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‘S. 36 & 37 OF TRANSFER OF PROPERTY ACT, 1882’

By

Name of the Student: Jahnavi Gopaluni

Roll No.: 20LLB035

Semester: IV

Name of the Program: 5 Year B.A., LL.B.(Hons.)

Name of the Faculty Member: Prof. N. Jogi Naidu

Date of Submission: 09-04-22.

DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

NYAYAPRASTHA “, SABBAVARAM,
VISAKHAPATNAM – 531035, ANDHRA PRADESH
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CERTIFICATE

Title of the subject: Transfer of Property

Name of the faculty: Prof. N. Jogi Naidu

I, Jahnavi Gopaluni, hereby declare that the project named "s. 36 & 37 of Trans-
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fer of property Act, 1882" that I have submitted is my own work. All of the sources
from which the ideas were derived have been properly cited. To the best of my
knowledge, there is no issue of plagiarism in the projects.

Name: Jahnavi Gopaluni

Roll No. 20LLB035

Semester IV
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ACKNOLEDGEMENT

I am grateful to our TRANSFER OF PROPERTY Teacher JOGI NAIDU SIR for his valuable guidance,
significant suggestions and help for accomplishing this project topic “SECTIONS 36 & 37 OF Transfer of
Property Act”. I have tried my best to collect information about the project in various possible ways to
depict clear picture about the given project topic
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TABLE OF CONTENTS
CONTENTS Pg. No

1. ABSTRACT 5

2. SYNOPSIS 5-7

3. INTRODUCTION 7-9

4. ANALYSIS OF S. 36 10-13

5. ANALYSIS OF S.37 13-16

6. CONCLUSION 16

7. BIBLIOGRAPHY 16
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ABSTRACT

Where there are no provisions provided under the contract for distribution of income arising
from any portion of interest in the property in the form of rents, annuities, pensions, dividends
and other periodical payments, then because there is no provision provided in the contract in
the transfer of property, it shall be divided between persons entitled legally depending upon
their entitlements. The distribution takes place in accordance with apportion-able portions of
income accruing to either of the persons according to section 36 and 37 of Transfer of property
Act.

SYNOPSIS

OBJECTIVES OF RESEARCH:

The objective of the study is to:

The aim of this paper is to study the concept of apportionment, as provided in Section 36 and
37 of the Transfer of Property Act, 1882 and bring a critical analysis of it through analysing
relevant case laws.

SCOPE OF THE STUDY:

The scope of the paper is confined to the discussion of the concept, the relevant statutes, and
case-law.

RESEARCH QUESTION:

The researcher has explored the following questions in the course of this paper:

1. What is apportionment in Indian property laws and what does it signifies?

2. What are the legal provisions and judicial pronouncements related to apportionment?

SOURCES REFERRED TO:

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The researcher has relied on both primary and secondary sources of data. Primary sources in-
clude the bare texts of various cases and secondary sources include books, magazines, journals
and web resources

Primary sources:

1. Transfer of Property Act, 1928.

Secondary sources:

1. Shantilal Mohanlal Shah, PRINCIPLES OF THE LAW OF TRANSFER, 59, 5 th edn (1982).

2. Halsbury’s Law of England, Vol. 24, 465, (1912 edn).

3. D.F.Mulla, MULLA ON THE TRANSFER OF PROPERTY ACT, 1882, 257, (Solil Paul, 9 th
edn., 1933).
4. Dr. Hari Singh Gour, ‘Commentary on Transfer of property Act’ (Delhi Law Houe, 12 th
Edn, Vol 1, 2013).

5. Avtar Singh, TEXTBOOK ON THE TRANSFER OF PROPERTY ACT, 1882, 114,

(Harpreet Kaur, 2nd edn., 2009).

CHAPTERIZATION/ RESEARCH DESIGN:

The researcher has divided the research paper into sections.

• The first section deals with a critical analysis of Section 36 of the Transfer of Property
Act, 1882.
• The second section deals with a critique of Section 37 of the Transfer of Property Act,
1882.
• The third section studies the case-law which deals with the concept of apportionment.

LITERATURE REVIEW:

1. Dr. Hari Singh Gour, Commentary on Transfer of property Act: This book along
with comprehensively and elaborately covering the subject matter, presents relevant
matter and cases in a simple and lucid manner. The information from this book has
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helped researcher of the present study to critically evaluate the rules and understand
them with careful scrutiny.

