Jai Ganeshaya Namaha

Notes on LLB 6th semester subject Transfer of Property Act and Easements Act

What do you mean by the Transfer of Property ? Discuss.

What properties are capable of transfer ? Explain.
Section 5 of the Transfer of Property Act, 1882: “Transfer of property” defined.—In the
following sections “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, or it himself
and one or more other living persons; and “to transfer property” is to perform such act.
In this section “living person” includes a company or association or body of individuals, whether
incorporated or not, but nothing herein contained shall affect any law for the time being in force
relating to transfer of property to or by companies, associations or bodies of individuals.

“Any kind of property may be transferred leaving only a few exceptions.” What are those
exceptions of the general rule ?
Property of any kind can be transferred: exception to this rule ?
Any property which is transferable, it can be passed or moved from one person
or organization to another and used by them. Section 6 to the transfer of property act,
1882 states that property of any kind may be transferred, except those which are provided
by this act or by any other law for the time being in force. Unless there is some legal
restriction preventing the transfer, the owner of the property may transfer it.
Section 6 of the Transfer of Property Act, 1882: What may be transferred.—Property of any
kind may be transferred, except as otherwise provided by this Act or by any other law for the
time being in force:
Section 6(a) : Spes Successionis
This section states that:
 The chance of heir-apparent succeeding to an estate cannot be transferred.
 The chance of a relation obtaining a legacy on the death of kinsman cannot be
transferred.
 Any mere possibility of a like nature cannot be transferred.
Example 1
A is the owner of a property, if he dies his son B will get the property as he is the legal heir and
here it can be said that B is the heir-apparent. But this same property cannot be transferred to B
during the lifetime of A.
Example 2
Son B dies during the lifetime of his father A, if during the lifetime of his father, he transfers the
property without his father’s consent then the transfer would be void ab initio and is prohibited
by law.
Section 6(b) : Right of re-entry
This clause states that the right to resume the possession of the land which could be given to
some other person for a certain period. For example, lease cases. As per this, if there is a mere
right of re-entry for breach of a condition, it later cannot be transferred to anyone except the
owner of the property who is thereby affected.
Example
‘A’ grants his plot to ‘B’ on a lease, for 5 years; with a condition that ‘B’ cannot dig a tank on the
land, if ‘B’ does any such act then ‘A’ has the right to re-enter. So, here ‘A’ cannot transfer his
right to re-entry to ‘C’ for the breach of the condition. If ‘A’ does any such act of transfer of his
right to ‘C’ then this transfer will be regarded as invalid.
Section 6(c) : Easement
An easement means a right that the owner or the occupier of certain land has in his possession
for the beneficial enjoyment of the said land. It can be said that the right to use or restrict the
use of the property of some other person. An easement cannot be transferred except the
dominant heritage.
Example
M, the owner of the house has the right of way over their adjoining land with N. Hence, M
cannot transfer his right without transferring the house.
 In the case of Sital v. Delanney, the court held that an easement cannot be transferred
unless the dominant heritage right is attached to it.
Section 6(d) : Restricted interest
A person cannot transfer anything that is interest restricted in the enjoyment to him. Restricted
rights are personal and cannot be transferred and if such transfer happens then it would be
void. The following types of interest are not considered transferable, such are:
 Service tenure;
 A right of pre-emption;
 Emoluments;
 Religious office.
Example
The right of the priest to receive the offering. This right is his restricted interest and he cannot
transfer this to another person who may be a doctor by profession.
Another example: A teacher’s right to teach is his beneficial interest. This right is given to him
only due to his personal qualifications. He cannot transfer it because on the basis of his
qualifications, he has been given this right by the institution. The reason behind making
personal interest non-transferable is that the transferee may not have that qualification which
the holder of such interest has.
Section 6(dd) : Right to future maintenance
This clause states that the right to future maintenance whatsoever cannot be transferred in any
manner. This is because the right is solely a personal benefit given to a person and so he
cannot transfer his benefit to someone else.
Example
A woman who receives maintenance from her husband under a decree or award or order.
 In the case of Dhupnath Upadhya v. Ramacharit, it was held that where the property is
given as maintenance, then the person cannot transfer the property during her lifetime. A
right of maintenance is a personal right and cannot be taken away.
Section 6(e) : Right to sue
According to this clause, a mere right to sue cannot be transferred. A right to sue cannot be
transferred as the transferee acquires no interest in the subject matter of the suit as much as
the owner of the property would.
Example
X published defamatory statements against Y and Y filed a suit against X. But Y cannot transfer
his right to Z to recover damages for him. If Y transfers his right to Z then this transfer will be
held void.
Section 6(f) : Public Office
A public office cannot be transferred and so the salary of the public officer, whether before or
after it becomes payable. A public officer is a person who is appointed to discharge his duty
towards the public and for doing such an Act he is paid in the form of salary. This salary is a
personal benefit to him that cannot be transferred.
Section 6(g) : Pensions
 Generally, pensions are the monetary value like a salary, given to a person timely who ceased
to be a government employee. This pension is his benefit which he cannot transfer just like his
salary.
 In Saundariya Bai v. Union of India, it was held by the court that pension is not
transferable and as long as such is in the hands of the government.
Section 6(h) : Nature of interest
According to this section, the Transfer should not affect the nature of the interest of anyone. For
example, the public or religious uses or services cannot be transferred. If any transfer whose
object is unlawful or has unlawful consideration is not permissible under this section. Also if the
property is transferred to someone who is disqualified legally to be a transferee then such
transfer is not valid.
Example
X, Y, and Z entered into an agreement for the division of gains among them which they acquired
by fraud. Hence, this agreement is void as the consideration is unlawful.
Section 6(i) : Statutory Prohibitions on the Transfer of Interest -As a general rule,
occupancy rights are transferable interests. But this clause makes an exception to this general
rule.
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.
When India became independent, the States of this country enacted their own land laws to
regulate their respective lands. Therefore, this section 6(i) of the Transfer of Property Act has
become almost irrelevant.

What do you understand by Transfer of Property ? What are the essentials for a valid
transfer ? Explain.
Transfer of Property is defined under section 5 of the act.
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 of property is a contract, so all requirements have to be met to constitute a valid
contract.
What are the essentials of transfer of property ?
The essentials of transfer of property are as follows: –
1. Transfer must be between Two or More Living Persons (Section 5)
A. The transfer must be inter vivos, a Latin phrase which means “while alive” or “between the
living.” Therefore transfer can only be possible between living persons and there is no
transfer of property to a person who is not in existence.
B. The living person including company or Association or body of individuals whether
incorporated or not.
2. The Property must be Transferable (Section 6)
A. Property of any kind may be transferred, except mentioned in Section 6 (a) to (i) cannot be
transferred. Therefore those properties described in the clauses (a) to (i) of Section 6
cannot be transferred. For Example: – a public office cannot be transferred.
3. The Transfer must not be: –
A. The property cannot be transferred if it is opposed to the nature of interest affected thereby
Section 6 (h);
B. for unlawful object and consideration as per provision of Section 23 of the Indian Contract
Act 1872, which provides a consideration or object is unlawful if: –
  It is Forbidden by law, or
 It is of such a nature that it defeats the provision of any law, or
 is fraudulent, or
 it involves or implies injury to the person or property of another or
 the court regards it as immoral or opposed to public policy.
C. To a person legally disqualified to be a transferee. As per Section 136 of Transfer of
Property Act, a Judge, a legal practitioner or an officer who is connected with Court of
Justice are disqualified from purchasing in actionable claim. This prohibition is only
with respect to actionable claim. It does not apply to any other kind of property.
4. Persons Competent to Transfer (Section 7)
A. “The person who is allowed to sign the contract is also allowed to transfer a property and
after that he will be allowed to enjoy the property to the fullest and legally permitted and
prescribed for the time being.”
B. Here are some of the individuals who may be enabled to transfer: – The capable, sound
mind of the contract, the transferor should be entitled to the transferable property.
What may be Transferred?
Section 6 of the Transfer of Property Act, 1882 discusses the property which may be
transferred. The section states that property of any kind may be transferred.
However, Clauses (a) to (i) of section 6 mention the properties which cannot be transferred.
1. 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.
2. 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.
3. 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.
4. 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.
5. 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.
6. 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.
7. 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.
8. 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.
9. 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.
Person competent to Transfer
Section 7 enumerates the concept of competency of persons who may be allowed to transfer
property.
According to this section, a person is allowed to transfer property if he satisfies two conditions.
The first condition is that the person must be competent to enter into contracts with other
persons.
The second condition is that the person who is willing to transfer property must have title to the
property or authority to transfer it if he is not the real owner of the property.
An important point to be noted in this regard is the conditions mentioned in section 11 of the
Indian Contract Act, which specifies the category of persons who may be competent to transfer.
In the section, it is stated that the person must have attained majority, he must be of sound
mind, and he must not be disqualified to enter into contracts by any other law applicable in
India.
What are the kinds of transfer under Transfer of Property Act?
Kinds of transfer under Transfer of Property Act are as follows: –
1. Sale: – A sale is an out-and-out transfer of property.
2. Mortgage: – In a mortgage, there is a transfer of a limited interest in the property.
3. Lease: – A lease is a transfer of a right to enjoy an immovable property for a specified time or
in perpetuity.
4. Exchange: – Exchange is like a sale but there is a difference in both. As in sale, the
consideration is money, while in exchange consideration can be any other thing other than
money. In gift, there is no consideration.
Case laws under definition of transfer of property
Harish Chandra vs. Chandra Sekhar AIR 1977, All 44
In this case, the court held that if the transfer deed states that the transferor was the owner of
the property and it shows the intention to transfer his title and it was adequately conveyed. So, it
would amount to transfer.
What do you understand by vested interest and contingent interest ? Explain the
difference of both the interests.
For example, Adam dies and leaves his estate to his son Brian absolutely, provided Brian
reaches the age of 18. Brian has a vested interest in his father's estate. On his 18th birthday,
his interest vests and he gets the estate outright.
The interest in a property which is created in favor of the person without specifying, the time or a
specific connection is known as Vested Interest in the property. In this, the interest in the
property is vested in favor of the transferee, even though the right to enjoy the property is
delayed.
The person having the vested interest does not get the possession of that property but has the
expectancy to receive it upon happening of a specified certain event.
Section 19 of Transfer of Property Act defines Vested Interest: – Where, on a transfer of
property, an interest therein is created in favour of a person without specifying the time when it
 is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an
event which must happen, such interest is vested, unless a contrary intention appears from the
terms of the transfer.
There are three main characteristics of a Vested Interest as follows: –
1. The vested interest does not depend upon an uncertain event, which may or may not
happen. It creates an immediate right, though the right to the enjoyment of property can be
delayed.
2. Vested interest does not defeat by death, the property is transferred to the transferee. And
on the death of the transferee the interest is passed to the heir of the transferee.
3. Vested interest is both transferable right and heritable right.

Section 21 of Transfer of Property Act defines Contingent interest:

When interest is created in favour of a person to whom such property is transferred, and such
interest depends upon the happening of a specified uncertain event, it is called Continent
Interest in the property. According to section 21 of Transfer of Property Act, the person having
the contingent interest does not get the possession of that property but has the expectancy to
receive it upon happening of that event but will not receive the property if the event does not
happen as the condition is not fulfilled. Contingent interest is entirely dependent on the condition
imposed on the transfer.
For example, ‘A’ agrees to transfer the property to ‘B’ on the condition that he shall secure 90 %
in his exams. This condition is uncertain and the happening of the event or not happening is in
doubt and therefore ‘B’ here acquires a contingent interest in the property. He shall get the
property only if he gets 90 % and when the condition is fulfilled.
Contingent Interest occurs on following conditons: –
 When interest is created in favour of a person to whom such property is transferred, and
such interest depends upon the happening of a specified uncertain event.
 Therefore, the transfer of interest depends upon an uncertain event which may or may not
happen.
 The contingent interest in the property can become Vested interest in the happening of that
event.
 The right of enjoyment of ownership or possession in the property depends upon the
happening of that uncertain event that may or may not happen.
There are three main characteristics of contingent interest: –
 This interest is entirely dependent upon the condition. It only happens when the condition is
fulfilled.
 Death of the transferee before getting the possession of the property will result in the failure
of contingent interest and the property will remain with the transferor.
 Contingent interest is a Transferable right, but whether it is heritable or not, it depends upon
the nature of such any transfer and the condition.

The difference between vested interest and contingent interest is given as follows:
–
1. Section Vested interest is provided in Section 19 of the Contingent interest is provided in Section 21
Transfer of Property Act, 1882. of the Transfer of Property Act, 1882.

2. Definiti The Vested Interest, mentioned in Section 19 of the It is an interest which is created in favour of a person
on Transfer of Property Act, 1882 is an interest that is on fulfilling a condition of happening of a specified
designed in favour of an individual where the time is uncertain event. The person having the contingent
 not mentioned but on the happening of a certain
event, the property transfer takes place.
interest does not get the possession of the property
but receives it upon happening of that event but
will not receive the property if the event does not
happen. Contingent interest is entirely dependent
on the condition imposed on the transfer.

3. Conditi The condition involves a specified certain event. A The condition involves a specified uncertain event.
on certain event means an event that will eventually There is a chance of the happening or
happen. non-happening of that particular event.

4. Fulfilm Vested Interest does not entirely depend on the Contingent interest is entirely dependent on the condit
ent of condition as the condition involves a certain event. on the transfer. Interest is
It creates a present right that is in effect immediately, only transferred to the transferee on the fulfilment
conditi although the enjoyment is postponed to the time of the condition imposed.
ons prescribed in the transfer.

5. Right This right is created as soon as the interest is There is mere chance to be having the ownership
of vested. rights.
Owner
ship

6. Death Death of the person who is having this interest will Death of the transferee before getting the possession
of not have any effect over that interest as after the of the property will result in the failure of
deceased, the interest will vest in his legal heirs. contingent interest and the property will remain
transfe with the transferor.
ree

7. Transf Vested interest is a Transferable and heritable Contingent interest is a Transferable right, but
erable right. whether it is heritable or not, it depends upon the
nature of such any transfer and the condition.
and
heritab
le

8. The There is present, immediate right even when its There is no present right of enjoyment, there is
present enjoyment is postponed. a mere expectancy of having such a right.
right of
enjoym
ent.

9. Exampl X professes to transfer the property ‘O’ to Y when he ‘A’ agrees to transfer the property to ‘B’
es attains the age of 20. There is a vested interest with on the condition that he shall secure
Y for the property ‘O’. 90 % in his exams. This condition is
uncertain and the happening of the
event or not happening is in doubt and
 therefore ‘B’ here acquires a contingent
interest in the property.

Conclusion
The difference between life interest, vested interest, and absolute interest is as follows;

life interest is transferred to a person who is living on the date of such transfer.
He will enjoy possession of the property and will be entitled to the benefits from the property.
The same can be enjoyed by his legal heirs till his death.
Vested interest is transferred to an unborn on being born.
Vested interest is an interest in which there is a fixed right to present or future enjoyment and
that can be conveyed to another.
It includes title to the property and the right to alienate property but does not include the right to
possession.
Under normal circumstances, the unborn will be immediately entitled to vested interest on birth.
But Section 14 makes provision for delay of granting vested interest to unborn, up to the age of
18 years.
This means the transferor can specifically emphasise that the unborn will get the property only
after attaining a certain age such as 18 years.
The rule mandates that vested interest can be delayed only up to 18 years of age to avoid the
property being inalienable for unspecified periods of time as the life interest holder does not
have the right to alienate the property.
Absolute interest is transferred to an unborn, now an infant, on the death of the life
interest holder.
Absolute interest includes the right of alienation. In property law, alienation is the
voluntary act of an owner of some property to dispose of the property, while alienability, or being
alienable, is the capacity for a piece of property or a property right to be sold or otherwise
transferred from one party to another.

To what extent and in what manner property can be transferred to an unborn person ?
Clarify.
Section 13 of the Transfer of Property Act, 1882 — Transfer for benefit of an unborn
person:
Where, on a transfer of property, an interest therein is created for the benefit of a person not in
existence at the date of the transfer, subject to a prior interest created by the same transfer, the
interest created for the benefit of such person shall not take effect, unless it extends to the
whole of the remaining interest of the transferor in the property.
The term ‘unborn’, refers not only to those, who might have been perceived but not yet born,
that is a child in womb, but also includes those who are not even perceived.
Whether they will be born at all or not is all possibility, but a transfer of property is admissible to
be effected for their benefit.
Thus, in order to transfer a property for the benefit of an unborn person on the date of the
transfer, it is imperative that the property must first be transferred by the mechanism of trusts in
favour of some person living other than the unborn person on the date of transfer.
In simpler terms, it can be said that the immovable property must vest in some living person
between the date of the transfer and the coming into existence of the unborn person as the
property cannot be transferred directly in favour of an unborn person.
The essential elements of section 13 have been discussed as follows:
a. No direct transfer: A transfer cannot be directly made to an unborn person. Such a transfer
can only be brought into existence by the mechanism of trusts. It is a cardinal principle of
property law that every property will have an owner. Accordingly, if a transfer of property is
made to an unborn person, it will lead to a scenario wherein the property will remain without an
owner from the date of transfer of property till the date the unborn person comes into existence.
There are two main reasons regarding this rule.
1. No existence of the unborn person (may be or may not be in the womb)
2. A property can’t be under abeyance.
Abeyance: State of Suspension- A property can not be without a owner. There has to be an
owner for a property.
b.Prior interest to a living person: We can say that the interest in favour of an unborn person
must always be preceded by a prior interest created in favour of a living person.
c.Unborn person will get absolute interest: There can’t be limited interest. In limited interest,
transfer is invalid. The unborn person will get absolute interest. There can’t be no clause.
d.Immediate transfer: When a unborn person is born, he or she will get immediate interest. But
max to the extent of attainment of majority which is 18 years.
What is interest ? All owners, or members, of a limited liability company have a
percentage of ownership of the business, referred to as interest.
Illustration
A, transfers the life interest of his property in the favour of B. On unborn (UB) being born, title,
as well as absolute interest, is transferred to UB.
The difference between life interest and absolute interest is such that life interest includes the
right to enjoy the property but does not provide the right to alienate the property (Alienation
refers to the transfer of property. For eg: sales, gifts, mortgages, etc.) whereas, absolute interest
is the transfer of all the rights of the property except the right to possession till the death of the
life interest holder. In the present situation on UB being born, absolute interest is transferred to
UB but he will only gain possession on the death of B.
Life interest: Transferred to a person living on the date of transfer. Confers right to enjoy the
property till person’s death. Also, permits the legal heirs of the person to enjoy the property till
the person’s death. In Rukhamanbai v. Shivram, it was held that a person who is entrusted with
life interest of an agricultural land can lease out the land unless any contrary intention arises.
Absolute interest: Confers all rights on the ultimate beneficiary including the right of alienation.
In property law, alienation is the voluntary act of an owner of some property to dispose of the
property, while alienability, or being alienable, is the capacity for a piece of property or a
property right to be sold or otherwise transferred from one party to another.
The conditions for transfer to unborn under Section 13 are as follows:
Taking into consideration the illustration
A transfers the life interest of his property in the favour of B. On unborn (UB) being born,
title, as well as absolute interest, is transferred to UB the conditions are—
If UB is never born: The property will go back to B. If B dies the property will go back to A and
if A is dead, the property will go to the legal heirs of A. It must be kept in mind that once a
property is reverted back it cannot be transferred again in the same transaction. A new
transaction is to take place.
When UB is born after the death of B: On the death of the B the property will revert back to A.
Hence, a new transaction is to take place.
If UB dies before the death of B: The property will go to the legal heirs of UB on the death of
B. If UB transfers the property to someone, the person will gain possession only on the death of
B.
To understand more clearly, let’s see these following illustrations and try to answer in
which cases, there can be a transfer of property.
 A father (X) transfers his property to his unborn child (Y). It is not valid. Because there is
no prior interest available. So it’s not a valid transfer.
  A father (X) transfers his property to his child(Y) for life, thereafter to his unborn
grandchild (Z) for life and finally to his unborn great grandchild (XY) absolutely. It is also
not valid. Because only one unborn child will get absolute interest and it will be end
there. So, it’s also a void transfer.
 A father (X) transfers his property to his child (Y) for life and thereafter to his unborn
grandchild (Z) absolutely which property is to vest in his unborn grandchild (Z) when he
attains the age of twenty one years. This is also void because of age. It says 21 years.
But the majority of years can be 18 and not more.
 A father (X) transfers his property to his child (Y) for life and thereafter to his unborn
grandchild (Z) absolutely which property is to vest in his unborn grandchild (Z) upon
birth. However, his grandchild (Z) is unborn till the time of death of his child (Y). It’s also
a void transfer unless a child is born within the period of 9 months or 280 days. It is
mentioned in Section 16 of Transfer of Property Act, 1882.
 A father (X) transfers his property to his child (Y) for life, thereafter to his unborn
grandchild (Z) absolutely which property is to vest in his unborn grandchild (Z) upon
birth. His grandchild (Z) is born before the death of his child (Y). It’s a valid transfer.
Because there is a prior interest created and the child is born before the death of B that
is to whom the prior interest is created.

What is the rule against Perpetuity ? Explain by giving example.

