. Either the lifetime
of transferor or 18 years whatsoever is longer will be applied.
The exceptions mentioned under Section 14,16 and 17 shall not apply to
cases where transfer of property is for the public benefit with respect to
advancement of religion, knowledge, commerce, health, safety or any such
beneficiaries. Similarly, rule of perpetuity would not apply. This exclusion is
incorporated in the Hindu law.[10]The main purpose of this Section is to
distinguish transfer of commercial and personal nature.
Idol is not considered to movable property. An image that is considered as a
legal and spiritual entity would not be called a property that is subject to gift.
[11]A gift made for the purpose of dharma is void and not certain.
[12]Settlements for religious purposes[13], worship[14]or formation of
wakf[15]are good in law if there is no violation of rule against perpetuity.
Whereas, a gift made for the usage of playground for children or gymnasiums
to endorse health will be considered as public purpose.
The property that is used for endorsing a hospital[16], eye care centers[17],
places offering medical facilities will be exempted from the rule against
perpetuity. So, under these circumstances the doctrine of accumulation of
income shall remain inapplicable as it is meant for the purpose of the public
benefit.                                                                                          
[1]32 ER 1030 (HL)
[2]Ashwatthamma v. Ramakka, (2011) 1 AIR Kant R 829: (2011) 3 ICC 323
[3]K. Muniswamy since deceased by L.Rs., v. K. Venkataswamy, AIR 2001
Kant246 (248): 2000 96) Kant LJ 487; Vencatachellum v. Kabalamurthy,
AIR 1955 Mad 350 (358)
[4]Watkins v. Admr. GL., AIR 1920 Cal 951 (954)
[5]Bhabatarini Debi v. Ashmantara Debi, AIR 1938 Cal 490 (496): 179 IC
847
[6]15 Geo. V.C. 20.
[7]Accumulation Act of 1800, Thellusson Act
[8]Ramanadham v. Vada Levvai, (1911) 34 Mad 12
[9]Ramanadham v. Vada Levvai, AIR 1916 PC 86 (89)
[10]Gopal Singh Visharad v. Zahoor Ahmed, 2011 (5) ADJ 281: 2011 (86)
ALR 646: (2011) ILR All 387: 2011 (4) JCR 397 (All): (2011) 2 UPLBEC
1311
[11]Pradyumna Kumar v. Pramatha Nath, AIR 1923 Cal 708
[12]Runchordas v. Parvatibai, (1899) ILR 23 Bom 725

Example

A transfers property to B in 1940 which is with the

direction that the income arising out of property is to
be accumulated till 1970. i.e. for 30 years. A dies in
1965 . The period during which the transferor is alive
is more than 18 years from the date of the transfer but
being the longer of the two periods, the direction is
valid till 1965. if however the transferor dies in 1950.
Then longer period would be 18 years and accordingly
the direction would remain valid till 1958.
Exceptions
However Such direction for accumulation of the income
is valid even beyond the above stated period under
section 17( 1) if the direction is for the purpose of

(a) The payment of the debts of the transferor , or

(b) The provision of portion for the children or ramoter

issue of transferor ,or of any other person taking
interest under the transfer ,or

(c) The provision for maintenance of property

transferred, or

(d) where the property is transferred for the benefit of

public or any other object beneficial to mankind for
example charitable purposes.
       In short the direction for accumulation of the
income is a particular mode of restraining the
enjoyment of the property. According to the principal
laid down in Section 17 such direction for accumulation
would be void  and inoperative but this section
provides  an exception and permits a direction for
accumulation of income to operate in certain cases.
This Section allows  accumulation of income upto the
life of transferor ,or up to the period of 18 years, from
the date of the transfer, whichever is longer.

This article has been written by  Ishaan Banerjee  from

Vivekananda Institute of Professional Studies, affiliated
to Guru Gobind Singh Indraprastha University. This
article explores the basics of the Transfer of Property
Act 1882, along with the concept of alienation. We will
also examine the conditions and exceptions relating to
the restriction of alienation under this Act.   

Table of Contents
 Introduction
 What is the transfer of property according to law?
o What can be transferred?
o Who is competent to transfer?
 What is alienation?
 Can alienation of property be restrained?
o Types of restraints
 Absolute Restraints
 Partial Restraints
o Exceptions to the restraints
  Lease
 Married Woman
o Repugnant conditions
 An exception to Section 11
o Positive and negative conditions
o Difference between Section 10 and Section
11
o Condition of insolvency
 Conclusion
 References

Introduction

The Transfer of Property Act, 1882 is an Act laying

down the rules and regulations regarding the transfer
of property among persons in India. It explains how a
transfer of property is completed and the conditions
under which transfer may be carried out. An
understanding of the basic terms of this Act along with
exploring alienation and its history would be important
in understanding the conditions and exceptions
involved in the restraint of alienation.
What is the transfer of property according to law?

