Condition Restraining Transfer

S.10 -Conditions restraining alienation

Example

1. Condition Precedent

Before the transfer {Fulfil prior}

• Fact — A sells to B
Condition — B to marry C with the consent of E.
Result — B marries C but with take E’s consent.
Valid

• Fact — A Transfer of Property B

Condition — B to marry C with the consent of E
Result — B married C but didn’t take consent of E.
Invalid

2. Condition Subsequent
- After the transfer

3. Condition Collateral
- During

Example — Rs. 50,000 {Will of father — Son and daughter}

• Important —
Fact — A Transfer of Property B
Condition — Alienation
Result — Transfer is valid but the condition is void

Classes of restriction on alienation

1. Consideration

• Fact — A TOP B
Condition — Sell further for Rs. 10,000
Result — Absolute, Void

• Fact — A TOP B
Condition — Sell further at Market Price
Result — Absolute, Void

2. Purpose

Fact — A TOP B
Condition — Religious purpose
Result — Absolute, avoid

If the purpose is different from what the property is being used for — S.25
3. Person

• Fact — A TOP B
Condition — B can only transfer to C
Result — Absolute, Void

• Fact — A TOP B
Condition — B can transfer to anybody except C
Result — Partial, Valid

• Fact — A TOP B
Condition — B to alienate need prior permission from A
Result — Absolute, Void

• Fact — Jew TOP Another Jew

Condition — Only alienate within the community
Result — Partial, Valid

• Fact — Hindu TOP Muslim

Condition — Muslim TOP Any Hindu
Result — Absolute, Void

4. Time

• Fact — A TOP B
Condition — B only transfer after 20 years
Result — Absolute, Void

• Fact — A TOP B
Condition — B only transfer after 5 years
Result — Absolute, Void

- Provided there was a provision for re-purchase in the contract. — Partial, Valid.
- Consent of both parties required.

————————————————————————————————————————

• Fact — A TOP B
Condition — B married D, who is dead
Transfer — Void
Condition — Impossible

• Fact — A TOP B
Condition — B to kill C
Transfer — Void
Condition — Prohibited by law
• Fact — A TOP B
Condition — B take consent of A before
Transfer — Valid
Condition — Void

Case law —

Venkat Ramana v. Brahmana

4 Brothers — Whoever dies with child, their property will come into share.
A was childless
Transfer — Valid
Condition — Void

S.10 — Based on principles

- Justice
- Equity
- Good conscience
- Public policy

• Right of alienation is a basic right that comes with the ownership of property.
• Encroaching that right is statutory prohibited by S.10

Exceptions —
- State under Companies Act 1956 not covered in S.10
- Not absolute restriction or right of alienation can be imposed.

— Absolute Restriction or alienation is valid in case of lease —

- Perpetual lease — longtime lease
- Can be transferred to children

Lease —
- Right to possession
- Right to enjoyment

Example —
• A—B—C
Condition — Valid
Transfer — Valid

• A—B
Condition — surrendering property rights when demanded by A
Condition — Valid
Transfer — Valid
• Christians, Zoroastrians, Jews, etc. except Hindu, Muslim and Buddhist (only married woman)
the absolute restraint on alienation is valid. The reason being the TOP Act. English law where
after marriage, the property of wife automatically devolves in her husband. This rule has been
abolished by S. 4 of Indian Succession Act.
Exception — Not personal Property

Case law —
Rosher v. Rosher

A — Will Wife (W)

After his death
Son

Condition —
• S or any other heir wants to sell off the property, offer it first to W (Pre-emption)
• Consideration for W = 1/5th of the price. Rs. 15,000 * 1/5 = Rs. 3000
• If lease 25 Pounds only for 3 years

Result —
Void transfers
• Person
• Consideration [Restraining right of alienation]

Case laws —
Zoroastrian co-operating housing society v. District registrar cooperation society Ltd. 2005

The property cannot further be alienated to a non-Parsi. This kind of restriction is partial in nature
and not absolute. When a member accepting himself to the by laws of the society, he has a partial
restraint but not absolute.