The rule against perpetuity is a legal principle that governs the transfer of property in India. It is
enshrined in Section 14 of the Transfer of Property Act, 1882. Perpetuity simply means
“indefinite Period”, so this rule is against a transfer which makes a property inalienable for an
indefinite period. The rule restricts the transfer of property by way of a contingent interest or a
future interest that is not certain to vest within a prescribed period. The main purpose of this
rule is to prevent the creation of property rights that may continue indefinitely in the
future.
Section 14 of The Transfer of Property Act, 1882: Rule against perpetuity.—No transfer of
property can operate to create an interest which is to take effect after the lifetime of one or more
persons living at the date of such transfer, and the minority of some person who shall be in
existence at the expiration of that period, and to whom, if he attains full age, the interest created
is to belong.
Explanation of Rule Against Perpetuity
The rule against perpetuity is based on the common law principle that property should not be
tied up in perpetuity. The rule applies to all transfers of property, including gifts, sales,
leases, mortgages, and bequests. It is intended to prevent the creation of future interests that
are too remote and uncertain to be enforced.
The rule operates by imposing a time limit on the vesting of contingent or future interests. The
time limit is generally the life of a person in being at the time the interest is created plus
twenty-one years. If the interest is not certain to vest within this period, it is void.
How Perpetuity May Arise?
Perpetuity may arise in two ways –
I) by taking away from transferee his power of alienation (In property law, alienation
is the voluntary act of an owner of some property to dispose of the property, while alienability, or
being alienable, is the capacity for a piece of property or a property right to be sold or otherwise
transferred from one party to another). Such a condition has been made void under
Section 10 of the Act.
Section 10 of The Transfer of Property Act: the Condition restraining alienation.—
In property law, alienation is the voluntary act of an owner of some property to dispose of the
property, while alienability, or being alienable, is the capacity for a piece of property or a
property right to be sold or otherwise transferred from one party to another.
Where property is transferred subject to a condition or limitation absolutely restraining the
transferee or any person claiming under him from parting with or disposing of his interest in the
property, the condition or limitation is void, except in the case of a lease where the condition is
for the benefit of the lessor or those claiming under him:
provided that property may be transferred to or for the benefit of a woman (not being a Hindu,
Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or
charge the same or her beneficial interest therein.)
II) by creating future remote interest (which has been prohibited under Section 14 of The
Transfer of Property Act)
Section 14 of The Transfer of Property Act: Rule against perpetuity.—No transfer of
property can operate to create an interest which is to take effect after the lifetime of one or more
persons living at the date of such transfer, and the minority of some person who shall be in
existence at the expiration of that period, and to whom, if he attains full age, the interest created
is to belong.
Rule against perpetuity is the rule against such creation of future remote interest or we can say
is a rule against remoteness of vesting (interest). Remoteness here means “The state of being
unlikely to occur”.

Object of the Section

It is important to ensure free and active circulation of property both for trade and
commerce as well as for the betterment of the property. There are people who want to
retain their property in their own families from generations to generations. This will be a loss to
the society because it will be deprived of any benefit arising out of that property. Free and
frequent circulation is important and the policy of the law is to prevent the creation of such
perpetuity.
Thus, the object of section 14 is to see that the property is not tied- up and to prevent creation of
perpetuity.
Essential Elements of Section 14 of The Transfer of Property Act, 1882: Right against
Perpetuity
 There needs to be a property transfer.
 The transfer should create an interest in favour of the ultimate beneficiary i.e, an unborn
child.
 The transfer to the Unborn allowed by the law. There cannot be a first or direct transfer to
an unborn person but subsequent transfer can be made to an unborn person.
 The life interest can be transferred to more than one living person but ultimately the
absolute interest will vest in the unborn person. For example, X transfer his property to A
for life, then to B for life, then to C for life, and after the death of C to C’s son Y. This
transfer of property is valid under Section 13 of Transfer of Property Act.
 The transfer in the favour of the unborn child needs to be preceded by the life or life
interest of a living individual.
 The ultimate beneficiary needs to be in existence (either born or in the mother’s womb) at
the expiration of the living individual’s interest.
 Transfer of property may be postponed only up to the life of a living person and the ultimate
beneficiary’s minority; but not beyond that.
Examples.
 Ram transfers property to Shyam for a lifetime and then transfers it to Shyam’s unborn
daughter when she turns 27. The said transfer becomes void because it’s exceeding the
time period of perpetuity i.e, minority.
Maximum Possible Remoteness of Vesting
 In India, the maximum permissible possible remoteness of vesting is –
Life of the preceding interest Period of gestation of ultimate beneficiary (only when the child is
not born) minority of the ultimate beneficiary
Exceptions to Rule Against Perpetuity
There are certain exceptions to the rule against perpetuity. These include:
1. Charitable trusts: The rule against perpetuity does not apply to charitable trusts. Charitable
trusts are trusts that are created for charitable purposes, such as the relief of poverty, the
advancement of education, or the promotion of religion. In Re: Venkata Subbiah, the court
held that a trust for a religious purpose was not void under the rule against perpetuity. The trust
was created to maintain a temple and provide for the performance of religious ceremonies, and
the court held that the trust was not subject to the rule because it was for a charitable purpose.
2. Section 18 of the ToPA states that where a property is transferred for the benefit of the public in
the advancement of religion, knowledge, commerce, health, safety or any other object which is
beneficial to the public at large, a perpetual transfer is not void. The purpose of the exemption is
to enable the formation of trusts. Generally, a transfer in the public interest is made via a trust.
In the trusts, the property is tied up in a trust for an indefinite period to achieve the object for
which the trust is created. If Section 14 will be made applicable in such cases, it would defeat
the purpose of such trusts.
3. Personal agreements, not creating any interest in the property, are exempted from the rule
against perpetuity. In the case of Ram Baran v. Ram Mohit, the supreme court held that a
mere contract of sale of immovable property does not create any interest in the immovable
property and therefore the rule against perpetuity is not applicable in such cases..
4. Transfer for the benefit of unborn persons: The rule against perpetuity does not apply to
transfers made for the benefit of unborn persons. For example, if a person transfers property
to a trust for the benefit of his or her unborn grandchildren, the rule against perpetuity
will not apply.
In Bai Diwali v. Mahadeo, the court held that a gift that was made to an unborn person was void
under the rule against perpetuity. The gift was made to the unborn son of the donee, and the
court held that the gift violated the rule because it was uncertain whether the son would be born
within the prescribed period.
5. Transfers in exercise of a power of appointment: The rule against perpetuity does not apply to
transfers made in exercise of a power of appointment. A power of appointment is a power given
to a person to appoint property to certain beneficiaries.
6. Leases: The rule against perpetuity does not apply to leases of property for a term not
exceeding twenty years. In the case of Raja Mohammad Amir Ahmad Khan v. Municipal
Board of Sitapur the Court held that a lease for a term of more than twenty years was
void under the rule against perpetuity. The lease was for a term of ninety-nine years, and
the court held that the lease violated the rule because it extended beyond the prescribed
period.
7. Options to purchase property: The rule against perpetuity does not apply to options to purchase
property, provided the option is exercised within the prescribed period.
What is conditional transfer ? What is fulfilment of condition precedent and subsequent
condition. Example with illustration.
Section 25 of The Transfer of Property Act, 1882: Conditional transfer.—An interest
created on a transfer of property and dependent upon a condition fails if the fulfilment of the
condition is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would
defeat the provisions of any law, or is fraudulent, or involves or implies injury to the person or
property of another, or the Court regards it as immoral or opposed to public policy.
Illustrations:
(a) A lets a farm to B on condition that B shall walk a hundred miles in an hour. The lease is
void.
(b) A gives Rs. 500 to B on condition that B shall marry A's daughter C. At the date of the
transfer C was dead. The transfer is void.
(c) A transfers Rs. 500 to B on condition that B shall murder C. The transfer is void.
(d) A transfers Rs. 500 to his niece C if she will desert her husband. The transfer is void.

A condition precedent is that which precedes the transfer of property. When an interest is
created in the transfer of a property but the vesting of such interest is dependent on the
fulfilment of a condition prior to the transfer, this condition imposed is called a condition
precedent. In other words, the condition must be fulfilled before the transfer is executed by the
transferor.
Section 26 of The Transfer of Property Act, 1882: Fulfilment of condition precedent.—
Where the terms of a transfer of property impose a condition to be fulfilled before a person can
take an interest in the property, the condition shall be deemed to have been substantially
complied with.
Illustrations:
(a) A transfers Rs. 5,000 to B on condition that B shall marry with the consent of C, D, and E. E
dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition.
(b) A transfers Rs. 5,000 to B on condition that B shall marry with the consent of C, D and E. B
marries without the consent of C, D and E, but obtains their consent after the marriage. B has
not fulfilled the condition.
Condition precedent becomes impossible or unlawful
When the condition precedent becomes –
Impossible to be performed– a condition which no longer can be fulfilled in any circumstance
is said to be impossible. A condition precedent may become impossible to be performed when
the subject matter is destroyed or there is no means to fulfil such a condition etc.
Illustration
X agrees to transfer his property to Y, provided Y sells his horse to Z. At the time of such
transfer, Y did not own a horse. Therefore the condition precedent was to sell the horse to Z, but
Y did not own any horse on the date of such transfer therefore the condition imposed is void and
transfer of property is also void.
Unlawful – when the condition imposed is unlawful or forbidden by the law or defeat the
provisions of law or fraudulent or opposed the public policy and is immoral or injures any person
or property the transfer becomes void.
Illustration
A agrees to transfer his property to B, provided B murders C. The condition of murdering is
forbidden by law, hence the transfer of the property will be void.
Fulfilment of Condition Precedent
Under section 26 when the condition to be fulfilled for the transfer of property is substantially
complied with or fulfilled, such a condition is deemed to have been fulfilled. In other words, the
interest made to accrue in the transfer will vest in the transferee if the transferee has
substantially complied with the condition precedent imposed by the transfer. The doctrine of
Cy-pres will apply to this section.

What is doctrine of Cy pres in law?

The term 'cy pres' comes from the old French phrase 'cy pres comme possible', which means
“as near as possible.” In the legal sphere, the phrase refers to ensuring that a donor's or
testator's desires are followed out as nearly as possible, whether in a will or as part of a
charitable trust or estate.
Illustration:
(a) A transfers Rs. 5,000 to B on condition that B shall marry with the consent of C, D, and E. E
dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition.

Section 29 of The Transfer of Property Act, 1882: Fulfillment of condition subsequent.—

An ulterior disposition of the kind contemplated by the last preceding section cannot, take effect
unless the condition is strictly fulfilled.
Condition subsequent is a condition which is required to be fulfilled after the transfer of a
property. The interest vested in the transferee after the transfer of property is affected by the
completion or non-completion of a condition after the vesting of the interest resulting from the
transfer. The condition imposed either destroys or divests the right upon happening of an event.
Illustration
 A gifts a property to B on the condition that B should marry C within three months from
such a transfer. Hence the property vests in B at present but if B does not marry C within
three months the transfer will fail.
 Venkatarama v. Aiyasami - X who was under a sentence of transportation for life,
transferred his field to Y, with a proviso that in case he returns from Port Blair, Y’s
interest shall cease. X returned from Port Blair and hence the court held that X can claim
back his field from Y.
 Famous Mahabharata episode on ‘fulfilment of condition subsequent’ :The lady agreed
to King Shantanu’s marriage proposal but with one condition that he will never question
her actions; and if this condition was broken, she would abandon him. Shantanu
accepted it and lived a happy marital life with her. However, when a child was born, the
queen used to drown him in the Ganges. One by one, seven sons were born and
drowned, while Shantanu remained silent because of his commitment. When she was
about to throw the eighth child into the river, Shantanu, unable to control himself,
stopped her and confronted her about her actions. The lady then left him as the
condition subsequent commitment was broken by the King Shantanu.
 X transfers a farm to Y for his life, with a condition that if Y cuts a tree from the farm, the
transfer will cease to have effect. Subsequently, Y cuts a tree from the farm. Y loses life-
interest in the farm.
Characteristics of Condition Subsequent
1. When a condition subsequent is imposed on the transfer, the fulfilment or non-fulfilment of
such a condition will defeat the transfer.
2. The transfer of property is effected immediately and the interest in such a property vests in
the transferee unless the condition subsequent is fulfilled or not fulfilled.
3. In case where the condition subsequent is impossible or unlawful, the condition will be
ignored and the interest created by the transfer in the transferee will still vest in him.
4. A condition subsequent should be strictly fulfilled.

What do you understand by onerous gift ?

Onerous gift is when one person transfer several gifts, i.e., more than one gifts to another in a
single transfer, out of these gifts one is not burdened by obligation but other is burdened with
obligation, so here donee has to accept in full, he cannot accept one which is beneficial and
reject burdened with obligation.
Section 127. TPA, Onerous gifts.
Where a gift is in the form of a single transfer to the same person of several things of which one
is, and the others are not burdened by an obligation, the donee can take nothing by the gift
unless he accepts it fully.
Where a gift is in the form of two or more separate and independent transfers to the same
person of several things, the doneee is at liberty to accept one of them and refuse the others,
although the former may be beneficial and the latter onerous.
Onerous gift to disqualified person.—A donee not competent to contract and accepting
property burdened by any obligation is not bound by his acceptance. But if, after becoming
competent to contract and being aware of the obligation, he retains the property given, he
becomes so bound.
Illustrations
(a) A shares in X, prosperous joint stock company, and also shares in Y, a joint stock company
in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his shares in
joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in X.
(b) A, having a lease for a term of years of a house at a rent which he and his representatives
are bound to pay during the term, and which is more than the house can be let for, gives to B
the lease, and also, as a separate and independent transaction, a sum of money. B refuses to
accept the lease. He does not by this refusal forfeit the money.
What is the essential element of onerous gift?
To constitute an onerous gift there must be a single transfer of several properties, one of which
is burdened with certain obligations and others not, then the transferee has to abide it to receive
all the properties. In simple words, he cannot relieve himself from the burden and take the rest
of the properties.
No one can confer a higher right on property than what he himself possesses.
A person cannot confer a better title in the property that he himself has to others.
Nobody can present a higher right on the property that he, at the end of the day, has.
A person cannot transfer a superior title to property than what he holds
Explain with exceptions about this general rule of Transfer of Property Act.
Discuss fully the law relating to transfer by an ostensible owner.
Ostensible Owner:
The word ‘ostensible’ literally means ‘apparent’ or ‘seeming’. An ostensible owner is a person who
appears to be the owner of immovable property even though he is not the real owner of the property.

The transfer of property by an ostensible owner is dealt with under Section 41 of the Transfer of Property
Act, 1882. According to it, when a person acts on the express or implied consent of a person who is
vested in a certain immovable property, that person is deemed the ‘ostensible owner’ of that property.
Section 41 of the transfer of property act, 1882: Transfer by ostensible owner.—Where, with the
consent, express or implied, of the persons interested in immoveable property, a person is the ostensible
owner of such property and transfers the same for consideration, the transfer shall not be violable on the
ground that the transferor was not authorised 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.
There is also the Rule of estoppel under Section 41 of Transfer of Property Act . The law of estoppel
argues that when the real owner of property depicts some other person as the owner to third parties, and
the latter act on that depiction, the real owner cannot rescind his representation.
The Latin term caveat emptor means that ‘let the buyer be aware’. This rule required the
transferee apart from acting in good faith, to take all reasonable care to apprise himself of any
defect in transferor’s title or clog on his power to affect the transfer.
The provision is based on the principle Nemo dat quod non habet i.e. no one can confer a
higher right on property than what he himself possesses. The doctrine of transfer by
ostensible owner is exception to this general rule.
The following persons are not permitted to be ostensible owners.
1. Professed agents
2. Guardians
3. Trustee
 4. Servant
5. Any person acting in fiduciary character
ESSENTIALS OF SECTION 41 OF THE TRANSFER OF PROPERTY ACT, 1882
The real owner is binding on transfer of immovable property by the ostensible owner if the following
conditions are satisfied –
1. A person must be the ostensible owner of a property,
2. That person must be such owner with the consent, express or implied, of the real owner,
3. The transferee must purchase the property from such ostensible owner for the consideration,
4. Before taking transfer, the transferee must take reasonable care to ascertain that the transferor has the
power to make the transfer; in other words, he must have acted in good faith.
The real owner is deprived of his rights in the property under this section only if above essential
conditions for the applicability of the section are satisfied.
Ramcoomar Koondoo V. John And Maria McQueen Case
In this case, the plaintiff who had inherited a property by way of a will came to know that
someone else had already purchased this property in her name and subsequently sold this
property to a third person, by making him believe that he had good title over that property. The
whole transaction was a ‘benami’ transaction but was not known to anyone except the person
who sold the property. The plaintiff sued the third party for recovery of the possession of the
land but the committee held that:
“It 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.”
It was thereby held that the plaintiff cannot take back the property form the third party
and that the transfer was a legitimate transfer in the eyes of the law.
‘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 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.
Consent from the real owner
The main purpose of this section is to protect the rights of the innocent third party who had
purchased the property, when the real owner was himself at fault by not protesting the
transfer. But a necessary requirement is that the real owner should have the capacity to give
the consent and that consent should not be obtained from any unlawful act. In the case of
minors, even if the ostensible owner claims that he has the consent of the minor, it will be held
to be no consent as minors do not have any capacity to give the required consent. And it was
laid down in the case of Satyanarayana Murthi vs. Pydayya, that consent need not be taken
from the true owner and it might also be the case that the true owner had no knowledge of the
transfer.
The consent in such transactions can be express or implied.
Implied Consent
Implied consent can be made out from the conduct of the real owner. It is not required that the
real owner has to give express consent or give his consent in writing. Therefore, where another
person is dealing with the property of the real owner, as if the property was his own, and the real
owner knows about it, then it will said to be implied consent on the part of the real owner. In the
case of Shamsher Chand v Bakshi Meher Chand, it was held that if a party is not aware of his
rights or is silent about them, then in such case it cannot be said that the real owner had
consented to the transfer of the property. It is required that a person who is not aware of his
rights could never have consented to that and such a transaction will not be valid. It is not stated
in the section that the real owner must have actually consented to the transfer, because if that
was the case, then the real owner could never have made any objection to such transfer. It is
just that the real owner is unaware of this transaction or is negligent. Silence may amount to
consent if the silence on the part of real owner leads the third party to believe that the ostensible
owner is the real owner of the property. But in the case of Gurucharan Singh v. Punjab State
Electricity Board Patiala, where the land in contention was transferred to someone else and
such person had perfected his right to the property by paying the money. The new owner which
is the real owner had not taken the possession of the land and the previous owner after having
waited for 12 years, sold the land to third party. The real owner then comes forward and claim
his right over the land and the court said that the real owner was a minor at the time of transfer
of land and therefore could not take the possession of the land and therefore it would not
amount to silence on the part of the real owner as he could never have consented to the
transfer. Therefore the subsequent transfer was held to be invalid.
Consideration
Consideration is a must if there is a transfer by ostensible owner. He cannot give away the
property as a gift. As it has also been provided in the Indian Contract Act, 1872 that
consideration is necessary component of any contract and transfer of property by an ostensible
owner is done by way of contract only. Also it has been provided in S. 4 of the Act that anything
not expressly defined in this act shall be deduced form the general definitions given under the
Indian Contract Act, 1872.
Reasonable Care
Reasonable care can be understood as the care which a reasonable and ordinary man would
have taken. He has a duty to check the title of the transferor. Like in the case of Nageshar
Prasad v. Raja Pateshri where there was an error in the revenue records regarding the name of
the owner. The name written was of some other person and the real owner had already made a
complaint about this error. The person whose name was in the revenue records subsequently
sold it to a third person and the third person without making proper inquiries took the property
and the real owner afterwards objects to it. The court held that the third party has not taken
reasonable care which was required of him and therefore he will not be protected by this
section. The advice of solicitor will not be enough to prove that the third party has taken
reasonable care in determining the title of the property. The third party is required all the
available documents which can possibly give some more information regarding the title of the
property and these documents may include police registers, municipal registers apart from other
documents.
There is also a safeguard for the real owner. In the case of Mathura v. Ambika, where the real
owner had sold the property to another person and got it registered before the transfer by the
ostensible owner could be registered, then it was held that the transfer by the real owner would
be held valid as he has a greater title over the property than the ostensible owner and the rights
of third person who had purchased this property from the ostensible would not be protected
under this section.
Proper Inquiry
As a person is required to make reasonable inquiries, sometimes it is difficult to make out what
will amount to proper inquiry. The courts in India have held that this being subjective, it will
depend on the facts and circumstances of each case and it can also be the case that what
amounts to proper inquiry in one case may not called proper inquiry in another case with
completely different facts. If the transfer is by Mahommedans, it is a required of the purchaser to
inquire if there is any female heir also. In many cases it is such that only males transfer the
property without taking the consent of the females and this will not be a valid transfer because
they also have a share in the property and therefore the third person has to inquire about such
things. The ultimate test that is that the “transferee should show that he acted like a reasonable
man of business and with ordinary prudence.”
Good Faith
Good faith simply means that the transferee should have honestly believed that the ostensible
owner is the true owner after all the proper inquiries conducted by him. But where after proper
inquiries the transferee has knowledge that the person selling him the property is not the real
owner but only the ostensible owner, the transferee cannot neglect true facts. This is because
of the fact that a person cannot take advantage of his own negligence and then claim protection
of this act. The rights of real owner also need to be safeguarded against such persons.
Burden Of Proof
The burden of proof is on the transferee to prove that the transferor was actually the ostensible
owner and had the consent to sell the property. Also he has to prove that he actually acted in
good faith and had taken all reasonable care that was required from him while taking the
property. This is because he has to prove that he was not at fault while taking the property and
to shift the burden on the real owner. Alternatively, to shift his burden, he can also prove that the
transferor did not allow the transferee to know the real facts and tried everything to suppress the
facts.
Conclusion
Section 41 of the Act has done a fair job in protecting the interest of the innocent third party.
Though this section may seem to be a bit biased towards the third party but this is mainly if the
real owner is himself at some fault. No one can simply say that he has now acquired the
property and he cannot be evicted now. The third party has to take a lot of care while
purchasing the property and these necessary requirements has been put by law itself to check
the misuse of this section by ostensible owner and the third party. This, in a way protects the
interest of the real owner also.

Write short notes on the Doctrine of ‘Lis Pendens’.

