Professional Documents
Culture Documents
Assignment
Assignment
ANSWER
Sign Ground of
Vested Interest Contingent interest
number Difference
Right of This right is created as soon as There is mere chance to be having the
5.
Ownership the interest is vested. ownership rights.
ANSWER
Introduction
The doctrine of election is stated in transfer of property act 1882 in section 35 and within 180-190 of
Indian succession act. Election means a choice between two alternative or conflicting rights. Granting
two rights in such a way that one is higher than the other, you can choose either of them. You cannot
have both. The applicant cannot use both, the recipient must choose between two inconsistencies or
alternative rights. Basically it means that the person taking the benefit should also bear the burden.
(C. Beepathuma V. Viduri Shankar Narayana Kadambolithya AIR 1965SC 241).it is an important part of
the transfer of property act 1882 to resolve property conflicts among people. This principle was
derived from the equity principle where a person cannot retain all the benefits of a transaction thus,
he cannot keep the property and get benefits still. They have to elect for Or against the instrument.
The doctrine of election is a general legal rule that requires the recipient to choose whether the heir
wants to own someone else#39;s property and decide whether to preserve the property or accept
his intentions.
Example: A promises to give B, 50 lakh but only on one condition that he will sell his house to C, now
B here has to make the election on what to do? If he takes A’s offer he will have to give his house to
C. On the other hand if he doesn’t, he won’t get 50lakh also hence he has to make an election on
what to choose. (Ibid) Maitland’s describes its doctrine of election as (Maitland’s lecture on equity)
In the same transaction, they must elect either to accept it or not, in case he doesn’t.
The benefits he had till then goes back to the transferor as if not given.
Although when benefit is transferred back, he must make some good to the transferee at least it can
be done in the following cases:
Where the transfer is voluntary and the Transferor had died or had become incapable of
doing a fresh transfer.
Example: The farmhouse at Udaipur is a property of C. A by gift means promises to give B 1,00,000.
He accepts it although C now wants to retain his farmhouse and A forfeits his gift. In such a course of
action B died, now his representative must pay C 1,00,000.
The person who indirectly derives benefits from the transactions and not directly according to
section 35 does not need to elect.
Example:: A promises to give B 1000 given if his son buys C’s house for 1200, Nowhere n’s son
doesn’t have to elect as it is B who will have to make the decision on what to do.
According to section 35 If the owner decides not to approve the transfer, he will surrender the
transferred service to him and this service will be returned to the transferor or his representative as
if he had not been released. Following could take place:
The transfer is voluntary and the Transferor had died or had become incapable of doing a
fresh transfer.
In all cases where the transfer must be checked, it is the responsibility of the transferor or his
representative to compensate disappointed buyers. The compensation amount is the
amount or value of the property that will be transferred if the option.
Q.3. Who is ostensible Owner? What are the requirements of Transfer by an ostensible owner?
ANSWER
Introduction
Section 41 of the act deals with ostensible owner and it has been defined as:
"Transfer By Ostensible Owner: where, with the consent, express or implies, of the persons
interested in immovable property, a person is the ostensible owner of such property and transfer the
same for consideration, the transfer shall not be voidable on the grounds that the transferor was not
authorized to make it: provided that the transferee, after taking reasonable care to ascertain that the
transferor had power to make the transfer, has acted in good faith."
The provision for its application lays down certain requirements to avail the benefit of this section.
They are:
The primary condition is that the person who is transferring the property should be
ostensible owner.
There should be either implied or express consent from the owner of the property.
The doctrine of transfer by ostensible owner is based on the doctrine of estoppel that when
real owner of property makes some one apparent to be the owner to third parties and they
act upon it, he cannot go back his representation.
These rules and the section is available only to immovable property and not on the
movables.
Ostensible Owner
Ostensible owner is not the real owner but who can represent himself as the real owner to the 3rd
party for such dealings. He has acquired that right by the willful neglect or acquiesces by the real
owner of the property thereby making him an ostensible owner. A person who has gone abroad for
some years has given his property to his family relative for making use of it for agricultural purpose
and for all other purposes as he may deem fit.