Section 5 of the Transfer of Property Act, 1882 has

several conditions for an act to be defined as a
‘transfer of property’-

 A ‘living person’ must convey property.

Conveying essentially means giving a title of
ownership on the property to the transferee. A
living person has been defined in the same
section to include company, association or a body
of individuals whether it has been incorporated or
not. 
 The conveyance of the property can be carried
out in both the present and the future.
 This conveyance may happen towards one or
more other living persons, including himself.

What can be transferred?

It is not explicitly stated in the Act regarding what is

‘property’ or what can be transferred. Rather, the Act
states that property of any kind may be transferred
subject to exceptions given under Section 6. The
property that can be transferred includes both movable
and immovable property, as well as intangible property
like tenancy, copyrights etc.

Who is competent to transfer?

Section 7 of the Transfer of Property Act categorizes

persons competent to transfer as-
  Every person is competent to contract under
the Indian Contract Act, 1872 and entitled to
the transferable property.
  A person who is authorised to dispose of
transferable property that he does not have the
ownership to.
This property can be transferred wholly or partly,
absolutely or conditionally, with regard to the extent of
the law and circumstances. The property, as stated
above may be conveyed to any living person including
a company, association or a body of individuals
whether incorporated or not. Under Section 13, even
an unborn child can be the transferee of the property. 

What is alienation?

Alienation means transferring of property. This transfer

of property can be through gifts, sales and mortgages.
Under Hindu Law, no person of the Joint Hindu family,
not even the Karta, has the full power to alienate the
joint family property or his own interest in the joint
family property without the consent of all coparceners.
In the case of separate property, a Hindu can alienate
that property whether it comes under Dayabhaga or
Mitakshara school. This power is absolute. 

Earlier, under the classical law, the father or the Karta

had the power to alienate the whole joint family
property without the consent of the other coparceners,
and that is why there have been certain conditions
added for the situation where a Karta or father can do
so.
Can alienation of property be restrained?

Section 10 to 18 of the Transfer of Property Act, 1882

state the rules for alienation of property-

 Section 10 lays down that where the transferee is

absolutely restrained from transferring his
interest in his property to another person
because of a condition which came along when
the property was transferred to the transferee,
then this condition will be made void. The
transfer, from the transferor to the transferee
would remain valid.  
 For example, A transfers some property to B as a
gift but with the condition that while A is alive, B
must not transfer the property to any other
person. This condition will be held void as it
absolutely restrains B from transferring his
interest in the property to another person.
This is commonly known as the ‘rule against
alienability’. The Transfer of Property Act is based on
the principle that there can be a free transfer of
property and has been specifically made with regard to
free transfer. If conditions restraining transfer are
imposed, then the free transfer would be restricted and
there would be no use for the Transfer of Property Act.

However, only conditions mandating ‘absolute

restriction’ are void. There are conditions which call
for partial restraint to be observed with regard to the
transfer of property. If we are to determine whether a
condition is absolute or partial, then one must look at
the substance of the condition, and not merely the
words. Therefore, restraints can be classified into two
categories.

Click Here

Types of restraints

Absolute Restraints

 An absolute restraint is such a restraint which

completely takes away the right of the transferee
to alienate or dispose of the property. The
transferee can now no longer transfer his interest
in the property to another person and he has no
freedom to do what he wants with the property
in his capacity as the owner of the property. 
 Section 10 stipulates that any condition imposed
on the transferee which would amount to an
absolute restraint on the right of the transferee
to dispose of his interest in the property shall be
void. The property must be transferred to the
transferee subject to the condition.
  In Rosher v. Rosher (1884) 26 Ch D 801, A made
a gift of a house to B, and gave a condition that
if B decides to sell the house during the lifetime
of A’s wife, she should have the option of
purchasing it for Rs 10000, while the market
value of the house was set at Rs 10,00,000. This
condition was held to be an absolute restraint
and was declared void. 
 In Kannamal v. Rajeshwari, AIR 2004 NOC 8
(Mad), a life estate was to be created in favour of
‘M’, but the transferor gave an absolute
restriction along with the property transfer to M,
whilst divesting himself of all his interests in the
property. This restraint was held to be void as
there was an absolute transfer. 
 In Mohd Raza v. Abbas BandiBibi,(1932) 59 IA
236, a condition imposing restriction for a
particular time or transfer to a specific person
has been held to be void. 