Explain with illustrations the Doctrine of ‘Lis Pendens’.
State the Doctrine of ‘Lis Pendens’ and explain its essentials.
The doctrine of lis pendens is incorporated in the Transfer of Property Act, 1882, under
Section 52.
‘Lis’ means litigation and ‘pendens’ means pending, literally signifying pending litigation.
Any action or proceeding which is pending in any court of law is said to be lis pendens.
The maxim representing this doctrine accurately is pendente lite nihil innovature, which
means that ‘during the pendency of litigation, nothing new should be introduced’.
The principle behind this doctrine is that nothing new should be introduced into a
litigation that is pending, i.e. to maintain the status quo, to abstain from doing anything
which may affect any party to the litigation.
In terms of property law, it implies that no new interest in respect of a property should be
introduced, if that property is the subject-matter of a litigation.
If a new interest or title is created in that property, that would amount to a transfer of that
property.
The doctrine of lis pendens prohibits the transfer of any property under litigation.
Section 52 of The Transfer of Property Act, 1882: Transfer of property pending suit
relating thereto.—During the pendency in any Court having authority within the limits of India
excluding the State of Jammu and Kashmir or established beyond such limits by the Central
Government of any suit or proceeding which is not collusive and in which any right to
immoveable property is directly and specifically in question, the property cannot be
transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the
rights of any other party thereto under any decree or order which may be made therein, except
under the authority of the Court and on such terms as it may impose.
Origin of Doctrine of Lis Pendens
The doctrine of lis pendens has its origin in the case of Bellamy v. Sabine, 1857 wherein Turner,
L.J., observed that the doctrine of lis pendens was a doctrine common to the courts of law as
well as equity, since it would become almost impossible for the suit that is instituted in a
court, to be adjudicated if alienations pendente lite were allowed to prevail. In property
law, alienation is the voluntary act of an owner of some property to dispose of the property,
while alienability, or being alienable, is the capacity for a piece of property or a property right to
be sold or otherwise transferred from one party to another.
The plaintiff, in such a situation, would be liable to be defeated by the defendants causing the
alienation before the judgement is passed, every time, and would be driven to institute a new
course of proceedings, every time.
“This is a doctrine common to law and equity courts, which I apprehend, on the grounds that, if
alienation pendente lite was allowed to prevail, it would simply not be possible for any
action or suit to be resolved successfully. In any case, the Plaintiff will be responsible for the
Defendant who alienated the property before the judgment or the decree and must be obliged,
according to the same course of action, to initiate these proceedings de novo.”
The facts of the above case were the following:
Mr X, sold an immovable property to Mr A.
Mr X’s son, Mr Z, who was the heir of Mr. X, sued Mr A in a competent court to declare the sale
as void.
However, while this litigation was pending, Mr. A sold the property to Mr. B, who did not take
notice of the suit.
The Court held that the son Mr. Z was entitled to the property and the sale was set aside.
Mr. B who purchased the property from Mr. A does not get any title as he purchased the
property from someone who did not have the title and therefore cannot convey it.
Therefore, evolving the principles of common law and Section 52 of The Transfer of Property
Act, 1882, was born and is as follows:
When there is an ongoing lawsuit in any Court having authority within the limits of India,
a suit or proceeding in which any right to immovable property is precisely in question,
the property cannot be conveyed by any party to the lawsuit which can influence the
rights of any other party thereto under any order which may be rendered therein, unless
under the jurisdiction of the Court and on such conditions as it may enforce.
Following are the essentials of Doctrine of Lis Pendens as described in section 52:
1. There must be a pendency of a suit or proceeding.
2. The suit/proceeding must be pending in a court which has the jurisdiction to try it.
3. A right to immovable property is either directly or indirectly involved in the
suit/proceeding.
 4. The immovable property in dispute is transferred/dealt with by any party to the suit.
5. Such transfer/dealing affects the rights of the other party(s) involved in the
suit/proceeding.
Application of Doctrine of Lis Pendens
The doctrine of lis pendens is not applicable where the suit is collusive i.e. instituted with
malafide intention. This means that there is no actual dispute but the suit is filed for some evil
motive, for example, defrauding a third party.
In Nagubai v. B. Sham Rao, the Supreme Court observed, “In such (collusive) a proceeding the
claim put forward is fictitious, the contest over it is unreal, and the decree passed therein is a
mere mask having the similitude of a judicial determination and worn by the parties with the
object of confounding third parties.” However, the doctrine is applicable in cases where the
litigation is ultimately compromised and a compromise/consent decree is passed, i.e. where
there is a compromise suit. Such compromise should be made during the pendency of litigation.
For the applicability of doctrine of lis pendens, there must be a question of the right to
immovable property involved in the suit. The suit itself should be regarding the dispute in an
immovable property, relating to any right or title of the same. Such suits include a suit for
partition, a suit on mortgage, a suit for pre-emption and a suit of easement.
In Clifford George Pinto v. M. R. Shenava & Ors., it was held that section 52 could be applied
to cases wherein a sale is made of an immovable property through private negotiations, during
pendency of litigation process. In Faiyaz Hussain Khan v. Prag Narain, a mortgagee sued the
mortgagor for enforcement of his loan, but before the summons could be served to the
mortgagor, he initiated a subsequent mortgage. The prior mortgagee continued his suit without
making the subsequent mortgagee a party to the suit, and obtained a sale decree from the
court. The subsequent mortgagee did not have any right to redeem the previous mortgage.
The inalienability of immovable property in dispute while litigation is pending is subject to the
power of the court. If the court decides, it can exempt the property from the application of
section 52 and may impose conditions accordingly. In Ramjidas v. Laxmi Kumar & Ors., the
court observed that section 52 does not defeat any claim that is just and equitable, instead it
subjects them to the authority of the court. The courts are required to interpret the section
strictly. Any transfer of immovable property which is made outside the period of the litigation
process will not be covered under the doctrine of lis pendens.
Define Lease. What do you understand by Lease from Month to Month ?
What Is a Lease?
A lease is a contract outlining the terms under which one party agrees to rent an asset—in this
case, property—owned by another party. It guarantees the lessee, also known as the tenant,
use of the property and guarantees the lessor (the property owner or landlord) regular payments
for a specified period in exchange. Both the lessee and the lessor face consequences if they fail
to uphold the terms of the contract. A lease is a form of incorporeal right.
Section 105 of The Transfer of Property Act, 1882: Lease defined.—A lease of immoveable
property is a transfer of a right to enjoy such property, made for a certain time, express or
implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of
crops, service or any other thing of value, to be rendered periodically or on specified occasions
to the transferor by the transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is
called the lessee, the price is called the premium, and the money, share, service or other thing
to be so rendered is called the rent.

KEY TAKEAWAYS
  A lease is a legal, binding contract outlining the terms under which one party agrees to
rent property owned by another party.
 It guarantees the tenant or lessee use of the property and guarantees the property
owner or landlord regular payments for a specified period in exchange.
 Residential leases tend to be the same for all tenants, but there are several different
types of commercial leases.
 Consequences for breaking leases range from mild to damaging, depending on the
circumstances under which they are broken.
 Certain protected groups are able to vacate their leases without any consequences, for
which some form of proof is usually required.
How Do Leases Work?
Leases are generally legally-binding contracts between two parties: the lessor and the lessee.
They involve a piece of property rented out by the owner (the lessor) to the lessee or the tenant.
Leases can be verbal agreements but are normally drawn up in writing. Both parties agree to
the terms of the lease, including the rental amount, length of time for the contract, as well as any
consequences that may result if either party doesn't uphold the terms and conditions of the
contract.
What Benefits Do Leases Provide for Landlords and Tenants?
Signing a lease provides both landlords and tenants with clear terms and conditions outlining
the relationship and the rental agreement. Doing so also establishes the rights and
responsibilities of each party involved. For instance, leases provide both parties with structure,
in that they establish the cost associated with renting and the length of time under which the
lease is exercisable. This provides both parties with stability. A lease also gives both parties a
clear understanding of what happens when either party breaks or goes against any of the terms
laid out within the lease contract.
Two kinds of Lease - a Month-By-Month Lease and a Fixed-Term Lease
Month-By-Month Leases: An Overview
A month-by-month lease is also referred to as a "month-to-month lease" or "month-to-month
rental." It is an arrangement where the lease may be altered or terminated by either party.
Parties must give "proper notice" to end or change a lease, typically at least 30 days in
advance. These rules can vary by state law, but this article offers a guide on general
explanations of these type of leases.
This type of lease offers you more flexibility since you will not have to pay a penalty or lose a
deposit if you decide you want to live elsewhere. However, the landlord may give you 30 days
notice to:
 Raise your rent (often called a rent increase)
 Change the rental terms (such as the rent end date)
 Evict you for any reason (called an eviction notice)
Contracts may be either written or oral, and rent is paid each month. Some rental units,
including residential hotels, may offer week-to-week leases.
Fixed-Term Leases: An Overview
A fixed-term lease is a type of rental agreement where the renter agrees to stay and pay rent for
the time indicated in the written contract.
Renters who break a long-term lease like this typically lose:
 Their deposit
 Their pre-paid rent for the final month of the lease (if applicable)
Renters who break a fixed-term lease early may be held liable, to varying degrees, for the
amount of time and rent left on their contract. However, the law typically limits this liability. You
would still owe rent until:
 The landlord finds a replacement tenant
  The amount of time deemed reasonably sufficient to find a new tenant passes
How a Month-to-Month Tenancy Works
Tenancy falls under the real estate laws that cover leases. In legal real estate terminology, a
lease is a contract between the owner of a property, also known as the landlord, and a tenant,
who rents the property. The lease transfers the owner’s rights to the exclusive possession and
use of the property to the tenant for an agreed-upon period.
As anyone who has rented an apartment knows, the lease sets forth the period of time for which
the contract is to run and the amount of rent the tenant is contracted to pay. The renter gains
access to the property and uses it in whatever manner was agreed upon in the lease. The
landlord receives rent for a specified period of time, and after the lease period is up their
ownership rights are returned.
Pros and Cons of a Month-to-Month Tenancy
Whether a month-to-month tenancy is advantageous or disadvantageous depends, in part, on a
renter's or landlord's desire for flexibility and ability to respond quickly to changing
circumstances.
Pros Explained
Control over the end date. Renters are not tied down to a long-term lease and can choose to
leave with relative impunity, with a maximum of 30 days' notice. Landlords can choose to end
the arrangement with the same impunity, giving them greater control of their property.
Financial fluidity. Landlords can change the rental amount every month if they wish. Renters
can take advantage of a better offer elsewhere in quick fashion.
Peace of mind. Renters are not stuck having to break a lease or find a sublessee in the event
they want to move, either of which could happen if they leave before a long-term lease expires.
Landlords can get rid of bad tenants much more easily than with a long-term lease.
Cons Explained
Moving out or replacing a tenant on short notice. Landlords can be stuck with an empty
property on short notice. Renters can be forced to find new lodgings on the same short notice.
Higher rents/less predictable income. Renters generally pay higher rents than with long-term
leases, because of the possibility of sudden vacancies that can’t be immediately filled.
Landlords can suffer from less predictable income than they would be afforded by a long-term
lease.
Uncertainty. Renters cannot be sure of their tenancy beyond the span of one month and so
must have a quick move plan always in place. Landlords cannot be sure of a steady supply of
tenants willing to live with the instability of a month-to-month tenancy.
Discuss Rights and Liabilities of Parties to an Exchange.
SECTION 118 OF TRANSFER OF PROPERTY ACT, 1882: ‘Exchange’ defined - “when two
persons mutually transfer ownership of one thing for the ownership of another, neither thing or
both things being money only, the transaction is called an “Exchange”. From above we
understand that for being an “Exchange”;
i. There must be two persons transferring ownership of one thing for the ownership of another;
ii. Neither thing or both things being money only. We are aware that transfer of any property
against consideration is called “Sale”, and transfer without consideration is called “Gift”. Now
when a property has been exchanged with another property it is called “Exchange”.
There may be both immovable or movable property, which can be transferred through
exchange. In some cases where transfer of ownership of a property along with some money
against some ownership of another property happen, it also comes under definition of
exchange.
Example: Suppose Mr. A is transferring his residential property in Banaras, valued Rs. 20.00
Lakhs against property of Mr. B in Lucknow of Rs. 17.00 Lakhs. Now in this case Mr. B is
transferring ownership of his property and giving cash of Rs. 3.00 Lakhs against ownership of
property belong to Mr. A. This case also falls under definition of “Exchange”, and not “Sale”.
Note: Oral exchange is not permissible
FEATURES OF EXCHANGE;
1. Transfer of ownership; Exchange involves transfer of ownership in some existing property.
In transfer of ownership, absolute interest of the owner is transferred. A partition of immovable
property is not considered as exchange.
2. Property need not be immovable property; In Exchange properties may be immovable or
movable. An immovable property can be transferred against a movable property and vice versa.
3. Exchange includes “Barter”; Exchange of one immovable property with another immovable
property is known as “Barter” and same in case of transfer of one movable property against
another moveable property.
4. Mode of Transfer;
i. Section 118 provides that a transfer of property in completion of an exchange can be made
only in a manner prescribed for transfer of such property by “Sale”. The formalities of Section 54
(dealing with sale of properties) will be complied with;
ii. Where both properties are of movable, then exchange may be affected by delivery of
properties and registration is not essential;
iii. Where properties are immovable, but value is less than Rs. 100, then registration is optional;
iv. Where the properties exchange are immovable properties and their value are more than Rs.
100/- then registration of exchange of ownership through instrument is necessary.
Note:
1. it is necessary that Deed of Exchange is a valid contract and not void under Contract
Act. Suppose persons are exchanging ownership of their properties to hide act of crime or
financial crime or benami properties then the instrument of exchange become void. [ Srihari
Jena Vs. Khetramohan Jena, AIR (2002) Orissa 195; 2002 (4) Civ LJ 279].
2. When in an exchange of properties, one party did not get possession of the property he was
entitled to receive in exchange, he was held entitled to return property transferred by him. [ Hari
Shankar Mishra Vs. Vice Chairman, Kanpur Development Authority, AIR 2001 All
139 ;2001(42) ALL LR 839].
3. Balakrishnan Bhagwanji Lodi Vs. Prakash Sheshrao Lodi, AIR 2005 NOC 89(Bombay);
it was held that in case of partition of joint family property, once partition is affected, whether by
way of family arrangement or deed of partition, there is severance of jointness of properties.
Two brothers thereafter exchanged properties which were held by them seperately. The
properties being worth more than Rs. 100/- in value. They could exchange them only through
registered instruments.

Rights and liabilities of parties in exchange

Transfer of Property through an exchange also gives the transferor and transferee some rights in order to
protect their interest and safeguard them from being exploited.
Sections 119 and 120 talk about the rights and liabilities of the parties.
In the event that one of the parties to the exchange loses the property received by him as a result of a
flaw in the other party's title, Section 119 (Right of party deprived of thing received in exchange.) allows
for a contingency.
If a party to an exchange (or any person claiming under him) is deprived of the thing received in exchange
due to any flaw in the other party's title, such other party is liable to him (or any person claiming under
him):
(a) for the loss caused by such flaw; or
(b) for the return of the thing transferred at the discretion of the person so deprived if the thing is still in
such other party's possession (or his legal representative or representative).
This remedy, however, is contingent upon the conditions of trade, indicating an opposite purpose. This
covenant cannot be assumed if the parties have explicitly agreed upon the opposite.

Under this provision, the person who has experienced loss because of the other party to the exchange's
faulty title has two options for redress:
 he may seek compensation for his losses;
 he may withdraw the object he has transferred.
However, the second remedy is only accessible in the following three circumstances:
 where the property is still in the other party's possession, or
 in the care of his legal agent; or
 transferred to another person from him without payment;
The Supreme Court in Jattu Ram v. Hakama Singh, AIR 1994 SC 1653, held that entries made by a
patwari in the official records do not create a title, so the opposing party was obligated to return the
property (land) to that extent when there was a defect in the title of the land received by one party to
exchange as a result of false entries made by the patwari and the party was deprived of some portion of
land as per stipulation.
The parties to exchange rights and obligations are not addressed in Section 120. It only states that each
participant has the obligations and rights of a seller with respect to what he delivers and has the
obligations and liabilities of a buyer with respect to what he receives. As a result, the participants in the
exchange have the same rights and obligations as a seller and a buyer in a sale. One thing is given and
another is taken or received in exchange. Each participant thus possesses the obligations and rights of
both the buyer and the seller. The Sales of Goods Act, of 1930's regulations may also apply if the traded-
in properties are movables.

Section 55 of The Transfer of Property, 1882: Rights and liabilities of buyer and seller.—
The transaction of sale is an ordinary contractual transaction and is governed by the Indian Contract Act
1872. Parties may settle any terms of sale, which shall be binding upon them. Where no terms are settled
between the buyer and seller, or the contract is silent on certain terms, the residuary terms have been
provided in Section 55 of the Transfer of Property Act, which will become operational between the buyer
and the seller.
Rights to the buyer
 Benefits of any improvements in the immovable property
 Benefits of increase of value of the immovable property
 Benefits of rents and profits of the immovable property
 Charge on the property in favour of the buyer. The charge would last until the conveyance is
executed by the seller, and possession is given to the purchaser.
 Original title deeds to the property after full payments have been made. This is not applicable
where the buyer is buying part property and the seller retains any part of the property. The buyer
is still entitled to a certified copy of the same.
Liabilities of the buyer
The buyer is liable to pay to the seller
 The purchase money at the time and place of executing the sale deed. Where the immovable
property is not free from encumbrances, the buyer has the right to retain the part of sale
consideration to meet such encumbrances.
 To bear the loss, after the ownership in the property has been passed on to him, arising from
damage, injury or decrease in value in the said immovable property.
 All public charges and rent from the date of sale.
Rights of the Seller
 Seller is entitled to the rents and profits of the immovable property till the ownership is passed on
to the buyer
 Seller has the charge over the immovable property in cases where the consideration is promised
or part paid.
Liabilities of the Seller
  To disclose any material defect in the property, which the buyer could not have detected in
ordinary care
 To produce any document of title of the immovable property when requested by the buyer
 To answer all relevant questions to the buyer in respect of the title or the property sold
 To execute a proper conveyance of the immovable property on receipt of entire sale
consideration at a proper time and place
 To take care of the immovable property and title documents between the date of contract of sale
and delivery of property
 To give possession of the immovable property to the buyer or his authorized representative
 To pay the public charge and rent in respect of the immovable property till the date of sale

Alternative answer below

Section 55 of The Transfer of Property, 1882: Rights and liabilities of buyer and seller.—
In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively
are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as
are applicable to the property sold:
Liabilities of buyer :-
According to section 55(5) of Transfer of Property Act, 1882
1. Liability to disclose facts– To disclose to the seller any fact as to the nature or extent of the
seller’s interest in the property of which the buyer is aware, but of which he has reason to believe
that the seller is not aware, and which materially increases the value of such interest. In the case
of Hazi isha V/s Daya Bhai (A.I.R 1896 mumbai 522) it has been held that it is the duty of the
buyer that he should provide all information related to ownership which he is in know, to the
seller. This arrangement is based on the principle of equity and relations of belief between buyer
and seller.
2. Liability of payment of purchase money- To pay or tender, at the time and place of
completing the sale, the purchase-money to the seller or such person as he directs: provided that,
where the property is sold free from encumbrances, the buyer may retain out of the purchase-
money the amount of any encumbrances on the property existing at the date of the sale, and
shall pay the amount so retained to the persons entitled thereto.
3. Liability to bear damages– where the ownership of the property has passed to the buyer, to
bear any loss arising from the destruction, injury or decrease in value of the property not caused
by the seller.
4. Liability to pay due amount- where the ownership of the property has passed to the buyer,
as between himself and the seller, to pay all public charges and rent which may become payable
in respect of the property, the principal moneys due on any encumbrances subject to which the
property is sold, and the interest thereon afterwards accruing due. In the case of Gangi V/s
Govinda it was held that the buyer is liable to pay all the charges after sale. Due amount includes
revenue, principal, interest etc.
Rights of Buyer:-
According to section 55(6) of transfer of property act 1882
5. Right to get Benefits, Rents- where the ownership of the property has passed to him, to the
benefit of any improvement in, or increase in value of the property, and to the rents and profits
thereof; in “Achtak V/s Parmeshwar” it was decided that the buyer is entitled to get benefits of the
maintenance done by seller.
6. Right to get Interest-unless he has improperly declined to accept delivery of the property, to a
charge on the property, as against the seller and all persons claiming under him, to the extent of
the seller’s interest in the property, for the amount of any purchase-money properly paid by the
buyer in anticipation of the delivery and for interest on such amount; and, when he properly
declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to
him of a suit to compel specific performance of the contract or to obtain a decree for its
rescission.
An omission to make such disclosures as are mentioned in this section, paragraph (1), clause
(a), and paragraph (5), clause (a), is fraudulent.
Liabilities of seller:-
According to section 55(1) of transfer of property act 1882
1. Liability to Reveal Fault:- to disclose to the buyer any material defect in the property or
in the seller’s title thereto of which the seller is, and the buyer is not, aware, and which
the buyer could not with ordinary care discover; In the Case “Ganpat Ranglal V/s
Mangilal Hiralal” High Court held that the seller is not bound to disclose such faults
which is really known by buyer or otherwise he is in know of the information.
2. Liability to Submit Documents:- to produce to the buyer on his request for
examination all documents of title relating to the property which are in the seller’s
possession or power;
3. Liability to Submit Document as to Entitlement:- to answer to the best of his information
all relevant questions put to him by the buyer in respect to the property or the title thereto; in the
case of Laxmidas & Company V/s D.J. Tata it has been held by the Mumbai high court that if
the seller does not answer for such questions then the contract may be rescinded by the buyer.
4. Liability to Excecute Conveyance:- on payment or tender of the amount due in respect of
the price, to execute a proper conveyance of the property when the buyer tenders it to him for
execution at a proper time and place;
5. Liability to Protect Documents:- between the date of the contract of sale and the delivery of
the property, to take as much care of the property and all documents of title relating thereto which
are in his possession as an owner of ordinary prudence would take of such property and
documents.
6. Liability to Deliver up Occupation:- to give, on being so required, the buyer, or such person
as he directs, such possession of the property as its nature admits; in the case Darpan V/s
Kedar Nath it has been held that if Seller does mistakes in delivering up to possession, the buyer
can file a suit against seller.
7. to pay all public charges and rent accrued due in respect of the property up to the date of the
sale, the interest on all encumbrances on such property due on such date, and, except where the
property is sold subject to encumbrances, to discharge all encumbrances on the property then
existing.
Right to Seller:-
According to section 55(4) of transfer of property act 1882
1. Right to get Rent and Profit:- to the rents and profits of the property till the ownership thereof
passes to the buyer.
2. Right to get Interest on Unpaid buying money:-where the ownership of the property has
passed to the buyer before payment of the whole of the purchase-money, to a charge upon the
property in the hands of the buyer, any transferee without consideration or any transferee with
notice of the non-payment, for the amount of the purchase-money, or any part thereof remaining
unpaid, and for interest on such amount or part from the date on which possession has been
delivered. In “Subba Rao V/s Vasudev Shastri” the A.P High Court decided that the seller is
entitled to get interest on selling-money only when the possession of sold property is given to
buyer.