In this case the family relative is the ostensible owner and if during that period he sells the property
to a third party, then the real owner after coming back cannot claim his property and say that the
person was not authorized to transfer his property. An alternative case can be when the property is
in wife's name but husband used to take care of it and the other dealings related to the property. If
the husband thereby sells this property, the wife cannot claim her property back.
Or as in the Mohamad Shakur v/s Shah Jehan, in which the real owners lived in a different village,
and had authorized a widow to use the property as she liked and afterwards she sold it. The real
owner lost the case and the transfer was a valid one.
The phenomenon of appointing an ostensible owner is a principle of natural equity, which must be
universally applicable, that where one man allows another to hold himself out as the owner of an
estate, and a third person purchases it for value from the apparent owner in the belief that he is the
real owner, the man who so allows the other to hold himself our shall not be permitted to recover
upon his secret title, unless he can overthrow that of the purchaser by showing, either that he had
direct notice, or something which amounts to constructive notice, of the real title, or that there
existed circumstances which ought to have put him upon an inquiry that, if prosecuted would have
led to discovery of it.
The individual must hold the property with the express or implied consent of the real owner.
The transferee must acquire the property for consideration from the ostensible owner.
The transferee must have acted in good faith and have taken reasonable care to ascertain
that the transferor had the power to transfer.
The transferor should perform an immovable property transfer rather than a moveable property
transfer. The transferee has to prove that the transferor was actually the ostensible owner and had
the consent to sell the property.
The transferee should act in accordance with some basic honesty and accept that the ostensible
owner is the genuine proprietor of the property.
Q.4.Define Transfer of Property. What are the essentials of a valid transfer? What property may be
transferred and a benami transfer?
ANSWER
Definition
Section 5 of the Transfer of Property Act, 1882 defines the term transfer of property. According to
this section, transfer of property means an act by which a living person conveys property, in present
or in future, to one or more other living persons, or to himself and other living persons.
The Transfer must be inter vivos. Therefore there cannot be a transfer to person not in existence at
the time of transfer. The living person including company or Association or body of individuals
whether incorporated or not.
Property of any kind of may be transferred, accepts as otherwise mentioned in S.6 (a) to (I) cannot be
transferred. Therefore those properties described in the clauses (a) to (I) of Section.6 cannot be
transferred. These are restrictions on the Transfer of Property and any transfer in contravention of
any of the clauses given in Section 6(a) to (I) is null and void.
Every person is competent to contract and entitle to transferable property, or authorized to dispose
of Transferable property not his own, is competent to transfer such a 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.
4. The Transfer must be made in the mode prescribed by the Act, under section 9
Section 9 of Transfer of property provides that for oral transfer, A Transfer of Property may be made
without writing in every case in which a writing is not expressly required by law.
No transfer can be made for an unlawful object or consideration as provided in Section 23 of the
Indian Contract Act, 1872.
6. The transfer must not be opposed to the nature of the interest effected thereby.
If the nature of property to be transferred does not admit of such transfer, it cannot be transferred.
(Section 6(h))
Clause (a) describes spes successionis cannot be transferred. This clause states that the transfer of a
bare chance of a person to get a property is prohibited under this section. For example, Arun
expecting that Chandini, his aunt, who had no issues, would bequeath her house worth Rs. 50,000
transfers it to Bhushan. The transfer is invalid as it is a mere matter of chance of receiving the
property on the part of Arun. Thus, it is invalid.
Clause (b) mentions that the right of re-entry cannot be transferred. The right to re-entry implies a
right to resume possession of the land which has been given to someone else for a certain time. The
section mentions that the right of re-entry cannot be transferred by itself apart from the land. For
example, A grants a lease of a plot of land to B with the condition that if shall build upon it, he would
re-enter — transfers to C his right of re-entering in case of breach of the covenant not to build. The
transfer is invalid.
Clause (c) mentions that easement cannot be transferred. An easement is a right to use or restrict
the use of land of another in some way. For example, the right of way or right of light cannot be
transferred.
Clause (d) mentions that an interest restricted in its enjoyment of himself cannot be transferred. For
instance, if a house is lent to a man for his personal use, he cannot transfer his right of enjoyment to
another.
Clause (dd) restricts the transfer of the right to maintenance. Such a right cannot be transferred as
such right is for the personal benefit of the concerned person.