RESEARCH TYPE:

Analytical research.

RESEARCH METHODOLOGY:

Doctrinal method of research.

MODE OF CITATION:

The researcher has employed Oxford University Standard for the Citation of Legal Authorities
(OSCOLA), Fourth Edition.

INTRODUCTION

Sections 36 and 37 of the Transfer of Property Act of 1882 discuss apportionment. It is one of
the aspects that must be considered while transferring immovable and moveable property. Ap-
portionment has two interpretations: 1) allocation of a property among numerous persons, and
2) Contribution made by different people towards a common property and the rights each of
them have.

Only the first sort of apportionment is addressed under the Transfer of Property Act of 1882.
The Doctrine of Apportionment is addressed in sections 36 and 37 of the Transfer of Property
Act of 1882. There are two types of it: 1
1. Apportionment by time under Section 36
2. Apportionment by estate under Section 37

Apportionment by time under Section 36:

1 Shantilal Mohanlal Shah, PRINCIPLES OF THE LAW OF TRANSFER , 59, 5 th edn (1982).
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According to section 36- “Apportionment of periodical payments determination of interest

of person entitled.—In the absence of a contract or local usage to the contrary, all rents annu-
ities, pensions, dividends and other periodical payments in the nature of income shall, upon the
transfer of the interest of the person entitled to receive such payments, be deemed, as between
the transferor and the transferee, to accrue due from day to day, and to be apportion able ac-
cordingly, but to be payable on the days appointed for the payment thereof.” 2

According to Section 8 of the act, Operation of transfer: “Unless a different intention is ex-
pressed or necessarily 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. Such incidents include, where the property is land, the easements annexed th ereto, the
rents and profits thereof accruing after the transfer, and all things attached to the earth.” 3

The payments will be collected on a time basis and split between the transferor and transferee
depending on the time of ownership, according to Section 36 of the act. Criteria for payments
is periodic and time based. Payments will continue to be made on the days set aside on a
regular basis.

Consider the following situation: X has rented his residence for Rs. 100 per month, payable on
last day of the month. If X sells his property to Z in the course of the month, X and Z will each
receive Rs. 50 in rent at the end of the month. If X pays rent from the beginning to the middle
of the month, and Z pays rent from the mid to the end. 4

NOTE: In the absence of any agreement to the contrary only such apportionment can be made.

1. Apportionment by estate: According to Section 37: – 5

“Apportionment of benefit of obligation on severance.—When, in consequence of a

transfer, property is divided and held in several shares, and thereupon the benefit of any
obligation relating to the property as a whole passes from one to several owners of the

2 Transfer of Property Act, 1928, s. 36.

3 Transfer of Property Act, 1928, s.28.
4 Ibid.
5 TPA, s. 37.
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property, the corresponding duty shall, in the absence of a contract to the contrary
amongst the owners, be performed in favour of each of such owners in proportion to
the value of his share in the property, provided that the duty can be severed and that the
severance does not substantially increase the burden of the obligation; but if the duty
cannot be severed, or if the severance would substantially increase the burden of the
obligation the duty shall be performed for the benefit of such one of the several owners
as they shall jointly designate for that purpose: Provided that no person on whom the
burden of the obligation lies shall be answerable for failure to discharge it in manner
provided by this section, unless and until he has had reasonable notice of the sever-
ance. Nothing in this section applies to leases for agricultural purposes unless and until
the State Government by notification in the Official Gazette so directs.”

• Apportionment by estate implies splitting any profits made by the property that is sold
to numerous owners amongst themselves in the manner described in section 36 (i.e., all
rentals, annuities, pensions, dividends, and other periodic payments). This partition
must be based on the property's ownership percentage. Traditionally, the money is di-
vided based on the percentage of the sale price paid by private shareholders. If the rev-
enue is in the form of a monetary asset, it can be distributed among the many owners;
otherwise, if the income is in the nature of a non-divisible asset, the transaction is done
at the direction of the many owners. 6

• The property holder's duties and liabilities do not increase with the number of owners.
The load of responsibilities on any individual does not rise with the number of owners,
but rather remains constant depending on the asset and the owners' intent.