What do you understand by Mortgage ? What are the kinds of Mortgage ? Explain.
Explain various kinds of mortgage under the Transfer of Property Act, 1882.
The term transfer includes transfer through sale, mortgage, lease, actionable claim, gift, or
exchange.
Mortgage Under The Transfer of Property Act, 1882
Mortgage is an old English term derived from two French words “mort” and “gage” meaning
“dead pledge.” This means that a debtor who owes money to the creditor considers property he
has pledged as a security to have no value or as good as “dead,” until the debt is paid in full.
Section 58 (a) of the Transfer of Property Act, 1882: A mortgage is defined as the transfer
of an interest in the specific immovable property for the purpose of securing the payment of
money advanced or to be advanced by way of loan, an existing or future debt, or the
performance of an engagement which may give rise to a pecuniary liability.
In simple words, mortgages refer to a debt instrument wherein immovable property is provided
as security until the debt amount is cleared. This transfer of interest in the immovable property
may be for money that is advanced by way of loans or in relation to payment of existing or future
debts.
Mortgages can be placed only on immovable properties and such immovable properties include
land and other benefits arising out of things attached to the earth such as buildings, machinery
etc. However, growing crops, standing timber, and grass are not included in such definition as
these are cultivated for a particular use and will be cut or removed for the same thereby
becoming movable property.
As per the Transfer Of Property Act, 1882 there are 6 kinds of mortgages and they are as
follows –
1. Simple Mortgage
Section 58(b) defines simple mortgage as a mortgage wherein there is no transfer of
possession of the property. Instead, in case the mortgagor fails to repay the loan amount, the
mortgagee has the right to have the specific immovable property sold through a court order.
Thus, the key feature of such kind of mortgage is –
 Does not involve the delivery or transfer of possession of the property
 Property remains with the mortgagor
 The mortgagor expressly or impliedly gives the mortgagee power to sell the immovable
property that is pledged as security in case of non-payment
 Though the mortgagee has the power to sell the immovable property he can not do so
without the intervention of the court.
 A simple mortgage has to be made only through a registered document irrespective of
the amount of money that is secured as per Section 59 of the Transfer Of Property Act,
1882.
In the case of Mathai Mathai v Joseph Mary, a certain property was mortgaged as collateral
security for stridhan. The mortgagor was supposed to pay interest towards repayment of the
loan amount. However, the deed did not consist of any provision about the delivery of
possession and thus, the court held that such deed was to be considered as a simple
mortgage.
In the case of Kishan Lai v Ganga Ram, the court reinstated that under section 58 (b) of the
Transfer Of Property Act, 1882 the words “right to cause the property to be sold” implies that
such power of sale can not be exercised by the mortgagee arbitrarily and requires the
intervention of the court.

2. Mortgage by conditional sale

Section 58(c) talks about mortgage by conditional sale. This type of mortgage works on the
condition that the mortgagor and mortgagee agree to a prescribed date post which failure of
payment will result in the absolute ostensible sale of the mortgaged property. Or in case, such
payment is made successfully on the prescribed date such sale will be void and the property will
have to be transferred back to the mortgagor.
The term ostensible means appearing to be true but is not so. Over here, the ostensible sale
means a sale which apparently looks like a sale but in reality is a security for debt. The key
essentials of such mortgages are as follows –
 There must exist a debt resulting in a debtor-creditor relationship between individuals
concerned.
  On the failure or default of payment of the mortgage money on a certain prescribed date,
the sale of such immovable property shall become absolute.
 In case payment of such mortgage money is made on the prescribed date the sale will
become void and the property will be transferred back to the mortgagor
 The conditions must be mentioned in the same document.
The mortgage deed must be executed with such conditions that are mentioned in the section.
In the case of Tamboli Ramanlal Moti Lal v Gharchi Chimanlal Keshavlal, the court held that
in order for the mortgage to be considered as a mortgage by conditional sale the existence of
the debt should be inferred from the very nature of conditions present in the mortgage deed.
The condition of absolute ostensible sale in case of default in payment and return of property in
case of payment prior to or on prescribed date should be mentioned. If such deed does not
reflect a debtor-creditor relationship then such deed will not be considered as mortgage by
conditional sale.
In the case of Rama v Samiyappa, the court held that an essential element of this form of
mortgage is that on default of payment the mortgaged property becomes the absolute property
of the mortgagee and there is no personal liability for the repayment of the debt on the part of
the mortgagor.

3. Usufructuary mortgages
Usufructuary mortgage is a type of mortgage where the mortgagor delivers the possession and
right to enjoy an income of and from the property to the mortgagee. If the mortgagor is not in a
position to give immediate possession, it is sufficient if he gives the right to possession.
For instance, if a farmer mortgages the agricultural land, then the lender will have rights on the
produce till the land is in His possession.
As per Section 58 (d) of the Transfer Of Property Act, 1882, Usufructuary mortgage is a type
of mortgage wherein the mortgagor transfers/delivers or agrees to transfer/deliver the
possession of such mortgaged property to the mortgagee and gives him the following authority
or powers –
 To retain such possession of mortgaged property up until the mortgage money is fully
paid
 To be entitled to receive the whole or any part of the rents and profits accruing from the
property that is mortgaged
 To appropriate such rents or profits; (i) in lieu of interest, or (ii) in payment of the
mortgage money, or (iii) partly in lieu of interest and partly in lieu of the mortgage money.
Thus, some key features or essentials of such mortgages is as follows –
 There is delivery of possession of the mortgaged property
 Personal liability of the mortgagor is not involved. The property is sufficient for the
mortgagee
 The mortgagor is entitled to redeem the mortgaged property when the mortgaged
amount is fully paid or the debt is discharged by way of rents and profits received by the
mortgagee.
 The mortgagee can not foreclose or sue for sale of mortgage property
 There is no fixed time period for the repayment of money.
 If such mortgage is for Rs. 100 or more, it must be registered but if it is less than Rs. 100
it may be by a registered deed or by delivery of property.
In the case of Prabhakaran v M Azhagiri Pillai, the mortgagor had transferred the interest of
his property to the mortgagee with authority to retain possession and enjoy the rents and profits
of the property until the amount equal to the debt is realized. The court held that beyond this no
personal liability of the mortgagor will be involved in the Usufructuary mortgage.
In Hikmatulla v Imam Ali, the court held that the mortgagee is entitled to hold on to the
mortgaged property until the money due is fully paid. The time period for payment of the due
amount is never fixed in Usufructuary Mortgage and if such time period is mentioned it ceases
to be a Usufructuary mortgage.
In Chathu v Kunjan, the court held that there is no personal liability of the mortgagor involved
to repay the mortgage amount and thus he can not be personally sued for the same.

4. English Mortgage
As per Section 58 (e) of the Transfer Of Property Act, 1881 in an English mortgage the
mortgagor binds himself to repay the mortgage money on a certain prescribed date, and
transfers the said mortgaged property to the mortgagee, but is subject to a condition that the
mortgagee will re-transfer it to the mortgagor when the mortgage money is fully paid.
Thus, the English mortgages has the following essentials:
 There is an absolute transfer of property by way of delivery of possession
 Personal liability of the mortgagor exists
 The mortgaged property is transferred absolutely to the mortgagee
 The transfer is subject to the provision that the mortgagee will re-transfer the property to
the mortgagor upon making payment of the mortgage money as agreed
In the case of Narayan v Venkatarama[8] the court held that the English mortgage has three
essential ingredients, which are –
 The mortgagor is personally bound to repay the money
 The property to the mortgagee is transferred absolutely
 The property will be transferred back once the dues have been settled.

5. Mortgage by deposit of title deeds

As per section 58 (f) of the Transfer Of Property Act, 1882 Mortgage by deposit of title deeds is
a kind of mortgage wherein a person delivers documents of title with regard to the immovable
property to the mortgagee or creditor as a form of security. Such a transaction is called a
mortgage by deposit of title deeds. This mortgage does not require registration. Some of its
essentials are as follows –
 Such mortgage is valid in the towns of Calcutta, Madras, Bombay, and in any other town
specified by the state government concerned.
 This mortgage does not require registration
 Merely depositing the title deeds of the immovable property to the mortgagee is enough.
In the case of United Bank Of India v Messra Lekharam Sonam and Co., the court held that
mere submission of the title deed with regard to the property is the only essential necessary for
it to be considered as a security. There is no other additional requirement.

6. Anomalous Mortgage
As per Section 58 (g) mortgage which 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 a mortgage includes
a mortgage formed by the combination of two or more types of mortgages as explained above.
In the case of Hathika v Puthiya Purayil Padmanathan, a mortgagor borrowed a certain
amount from the mortgagee and such property was also handed over to him. The mortgage
amount was to be paid within a period of 6 months failing which the mortgagee had the right to
sell the property and realize the amount. Though the document described it as a usufructuary
mortgage the court held it to be an anomalous mortgage as it had characters of simple
mortgage as well as Usufructuary mortgage.
What do you understand by the Easement ? Discuss the various types of Easement.
Define easement and explain essential features of such right.
‘An easement is always a right in rem and never in personam.’ Explain.
Right in Rem or Jus in Rem
Anyone signing a contract possesses rights in Rem or intangible rights. They have this right against the whole globe.
Basically, it prevents a person’s stuff from being stolen by anyone in the universe.
As a result, we refer to this type of right as a negative one for the simple reason that it provides everyone with the
right to be alone. This means that no one else has the right to meddle with the right(s) of a person. These are rights
residing in individuals and can be availed against the other parties.
Right in Personam or Jus in Personam
Right in Personam is the polar opposite of Right in Rem. Right in Personam confers legal rights on a single person or
party to a contract. It usually corresponds to a responsibility placed on the mentioned person or group.
Difference Between Right in Rem and Right in Personam
 Rights in Rem: These are real rights; Rights in Personam: These are personal rights.
 Rights in Rem: These rights are available against common/globe; Rights in Personam: These rights are
available against a particular party.
 Rights in Rem: This is the subject matter of right in personam; Rights in Personam: This is the subject
matter of right in rem.
Example: Right of Shyam after he signs a contract with Ram for a piece of land purchase is right in
personam. Whereas after execution of sale deed the right will be right in rem available against the whole
world.
 Rights in Rem: No relationship is established; Rights in Personam: Relationship is established.
 Rights in Rem: These are negative rights; Rights in Personam: These are positive rights.
 Rights in Rem: These are general rights; Rights in Personam: These are special rights.

Examples of Right in Rem

1. X purchased a car. X has the Right in Rem with respect to the car. No party can disturb the Right in Rem of X.
2. Y gifted a landed (landed means owning much land, especially through inheritance) property to his son Z. Z has
Right in Rem with respect to the gifted property.
Examples of Right in Personam
1. A sold his house to B for Rs. 25 lakhs. Hence, A’s right to receive the sale amount from B is A’s personal right and
no other party is involved. Hence this is Right in Personam.
2. B rented his farmhouse to C for a monthly rent of Rs. 5000. Hence, B’s right to collect rent from C is his personal
right, and no other party is involved. Hence, this is Right in Personam.

“An Easement is a Right”

 Easement is a right possessed by the owner of a land (dominant land),
 to use the land of another (servient land),
 for the beneficial enjoyment of the (dominant) land.
“Easement Does Not Confer Ownership or Possession”
 No Ownership is bestowed in the (servient) land (AIR 2004 All 359; AIR 1925 Bom 335).
 No Possession obtained in the (servient) land. (2011 (2) KLT 605; AIR 1925 Bom 335)
 No Interest is created in the (servient) land. (2003 (1) KLT 320; AIR 1954 All 393).
Easement is Well Recognised; but Circumscribed by Law
 Easement is a limited right to ‘use’ or ‘enjoy‘ another’s land.
 It is to do, or to prevent to do, some specific thing.
 It is to be exercised in a way least onerous to the ‘another’s land’.
 It is not a right to build and enjoy.
 The right gained cannot be enlarged.
 That is, an easement of way to a particular (dominant) property cannot be extended to another property by
the dominant owner; an easement for residential purpose cannot be enlarged for an industrial purpose.
 Servient owner can use his land in any manner (without disturbing enjoyment of the easement).
Easement is a right held by one property owner to make use of the land of another for a limited purpose, as right
of passage. There are three main types of easement property rights: Right of Way, Right of Light, and Right of
Air.
Section 4 of The Indian Easements Act, 1882: “Easement” defined.—
An easement is a right which the owner or occupier of certain land possesses, as such, for the beneficial enjoyment
of that land, to do and continue to do something, or to prevent and continue to prevent something being done, in or
upon, or in respect of, certain other land not his own.
Dominant and servient heritages and owners.— The landowner that enjoys certain rights over the property that is not
owned by them legally is known as the dominant owner. Hence, the land in this respect is referred to as the dominant
tenement or heritage. The landowner that cannot restrict the dominant owner from using their land is known as the
servient heritage or servient tenement. The actual landowner in this case is referred to as the servient owner.
Remember, a servient estate serves the other. And a dominant estate dominates the other through holding an
easement of the other property. For instance, A owns a piece of land and has passed the easement right over the
land to B. Here A is the servient owner and has the servient heritage. B is the dominant owner and enjoys the
dominant heritage. See the colourful picture below.

Illustrations
(a) A, as the owner of a certain house, has a right of way either over his neighbour B’s land for purposes connected
with the beneficial enjoyment of the house. This is an easement.
(b) X’s right to go on his neighbour Y’s household for fetching water from the well for the purpose of his own
household is a right of easement. Here, the way to the well is through Y’s land only. Hence, X has an easementary
right to pass through Y’s household.
(c) A, as the owner of a certain house, has the right to conduct water from B’s stream to supply the fountains in the
garden attached to the house. This is an easement.
(d) A, as the owner of a certain house and farm, has the right to graze a certain number of his own cattle on B’s field,
or to take, for the purpose of being used in the house, by himself, his family, guests, lodgers and servants, water or
fish out of C’s tank, or timber out of D’s wood, or to use, for the purpose of manuring his land, the leaves which have
fallen from the trees on E’s land. These are easements.
(e) A dedicates to the public the right to occupy the surface of certain land for the purpose of passing and
repassing. This right is not an easement.
(f) A is bound to cleanse a water course running through his land and keep it free from obstruction for the
benefit of B, a lower riparian owner. This is not an easement.
NB: If you own land alongside a river, lake or other water course you are legally termed a riparian owner.
Essential elements of easement –
• Dominant Heritage and servant heritage :- For the enjoyment of right of easement, necessary existence of two
properties i.e dominant and servient heritage is a must. This is because as per the definition, it is the right exercised
by the owner or occupier of one land for enjoying the benefit of his/her land, over the land of some other person.
Dominant and servient heritage cannot be one. Thus, the existence of two properties and that to be separate
from each other is essential.
• Easement Negative or Positive:- Easements can be both positive or negative. Former refers to a right through
which the dominant owner does some act to exercise the right over the land of the servient owner. Whereas, the
latter denotes an act of prevention. In a negative easement the dominant owner prevents or restricts the servient
owner from doing certain act or acts.
In a right of easement an owner of dominant heritage can do an act or prevent the servient owner from doing
something but he cannot bind the servient owner to do something for him.
The easementary right exists only when two heritages are adjacent to each other. It is a right in rem, which
means a right available against the whole world. Easement as a right is always annexed to the dominant
tenement. It is a right of re-aliena which means a right over a servient tenement and not on one’s own land.
• Beneficial enjoyment: The object of easements is that the dominant owner enjoys it in a way which includes
express and implied benefits.
Section 5 of The Indian Easements Act, 1882: Continuous and discontinuous, apparent and non-apparent,
easements.—
Section 5 of the The Indian Easements Act, 1882 classifies the easements as follows–
Continuous or Discontinuous
Continuous easements are the one whose enjoyment may be continued without the intervention of any human
conduct or act of a man. There is no interference by a man and it adds special quality to the property. While, on the
other hand, right of easement for the enjoyment which an interference of a man is required is known as
discontinuous. In this kind of easement, it is necessary that a human act is done on the servient heritage.
Apparent or Non- Apparent
An apparent easement is one the existence of which can be seen through a permanent sign. It can be visible by a
careful examination and on reasonable foresightedness. It is also known as express easement. An inspection is
required to check the existence of a right. For example- There is a drain from A’s land to B’s land and from there
it led to an open yard. This can be visible through a clear inspection and is an apparent easement.
Whereas, a non-apparent easement is just opposite of what apparent easement is. This kind of easement is not
visible through an inspection. There is no permanent sign as such. The right is in use but is not visible and thus, is
known as an invisible easement. For example, A’s right annexed to A’s land to prevent B from building on his
own house.
Another example to explain non-apparent easement is that the right to stop construction over a certain
height.
Illustrations
(a) A right annexed to B’s house to receive light by the windows without obstruction by his neighbour A. This is a
continuous easement.
(b) A right of way annexed to A’s house over B’s land. This is a discontinuous easement.
(c) Rights annexed to A’s land to lead water thither across B’s land by an aqueduct and to draw off water thence by a
drain. The drain would be discovered upon careful inspection by a person conversant with such matters. These are
apparent easements.
(d) A right annexed to A’s house to prevent B from building on his own land. This is a non-apparent easement.
An Easement may be –
Permanent easement:- It is of permanent nature. It is the general rule of easement to be permanent. A limit or
condition is exception .
Limited easement:- It is temporary easement . It is meant for limited period or purpose.
Conditional easement :- It is such easement which depends upon fulfillment depends upon certain conditions.
What do you understand by ‘Customary easements’ ?
Section 18. Customary easement.—An easement may be acquired in virtue of a local custom. Such easements are
called customary easements.
Illustrations
(a) By the custom of a certain village every cultivator of village land is entitled, as such, to graze his cattle on the
common pasture. A having become the tenant of a plot of uncultivated land in the village breaks up and cultivates
that plot. He thereby acquires an easement to graze his cattle in accordance with the custom.
(b) By the custom of a certain town no owner or occupier of a house can open a new window therein so as
substantially to invade his neighbour’s privacy. A builds a house in the town near B’s house. A thereupon acquires an
easement that B shall not open new windows in his house so as to command a view of the portions of A’s house
which are ordinarily excluded from observation, and B acquires a like easement with respect to A’s house.