Clause (e) provides that mere right to sue cannot be transferred. The prohibition has been imposed
as the right to sue is a right which is personal and exclusive to the aggrieved party. For example, a
person cannot transfer his right to sue for the damages suffered by him due to breach of contract by
the other party.
Clause (f) forbids the transfer of public offices. The philosophy behind the prohibition is that such a
transfer may be opposed to public policy in general. A person is eligible to hold a public office on the
grounds of his personal qualities, and such qualities cannot be transferred. Thus, the transfer of
public offices is prohibited under this section.
Clause (g) of section 6 provides that pensions cannot be transferred. Pensions allowed to military and
civil pensioners of government and political pensions cannot be transferred. In simpler terms, a
pension may be understood as any periodical allowance which may be granted in regard to any right
of office but only on account of the past services offered by the pensioner.
Clause (h) of this section is titled as nature of nature. This clause prohibits transfer which will oppose
the interest affected thereby. The transfer is also forbidden if the object or consideration of the
transfer is unlawful. Moreover, a transfer by a person who is legally disqualified from being a
transferee is also forbidden.
Clause (i) of section 6 was inserted by the Amendment Act of 1885. The clause declares that certain
interests are untransferable and inalienable. For example, a farmer of an estate, in respect of which
default has been made in paying the revenue, cannot assign his interest in the holding.
Thus, section 6 containing clauses (a) to (i) specifically mention that certain things cannot be
transferred. Such a transfer if undertaken would be invalid in the eyes of the law in India.
Benami transactions
The Benami Transaction (Prohibition) Act of 1988 states that when the transfer of a property is done
benami (that is, under the name of some other person), the person who holds the property becomes
the real owner. The benamidar is only a trustee for the real owner and merely acts as a
representative. If a property is acquired in the guise of a benamidar and the indicia of ownership are
entrusted to him, the real owner can only overcome the impact of alienation by demonstrating that
it was done without his consent and that the buyer was aware of it. No litigation, actions, or claims
to enforce any right concerning the property held benami against the person in whose name the
property is held, or any other person claiming to be the real owner of the property, is allowed under
the Act.
In other words, following the implementation of the Act, the real owner is no longer able to reclaim
the property from the benamidar by instituting any legal suit. The argument of being the real owner
is likewise unsustainable.
However, the Act offers certain exemptions when the provision of Section 41 do not apply:
1. When the person in whose name the property is held acts as a coparcener and that property
is being held for the benefit of all coparceners in the Hindu Undivided Family, or
2. Where the person in whose name the property is held is a trustee or some other person
acting in a fiduciary position, and the property is held for the benefit of another person
towards whom he acts as a trustee or in a similar capacity. Excluding the cases where he is a
coparcener in a Hindu Undivided Family or a trustee acting in a fiduciary capacity, an
ostensible owner or benamidar will become the real owner. Therefore, except if benamidar is
a coparcener or a trustee acting in a fiduciary position, the provision established by Section
41 of the Act stands to be modified.
The Supreme Court noted in Jayadayal Poddar v. Bibi Hazara (1974) that whether a person is an
ostensible owner is a subjective matter that depends on specific facts and circumstances. When
determining whether a person is an ostensible owner or not, the following factors must be
considered:
2. Who held possession following the purchase, i.e. who owned the property?
3. The motive for acquiring the property in a benami fashion i.e. why was the property acquired
in the name of someone else?
4. Relationship between the parties, i.e., whether the real and ostensible owners were familiar
with each other or not?
5. The parties’ conduct in managing the property, i.e. who used to look after, oversee and
manage the property?
Q.5. What is an exchange? What are the rights and liabilities of the parties to an exchange?
ANSWER
INTRODUCTION
Exchange is defined under section 118 of the Transfer of Property Act, 1882 – when two people
mutually transfer the ownership of one thing for the ownership of another, the transaction is called
an ‘exchange’ when neither thing or both things are money only. A transfer of property at the
completion of an exchange can take place only in the manner provided for the transfer of such
property by sale.
The transaction is called an exchange when the ownership of one thing for the ownership of another
is mutually exchanged by two parties, neither thing or both things being money only. It is a
transaction in which each party acquires property in which it previously had no interest. There must
be a physical delivery of the property to the parties for a valid exchange, and each party to the
exchange has the rights and is subject to the seller’s liability as to what he gives, and also has the
rights and liabilities of the buyer as to what he takes.