• The person who has the responsibility to fulfil the obligations cannot be held account-
able for non-performance unless he has been provided notice of severance in a fair
amount of time. 7

6 Halsbury’s Law of England, Vol. 24, 465, (1912 edn).

7 Ibid.
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s. 36 & 37 ANALYSIS WITH HELP OF CASE LAWS:

SECTION 36

Section 36 of the Transfer of Property Act, 1882 states that:

“ Apportionment of periodical payments determination of interest of

person entitled.- In the absence of a contract or local usage to the
contrary, all rents, annuities, pensions, dividends and other periodi-
cal payments in the nature of income shall, upon the transfer of the
interest of the person entitled to receive such payments, be deemed,
as between the transferor and the transferee, to accrue due from day
to day, and to be apportionable accordingly, but to be payable on the
days appointed for the payment thereof.” 8

This section applies to payments such as rents that are accrued after the transfer is completed
and are called day-to-day payments. The rent that has collected between the date of transfer
and the day the rent payment. Section 36 is based on the apportionment by time approach.

Section 36 is founded on the apportionment by time approach. A home whose rent is due on
the last day of the month, for example, is sold in the middle of the month. In this instance, in
absence of any agreements to the contrary, the transferor of the property will be eligible to
get rent for first half of the month prior to the sale, and the buyer will be eligible to rent for the
second half of the month following the sale. The tenant, for his part, will continue to pay the
rent until the end of the month.

8 TPA, s. 36.
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Section 36 applies only to transfers between a transferor and transferee and cannot be applica-
ble in cases of landlord and tenant. This was verified in the case Smt. Satyabhamadevi
Choubey v. Ramkishore Pandey 9

“What is, however, pertinent to note is that this section is applicable

only as between the transferor and the transferee. It does not affect the
liability of the tenant which must be determined independent of it.
Since the rent for the entire month of June fell due on the 1st of July,
the tenant was liable to pay the rent for the whole month to the plain-
tiff even though the vendor may be entitled to claim apportionment
under Section 36 of the Transfer of Property Act from the plaintiff.”

Apportionment of Rent:

In case of rents section 36 of the Transfer of Property works in connection to section 8. Section
8 says that along with the transfer of property, the transferee also gains all the interest which
comes with the property is and is in a position to be transf erred. This section comes into play
for payments like rents which are accrued after the transfer has been made and are considered
as a day-to-day payment. 10 The transferee is entitled to the rent that is accrued between the
date of transfer and the day the rent is paid. In Nand Kishore v. Ram Sarup 11 a piece of
land the rent for which was payable in two instalments on 1 st December (10 annas) and 1 st May
(6 annas) was transferred on 20th February. The court held that the transferee was entitled to
only the 6 annas instalments after the date of the transfer as it was incurred on a de die in diem
from December 1 to May 1. Apportionment in such an agricultural case is to be done on the
rent for the season in which the crop is grown and not for the whole year.

Section 36 is inapplicable in transfer of interest of a lesser. In S.K.G. Sugar Mills v. D.G.

Mehta 12 : There was a lease agreement in effect between the sugar mill and D.G. Mehta.
According to this agreement lease/rent was to be paid in instalments. The mill was sold by
court order to some other person, and it was determined that the lessee was obligated to pay

9 Smt. Satyabhamadevi Choubey v. Ramkishore Pandey, AIR 1975 MP 115.

10 TPA, s. 8.
11 Nand Kishore v. Ram Sarup, AIR1927All569.
12 S.K.G. Sugar Mills v. D.G. Mehta, AIR1964Pat258.
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rent for the mill until the date of the transfer, despite the fact that no sugarcane crushing had
taken place prior to the sale.

Apportionment also does not affect the date of the payment. If the assignment of the property
takes place in the middle of the year and the lessee is supposed to pay the rent at the end of the
year then the date of his due payment still remains unchanged though he will have to pay dif-
ferent amounts to the transferor and the transferee. In re United Club and Hotel co. case
13 a company was occupying a property which was under lease and was rented out to them
the rent for which was payable on the usual quarter days. At the time of winding up of business,
it was held that the lesser was not liable to the rent which was not due yet.

Another instance of the application of section 36 to cases out of its defined boundaries is in
Shivaprasad Singh v.Prayagkumari Debee 14 where the issue was regarding the in-
heritance of an impartibly estate between the said heirs and the son who intervened as executor
de son tort. The court held that on the basis of the principle of equity the son was not the rightful
heir to the estate and that the plaintiff is entitled to rents and royalties only up to the death of
the original property holder. 15

In Y.S. David v. Bangaru Rangaraju 16 section 36 was applied to sales in execution

though the section is not applicable to such sales. This was done on the basis of equity, justice
and good conscience. The court held that when a property which is pending a mortgage suit is
allotted to a receiver who leases out the property, and on the day of the execution of the suit
the property is in the possession of the lessee, then on the instance of the auction- purchase the
rent subsequent to the date of the sale can be apportioned between the receiver and the pur-
chaser.