Partial Restraints

 A partial restraint is a condition which partially

takes away the right of the transferee to dispose
of his interest in the property. Here, the right is
not taken away substantially. Section 10 does
not explicitly talk about partial restraints. A
condition imposing partial restriction is valid. 
 In Mata Prasad v. Nageshwar Sahai (1927) 47 All
484, there was a dispute regarding succession
between nephew and widow. A compromise was
formed that the widow had possession of the
property while the title for the same was given to
the nephew with the condition that he was
restricted from alienating the property during the
 widow’s lifetime. It was held that the
compromise and the condition were valid and
prudent in the present case.

Exceptions to the restraints

Lease
A lease is a transfer of property wherein the lessee
only has the right of enjoyment of the property, while
the ownership right is still with the lessor. Conditions
imposing restrictions are valid in the case of a lease,
where the condition is for the benefit of the lessor or
those claiming under him. In Raja JagatRanvir v.
Bagriden, AIR 1973 All 1, a condition in the lease that
the lessee shall not sublet or assign was held to be
valid. 

Married Woman
When the property is to be transferred to a married
woman, who is not a Hindu, Mohammedan or
Buddhist, then the condition restricting alienation can
be valid.

Repugnant conditions

 Section 11 of the Transfer of Property Act

contains conditions which are inconsistent with
the nature of the interest transferred are
repugnant conditions. These conditions come
with the transfer when the transfer confers to the
transferee, absolute interests in the property.
Any condition with a transfer of absolute
interests in the property will be void.
  When a property is transferred absolutely, it
must be transferred along with all its legal
incidents. In Manjusha Devi v. Sunil Chandra,
AIR 1972 Cal 310, the parties entered into a sale
for a piece of land. In the sale deed, it was
mentioned that the buyer could only use the land
for setting up a factory for jute textile
manufacturing. It was held that this condition
was invalid as the absolute interests in the land
had been transferred to the buyer and he could
use it as he pleased.

An exception to Section 11
If the transferor has another piece of immovable
property, he may, for the benefit of that property,
impose conditions of restrictions on the transferee’s
right of enjoyment. For example, A has two properties:
X and Y. A sells them to B with the condition that a
portion of X, adjoined to Y, shall be kept open for the
benefit of Y. This condition will be valid.  

Positive and negative conditions

 Positive conditions: These are those conditions

imposed on the transfer where the transferor
imposes a condition on the transferee to do some
act. For example, A transfers land to B, on the
condition that he shall maintain and keep filling
up the well on that plot of land. This condition is
positive.
 Negative conditions: These are those conditions
imposed on the transfer when the transferor
imposes a condition on the transferee to not do
some act. For example, A transfers land to B, on
 the condition that he shall leave open a four feet
wide space on the land, and would not build
anything on it.

Difference between Section 10 and Section 11

 Section 10 specifies that in a transfer with

condition that absolutely restrains the alienation
of the property by the transferee, the condition
will be deemed to be void.
 Section 11 specifies that in a transfer where
absolute rights in the property have also been
alienated to the transferee, and where a
condition is imposed that the transferee cannot,
in spite of having the absolute right in the
property, do an act for his enjoyment of the
property, such condition will be deemed to be
void.
 Thus, the differences in these sections are that
in Section 10 the condition is deemed void due to
absolute restrainment and in Section 11, the
condition is deemed void due to the transfer
being of absolute nature.   

Condition of insolvency

 Section 12 provides that when the transferee

becomes insolvent, and if he has some interest in
the property that was transferred to him by the
transferor, the transferee still would not lose his
interest in the property. Hence, any condition
stating that transferee shall lose the interest in
the transferred property on insolvency and this
 interest shall be reverted back to the transferor
shall be void. 
 However, this section does not apply to a
condition on a lease for the benefit of the lessor
or those claiming benefit under him. However,
in Smith v. Gronow (1891) 2 QB 394, if lessee
assigns the lease and then is rendered insolvent,
then this condition will not apply.

Conclusion

The Transfer of Property Act, 1882 has been made for

the regulation of the free transfer of property in India.
This transfer can be in the present or the future and
must be between living persons. This article also
explores what can be transferred under this Act, and
who are the ones competent to transfer. The concept
of alienation was also explored. Earlier, under the
classical law, the father or the Karta had the right to
alienate the joint family property without the consent
of the coparceners, but now conditions have been
introduced to regulate this. 