The foundation of the Doctrine of Election is that a person taking the benefit of an
instrument must also bear the burden. Explain.
Doctrine of Election
The law of estoppel underpins/support the doctrine of election.
It is based on the concept that one cannot approbate (approve) and reprobate
(disapprove) at the same time.
The doctrine is known as estoppel in pais (or equitable estoppel).
The doctrine of election is stated in transfer of property act 1882 in section 35 and within 180-
190 of Indian succession act.
The word ‘election’ here refers to making a choice between two distinct rights or lines of
conduct.
Section 35 of the Transfer of Property Act, 1882 bestows on the true owner two
alternatives with respect to it, viz., to either authorize the transferor or to defer from it.
In the event where the owner differs or rejects such transfer, he must give up all benefits
created by such transfer. In other words, the owner must abandon the benefits and return them
to the transferor (who may give them back to the disappointed transferee).
More precisely, if the owner enjoys a certain benefit, he or she must also bear its burden.
The doctrine is in line with the law of equity, as per which, the owner cannot enjoy both the
benefit as well as the property in question, since it would be unjust to the transferee.
Section 35 of the transfer of property act, 1882; Election when necessary: —Where a
person professes to transfer property which he has no right to transfer, and as part of the same
transaction confers any benefit on the owner of the property, such owner must elect either to
confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so
conferred, and the benefit so relinquished shall revert to the transferor or his representative as if
it had not been disposed of, subject nevertheless, where the transfer is gratuitous, and the
transferor has, before the election, died or otherwise become incapable of making a fresh
transfer, and in all cases where the transfer is for consideration, to the charge of making good to
the disappointed transferee the amount or value of the property attempted to be transferred to
him.
Illustrations
The farm of Sultanpur is the property of C and worth Rs. 800.
A by an instrument of gift professes to transfer it to B, giving by the same instrument Rs. 1,000
to C. C elects to retain the farm. He forfeits the gift of Rs. 1,000.
In the same case, A dies before the election.
His representative must out of the Rs. 1,000 pay Rs. 800 to B.
The rule in the first paragraph of this section applies whether the transferor does or does not
believe that which he professes to transfer to be his own.
A person taking no benefit directly under a transaction, but deriving a benefit under it indirectly,
need not elect.
A person who in his one capacity takes a benefit under the transaction may in another dissent
therefrom.
Illustration: A property worth Rs. 13,00,00,000 belonging to Z is transferred by X to Y for Rs.
31,00,00,000. X, in the deed, confers the benefit of Rs 31,00,00,000 on Z. Z elects to retain the
property. Hence, Z must relinquish the benefit so conferred.
Essential Conditions for Application of the Doctrine of Election
For the doctrine of election to apply, the conditions listed under must be present:
 Firstly, the transferor must neither be the owner of the property transferred nor
‘authorized by the owner’ to transfer the property. The transferor may even believe the
property to be his own or that he is authorized to transfer it, while in reality, he may not
be;
 Secondly, the property of the owner must be transferred to a third person (transferee) by
the transferor;
 Thirdly, the transfer must be for some consideration.
 Fourthly, some benefit must be conferred upon the owner;
 Fifthly, the two transfers, namely the transfer of the owner’s property to the transferee
and the conferment of benefit on the owner of the property, must be accomplished
through the same transaction, instrument, deed, or will.
 Sixthly, the owner must have propriety interest in the property; Proprietary interest
encompasses the rights, profits, advantages, and ownership shares associated with full
or partial ownership of an asset.
 Seventhly, the transferee must get the immovable or movable property ‘directly’. If the
transferee gets an ‘indirect’ benefit, the election does not apply.
 Eighthly, the transfer must be accepted absolutely and in its entirety as a whole and
must confirm to the provisions of the deed and renounce rights inconsistent with it. The
same was reiterated in the case, Beepathuma v. Kadambolithay. The precedent for the
principle was established in the case, Codrington v. Codrington by Lord Cairns L.C.
 Ninthly, if the owner elects to disapprove the transfer, the benefit must revert to the
transferor, who would be responsible to make good the loss of or compensate the
disappointed transferee. If the transferor dies or becomes incapable of transferring
before the election, then his legal representative must take up the responsibility.
Explain the Doctrine of feeding the grant by estoppel.
Doctrine of Feeding the Grant by Estoppel: This general rule states that no property may be
transferred by anyone who is not authorized to do so. As a result, if a person lacks title to
property, he cannot validly transfer it to another. A feeding grant by estoppel is a grant made by
an incompetent person who convinces the other that he is competent. When the incapacity is
gone, the estoppel is fed, and he is barred from claiming incompetency at the time of initial
transfer. Even so, due to the "adjustment of equities" between such an individual and the
transferee, this requirement has been modified in fact. One of the exceptions to this provision is
stated in Section 43 of the Transfer of Property Act.
Section 43 of The Transfer of Property Act, 1882: Transfer by unauthorised person who
subsequently acquires interest in property transferred.—Where a person fraudulently or
erroneously represents that he is authorised to transfer certain immovable property and
professes to transfer such property for consideration, such transfer shall, at the option of the
transferee, operate on any interest which the transferor may acquire in such property at any
time during which the contract of transfer subsists.
Nothing in this section shall impair the right of transferees in good faith for consideration without
notice of the existence of the said option.
Illustration
A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z, representing
that A is authorised to transfer the same. Of these fields Z does not belong to A, it having been
retained by B on the partition; but on B's dying A as heir obtains Z.C, not having rescinded the
contract of sale, may require A to deliver Z to him .

The doctrine of feeding the grant by estoppel is based on the maxim "nemo dat quod nonhabet,"
which means that no one can give to another what he does not have himself.
A person who has no interest in or power over a property is not authorized to transfer it. If he
does, the transfer will be considered to have been made by an unauthorized person. When he
acquires that property, he cannot deny transferring it to the person who he erroneously or
fraudulently told that he would transfer that property to him, because the former will be
prevented from retracting his previously made statement, and now that he has obtained that
property, he must transfer it to the person to whom he promised to transfer that property.
Section 43 is based on two guiding principles −
 English Common Law of Estoppel
 Principle of Equity, which states that when a person promises to fulfil a thing beyond his
capacity, he must do it when he gets the ability.
Estoppel is a rule of evidence that prevents a person from rejecting a statement he makes when
that statement is used against him. Even so, the Transfer of Property Act depicts the
relationship between the transferor (both before and after acquiring the right to transfer) and the
transferee for value without providing any notice.
Analysis of section 43 and its essential ingredients
1. The transferor makes a representation to the effect that he is competent to the
transfer a particular piece of immovable property.
2. This representation may be fraudulent or erroneous.
3. This representation is not true.
4. The transferee believes or is made to believe that the representation is correct and
the transferor is competent to transfer the property, i.e he does not know of the defect
in the title or lack of capacity thereof.
5. The transferor professes to transfer the property for a consideration.
6. The transferee acts on the representation and enters into the contract.
7. The transferor subsequently acquires competency to transfer the same property.
8. The contract is subsisting.
9. The property is still with the transferor, i.e he has not transferred it to a bonafide
purchaser who takes it without actual or constructive notice of this earlier contract
between the transferor and transferee.
10. The transferee exercises the option to signify his intention to go ahead with the
contract.
The transfer shall become valid and enforceable in the court of law.
Discuss the doctrine of part performance with exceptions.
The Doctrine of Part Performance is an equitable principle designed to prevent fraud and unlawful
exploitation resulting from the non-registration of a document. This doctrine operates under the maxim
that equity regards an action as if it has been done, which should have been done.
Essentially, the doctrine states that the transferor or any party claiming through them is barred from
enforcing any rights against the transferee and those claiming under them, regarding the property that the
transferee has taken possession of or continued to possess, except for rights explicitly provided for in the
contract terms.
Section 53A of the Transfer of Property Act of 1882 seeks to protect prospective transferees by
allowing them to retain possession of the property against the rights of transferors who, after the
execution of an incomplete instrument of transfer, fail to complete it in the manner specified by law,
without the transferee's fault.
Doctrine of Part Performance
The doctrine of part-performance was inserted in Section 53A by the Amending Act of 1929. This
doctrine, unlike in England, does not merely give rise to equity rather it establishes a statutory right as
well. However, this right is limited in two ways compared to English equity.
Firstly, it states that the contract must be in writing and that it is only available as a defense.
Second, the Supreme Court observed that the protection provided by Section 53A only applies to the
transferor. It prohibits the transferor from interfering with the possession of the proposed transferee, who
has been put in possession under the agreement.
Likewise, the doctrine of part-performance, also known as "equity of part-performance," if a person has
taken possession of an immovable property on the basis of a contract of sale and has either performed
or is willing to perform his part of the contract, he cannot be evicted from the property because the sale
was unregistered and the legal title has not been transferred to him. This doctrine is founded on the
principle that equity looks at what is done rather than what should have been done.
Essential Elements of the Doctrine of Part Performance
The essential elements of the doctrine of part performance are −
 A written agreement for the transfer of real estate;
 Consideration is required;
 The agreements shall state the terms of the exchange with reasonable conviction.
 The transferee should have taken possession as a result of this agreement or proceeded to take
possession if he was already in possession of the property at the time;
 The transferee must have performed some act to facilitate the agreement; and
 The transferee must have completed or be willing to complete his portion of the arrangement.
Example:
‘A’ contracts to transfer his immovable property to ‘B’ and give ‘B’ ownership of the property prior to the
completion of a regular sale deed. If ‘A’ later refuses to execute a regular document of sale and files an
eviction complaint against ‘B’, the contract is considered to be partly performed.
The Doctrine of Part Performance - When Applies?
In Vasanthi v. Venugopal case, the Supreme Court emphasized that the following conditions must be
followed for the doctrine of partial performance to apply −
 There should be an agreement, appropriately composed and marked, by the transferor or on his
behalf to transfer any immovable property for consideration, from which the terms necessary to
establish the exchange may be determined with reasonable conviction.
 The transferee must have taken possession of the property or any part of it, or if already in
possession, must have proceeded to take possession in part performance of the agreement and
must have performed some act in advancement of the agreement.
 The transferee has more than likely performed or is prepared to execute his part of the
agreement.
 This doctrine has no bearing on any subsequent transferee's right to consideration without notice.
Exception to Section 53A
This section provides an exception to the rule that the rule laid out in this section has no application to or
affects the rights of a subsequent transferee for consideration who has no notice of the contract or of the
part-performance thereof. Even so, the doctrine can be invoked against a gratuitous transferee (one who
receives no consideration) as well as a transferee for value if he is aware of the contract or its part
performance.

The doctrine stipulated under Section 53A does not apply to or have any impact on the rights of a
subsequent transferee for consideration who is unaware of or has no knowledge about the terms of the
contract or its part performance. In other words, the doctrine of part performance does not apply to those
cases where the transferee who made a contract for the transfer of immovable property for consideration
has no knowledge, neither actual nor constructive notice, of the contract or its part performance.
Any claim the transferee would have against the transferor under the provisions of Section 53A of the Act
would be useless if the recipient of the transfer is a genuine transferee for consideration who was
unaware of the transaction.
In the case of Hemraj v. Rustomji (1952), the Supreme Court ruled that the Proviso to Section 53A
protects and preserves the right of a bonafide transferee for consideration. This means that any rights the
transferee under the unregistered document may have on the basis of the transferor’s partial
performance of the contract would be useless against a bona fide transferee for value who had no
knowledge of the prior transaction. The party claiming the benefit of part performance is required to
demonstrate that the subsequent transferee received notice.
The right under Section 53A is not negated, according to the Supreme Court, even if the lawsuit to
enforce the terms of the sale contract has expired or the claim that the title was acquired by adverse
possession was rejected because the possession was unlawful.
What do you understand by Subrogation ? What are the kinds of Subrogation ?
Section 92 of the transfer of property act, 1882: Subrogation.—
Any of the persons referred to in section 91 (other than the mortgagor) and any co-mortgagor
shall, on redeeming property subject to the mortgage, have, so far as regards redemption,
foreclosure or sale of such property, the same rights as the mortgagee whose mortgage he
redeems may have against the mortgagor or any other mortgagee. The right conferred by this
section is called the right of subrogation, and a person acquiring the same is said to be
subrogated to the rights of the mortgagee whose mortgage he redeems. A person who has
advanced to a mortgagor money with which the mortgage has been redeemed shall be
subrogated to the rights of the mortgagee whose mortgage has been redeemed, if the
mortgagor has by a registered instrument agreed that such persons shall be so subrogated.
Nothing in this section shall be deemed to confer a right of subrogation on any person unless
the mortgage in respect of which the right is claimed has been redeemed in full.
Subrogation is a person's right to stand in the place of a creditor once he has paid off his
liabilities.
Subrogation happens only through redemption in the case of a mortgage.
To be entitled to subrogation, a person must pay off the total amount of a prior mortgage.
A claim for partial subrogation cannot be based on a partial payment of the mortgage debt.
Section 92 of the Transfer of Property Act of 1882 expressly recognizes and explains the right
of subrogation. Subrogation doctrine is based on the principles of equity, justice, and good
conscience. The basis of the doctrine is that the party that pays off a mortgage gets all of the
mortgagee's rights.
Doctrine of Subrogation in India
The term "subrogation" means to substitute. Any individual other than the mortgagee or co-
mortgagor who has an interest in the mortgaged property and redeems the mortgage is entitled
to be substituted in place of the mortgagee. In other words, the person who pays off the
mortgage debt steps into the shoes of the mortgagee (creditor). This is called subrogation or
substitution of that person in place of the mortgagee for the purpose of redemption, foreclosure,
or sale.
The doctrine of subrogation under Section 92 had been included in the Transfer of Property Act
by the Amendment Act of 1929. Before this amendment, only the principles of the equitable
doctrine of subrogation existed and were applied in India. The Calcutta High Court explained
the nature and scope of the doctrine of subrogation in Bisseswar Prasad v. Lala Sarnam Singh
(1910), 6 Cal. LJ 134 −
“The doctrine of subrogation is a doctrine of equity jurisprudence. It does not depend upon the
privity of contract, express or implied, except in so far as equity may be supposed to be
imported into transaction and thus raise a contract by implication. It is founded on the facts and
circumstances of each particular case and on the principles of natural justice.”
Essential Requisites for a Valid Claim for Subrogation
The following are the basic elements of a valid subrogation claim −
 A person claiming the right must have an interest in or charge over the mortgaged property
that entitles him to redeem the mortgage.
 He must redeem the mortgage.
 A person must have given money to a mortgagor to redeem a mortgage with an agreement
in writing that he will be subrogated to the rights of the mortgagee whose mortgage is
discharged.
Kinds of Subrogation
Section 92 of the Transfer of Property Act, 1882, provides for two kinds of subrogation −
 Legal subrogation
 Conventional Subrogation
Legal subrogation arises by operation of law, but conventional subrogation occurs when the
person paying off the debt has no interest to protect but provides the money with the agreement
that he will be subrogated to the creditor's rights and remedies.
Legal Subrogation
Legal subrogation arises by operation of law and is based on the reimbursement principle.
When one person intends to make a payment that another person is legally bound to make, that
person must be reimbursed when he makes the payment.
Legal subrogation may be claimed by the following persons −
 Puisne mortgagee
 Co-mortgagor
 Surety
 Purchaser of equity by redemption
Puisne Mortgagee
Mortgagee is someone who has a right to redeem the mortgaged property under the earlier
mortgage. He may file a suit to redeem the prior mortgage. If a prior mortgagee wins a decree
without first suing the puisne mortgagee, he gains the right to sue for redemption of the earlier
mortgage.
Co-mortgagor
A co-debtor is also a co-mortgagor. He is only liable for his share of the debt. When he
redeems his own share and also pays off the share of the other mortgagor, he obtains the rights
to be subrogated in place of the other mortgagor.
Surety
An individual who serves as a surety in a mortgage for loan repayment in the case that the
mortgagor fails to do so has the right to redeem the mortgaged property under Section 91 of the
Transfer of Property Act. When the mortgagor's surety redeems the property, he is subrogated
to the creditor's position and rights.
Purchaser of Equity of Redemption
There were some doubts regarding whether the purchaser of equity of redemption might be
subrogated. The mortgagor's equity of redemption is seen as a property that he can sell or
assign. The purchaser of such equity becomes the owner of the property.
Conventional Subrogation
When a stranger makes a payment to a creditor with the anticipation of being substituted in
place of the creditor, he is entitled to such substitution. However, the generally accepted
doctrine is that a conventional subrogation can result only from a direct agreement to that effect
made with either the creditor or the debtor, and that it is not sufficient for a person paying the
debt of another to do so merely with the understanding that he will be subrogated to the rights
of the creditor, though if the agreement has been made, a formal assignment is not required,
and the agreement may be shown by subsequence.
Conclusion
There is no registration necessary to confer the rights of subrogation that apply in a case where
a person has a virtue interest in the property and is entitled to redeem a mortgage on it by
discharging the mortgage. A claim to legal subrogation may be sustained.
A claim for conventional subrogation, on the other hand, can be filed only if the convention or
agreement is in writing, and the writing is registered only if a person who has no interest in the
property and has no right to redeem provides money to the mortgagor with the aim of
discharging a mortgage. This change was brought about after the amendment to Act. A claim
for conventional subrogation is based on the declared agreement prior to amendment.
Frequently Asked Questions (FAQs)
Q1. What are the essentials of the doctrine of subrogation?
Ans. The doctrine of subrogation grants the insurer the right to sue a third party in the insured's
name. When a letter of subrogation limits the subrogation conditions between the insurer and
the insured, the letter governs both parties' rights.
Q2. What is subrogation under the Indian Contract Act?
Ans. According to Section 140 of the Indian Contract Act of 1872, after the guarantor has paid
off the principal debtor's debt, he steps into the shoes of the creditor and has all the rights that a
creditor has against the principal debtor.
Q3. What is an example of the principle of subrogation?
Ans. It can be claimed when the insured individual has suffered injuries due to a third party's
mistake and intends to bear their expenses. For example, if an insured person receives Rs. 5
lakh while claiming their health insurance, the company can collect the same amount from the
defaulter as part of subrogation.

Which types of claims comes under the meaning of actionable claims ?

In general terms, an actionable claim is a debt or claim for which the person can take an action
and also approach the Court for recovery his debt or claim.
An actionable claim is one that seeks payment for a debt owed in connection with a benefit
from moveable property that is not already in the claimant's possession.
In a nutshell, an actionable claim is one that the creditor may assert against the claimant for any
sort of debt—whether actual or constructive—that is not secured by a mortgage of immovable
property, hypothecation of moveable property, or a pledge of movable property. The claimable
debts must be acknowledged by the civil courts as justification for relief. A court of law may
enforce actionable claims.
Section 3 of The Transfer of Property Act, 1882 defines “actionable claim” as a claim to
any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or
pledge of moveable property, or to any beneficial interest in moveable property not in the
possession, either actual or constructive, of the claimant, which the Civil Courts recognise as
affording grounds for relief, whether such debt or beneficial interest be existent, accuring,
conditional or contingent;
For example, if A sells his car to B and B has completed his obligation, that is, B has forwarded
the consideration from his side, then B has the right to possess the car; but if B is unable to
acquire possession, then B can approach the Court to claim this possession.
But if the movable property is already in the possession of the claimant, either actual or
constructive, then he cannot claim possession.
So, if in the previous example, A had given the car keys to B, then it can be said that B has
constructive possession, and hence, B cannot approach the Court to claim possession.
Moreover, the right to possess of the Claimant must be a legal right, which is recognized by the
law.
Another example, for instance, if a person of unsound mind or a minor, A sells 100 bags of
wheat (or any other movable property) to Mr. B, and Mr. B also forwards the consideration from
his side, that is Mr. B fulfils his obligations, then also Mr. B cannot claim possession.
This is so because Mr. B does not have a legal right to possess, as A does not have the
capacity to contract, and the agreement between A and Mr. B is void ab initio.
Now, since the right to possess of Mr. B is not recognized legally, so this is not covered under
the heading of actionable claim.
According to Section 3 of the Act, actionable claim means:
 Claim to an unsecured debt
 Beneficial interest/Any ownership stake in a movable property
These are both claims that are recognized in the Courts of law as affording relief. There are
other types of claims also that afford relief and are actionable in the Courts of law, such as
secured debts and tortuous suits like defamation or nuisance. But those are not categorized
under the meaning of actionable claim. The term actionable claim only covers the above
mentioned two types of claims.
Unsecured Debt
Unsecured debt refers to all monetary obligations of a certain amount, and that is not covered
by any security in the form of mortgage, pledge or hypothecation. This is not just limited to the
concept of loans forwarded by a creditor to a principal debtor. It extends to all kinds of monetary
obligations, such as rent or payment on sale of property etc.
The three requirements for a transaction to qualify as unsecured debt are:
 Monetary obligation
 No security
 Certainty of amount of money obligated
According to Sunrise Associates v. Govt. of NCT of Delhi [2], an actionable claim may be
existent in praesenti, accruing, conditional or contingent. So, the three types of unsecured debt
are:
 Existent Debt
 Accruing Debt
 Conditional or Contingent Debt
Existent Debt
This is the kind of debt that has already become due, and is payable and enforceable in the
present. For instance, if Mr. A sells a house to Mr. B in present, and the monetary consideration
has to be paid then and there, then the consideration becomes payable right then, and this is
existent debt.
Accruing Debt
If a monetary obligation is due in present, but becomes payable on a future date, then that is
accruing debt. For example, if Mr. A is the employee of Mr. B and he gets his salary on the last
day of every month, then his salary is accruing debt during that month, as it is due throughout
the month, but it becomes payable only on the last day of the month. So, if Mr. B fails to pay the
salary, then Mr. A can approach the Court to claim it only after the last date of the month, when
it becomes payable.
Conditional or Contingent Debt
A debt is conditional or contingent if it becomes payable on the fulfillment of a condition or
contingency.
It is called conditional debt when the stipulation is in control of the parties. For example, an
agreement between A and B that A will pay Rs. 1000 if B buys C’s house, then this is a
conditional debt. Here, Rs. 1000 becomes payable and B can claim it only after he fulfills the
condition.
On the other hand, when the stipulation is beyond human control, then it is called a contingent
debt. For instance, if A promises to pay a particular amount to B if C’s ship sinks, then since the
sinking of the ship is beyond the control of the parties, so it is a contingent debt.
Beneficial Interest in Movable Property
If a person has the right to possess a movable property, then it is said that he has beneficial
interest in that movable property. But if that property is not in his possession, then he has an
actionable claim. So, the requirements to constitute this type of actionable claim are:
 Movable property;
 The movable property is not in the possession of the claimant;
 The claimant has the right to possess that movable property.
For example, if A sells his car to B and B has completed his obligation, that is, B has forwarded
the consideration from his side, then B has the right to possess the car; but if B is unable to
acquire possession, then B can approach the Court to claim this possession.
But if the movable property is already in the possession of the claimant, either actual or
constructive, then he cannot claim possession. So, if in the previous example, A had given the
car keys to B, then it can be said that B has constructive possession, and hence, B cannot
approach the Court to claim possession.
Moreover, the right to possess of the Claimant must be a legal right, which is recognized by the
law. For instance, if a person of unsound mind or a minor, A sells 100 bags of wheat (or any
other movable property) to Mr. B, and Mr. B also forwards the consideration from his side, that
is Mr. B fulfills his obligations, then also Mr. B cannot claim possession. This is so because Mr.
B does not have a legal right to possess, as A does not have the capacity to contract, and the
agreement between A and Mr. B is void ab initio. Now, since the right to possess of Mr. B is not
recognized legally, so this is not covered under the heading of actionable claim.
Instances of actionable claims are:
 Claim for arrears of rent.
 Claim for money due under insurance policy.
 Claim for return of earnest money.
 Right to get back the purchase money when the sale is set aside.
 Right of a partner to sue for an account of the dissolved partnership firm.
 Right to claim benefit under a contract for the purchase of goods.
 Right to get the proceeds of a business.
In all of these instances the amount for which the suits are filed are certain and definite. So,
such claims are transferable under actionable claims.

Clarify the transfer of Actionable Claims.