In James C.P. Fernandez v. Ramakrishna Marthoba Rao Kesbekar 17 the court

stated that the defendant was in possession of the concerned property only up to the date of
partition and till that date he would be liable to pay rent however after the date of partition, the
property shall be enjoyed severally. Section 36 is applicable in cases where an assignee of a
lessee seeks apportionment of rent. If the assignment is the same size as th at in the lease, then

13 In re United Club and Hotel Co., (1898) 67 LJQB 517 (518).

14 Shivaprasad Singh v.Prayagkumari Debee, AIR 1935 Cal 39.
15 Supra note 16.
16 Y.S. David v. Bangaru Rangaraju, AIR 1944 Mad 56.
17 C.P. Fernandez v. Ramakrishna Marthoba Rao Kesbekar, AIR 1940 Mad 21.
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the rent should not be more that in this assignment. However, if it is a question of tenancy over
a long period of time then the assignee can ask for apportionment of rent.

SECTION 37

This section applies the principle of apportion by estate. Before the TPA was enacted, when a
property was sold among many people jointly, the tenement was supposed to pay the rent
jointly unless the property holders decided to appropriate the rent. The f or need for this princi-
ple arises when a property is divided into multiple shares and the benefit arising from the prop-
erty also requires to be divided among the many shareholders in accordance to the amount of
share held by each person. It is presumed that while applying this section there was some ob-
ligation relating to the property before the transfer took place. Upon the break-up of the prop-
erty among the various owners, the benefits from the obligation is also distributed among them.
18

There are three conditions to this rule: 19

1. The person upon whom the burden of carrying out the obligation’s falls must be pro-
vided with a reasonable notice of severance of the property and such a notice be given
at an earlier time by the assignor or the assignees. If no such notice is given, the executor
of the obligation cannot be held liable for the failure to discharge the obligation sever-
ally. Further, if he has already discharged the obligation towards the transferor, the new
owners cannot ask him to do it a second time. 20
2. The obligation itself must be of a nature that can be severed and be performed in favour
of each shareholder. If the obligation cannot be severed, it shall be done towards one
owner which all the joint owners choose.
3. The severance of the property must also not result in the increase in the burden of the
obligation which needs to be carried out by the person in charge of the act. If the sever-
ance provides an additional burden on the whole of the property, then it should be per-
formed as if the obligation cannot be severed.

18 Supra note 2 at 16.

19 D.F.Mulla, M ULLA ON THE TRANSFER OF PROPERTY ACT, 1882, 257, (Solil Paul, 9 th edn., 1933).
20 Dr. Hari Singh Gour, ‘Commentary on Transfer of property Act’ (Delhi Law Houe, 12th Edn, Vol 1, 2013).
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4. This section goes along with section 30 of the Easement Act, 1882 which states simi-
larly to section 37.

Partition of dominant heritage:

Where a dominant heritage is divided between two or more persons, the easement
becomes annexed to each of the shares, but not so as to increase substantially the
burden on the servient heritage:

Provided that such annexation is consistent with the terms of the instrument, de-
cree or revenue proceeding (if any) under which the division was made, and, in
the case of prescriptive rights, with the user during the prescriptive period.”

Note: Any person who holds the burden of obligation is not liable under section 37 for im-
proper discharge of obligation unless he has been given a reasonable notice of severance. This
is section as well as section 30 of Easements Act, 1882 are applicable to section 50 and section
109. 21

Benefit of any obligation- The obligations in these sections are limited to an active nature
which require some action to perform. For this reason, easements are not included in this sec-
tion as they are not of an active nature. To make provision for this, a similar clause as this
section has been included in the Easement Act, 1882. When a property is sold by a lesser, the
obligations that are attached to the property are also transferred and the lessee is obliged to
perform them for all the sharers. 22

In Badri Prasad v. Shyam Lal 23: Ramaswami C.J. held that in cases of partition when
the property is in the possession of the lessee, the lessee’s obligation to pay rent to one single
lesser gets converted to paying rent to all the new owners individually. There lesser can also
file individual suits against the lessee on the failure of payment of the rent if he has received
the notice for partition or has been paying rent severally. Such cases of partition will be ruled
by section 37 and section 109 of the TOPA.