ESSENTIALS OF AN EXCHANGE
1. There must be a minimum of two parties and two properties, one each belonging to each of
them;
2. A mutual transfer of these properties has to take place, i.e. A to transfer his property to B
and B to transfer his property to A;
An exchange involves a mutual transfer of their respective properties between two parties. The
primary factor which distinguishes an exchange from a sale is that no monetary consideration is
involved in an exchange. A sale is the exchange of one property for money, and a barter is an
exchange of movable property with another movable property. An exchange of one stamp for
another, or as a consideration shares in a limited company, is an exchange. The consideration must
be specified in an exchange, since, if it is not mentioned, the transaction is not an exchange. If one of
the transferred items is coupled with money, the transaction is not an exchange, but a sale.
(i) The seller has to disclose to the buyer any material defect in the property or in the seller’s title.
(ii) The seller is deemed to contract with the buyer that he / she enjoys full rights over the property
which he / she intends to transfer to the buyer, and that he / she has authority to transfer the same
to the buyer.
(iii) To produce to the buyer all documents of title relating to the property and to answer relevant
questions of the buyer in respect of property and the title.
(iv) To execute a proper conveyance of the property, on payment of the due amount, at a proper
time and place. Generally, it is the sub-registrar’s office.
(v) To pay all public charges, rents, taxes, in respect of the property up to the date of sale.
(vi) To deliver, after receipt of the price or as agreed, to the buyer all documents of title relating to
the property which are in the sellers’ possession and power.
Duties:
(i) Where the buyer is aware of the seller’s interest in the property of which the seller himself is not
aware, then the buyer must disclose it to the seller.
(ii) To pay or tender the purchase price, to the seller or his authorized agent, at the time and place of
completing the sale.
(iii) To bear any loss arising from the destruction, injury or decrease in value of the property after
ownership of the property has passed to the buyer and such destruction / injury is not caused by the
seller.
Rights:
(i) To the benefit of improvement or increase in value of the property where the ownership of the
property has passed to him.
(ii) Where two properties are subject to a common charge and one of the properties is sold, the
buyer is entitled to get the charge satisfied out of the other property without affecting the property
purchased by him.
(iii) To compel the seller for specific performance of the contract to the extent of the seller’s interest
in the property, where he has paid the purchase price
Q.6. What is Mortgage? What are the different types of mortgages? Discuss the rights and liabilities
of a mortgagor?
ANSWER
Meaning of Mortgage
A mortgage is a loan that the borrower uses to purchase or maintain a home or other form of real
estate and agrees to pay back over time, typically in a series of regular payments. The property
serves as collateral to secure the loan. A mortgage is the transfer of an interest in specific immovable
property to secure the payment of funds or to be advanced through a loan, an existing or future
loan, or the performance of an engagement that may give rise to a pecuniary liability.
o immovable property includes land and profits that arise from things attached to the
earth such as trees, buildings and machinery.
o But a machine that is not permanently fixed to the earth and is able to shift from one
place to another is not considered immovable property.
3. The purpose of the transfer of an interest in property would be to secure a loan, resulting in
a monetary obligation. Transfer of property for the purpose other than the above will not
amount to mortgage. For example: – property transferred to liquidate prior debts will not
become mortgage.
4. The mortgaged property must be a specific one, i.e., that can be identified by its size,
location, boundaries, etc.
5. The actual possession of the mortgaged property should not always be transferred to the
mortgagee.
6. The owner of the property will get the interest back in the mortgaged property after the
repayment of the debt.
7. If the mortgagor fails to repay the loan, the mortgagee receives the right to recover the debt
from the sale proceeds of the mortgaged property.
Types of mortgages
o Possession remains with the mortgagor in the case of a simple mortgage. The
security which is obtained by the mortgagee is of the mortgaged property, not of the
rents and profits accruing from it.
o The mortgagee is empowered to sell the property in the case of non-payment of the
mortgaged money.
o The mortgagee is entitled to receive rent and profits accruing from the mortgaged
property till the money is repaid.
o The mortgagor does not take any personal responsibility for the payment of
mortgage money in the case of a usufructuary mortgage.
o In case of default by the mortgagor, the remedy available with the mortgagee is to
sell off the mortgaged property and recover himself.
o The mortgagee in this form of mortgage gets the right of possession whether the
right of entry is expressed or not, and can retain the same till the said amount is not
paid to him.