Section 130 of The Transfer of Property Act, 1882: Transfer of actionable claim.—
(1) The transfer of an actionable claim whether with or without consideration shall be effected
only by the execution of an instrument in writing signed by the transferor or his duly authorised
agent, shall be complete and effectual upon the execution of such instrument, and thereupon all
the rights and remedies of the transferor, whether by way of damages or otherwise, shall vest in
the transferee, whether such notice of the transfer as is hereinafter provided be given or not:
Provided that every dealing with the debt or other actionable claim by the debtor or other person
from or against whom the transferor would, but for such instrument of transfer as aforesaid,
have been entitled to recover or enforce such debt or other actionable claim, shall (save where
the debtor or other person is a party to the transfer or has received express notice thereof as
hereinafter provided) be valid as against such transfer.
(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer
as aforesaid, sue or institute proceedings for the same in his own name without obtaining the
transferor's consent to such suit or proceedings and without making him a party thereto.
Exception.—Nothing in this section applies to the transfer of a marine or fire policy of insurance
or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938).
Illustrations:
(i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not
having received notice of the transfer to C, as prescribed in section 131, pays B. The payment is
valid, and C cannot sue A for the debt.
(ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for
securing the payment of an existing or, future debt. If A dies, the Bank is entitled to receive the
amount of the policy and to sue on it without the concurrence of A's executor, subject to the
proviso in sub-section (1) of section 130 and to the provisions of section 132.
Instances of Claims not recognized as Actionable Claims
There are certain types of rights and claims which are not recognized as actionable claims, and
hence cannot be transferred. Some examples of this type of claims are:
 Right to get damages under the law of torts or for the breach of a contract: Since
these are uncertain amounts of money and hence, this cannot be transferred.
 Claim for mesne profits: This is also uncertain, and so cannot be allowed to be
transferred.
 Copyright, patents and trademarks: These rights are personal in nature, as these are
available to that particular person.
 Decree or judgment of debt: This cannot be transferred under actionable claim, as
after the judgment has been pronounced, no action subsists that could be
transferred.

State the facts, judgment and the principles of law laid down in the case of Kedarnath Lal
(dead) by his legal representatives and another (in all the appeals) v. Sheonarain and
others – AIR 1970 and SC 1717.
One Laxminarain was the previous owner of these two Survey Nos. 3384 and 3385.
On his death, his daughter's sons RamNarain, Sheonarain and Gopal inherited these
Survey Nos. along with other properties.
The first two sons were defendants 1 to 2 in the suits and defendant 3 is the son of
Sheonarain.
In 1930 the other two brothers sued Gopal for a partition.
Preliminary decree was passed on April 15, 1931 and the final decree on September 10,
1932.
Half share in the property went to Gopal and other half jointly to the other two brothers.
The suit Survey Nos. 3384 and 3385 came to the share of Ramnarain and Sheonarain.
On April 27, 1931, Ramnarain executed a mortgage of a half share in 27 plots made in the
two Survey Nos. and some other property with Buxar Trading Co-operative Society.
On September 20, 1932 Sheonarain filed a suit for partition against Ramnarain.
The preliminary decree was passed in May 1933, that is to say, after the release by the
Society.
The two brothers divided the two Survey Nos. half and half between them.
No final decree in this partition suit seems to have been passed.
On 20-4-1933, the Society released Ramnarain's share in the 27 plots from the mortgage
by a registered release deed.

Devendranath (one of the defendants) obtained settlement of 3 katha 13 dhur of land out
of Survey No. 3384 from Sheonarain on June 10, 1933 and in execution of a money
decree against Ramnarain and Sheonarain purchased on August 13, 1934 the remaining
portion of Survey No. 3384 and Survey No. 3385.
He obtained possession on February 27, 1935.
He had obtained attachment of the two plots before judgment, on April 23, 1934. All the
leases made by Devendranth were after the proceedings commenced. Devendranath
purchased the right, title and interest of Ramnarain on August 13, 1934.
His acquisition was prima facie hit by the doctrine of lis pendens.
The High Court and the Court below have decided unanimously that the release was not
binding on the Society and Devendranath obtained no title.

On April 26, 1934, that is to say, before Devendranath's purchase but after attachment by
him, the Society applied to the Registrar, Co-operative Societies, for a mortgage award.
The final mortgage award was made on May 28, 1935.
The award ordered sale of all mortgage properties including the half share of Ram narain
in Survey Nos. 3384 and 3385.
It was contended that the sale was by court auction and the doctrine of lis pendens
would not apply to such a sale.
In execution of the decree the Society purchased the two Survey Nos. on February 7,
1936 and obtained possession on July 20, 1937.

One Dwarikanath had a money decree against the Society and he attached the two
disputed Survey Nos. and brought them to sale.
The Buxar Central Co-operative Bank purchased the two Survey Nos. in auction-sale on
February 8, 1940, obtaining possession on July 5, 1941.
On March 26, 1943 the Society and the Bank went into liquidation.
The right, title and interest of the Society and the Bank was sold by the common
Liquidator to Kedarnath including the 27 plots made in the two Survey Nos. Kedar nath's
purchase was on March 20, 1943.

Lastly it was argued that if the fields were released from the operation of the mortgage
they could not be made the subject of a mortgage decree, and whatever was done in the
mortgage proceedings was not of any consequence. To this there are two answers.
Firstly, the respondent before the Registrar (Ramnarain) made no objection to the
inclusion of the plots in the petition for a mortgage award. Secondly, the doctrine of lis
pendens applies irrespective of the strength or weakness of the case on one side or
other. There is, however, one condition that the proceedings must be bona fide. Here no
doubt the Society knew that the plots had been released from the mortgage, but it was
also clear that the release was to enable Ram Narain Ram to dispose of some of the plots
and pay Rs. 500 to the Society. This amount was never paid and the Society must have
bona fide felt that the plots still remained encumbered. In fact the attitude of Ram narain
in not claiming that these plots be removed from the mortgage award shows that he too
felt that this was the true position.
For the above reasons we are clear that the purchase by Kedarnath was protected by the
doctrine of lis pendens, the prior transfer to the defendants notwithstanding. In this view
of the matter the judgment of the High Court cannot be sustained. The appeals will,
therefore, be allowed. The judgment and decree of the High Court will be set aside and
the suits of the appellant will be decreed with costs throughout. In this Court the cost will
be one set.
Appeals allowed.

State the facts, judgment and the principles of law laid down in the case of Murarilal vs
Dev Karan on 8 May, 1964,
Equivalent citations: AIR 1965 SC 225, 1964 8 SCR 239.
When a mortgage takes place, the mortgagor has the right to get back his property when
he pays back the mortgage amount. This is known as the right of redemption and arises
out of equity. Anything which obstructs the right of the mortgagor to redeem his property
is void, and such obstruction constitutes a clog on the right to redemption. This is also
known as the doctrine of a clog on redemption.
JUDGMENT Gajendragadkar, C.J.
Background of the case
This appeal by special leave arises out of a redemption suit filed by the respondent Dev Karan
against the appellant Murarilal.
The mortgage sought to be redeemed was executed on the 19th March, 1919 for a sum of
Rs. 6,500.
The mortgaged property consisted of a shop which was delivered over in the possession of the
mortgagee after the execution of the mortgage deed.
The mortgage deed had provided that the amount due under the mortgage should be repaid to
the mortgagee within 15 years, whereupon the property would be redeemed.
It had also stipulated that if the payment was not made within 15 years, the mortgagee would
become the owner of the property.
The mortgagor was Mangal Ram who died and the respondent claims to be the heir and
legal representative of the said deceased mortgagor.
In the plaint filed by the respondent, it was averred that the transaction was, in substance, a
mortgage and the mortgagor's right to redeem was alive even though the stipulated period of 15
years for the repayment of the loan had passed.
On these allegations, the respondent claimed a decree for redemption of the suit mortgage on
payment of Rs. 6,500.
It appears that the original mortgagee Gangadhar had also died before the institution of the suit,
and so, the appellant Murarilal was impleaded as the defendant on the basis that he was the
only heir and legal representative of the deceased mortgagee Gangadhar.

The claim for redemption thus made by the respondent was resisted by the appellant on several
grounds.
It was alleged that after the expiry of the stipulated period of 15 years, the property had become
the absolute property of the mortgagee and it was urged that the original transaction was, in
substance, and in reality, not a mortgage but a sale.
The learned trial Judge framed appropriate issues which arose on the pleading of the parties.
In substance, he held that the claim for redemption made long after the 15 years' period
had expired could not be sustained.
Findings were made on other issues also and they were against the respondent.
In the result, the respondent's suit was dismissed.

The respondent then took the matter in appeal before the Rajasthan High Court.
He urged that the view taken by the trial Court that the stipulation as to the mortgagor's liability
to re-pay the loan within 15 years did not bar his present suit for redemption, because the said
stipulation amounted to a clog on the equity of redemption and as such, could not affect the
mortgagor's right to redeem, and he added that the transaction, in substance, was a mortgage
and not a sale, and so, his right to redeem was alive and be effectively enforced by the present
suit.
The High Court has upheld his first contention that the relevant provision as to the period within
which the mortgage amount had to be repaid amounted to a clog on the equity of redemption
and could not be pleaded as a bar to the present suit.
But on the question about the character of the original transaction itself, the High Court
appears to have been inclined to take the view that the relevant clause on which the plea
about the bar was raised did not really support the said plea, because it was by no
means clear that even after the expiration of 15 years, the mortgagee was intended to be
the absolute owner of the property.
On these findings, the decree passed by the trial Court dismissing the respondent's suit
has been reversed and the suit has been remanded to the trial Court to be disposed of in
accordance with law.
It is against this order that the appellant has come to this Court by special leave.
Pending the appeal before this Court, both the appellant and the respondent have died, and
their respective heirs have been brought on the record.
Analysis
The first question which calls for our decision is whether the relevant clause on which
the appellant relies makes the mortgagee the owner of the property at the end of the
stipulated period of 15 years.
The mortgage provides, inter alia, that after the house which was the mortgage property was
delivered over to the mortgagee, it was open to him either to live in it, or to let it out to tenants.
The mortgagee was further given liberty to spend up to Rs. 35 for repairing the house and if
more expenses were intended to be incurred, the said expenditure would be incurred through
the mortgagor.
On the expenditure thus incurred the mortgagor was liable to pay interest at the rate of 6% per
month.
Then the document proceeded to add that the mortgagor would get the property redeemed on
payment of the mortgage amount as well as the cost of Patta which may have been incurred by
the mortgagee and the repairing expenses within a period of 15 years.
Then, occurs the relevant clause : "After the expiry of the stipulated period of 15 years,
this shop would be deemed as an absolute transfer "Mala Kalam" for this very amount.
Till the mortgage money is paid, I shall have no concern with the shop."
The High Court appears to have taken the view that the words "Mala Kalam" which occur at the
end of the relevant clause do not necessarily impart the notion that the mortgage property would
be the absolute property of the mortgagee. According to the High Court, the said words
literally mean "where there is no scope for having any say". If that is the meaning of the
relevant words, it seems difficult to accept the view that the document did not intend to make the
mortgagee the owner of the property at the end of 15 years if the debt due was not paid within
that period.
When the document says that there would be no scope for the mortgagor to say anything, it
necessarily means, in the context, that the mortgagor would, in that case, have lost his title to
the property, and that means the mortgagee would become the absolute owner of the property.
Therefore, we feel no difficulty in holding that if the terms of the document were to
prevail, the appellant's contention that the present suit for redemption is barred, must
succeed.
It is common ground that the amount due under the mortgage deed was not paid by the
mortgagor or his heir within the stipulated period and that would extinguish the title of the
mortgagor and make the mortgagee to be the owner of the property.

But the question is whether such a stipulation can be allowed to be pleaded as a bar to the
respondent's claim for redemption.
Just as it is common ground that if the terms of the document were to prevail, the suit
would be barred, it is also common ground that if the doctrine that the clog on the equity
of redemption cannot be enforced is to prevail in the present proceedings, the
respondent's action for redemption must succeed.
The fact that a stipulation of the kind with which we are concerned in the present case amounts
to a clog on the equity of redemption, is not and cannot be disputed.
Therefore, the main question which arises in the present appeal is : does the equitable doctrine
ensuring the mortgagor's equity of redemption in spite of a clog created on such equity by
stipulations in the mortgage deed apply to the present case ?
This question arises in this form, because the Transfer of Property Act did not apply to
Alwar at the time when the mortgage was executed nor at the time when the 15 years'
stipulated period expired.

The High Courts in India conformed to the view that whether or not there is a statutory provision
directing the Judges to give effect to the principles of justice, equity and good conscience, it is
their duty to enforce that principle where they are dealing with stipulations introduced in
mortgage transactions which appear to them be unreasonable, oppressive or unjust.

There is one other circumstance to which we ought to refer.

We do not know what the true position of the Hindu law was in the State of Alwar at the relevant
time.
In fact, we do not know what the provisions of the Contract Act were in the State of Alwar.
Even so, we think it would be reasonable to assume that civil courts established in the
State of Alwar were like civil courts all over the country, required to administer justice
and equity where there was no specific statutory provision to deal with the question
raised before them.
Whether or not the Hindu law which prevailed in Alwar was similar to that prescribed by ancient
Hindu Sanskrit texts, is a point on which no material is produced before us.
It may well be that just as in Bombay and Madras, notwithstanding the ancient provisions
of Hindu Law which seem to entitle the mortgagee to insist upon the performance of a
stipulation as to time within which the mortgage debt has to be paid, the High Courts had
consistently refused to enforce such stipulations, the Courts in the State of Alwar also
may have adopted the same approach.
In the absence of any material on the record on the point, we are reluctant to accept Mr. Sarjoo
Prasad's argument that the doctrine of equity and justice should be treated as irrelevant in
dealing with the present dispute.

In this connection, it is material to refer to the recent decisions pronounced by the Rajasthan
High Court in which this position has been upheld either because it was conceded, or because
the High Court took the view that the principles of equity were enforceable in dealing with
mortgage transactions in Rajasthan. In Amba Lal v. Amba Lal [I.L.R. 1957 Raj. 964.], the
Rajasthan High Court held that s. 60 and its proviso contained a general principle of law
applicable to mortgages in this country, which should be applicable even in those places where
the Transfer of Property Act may not be in force as such, but where its principles may be in
force. The property in question which was the subject-matter of the mortgage was situated in
the State of Udaipur.

Similarly, in the case of Seleh Raj v. Chandan Mal [I.L.R. 1960 Raj. 88., the Rajasthan High
Court held that the principle underlying s. 60 may well be regarded to be a salutary one and in
accordance with the principles of equity, justice and good conscience. Accordingly it took the
view that though the Transfer of Property Act may not be in force in the territory in question, it
would not be unreasonable to decide a case in accordance with the principles underlying the
said section. The property with which the Court was concerned in this case was situated in the
State of Jodhpur.

Thus, it is clear that the equitable principle of justice, equity and good conscience has
been consistently applied by Civil Courts in dealing with mortgages in a substantial part
of Rajasthan and that lends support to the contention of the respondent that it was
recognised even in Alwar that if a mortgage deed contains a stipulation which
unreasonably restrains or restricts the mortgagor's equity of redemption, courts were
empowered to ignore that stipulation and enforce the mortgagor's right to redeem,
subject, of course, to the general law of limitation prescribed in that behalf. We are,
therefore, satisfied that no case has been made out by the appellant to justify our
interference with the conclusion of the Rajasthan High Court that the relevant stipulation
on which the appellant relies ought to be enforced even though it creates a clog on the
equity of redemption.
In the result, the appeal fails and is dismissed with costs. Appeal dismissed.
State the facts, judgment and the principles of law laid down in the case of Nainsukhdas
Sheonarayan v. Goverdhandas Bindrabandas, AIR 1948, Nagpur 110
This appeal arises out of a suit under Order 21, Rule 63 of the CPC, 1908, filed by
respondent 1 Goverdhandas on 2-11-1934, in the Court of the First Subordinate Judge,
Second Class, Harda, for a declaration that he was the owner of the house at Harda,
which had been attached by the appellant, the firm of Nainsukhdas Sheonarayan of
Bombay, in execution of a decree dated 25-7-1932 in Civil Suit No. 1033 of 1930 of the
Bombay High Court, and that a 2/3 rd share of the house was not liable to attachment and sale
in execution of that decree. Harda is a town and a municipality in Harda district in the Indian
state of Madhya Pradesh.
In order to understand the points involved in this appeal it is necessary to set out briefly a few
relevant facts.
The respondents are related.
Respondent 2 Ballabhdas is the father of respondents 3 and 4, Vithaldas and
Bindrabandas.
Respondent 1 Goverdhandas is the son of Ballabhdas's sister and the first cousin of
Vithaldas and Bindrabandas.
Ballabhdas and his sons carried on business in the name of the firm of Ramchandra
Ballabhdas at Harda and at Bhopal.

They were indebted to a number of persons among whom was the Imperial Bank of India,
Bhopal Branch.
The bank filed a suit on 20-11-1929 in the High Court at Bhopal against the firm of
Ramchandra Ballabhdas for Rs. 30,430-15 and obtained a decree on 7-5-1930 for that
sum with interest at bank rate from 22-10-1929 till realisation; the decretal amount was
payable in two instalments, the first instalment of Rs. 15,200 on 15-11-1930, and the
balance together with costs on 15-5-1931.
In execution of the decree of the Imperial Bank, a house at Bhopal was sold.

Appeal filed by defendant, the firm of

Nainsukhdas Sheo Narayan of Bombay at
Nagpur Bench of the High Court of
Bombay.

The District Court, Hoshangabad decreed
the claim of the plaint. The claim that he
was the owner of the entire house at Harda.
The Court of the Subordinate Judge,
Second Class, Harda
Decree by The Court of the Subordinate
Judge, Second Class, Harda dated 6-9-
1938, was set aside in Civil Appeal No.
11-A of 1938 on 15-3-1940
by the decree dated 6-9-1938,
dismissed the suit.

A revision application was filed by and Pollock, J. refused to interfere in

Goverdhandas against the order dated 24-
2-1934 civil Revision No. 298 of 1934
revision with that order in civil Revision
No. 298 of 1934 on 4-12-1936 (Ex. P-13),
on the ground that the applicant had
another remedy of a suit under Order
21, Rule 63 of the CPC (adjudication of
claims and objections to attachment of
property).

Goverdhandas filed a suit under Order 21,
Rule 63 of the CPC, 1908, in the Court of the
First Subordinate Judge, Second Class,
Harda, on 2-11-1934,
Court of the Subordinate Judge, First
Class, Hoshangabad, in Miscellaneous
Judicial Case No. 9 of 1933.
Bombay High Court decree dated 25-7-1932
Vithaldas sold house at Harda to
Goverdhandas under a sale deed dated
30/5/1931
Civil Suit No. 1033 dated 15/5/1930 filed by
the firm of Nainsukhdas Sheonarayan of
Bombay, at the Bombay High Court.
for a declaration that he was the owner
of the entire house at Harda, MP.
The objection/ claim by Goverdhandas
that he was the owner of the entire
house at Harda was partly allowed by
an order dated 24-2-1934.
was transmitted on 23/9/1932 to the
District Court, Hoshangabad for
execution at Harda.
For a consideration of Rs 7,000/
The house at Harda had been attached
by the appellant, the firm of
Nainsukhdas Sheonarayan of Bombay,
in execution of a decree dated 25-7-
1932.