Section 10, 11 and 12 contain certain conditions under

which restraining of alienation of the property by the
transferee is void. It also has exceptions where these
conditions may be valid. Primarily, under Section 10,
conditions of restraint can be classified into two
categories: absolute and partial. Whether a condition is
absolute or partial is determined by the substance of
that condition, not merely the words. This article
explored other conditions such as positive and
negative and insolvency, along with their exceptions.
References

[1] https://www.lawctopus.com/academike/restraints-
on-transfer/#_edn40

[2] https://www.legalbites.in/restraints-transfer-
section-10/

[3] https://www.lawctopus.com/academike/alienation-
of-property/

Direction for Accumulation of Income .

Every person on transfer of Property must be in position to
enjoy to income or profit that arise out of such property
during his lifetime. Therefore, direction for accumulation of
income beyond certain period is void. But there are certain
exceptions to this rule.
Direction for Accumulation

Direction For Accumulation is prescribed in Chapter II of

Transfer of Property Act as follows -
S.17 Direction for accumulation -
(1) Where the terms of a transfer of property direct that the income arising from the
property shall be accumulated either wholly or in part during a period longer than-
(a) the life of the transferor, or

Facts
Peter Thellusson directed the income of his property, consisting of
real estate of the annual value of about £5,000 and personal estate
amounting to over £600,000, to be accumulated during the lives of
his children, grandchildren and great-grandchildren, living at the time
of his death, and the survivor of them. The property so accumulated,
which, it is estimated, would have amounted to over £14,000,000,
was to be divided among such descendants as might be alive on the
death of the survivor of those lives during which the accumulation
was to continue.[1]
Judgment
The bequest was held valid. In 1856, there was a protracted lawsuit as
to who were the actual heirs. It was decided by the House of Lords (9
June 1859) in favour of Lord Rendlesham and Charles Sabine
Augustus Thellusson. Owing, however, to the heavy expenses, the
amount inherited was not much larger than that originally
bequeathed.[1]
Significance
To prevent such a disposition of property in the future, the
Accumulations Act 1800 (known also as the "Thellusson Act") was
passed, by which it was enacted that no property should be
accumulated for any longer term than either
1. the life of the grantor; or
2. the term of twenty-one years from his death; or
3. the minority of any person living or en ventre sa mere at the
time of the death of the grantor; or
4. the minority of any person who, if of full age, would be entitled
to the income directed to be accumulated.[1]
The Act, however, did not extend to any provision for payment of the
debts of the grantor or of any other person, nor to any provision for
raising portions for the children of the settlor, or any person
interested under the settlement, nor to any direction touching the
produce of timber or wood upon any lands or tenements. The act was
extended to heritable property in Scotland by the Entail Amendment
Act 1848, but does not apply to property in Ireland. The act was
further amended by the Accumulations Act 1892, which forbids
accumulations for the purpose of the purchase of land for any longer
period than during the minority of any person or persons who, if of
full age, would be entitled to receive the income
ACCUMULATION, in law, the continuous adding of the interest of a fund to
the principal, for the benefit of some person or persons in the future. Previous
to 1800 this accumulation of property was not forbidden by English law,
provided the period during which it was to accumulate did not exceed that
forbidden by the law against perpetuities; viz., the period of a life or lives in
being, and 21 years afterwards. In 1800, how ever, the law was amended in
consequence of the eccentric will of Peter Thellusson (1737-97), an English
merchant, who di rected the income of his property, consisting of real estate
of the annual value of about .Ł5,000 and personal estate amounting to over
L600,000, to be accumulated during the lives of his children, grandchildren
and great-grandchildren, living at the time of his death, and the survivor of
them. The bequest was held valid (Thellusson v. Woodford, 1798, 4 Vesey,
To prevent such a disposition of property in the future, the Accumulations
Act, 1800 (known also as the "Thellusson Act") was passed, by which (as
altered and re-enacted by the Law of Property Act, 1925) it was enacted that
no property should be accumulated for any longer term than either (I) the life
of the grantor or settlor; or (2) the term of 21 years from his death; or (3)
during the minority of any person living or en ventre de sa mere at the time of
his death; or (4) during the minority of any person who, if of full age, would
be entitled to the income directed to be accumulated. The act does not extend
to any provision for payment of the debts of the grantor or of any other
person, nor to any provision for raising portions for the children or remoter
issue of the settlor, or any person interested under the settlement, nor to any
direction touching the produce of timber or wood. It does not apply to
property in Ireland. The act has been amended by the Accumulations Act,
1892, which forbids accumulations for the purpose of the purchase of land for
any longer period than during the minority of any person or persons who, if
of full age, would be entitled to receive the income. The Accumulations Act,
1800, was applied to heritable property in Scotland by the Entail Amendment
Act, 1848, and the saving clause as to provision for payment of debts was dis
applied to Scotland by the Entail (Scotland) Act, 1914. The Accumulations
Act, 1892, applies to Scotland.