5. Mortgage by Deposit of Title Deed [Section 58(f)]: – The mortgagor deposits the title deed
of the property to the mortagagee with the mortagaged property against the debt to avail.
Where a person in any of the following towns, namely, the towns of Calcutta, Madras, and
Bombay, and in any other town which the State Government concerned may, by notification
in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of
title to immovable property, with intent to create a security thereon, the transaction is called
a mortgage by deposit of title-deeds. In this type of mortgage, the title deeds of the
property are given to the lender. This is a common phenomenon in the banking mortgage
loans. It is done to secure the property.
6. Anomalous Mortgage [Section 58(g)]: – A mortgage that does not fall under any of the
above types of mortgage is a divisional mortgage. A mortgage that is not a simple mortgage,
a mortgage by conditional sale, a usufructuary mortgage, an English mortgage, or a
mortgage by deposit of title deeds within the meaning of this section is called an anomalous
mortgage. Such agreement which is made between the mortgagor and the mortgagee
according to their terms and conditions is called an anomalous mortgage. Where it is not a
simple, usufructuary, mortgage by conditional sale, etc. is termed as an anomalous
mortgage.
o In the case of an anomalous mortgage the rights and liabilities of the parties shall be
determined by their contract as evidenced in the mortgage deed, and, so far as such
contract does not extend, by local usage.
o Such agreement which is made between the mortgagor and the mortgagee
according to their terms and conditions is called an anomalous mortgage.
The relationship between the mortgagor, who is the borrower, and the mortgagee, who is the lender,
is governed by the rights and liabilities set forth in the mortgage agreement. The mortgagor has
several rights and responsibilities that are important to understand.
A. Right to Possession:
The mortgagor has the right to possess and use the property that has been pledged as collateral for
the loan. This right is subject to certain conditions that are agreed upon in the mortgage agreement.
The mortgagor must comply with the terms of the mortgage agreement, including making timely
payments, keeping the property in good condition, and using it for lawful purposes.
B. Right to Redeem:
The mortgagor has the right to redeem the property by paying off the loan. This is known as the right
of redemption. This right is important as it allows the mortgagor to regain ownership of the property
once the loan has been paid off. The right to redeem may be subject to certain conditions, such as
time limits or penalties for early redemption.
The mortgagor is liable for any damage caused to the property. The mortgagor has an obligation to
maintain the property in good condition and to take reasonable steps to prevent damage. If damage
occurs, the mortgagor may be required to repair it or compensate the mortgagee for any losses
suffered as a result.
The mortgagor is responsible for maintaining insurance on the property. The types of insurance
required by the mortgage agreement may include fire and casualty insurance, liability insurance, and
mortgage insurance. The mortgagor must provide proof of insurance to the mortgagee and keep the
insurance policy in force throughout the term of the mortgage.
E. Payment Obligations:
The mortgagor has an obligation to make regular mortgage payments. The mortgage agreement will
specify the amount and frequency of the payments. Failure to make timely payments may result in
penalties, fees, or even foreclosure. It is important for the mortgagor to understand their payment
obligations and to make payments on time to avoid default.
The mortgagor has several rights and responsibilities that are set forth in the mortgage agreement.
The mortgagor has the right to possess and use the property, redeem the property by paying off the
loan, maintain the property in good condition, maintain insurance, and make regular mortgage
payments. Understanding these rights and responsibilities is essential for a successful mortgage
transaction.
ANSWER
Meaning
Redemption is the right of a mortgagor to get back mortgaged property after paying off the debt. The
mortgaged property is kept secure so that it can be returned to the mortgagor once the debt is paid.
The right of redemption is discussed under section 60 of the Transfer of Property Act, 1882. The
mortgagor has the right to receive the property in the state it was given or in the form as specified in
the contract. The mortgagor also has the right to extend or renew the lease.
The right of redemption allows individuals who have defaulted on their mortgages to reclaim their
property by paying the amount due (plus interest and penalties). This can be done before the
foreclosure process begins, or, in some states, even after a foreclosure sale.