As the house in dispute was situated at Harda, it was necessary that the partition deed
should have been registered there, and as it was not done, the partition deed was not
effective and operative so far as the allotment of the house to Vithaldas at the partition
was concerned.
We hold that the deed of partition dated 19-10-1929 did not affect the house at Harda and
was not admissible in evidence to prove that the house was allotted to the share of
Vithaldas at a partition between him and his father, Ballabhdas and brother
Bindrabandas.
Defendant 1, the firm of Nainsukhdas Sheonarayan, denied the partition and pleaded in
the alternative that it was fraudulent as it was made to defeat or delay the creditors of
defendants 2 to 4.
The trial Court found that the partition was not real and was a device to embarrass the
creditors of Ballabhdas and his sons. In our opinion, the finding is correct. The partition
deed was executed on 19-10-1929, at a time when Ballabhdas and his sons were heavily
indebted. No provision was made in the partition deed for the payment of debts.
Our conclusions regarding partition may be thus summarised:
(1) The partition made on 19-10-1929 was not real and was fraudulent.
(2) The partition deed dated 19-10-1929 was inadmissible if evidence to prove that the
house at Harda fell to the share of Vithaldas at a partition between him and his father
Ballabhdas and brother Bindrabandas.
(3) No oral evidence was admissible to prove that the house at Harda was allotted to the
share of Vithaldas at a partition.
(4) The evidence adduced in the case does not prove that the house was allotted to the
share of Vithaldas.
(5) The house in suit remained joint property of Ballabhdas and his sons.
The second question for decision is whether the transaction embodied in the sale-deed
dated 30-5-1931 (Ex. P-22) was genuine and for consideration. (Their Lordships
considered the evidence on this point and in the course of their judgment observed as
follows):
The Sub-Registrar, Harda, made an endorsement on the sale-deed that Rs. 7000 the
consideration of the sale-deed, was paid in his presence by Jasraj, the agent of the
plaintiff, to Vithaldas.
Accordingly it must be accepted in second appeal that the transaction embodied in the
sale deed dated 30-5-1931 (Ex. P-22) was genuine and for consideration. The third
question is whether the sale deed was executed in order to defraud the creditors of
defendants 2 to 4. The Court of the Subordinate Judge, 1st Class, Hoshangabad, in the
objection case held that the sale was not fraudulent but that the sale of the house was
effected in order to raise funds for setting aside the sale of the ancestral residential
house of defendants 2 to 4 at Bhopal.
The last question for decision is what interest did Goverdhandas acquire under the sale
deed dated 30-5-1931 (Ex. P-22). Did he acquire merely the ⅓ rd share of Vithaldas or
did he acquire the entire house inclusive of the interest of Ballabhdas and
Bindrabandas ?
The sale deed was executed in favour of the plaintiff Goverdhandas by Vithaldas and it
was attested by his father Ballabhdas and brother Bindrabandas. The solution of the
question turns on the effect of attestation on the rights of the parties.
The transfer was thus operative only to the extent of the ⅓ rd share which Vithaldas
had, notwithstanding that he purported to transfer the entire house to
Goverdhandas.
Section 41 of the Transfer of Property Act, is an exception to the ordinary rule that a
transferor cannot convey a greater title to the transferee than he himself has and has to
be construed strictly
Goverdhandas was not present at the time of the execution of the sale-deed but was
represented by his munim Jasraj who arranged for the execution of the sale deed. Jasraj
is dead and he has not been examined as a witness.
In the absence of the evidence of munim Jasraj it is not possible to know the reason why
he got the sale deed executed by Vithaldas alone and had the attestation made by
Ballabhdas and Bindrabandas.
A reasonable enquiry by a prudent person would have disclosed that Vithaldas had no
power to transfer beyond his ⅓ rd share and if he took the sale deed from Vithaldas
for more than his share the sale deed was not binding so far as the interest of
other co-sharers who had not joined in the execution of the sale deed was concerned
We accordingly hold that Goverdhandas merely acquired ⅓ rd interest of Vithaldas in
the house under the sale deed dated 30-5-1931 and is not entitled to a declaration
that the ⅔ rd share of Ballabhdas and Bindrabandas in the house is not liable to
attachment and sale in execution of a decree of defendant 1 against defendants 2
to 4.
The appeal is allowed.
The decree of the lower appellate Court is reversed and that of the trial Court
dismissing the suit of the plaintiff is restored.
Respondent 1 will bear the costs of defendant 1 in all the Courts.
Appeal allowed.
State the facts, judgment and the principles of law laid down in the case of
Associated Hotels of India Ltd. vs. R.N. Kapoor, AIR 1959 SC 1262
Hon’ble Judges/Coram: A.K. Sarkar, K. Subba Rao and S.K. Das, JJ.
Date of Decision: 19.05.1959

FACTS:-
The respondent occupied two rooms in the appellant’s hotel, described as the Ladies’ and
Gents’ Cloak Rooms, where he used to carry on his business as a hair-dresser.
The document executed by the parties purported to be one as between a licenser and licensee
and provided, inter alia, that the respondent was to pay a monthly rent of Rs. 800, which was
later reduced to Rs. 700/month by mutual agreement.
The respondent made an application for standardization of rent under section 7(1) of the Delhi
and Ajmer-Merwara Rent Control Act, 1947 (hereinafter called ‘the Act’), and the Rent Controller
of Delhi fixed the rent at Rs. 94 per month.
On appeal by the appellant, the District judge reversed the order of the Rent Controller and
dismissed the application holding that the Act did not apply.
The High Court in revision set aside the order of the District judge and restored that of the Rent
Controller, holding that the agreement created a lease and not a license and that Section 2 of
the Act did not exempt the two rooms from the operation of the Act. Hence this appeal.
ISSUE:-
The two questions for determination in this appeal were:
1. Whether the agreement created a lease or a license? And,
2. Whether the said rooms were rooms in a hotel within the meaning of section 2(b) of
the Act?
JUDGMENT:-
With regards to the first issue, Court observes that the document no doubt uses phraseology
appropriate to a licence, but it is the substance of the agreement that matters and not the form,
for otherwise clever drafting can camouflage the real intention of the parties.
According to Court there is a marked distinction between a lease and a licence. Section 105 of
the Transfer of Property Act defines a lease of immovable property as a transfer of a right to
enjoy such property made for a certain time in consideration for a price paid or promised.
Under section 108 of the said Act, the lessee is entitled to be put in possession of the property.
A lease is therefore a transfer of an interest in land. The interest transferred is called the
leasehold interest. The lessor parts with his right to enjoy the property during the term of the
lease, and it follows from it that the lessee gets that right to the exclusion of the lessor.
Whereas, under Section 52 of the Indian Easements Act which defines a licence, if a document
gives only a right to use the property in a particular way or under certain terms while it remains
in possession and control of the owner thereof, it will be a licence. The legal possession,
therefore, continues to be with the owner of the property, but the licensee is permitted to make
use of the premises for a particular purpose.
But for the permission, his occupation would be unlawful. It does not create in his favour any
estate or interest in the property. There is, therefore, clear distinction between the two concepts.
The dividing line is clear though sometimes it becomes very thin or even blurred.
The following propositions may, therefore, be taken as well-established : (1) To ascertain
whether a document creates a licence or lease, the substance of the document must be
preferred to the form; (2) the real test is the intention of the parties – whether they intended to
create a lease or a licence; (3) if the document creates an interest in the property, it is a lease;
but, if it only permits another to make use of the property, of which the legal possession
continues with the owner, it is a licence; and (4) if under the document a party gets exclusive
possession of the property, prima facie, he is considered to be a tenant; but circumstances may
be established which negative the intention to create a lease.
Judged by the said tests, Court held that that the document is one of licence. Certainly it does
not confer only a bare personal privilege on the respondent to make use of the rooms. It puts
him in exclusive possession of them, untrammelled by the control and free from the directions of
the appellants. The covenants are those that are usually found or expected to be included in a
lease deed. The right of the respondent to transfer his interest under the document, although
with the consent of the appellants, is destructive of any theory of licence. The solitary
circumstance that the rooms let out in the present case are situated in a building wherein a hotel
is run cannot make any difference in the character of the holding. The intention of the parties is
clearly manifest, and the clever phraseology used or the ingenuity of the document-writer hardly
conceals the real intent. Therefore, it was held that under the document there was transfer of a
right to enjoy the two rooms, and, hence, it created a tenancy in favour of the respondent.
Now, for the purpose of second issue, Court refers to the Section 2(b) of the Delhi and Ajmer-
Merwara Rent Control Act 1947, which is provided as follows:-
“Section 2: In this Act, unless there is anything repugnant in the subject or context-
Premises’ means any building or part of a building which is, or is intended to be, let separately
for use as a residence or for commercial use or for any other purpose…… but does not include
a room in a dharamshala, hotel or lodging house.”
Court observes that for the purpose of the present case it may be stated that the object of the
Act is to control rents and evictions. Section 3 says that no tenant shall be liable to pay for
occupation of any premises any sum in excess of the standard rent of these premises. Section
2(d) defines a tenant as a person who takes on rent any premises. Section 2(b) defines what is
a premises within the meaning of the Act. Section 2(c) provides how standard rent in relation to
any premises is to be determined. It is clear from these provisions of the Act that standard rent
can be fixed only in relation to premises as defined in the Act and only a tenant, that is, the
person to whom the premises have been let out, can ask for the fixing of the standard rent.
Moreover, it is clear from definition of the term ‘premises’ that the Act did not intend to control
the rents payable by and evictions of, persons who take on rent rooms in a dharamshala, hotel
or lodging house.
The language used in the Act is “room in a………..hotel”. The word “hotel” here must refer to a
building for a room in a hotel must be a room in a building. That building no doubt must be a
hotel, that is to say, a building in which the business of a hotel is carried on. The language used
in the Act would include any room in the hotel building. That is its plain meaning. Unless there is
good reason to do otherwise, that meaning cannot be departed from.
In a physical sense the rooms in question were undoubtedly rooms in that hotel. A strictly literal
construction may not be justified and the word ‘room’ in the composite expression ‘room in a
hotel’ must take colour from the context or the collocation of words in which it has been used; in
other words, its meaning should be determined noscitur a sociis [a doctrine or rule of
construction: the meaning of an unclear or ambiguous word (as in a statute or contract) should
be determined by considering the words with which it is associated in the context]. On this view,
a room in a hotel must fulfil two conditions: (1) it must be part of a hotel in the physical sense
and (2) its user must be connected with the general purpose of the hotel of which it is a part. In
the present case under consideration, the spaces were let out for carrying on the business of a
hair dresser. Such a business is one of the amenities which a modern hotel provides. The
circumstance that people not resident in the hotel might also be served by the hair dresser does
not alter the position; it is still an amenity for the residents in the hotel to have a hair dressing
saloon within the hotel itself. A modern hotel provides many facilities to its residents; some
hotels have billiard rooms let out to a private person where residents of the hotel as also non-
residents can play billiards on payment of a small fee; other hotels provide post-office and
banking facilities by letting out rooms in the hotel for that purpose. All these amenities are
connected with the hotel business and a barber’s shop within the hotel premises is no
exception.
HELD:-
In the aforesaid paragraphs, test is laid down to ascertain the nature of document whether it is
lease or license. Apart from that, it is also held that a room in a hotel within the definition is any
room in a building in the whole of which the business of a hotel is run. So understood, the
definition would include the spaces in the cloak rooms of the Imperial Hotel in the present case.
These spaces are, in majority view, rooms in a hotel and excluded from the operation of the Act.
Hence, appeal was allowed.
State the facts and principle of law laid down in Jama Masjid vs Kodimaniandra Deviah
and others.
The Jumma Masjid, Mercara vs Kodimaniandra Deviah on 11 January, 1962
Equivalent citations: 1962 AIR 847, 1962 SCR Supl. (2) 554
Madikeri, also called Mercara, town, southern Karnataka state, southern India. It lies in the
Western Ghats, at an elevation of 3,800 feet (1,160 metres), on the national highway from
Mysuru (Mysore; northwest) to Mangaluru (Mangalore; east).
This case deals with the difference between 6(a) and Sec. 43 of Transfer of Property Act,
1882.
Section 6 of the Transfer of Property Act, 1882: What may be transferred.—Property of any
kind may be transferred, except as otherwise provided by this Act or by any other law for the
time being in force:
(a) The chance of an heir-apparent succeeding to an estate, the chance of a relation obtaining a
legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be
transferred.
Sec. 43 of Transfer of Property Act, 1882: Transfer by unauthorised person who
subsequently acquires interest in property transferred.—Where a person fraudulently or
 erroneously represents that he is authorised to transfer certain immovable property and
professes to transfer such property for consideration, such transfer shall, at the option of the
transferee, operate on any interest which the transferor may acquire in such property at any
time during which the contract of transfer subsists. Nothing in this section shall impair the right
of transferees in good faith for consideration without notice of the existence of the said option.
Illustration
A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z, representing
that A is authorised to transfer the same. Of these fields Z does not belong to A, it having been
retained by B on the partition; but on B's dying A as heir obtains Z. C, not having rescinded the
contract of sale, may require A to deliver Z to him .

“The Rule of Estoppel signifies that when a person makes a promise to another person,
which is more than what he can perform or which he is incapable of performing, then he
cannot later on claim incompetency as a legitimate excuse when he acquires the
competency.
Example: A represents to B that he is authorised to transfer the property X whereas in reality he
is not and professes to transfer the same. Acting on that representation B provides
consideration for the same. Now the transfer is inoperative as A had no authority to transfer the
property. But later on, A acquires the property under the will of his Uncle, who was the owner of
the property.

Nanjundappa had died in 1907 leaving behind his widow Ammakka who later died in 1910.
Similarly, Basappa had died in 1901 leaving behind his widow Gangamma.
The property was in the hands of Gangamma when most of the joint family members had died
and Bassappa, Mallappa and Santhappa were the next reversioners now. These 3 sold this
property to one Ganapathi, making him believe that these three were actual owners of the
property now.
Ganapathi later sued to recover possession of the properties but Gangamma claimed that she
was entitled to them as those properties were the self acquisitions of her husband
Basappa. Before the case could finally dispose of, Gangamma died.
Basappa asked the Revenue Authorities to transfer the property in his name. Here the Jumma
Masjid, Mercara intervened and claimed that it was entitled to the properties on 2 grounds :
1. Firstly under a gift alleged to have been made by Gangamma before dying, and
2. Secondly, under a deed of release executed by Santhappa, one of the reversioners, giving up
his half-share in the properties to the mosque for some consideration
Ganapathi contended that since he did not know that those three reversioners were not actually
the owners because they themselves represented as if they had the title, and now when they
are in actual possession after the death of Gangamma, according to Sec. 43, TPA,1882 which
includes Rule of Estoppel, he (Ganapathi) should be entitled to get the title of the property.
 Masjid claimed that three reversioners were only expecting that property in succession and did
not have any title then and therefore under section 6(a), those three revesioners were not
entitled to transfer the property and that the sale of that property to Ganapthi by 3 reversioners
was void.

HEADNOTE:
M and S claiming to be reversioners to the estate of N sold the property in dispute to G
predecessor-in-interest of the respondents.
The sale deed recited that the property belonged to the joint family of two brothers N and B,
and on the death of N it was inherited by his widow and on her death it had devolved upon them
as reversioners to the state. G sued to recover possession of the properties. The suit was
contested by the widow of B(brother of N)claiming that the property was the self acquired
property of her husband. During the pendency of the litigation the widow died, and G applied to
the revenue authorities to transfer the 'pattas' in his name. The appellants intervened alleging
that the property was gifted to them by the widow, and S one of the reversioners had also
executed a release of the said property for a consideration. This objection was rejected. The
appellants then sued for possession of a half share in the properties held by the widow of B,
relying upon the gift by the widow, and the deed of surrender by S one of the two reversioners
to the estate of N. They contended that the Vendors of the property to G had only a spes
successionis during the life time of the widow of B, and the transfer was on that account void
and conferred no title. The heirs of contended that the property was sold to by M and S on a
representation that the Vendor had become entitled thereto, and the appellants as transferees
from S were estopped from asserting that it was in fact the self-acquisition of and that in
consequence he had no title at the date of the sale.
Issue
Whether a transfer of property, in return for some consideration, made by a person who
represents that he has a present and transferable interest in that property, while in reality he
possesses only a spec succession, is within the protection of section 43 of the TPA, 1882 ?

Law/Observations
1. The court while explaining the significance of Section 43, TPA said, “ it clearly applies whenever
a person transfers property to which he has no title on a representation that he has a present
and transferable interest therein, and acting on that representation, the transfree takes a
transfer for consideration. When these conditions are satisfied, the section enacts that if the
transferor subsequently acquires the property, the transferee becomes entitled to it, if the
transfer has not meantime been thrown up or cancelled and is subsisting. There is an exception
in favour of transferees for consideration in good faith and without notice of the rights under the
prior transfer.”
2. On the contention by appellants(Jumma Masjid) that sale was void under Sec 6(a), TPA the
apex Court observed that :
3. Section 6(a) and Section 43 relate to two different subjects, and there is no necessary conflict
between them.
4. Section 6(a) deals with certain kinds of interests in property mentioned therein, and prohibits a
transfer simply of those interests. Section 43 deals with representations as to title made by a
transferor who had no title at the time of transfer, and provides that the transfer shall fasten itself
on the title which the transferor subsequently acquires.
5. Section 6(a) enacts a rule of substantive law, while Section 43 enacts a rule of estoppel which is
one of evidence.
6. Where the transferee knew as a fact that the transferor did not possess the title which he
represents he has, then he cannot be said to have acted on it when taking a transfer. Section 43
would then have no application, and the transfer will fail under Section 6(a). Where the
transferee knew as a fact that the transferor did not possess the title which he represents he
has, then be cannot be said to have acted on it when taking a transfer. Section 43 would then
have no application, and the transfer will fail under Section 6(a).
 On the contention by the appellants that there a plea of estoppels could not be raised
against a minor who had transferred property on a representation that he was of age
above that of a minor, the court observed, “Section 43 deals with transfers which fail for
want of title in the transferor and not want of capacity in him at the time of transfer. It
may further be observed in this connection that the doctrine of estoppel has been held to
have no application to persons who have no contractual capacity where the claim is
based on contract………..Decisions on transfers by minors therefore are of no
assistance in ascertaining the true scope of Section 43.” (in short Court said that neither
section 43 nor the Rule of Estoppel deals with those cases where the competency of the
party to contract is in conflict rather they deal with the cases where the title of the
transferor is in conflict at the time of transfer)
Held
The court held that when a person transfers property representing that he has a present interest
in that property, whereas he has, in fact, only a spes successionis, the transferee(means to
whom the property is transferred ) is entitled to the benefit of Section 43, if he has taken the
transfer on the faith of that representation and for consideration.
The Apex Court further held that the courts below were right in upholding the title of the
respondents.
In our judgment, the interpretation placed on section 43 in those decisions correct and the
contrary opinion is erroneous. We accordingly hold that when a person transfers property
representing that he has a present interest therein, whereas he has, in fact, only a spes
successionis, the transferee is entitled to the benefit of section 43, if he has taken the transfer
on the faith of that representation and for consideration. In the present case, Santhappa, the
vendor in Ex. III, represented that he was entitled to the property in praesenti, and it has been
found that the purchaser entered into the transaction acting on that representation. He therefore
acquired title to the properties under section 44 of the Transfer of Property Act, when
Santhappa became in titulo on the death of Gangamma on February 17, 1933, and the
subsequent dealing with them by Santhappa by way of release under Ex. A did not operate to
vest any title in the appellant. The Courts below were right in upholding the title of the
respondents, and this appeal must be dismissed with costs of the third respondent, who alone
appears.
Appeal dismissed.

What is the difference between Ownership and Possession of Property

Definition of Ownership
Austin defined ownership as “a right indefinite in point of user, unrestricted in point of
disposition, and unlimited in point of duration over a determinate thing.” The theoretical concept
of ‘ownership’, therefore, appears to be that a person can be considered to be owner if he has
absolute dominion over it in all respects and is capable of transferring such ownership.
Hence, according to Austin, the three attributes of ownership are:-
(a) indefinite use
(b) unrestricted disposition and
(c) unlimited duration.
Ownership involves the absolute rights and legitimate claim to an object. It means to own the
object by the owner. Possession is more the physical control of an object. The possessor has a
better claim to the title of the object than anyone, except the owner himself.
Ownership and possession of a property are two separate concepts that have different meaning
s and implications.
Ownership of a property is the legal right to possess, use, and control the property.
Possession of a property is the actual physical control of the property.
Ownership of a property is the legal right that a person or entity has to possess, use, and control
the property.
It is important to understand that ownership is a legal right, not a physical possession.
Ownership can be held by an individual or a legal entity such as a corporation.
Ownership of a property can be further broken down into different types of ownership, such as f
ee simple, leasehold, and
cooperative.
Fee simple is the most common form of property ownership and gives the owner the right to pos
sess, use, and control theproperty as they see fit.
Ownership of a property in fee simple is absolute and cannot be taken away without due proces
s of law.
This means that the owner can sell, lease, or transfer the property to someone elsewithout the c
onsent of any other party.

Leasehold ownership is a form of ownership in which the owner does not actually own the prope
rty but has the right to
possess and use it for a specific period of time.
The leaseholder pays rent to the landlord and must abide by the terms of the lease
At the end of the lease, the property will return to the landlord.
Cooperative ownership is a form of ownership that is similar to a condominium.
In a cooperative, the residents own shares in the property and have certain rights and responsib
ilities to maintain the property.
They are not allowed to sell or transfer their shares in the property without the consent of the oth
er owners.
Possession of a property is the actual physical control of the property.
Possession can be held by an individual or a legal entity such as a corporation.
Possession of a property is not the same as ownership and does not confer any legal rights to t
he possessor.
Possession is an important concept in real estate law as it can affect the rights of an owner or te
nant.
For example, if a tenant has exclusive possession of a property, the landlord has no right to ent
er the property without
the tenant’s consent.
Similarly, if a tenant has exclusive possession of a property, the tenant can sue the landlord for
any damage done to the property by the landlord.
Possession can also be used to establish a tenant’s right to the property.
If a tenant has been in exclusive possession of a property for a certain period of time, they may
be able to prove that theyhave a right to the property, even if they are not the legal owner.
This is known as the doctrine of adverse possession.
In summary, ownership and possession of a property are two distinct concepts.
Ownership is the legal right to possess, use,and control the property, while possession is the act
ual physical control of the property.
Ownership can be held by an individual or a legal entity and is further broken down into different
types of ownership
such as fee simple, leasehold, and cooperative.
Possession can also be held by an individual or a legal entity and can be used to establish a ten
ant’s right to the property.
 Sl. # Ownership
1 It is an absolute right.
2 It is de jure recognition of a claim. De
jure means by right. Or, existing or
holding a specified position by legal
right.
3 It is the guarantee of the law.
4 It is related to a right.
5 It includes possession.
6 It excludes interference.
7 It is developed on possession.
8 It provides proprietary remedies.
9 Its transfer is too technical.
Sl. # Ownership
Possession
It is evidence of ownership.
It is a de facto exercise of fact. De
facto means it exists, even though it may
not be legally accepted as existing.
It is the guarantee of the fact.
It is related to a fact.
It does not include ownership.
It excludes others except for the owner.
It is developed with civilisation.
It provides possessory remedies.
Its transfer is less technical.
Possession

What are the difference between movable and immovable property ?