21 Avtar Singh, TEXTBOOK ON THE TRANSFER OF PROPERTY ACT, 1882, 114, (Harpreet Kaur, 2nd
edn., 2009).
22 Ibid 778.
23 Badri Prasad v. Shyam Lal, AIR 1963 Pat. 85.
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Property divided and held in shares:

This section is not applicable where there is no division of the property. Hence, in case of when
there is a transfer of shares in a tenure let out wholly to a tenant has no effect on the severance
of the tenure and the first half of the section cannot be applied. In such cases, 24 the apportion-
ment of rent is done by agreement between all parties and if there is no such agreement then it
is done by a suit for apportionment like in the case of Shyama Charan Das v. Jogesh
Chandra Roy25 where the co sharer sued the tenant for rent for his share of land. The court
held that “on the absence of separate collection of rent, a co-sharer can, of course, maintain a
suit for the entire rent due to all the co-sharers making them parties to the suit, and there is such
a prayer in the plaint.”

In cases where any part of a leased property is transferred under application of section 109, the
property cannot be held to be divided into several shared among the co -sharers. This means
that the tenant is not liable to apportion his rent. Here too the apportionment can only be done
upon the agreement by all the parties. In Sardarilal v. Narayanlal 26 when there is only a
fractional share is transferred, the transferee of the lease property will become a co - owner with
the lesser as he would gain the all the rights of a lesser with regard to the shares.

Partition:

In Durga Rani Devi v. Mohiuddin 27 it was held that section 37 and section 109 of the
Transfer of Property Act are not applicable when as a result of partition, reversion of land is
not possible anymore. Instead, they apply to the cases of assignment or severance of the rever-
sion of land which may result as consequence of partition.

In Sk. Sattar Sk. Mohd. Choudhari v. Gundappa AMabadas Bukate 28 it was

held that tenancy cannot be split either in estate, rent or any other obligation by a one-sided act
of a one of the co-sharers. A single co-sharer also cannot evict a tenant or sure him for rent.
But if all the co- owners split the property in a def inite and identifiable manner by metes
through mutual agreement, they become individual owners of that part of the property and can

24 Harapali Sarkar and Ors. v. Syed Rajabali Mia and Anr. and Annapurna Dassya , AIR 1919 Cal 998
25 Shyama Charan Das v. Jogesh Chandra Roy, 14Ind. Cas.29.
26 Sardarilal v. Narayanlal, AIR 1980 MP 8.
27 Durga Rani Devi v. Mohiu-ddin, (1950) 86 Cal LJ 198.
28 Sk. Sattar Sk. Mohd. Choudhari v. Gundappa AMabadas Bukate, AIR 1997 SC 998.
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practice individual rights as given in section 109. The tenant in this matter cannot prevent the
co- owners from partitioning the property but can move the court to prove that the partition
was not bona fide.

CONCLUSION

Apportionment is a very fundamental concept under the law relating to property. However,
“

there are various problems that have arisen as a result of this subject. The division of property
can have different meanings when taken in different senses, and even be of various types. ”

Through the course of this research paper, the concept of apportionment has been exp lored
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under the two different sections given in the Transfer of Property Act, 1882. Section 36 applies
to apportionment when it entails periodical payments once the person in whom the interest lies
is determined. On the other hand, Section 37 applies to those situations where a severance has
happened, and apportionment of benefit of obligation needs to be done. The researcher has
found that in these sections provide the two types of apportionments, that is, by time and by
estate. ”

The researcher has also concluded the different ways in which the law related to apportion-
ments is applicable to the Indian law of property and how the sections and their provisions are
flexible and can be applied to different situations.

BIBLIOGRAPHY

1. Transfer of Property Act, 1928.

2. Shantilal Mohanlal Shah, PRINCIPLES OF THE LAW OF TRANSFER.
3. Halsbury’s Law of England (1912).
4. D.F.Mulla, MULLA ON THE TRANSFER OF PROPERTY ACT.
5. Dr. Hari Singh Gour, ‘Commentary on Transfer of property Act’.
6. Avtar Singh, TEXTBOOK ON THE TRANSFER OF PROPERTY ACT, 1882.