The following are the differences between movable and immovable property:
1. The movable property can be easily transferred from one place to another without
changing its capacity or quantity. While an immovable property cannot be easily
transferred from one place to the other place and if transferred then it loses its originality
and changes in its shape or capacity or quantity.
2. The movable property is the property that is not attached to the earth and can be moved.
Example- car, books, etc. but if mango trees are cut and sold for timber then it is
considered as movable property. In the case of immovable property, which is attached to
the earth and cannot be moved. Example: buildings, trees, etc but if mango trees are
sold for nourishment purposes and fruits then it is considered immovable property.
3. The registration of the movable property is not mandatory and optional under the Indian
Registration Act, 1908. In the case of immovable property, if there is a transformation at
any point of time whose subject value exceeds Rs. 100, the registration is mandatory
under the Indian Registration Act, 1908.
4. The movable property is liable to sales tax, central tax though subject to certain
restrictions under the Andhra Pradesh General Sales Tax, 1957 and also the Central
Sales Tax. whereas the immovable property is not liable to sales tax but stamp duty and
registration fees have to be paid under the respective acts.
5. In the case of movable property, the transfer is complete when there is mere delivery
with intention to transfer. It is not the same in case of immovable property. In this, the
mere delivery with intention does not constitute a valid transfer. The property transferred
must be registered in the name of the transferee.
Define Property. What are the various kinds of properties ?
The Transfer of Property Act, 1882 - An Act to amend the law relating to the Transfer of Property by act of
Parties.
Commencements.—It came into force on the first day of July, 1882.
The Transfer of Property Act, 1882 has no definite definition of the term property. Section 2(c) of the
Benami transactions (Prohibition) Act, 1988 defines property as:
“Property” means property of any kind, whether movable or immovable, tangible or intangible, and
includes any right or interest in such property. interest in property means a right, claim, title, or legal
share in that property. Refers to the bundle of rights which may be transferred or conveyed separately or
in total.
There are some traditional principles related to property rights which include:
1. Control over the use of the property.
 2. Right to take any benefit from the property.
3. Right to transfer or sell the property.
4. Right to exclude others from the property.

Under the Indian legal system, properties are divided into two categories – movable and
immovable properties. Transfer of Movable property is governed by the Sale Of Goods Act,
1930 whereas transfer of immovable property is governed by Transfer of Property Act, 1882.
Different classification of Property are as below:
Corporeal and Incorporeal Property
These are the two categories of properties that exist.
(i) Corporeal Property has a tangible existence in the world and is related to material things such as land,
house, ornaments, silver, etc.
(ii) Incorporeal Property is intangible because it’s existence is neither visible nor tangible. Right of
easement and copyrights are incorporeal Property.
Movable and Immovable Property
All corporeal Property may either be movable or immovable in nature. The basis of this kind of
classification is the portability of the object. The two categories are discussed as follows:
(i) Section 3 of the general clauses act, 1897; Section 2(6) of the Indian Registration Act, 1908 defines the
term immovable Property. It includes land, things attached and embedded in the land.
(ii) On the other, movable Property includes any corporeal property which is not immovable property. It
may include furniture, stationery items, etc. The concept of immovable Property holds greater importance
and has elaborately been dealt with under Indian statutes. The following mentioned are judicially
recognized as immovable Property:
1. Right of way
2. Right to collect the rent of immovable Property
3. Right of ferry
4. mortgagor’s right to redeem the mortgage
5. The interest of the mortgagee in immovable Property
6. Right of fishery
7. Right to collect lac from trees
On the other hand, the following are not judicially recognized as immovable Property:
1. Standing timber
2. Growing crops
3. Grass
4. Royalty
5. A decree of sale or sale of immovable property on a mortgage
6. Right of the purchaser to have land registered in the name
7. Right to recover maintenance allowance even though it is charged through immovable
Property

Public Property and Private Property

With reference to the concept of ownership, Property may be classified into public and private property.
The two kinds are discussed below:
(i) Public Property is owned by the public as such in some governmental capacity. In other words, it is
owned by the government and used for the beneficial use of the public in general. A park or a government
hospital is a public property.
(ii) Private Property is that Property which is owned by a particular individual or some other private
person. A residential house of a citizen may be his private property.
Real and Personal Property
This distinction between real and personal Property basically originated from Roman law, and it still exists
in England. The two categories of Property are discussed below:
(i) Real Property means all rights over land recognized by law.
(ii) Personal Property means all other proprietary rights, whether they are right in rem or in personam.
Right in re aliena and Right in re propria
Right in re aliena are also sometimes referred to as encumbrances. These are the rights of a specific
user. These prevent the owner from exercising some definite right in reference to his Property. Lease,
security and trust may be included under this category. Right in re propria are immaterial forms of
Property. These are a product of human skill and labour. Patents, copyrights and commercial goodwill
may be included under this category.

Write short notes on ‘fraudulent transfer.’

Explain the law relating to fraudulent transfer.
Section 53 of the Transfer of Property Act: talks about the doctrine of fraudulent transfer.
It deals with two aspects.
One, the transfer of property was made with a motive to defeat or delay the creditors of the transferor.
Two, the transfer of property was made with a motive to defraud the subsequent transferee.
The section was incorporated to protect the interests of a creditor of the transferor and the subsequent
transferee of the property against fraud.
Every transfer of property with such above-mentioned motives on the part of the transferor is voidable at
the option of the party so defeated or defrauded, i.e., the creditor or subsequent transferee.
Because of this, the burden of proof is also shifted to the creditor or subsequent transferee.
For instance, a fraudulent transfer takes place when A transfers her property to B without giving
possession and ownership of the said property to B to keep it out of the reach of her creditor.
Here, the said transfer is voidable at the option of B.
A civil suit may result from a fraudulent transfer of property. At the request of the aggrieved creditor, the
court may declare the said transfer of property void.
Section 53 of the Transfer of Property Act: Fraudulent transfer.—
(1)Every transfer of immoveable property made with intent to defeat or delay the creditors of the
transferor shall be voidable at the option of any creditor so defeated or delayed.
Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.
Nothing in this sub-section shall affect any law for the time being in force relating to insolvency.
A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for
execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or
delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors.
(2) Every transfer of immoveable property made without consideration with intent to defraud a subsequent
transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, no transfer made without consideration shall be deemed to have
been made with intent to defraud by reason only that a subsequent transfer for consideration was made.
As per Section 58 of the Transfer of Property Act, 1882, the mortgage is a conditional conveyance of
certain interests in immovable property as security for payment of the loan or performance of a duty that
may give rise to a pecuniary liability.
In general-parlance, if a person takes a loan, he grants some interest in his immovable property as
security for repayment of such loan to the lender, it is known as a mortgage of a property.
The person raising funds through keeping his/her property as security or lien is the mortgagor and the
person in whose favour the interest has been transferred is the mortgagee.
It is to be noted that mortgagors are irrefutably bestowed with the right of redemption i.e. they can get
their property back by repaying the loan, without any encumbrances, because the ownership still remains
with the mortgagor.
Right of Redemption
Ownership of immovable property is associated with a bundle of rights. Upon a mortgage, a mortgagor
generate two interests,
1. The interest of the creditor/lender on the property (limited, fixed, and temporary)
2. Residuary interest qua the interest that remains with the mortgagor (can be estimated through
deducting the interest transferred to the mortgagee)
The mortgagor can retain the former division of interest by paying off the borrowed principal money with
interest.
Per contra, the status quo is that since mortgagors borrow money out of some financial predicaments,
lenders often ostensibly purported to take advantage of it by persuading mortgagors to sign agreements
that transcends mere mortgage qua intends to turn a mortgage deed into a sale deed.
Such covenants are of nature that deliberately seizes the mortgagor’s right of redemption conferred
by Section 60 of Transfer of Property Act, 1882.
It is pertinent to note that the mortgagor’s right to redeem is a statutory right; thereby, the parties are no
way competent to withhold such an absolute right through any agreement.
To address the bone of contention and to reinforce the mortgagor’s right to buy back the mortgaged
property, the principle ‘once a mortgage always a mortgage,’ was laid down in the case of Harris v.
Harris.
Construing the right to redemption as a right of equity, any impediment to this right is void, and it
constitutes a clog on the equality of redemption.
Thus, covenants that modify the character of the mortgage would not defeat the mortgagor’s right of
redemption, even he himself agrees to it.
What exactly is a clog on redemption?
Let us suppose that a clause in a mortgage deed debars the mortgagor from getting back his property on
default in repayment of the loan within a stipulated deadline i.e. if the mortgagor is not able to repay the
loan within 5 years of the execution of the mortgage deed.
Then, he is left with no option but to sell his property to the mortgagee. This condition/stipulation would be
a clog on the equity of redemption, such clog is inequitable and hence, void.
Similarly, in the case of Murari Lal v. Devkaran, a condition was imposed by the mortgage deed that the
mortgaged money must be paid within 15 years; otherwise, the mortgagee would become the owner of
the property.
It was held that the condition is void as it is unreasonable and implies impediment/clog to the mortgagor’s
right to redemption.
What is a lease in property renting?
When a property owner, though a registered agreement, grants a tenant certain rights on his immovable
property for a specific period, in return for the payment of rent, this arrangement is known as leasing in
legal parlance.
The term has been defined in Section 105 of the Transfer of Property Act, 1882. “A lease of
immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or
implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops,
service or any other thing of value, to be rendered periodically or on specified occasions to the transferor
by the transferee, who accepts the transfer on such terms,” says Section 105.
What is a licence in property renting?
When a landlord, for a specific purpose, grants temporary accommodation of his property to another party
though a contract, it is done by issuing a licence, in return for the payment of rent.
Unlike a lease, a licence does not give the other party any exclusive possession right over the premises.
The term has been defined in Section 52 of the Indian Easements Act, 1882. “Where one person
grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the
immovable property of the grantor, something which would, in the absence of such right, be unlawful, and
such right does not amount to an easement or an interest in the property, the right is called a license,”
reads Section 52.
What are the key differences between a Lease and a licence ?
Nature of possession
The key difference between the two arrangements lies in the manner in which the tenant is allowed to use
the rented premises.
The ownership of the said property continues to lie with the landlord under a lease, as well as licence
agreement. However, while a lease grants the tenant a certain right to use the premise for a specific
period, a licence only ensures the short-term occupancy or use of the premise by the tenant.
Unless you have the written permission of the owner to do so, occupying another person’s property is
against the law. This way, a rent agreement is basically a lease, while the permission to use a banquet
hall for a wedding ceremony is a licence.
Duration
Short-term as they are, licences lose validity as soon as the specific task for which it was drafted, is
concluded.
On the other hand, a lease could be signed for a wide range of periods – from one year to perpetuity.
It is also important to note here that a lease comes to an end, only after the period specified in the
agreement and the landlord generally cannot revoke it before this period.
The same is not true of licence agreements.
They can be revoked as and when the landlord deems fit.
A licence is a personal contract and terminates, if either party dies.
Rent
Leasing is always a monetary transaction.
Licence agreements could also be signed without any monetary exchange involved.
Eviction
Under the 2019 draft law, a rent authority ought to be set up, which will help landlords seek eviction of
tenants.
In a licence, because there is no possession by the tenant, the need for eviction does not arise.
Transfer
A lease can be transferred to third parties and legal heirs, while a licence cannot be transferred. If a
property is transferred to another owner while it is rented, the new owner is obliged to act upon the terms
and conditions prescribed in the lease agreement. The reverse is also true.
transfer by operation of law means that all or a part of a grantee's interest in an operating authority
passes to a fiduciary or other person by application of established rules of law; In its most simple terms,
the operation of law means that someone can be liable for certain obligations or acquire certain rights
because of existing legal rules, regardless of what their intentions are or what they want to do. The
operation of law can also impose prohibitions or restrictions on someone, determining what they can or
cannot do.
For example: If John passes away without a will, his heirs will be determined through operation of law.
The operation of a law states that if he has no surviving spouse, but has a surviving child, that child will
inherit everything that John has, regardless of whether that child wanted to inherit his assets.
Example: Ram expects that his maternal uncle, who had no children of his own, would bequeath his
property to him and he transfers his right in the property to his son, the transaction would be held invalid.
The opposite of an inter-vivos trust is a testamentary trust, which goes into effect upon the death
of the trustor.
What are the Key differences between Lease and License ?
Whether a transaction is a lease or license, the dominant test is the intention of the parties. In license the
licensee is entitled to use the premises having not right and interest therein. But in lease agreement, the
lease has right to enjoy the property and property to the extent transferred to the Lessee.
Section 105 of Transfer of Property Act:
“Lease Defined. A lease of immovable property is a transfer of a right to enjoy such property, made for a
certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money,
a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions
to the transferor by the transferee, who accepts the transfer on such terms.”
Section 52 of the Easements Act, 1882:
“License, Defined. Where one person grants to another, or to a definite number of other persons, a right
to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the
absence of such right, be unlawful, and such right does not amount to an easement or an interest in the
property, the right is called, a license.”
What Is Charge in TPA?
According to section 100 of the Transfer of Property Act, 1882, when the immovable property of
one party is (by an act of parties or operation of law) pledged as security for the payment of
money to another, and the transaction does not constitute a mortgage, the latter would acquire
a charge over the property.
In simple terms, a charge is a claim against an immovable property acquired by one person (by
the act of parties or by operation of law) as security for payment to another, and the property is
not mortgaged.
A charge on immovable property is created to secure payment of money. The payment is
made out of the property charged if it is not made by the person responsible for such payment.
The charge does not amount to a transfer of any interest in the property in favour of the charge
holder.
Let us take an example.
X has two daughters, P and Q. X gives his entire property to P and puts a condition that P would
be under an obligation to pay Rs 10,000 out of the property every month to Q. This amount of
money would constitute a charge in favour of Q. If P sells the property to a third person (say Z),
then Q can enforce her right against the third person provided he (the third person, Z) has
notice of this charge.
What Are the Essentials of Charge?
These are the three primary requisites of charge as per section 100 of TPA:
(i) Immovable property of one person is made security for the payment of money to
another.
A charge can only be secured by specific immovable property; otherwise, the charge is null and
void. A clear intention must exist to use the property as a security for the payment.
(ii) By the act of parties or by operation of law.
An agreement between the parties creates a charge. There is no specific form of language or
words that must be used to create a charge. When the document indicates the intention of using
the property as a security for the payment of the money, without transferring any interest or right
in the property, it will be enough to create a charge.
A charge can also be created by the operation of law. This means the charge was imposed
against the parties, against their will, without their intention, but the law compelled them to
comply with the obligations of the charge.
For example: An order of the court creates a charge upon certain property of the husband to
support her deserted wife for the remainder of her life.
A charge is created by operation of law under section 55(4) of TPA in the case of the unpaid
vendor.
(iii) This transaction does not amount to a mortgage.
Unlike a mortgage, a charge represents neither a transfer of property nor a transfer of rights but
rather the creation of a personal obligation or a right to payment out of a specified property. All
mortgages have a charge, but no charges are mortgages. It is important to note that the charge
is subject to the same provisions as a simple mortgage.
What Is the Difference Between Charge and Mortgage?
In the case of JK Bombay Private Ltd vs New Kaiser-I-Hind Spinning and Weaving Co Ltd
(1968), the Supreme Court noted that a charge doesn’t convey a property interest but rather a
right to take payments from the property, whereas a mortgage transfer a property interest.
Furthermore, it is not necessary to use a specific phrase to establish a charge. The court said
that to make a property security for payment, there only needs to be a clear intent to do so.
Here are the major differences between charge and mortgage as per the Transfer of Property
Act:
Charge: Defined in section 100 of the Transfer of Property Act, 1882 Act.
Mortgage: Defined under section 58 of the Transfer of Property Act, 1882 Act.
Charge: No transfer of interest.
Mortgage: Transfer of an interest in the property.
Charge: There may or may not be a debt.
Mortgage: Transaction for the security of repayment of a debt
Charge: It can be in oral and written form.
Mortgage: It must be in writing.
Charge: It is Right in Personam, that is, enforceable against a person.
Mortgage: It is Right in Rem, that is, enforceable against the world. Must See: What Is Right in
Rem and Right in Personam
Charge: Registration is compulsory only when it is created by the act of the parties.
Mortgage: Registration is compulsory.
Charge: It is created either by an act of parties or the operation of law.
Mortgage: It can be created by an act of parties.
Define Gift and state its essentials. Explain the statement, ‘ordinarily a gift is irrevocable.’
Definition and essential elements of ‘gift’
Section 122 of The Transfer of Property Act, 1882 - Gift defined - as “the transfer of an existing
movable or immovable property voluntarily by a person called as the ‘donor’ to a person called as ‘donee’
and accepted by or on behalf of the donee without any consideration at the time when the donor is alive
and still capable of giving it.”

The following are five important essentials of a valid gift:

 Transfer of ownership
 Existing property
 Transfer without consideration
 Voluntary transfer with free consent
 Acceptance of the gift
Various essential elements of ‘gift’ are described below:
1. The transfer of ownership- The owner of the property while transferring the property to the
donee must transfer all the rights in the said property. However, there can be conditional gifts
provided that such conditions are not repugnant to the provisions laid down under section 10- 34
of the Act.
2. Existence of property- The property which the donor intends to transfer by way of gift must be in
existence at the time of transfer. It can be either movable or immovable property. Section 124 of
the Act says that the transfer must be of property in existence otherwise it will be void. At
the same time, another point to be noted is with regard to the future property. The transfer of a
future property by way of gift is void and in case of both existing and future property, the
gift transfer is void as far as the future property is concerned. In case of a gift in relation to a
joint family which fell to the donor by preliminary decree of the partition of coparcenary property is
held as valid.
3. The transfer must be without consideration and done voluntarily- This is the most important
element in making a gift without which the whole of the purpose for which gift is made is defeated.
The gift must be given by the donor with his full knowledge and consent. If obtained through
coercion and undue influence as defined under sections 15 and 16 of the Indian Contract Act,
1872, the gift will be invalid. There are two tests laid down for the courts to ask in such situations;
whether one party is in a position of dominance over the other and whether such a position has
been used to dominate the will, i.e., has the person used undue influence over the other person.
In the case of Mukhraj Devi v. Manoj Kumar Singh, strange event of things happened when an
illiterate woman had signed a gift- deed not attested by any villagers or relatives as witnesses and
 was said to be witnessed by a person outside the village. Here, the court held the transfer to be
invalid.
4. Donor must be a competent person- Donor is the person who intends to transfer the property
by way of gift. Thereby, he must be a ‘sui generis’. He must have attained the age of majority, of
sound mind and must not be disqualified in any way. Even section 7 of this Act states that
transfer can be made only by a person of competency.
5. The transferee/ donee must accept the gift- Another pre-requisite for a valid gift is that the
transferee must accept the gift. If before acceptance of the gift the donee dies, the transfer
becomes void. Also, the acceptance must be made during the lifetime of the donor when he is
capable of making a gift. The donee has the right to accept it expressly or impliedly. If he accepts
the title- deed of the property gifted, it is an implied acceptance. Even though the transferor must
be a major, the transferee can be a minor and he can accept it by himself or by his guardians and
the minor on attaining the majority accept it or reject it.
6. Delivery of possession- As stated earlier, the property can be either movable or immovable. If it
is an immovable property, it is not necessary to show that the property has been delivered. It is
sufficient to showcase the acceptance by the donee. For effecting the gift of immovable property,
section 123 says that it must be effected by a registered instrument signed by or on behalf of the
donor in the presence of two witnesses and in case of movable property, it can be either done by
a registered instrument or by delivery.
Registration of a gift deed
According to Section 17 of the Registration Act (1908), a gift deed is valid and legally binding only once it
is registered. The subsequent stamp duty payable on registration varies depending on the state. Section
123 of the Transfer of Property Act (1882) addresses registration of gift deeds too. In this Section it is
stated that the registration of a gift deed is necessary for immovable property to be validly transferred as a
gift. It is also mentioned that the gift deed ought to be signed by the donor and the donee and be attested
by two witnesses too. The gift deed is to be drafted on stamp paper which should also be signed by both
the parties involved and be attested by two witnesses. Even the stamp paper is to be registered as per
this Act.
Types of gift deeds
Revocable gift deed
In the case of revocable gift deeds, the legal document stays with the donor till they decide to hand it over
to the donee. The gift can be revoked by the donor at any time during their lifetime. Here, the donor has
no legal obligation towards the donee.
Irrevocable gift deed
In the case of irrevocable gift deeds, the donee legally becomes the owner of the gift as soon as they
physically receive the gift. Once this is done, the donor cannot revoke the gift. A gift deed cannot be
revoked once it is executed and registered unless the requirements of Section 126 of the Transfer of
Property Act (1882) are fulfilled.

Gifts of future property are void, while onerous gifts, where the liability of the gift is greater than the
benefit, can be rejected by the donee. If a gift consists of the donor’s entire property, the donee is liable
for any debts associated with it. There are also exceptions to gifts, such as donations and hiba in
Muslim law. Finally, revocation of a gift can occur if the donor and donee mutually agree and follow
certain conditions, such as expressly stating the conditions, relating to the same transaction, mentioning
them in the gift deed or a separate document, and mutually agreeing to them.

Types of gifts
Now, let’s understand the different types of transfers which are deemed to be a gift. The following are
some of the kinds of gifts recognized by law:
 Void gifts- Even though it is named as void ‘gift’ it is in fact not a valid gift. If any gift is mane for
unlawful purposes (sec 6), if made upon a condition, the fulfillment of such a condition is either
impossible or forbidden by law or; made by an incompetent person or if the transferee dies before
acceptance or if the gift is for both existing and future property, the gift is void to the extent of
future property.6 Thereby, it can rightly be stated that void gifts are an exception to clearly
understand what all will be included under the concept of gift.
  Onerous gifts- Section 127 deals with onerous gifts. These are those kinds of gifts which
involves burden or obligation attached to the property. It is based on the principle “qui senti
commode sentire debetet onus’ which means that the person who receives an advantage must
bear the burden.7 To constitute an onerous gift there must be a single transfer of several
properties, one of which is burdened with certain obligations and others not, then the transferee
has to abide it to receive all the properties. In simple words, he cannot relieve himself from the
burden and take the rest of the properties.
 Lifetime gifts- These are the most common type of gift, where the gift is given by the donor for
lifetime, mostly these are given at certain occasions like birthdays etc. For example, Mr. A gifts
his son a laptop for his 21st birthday is a lifetime gift.
 Deathbed gifts- These are the gifts given by the donor during his lifetime with the condition that
the said gift will be effective only after the donor’s death. This type of gift is also known as
donations. For example, if A wants to sell a part of his property to an Orphanage ‘XYZ’ after his
death, it is called as deathbed gifts.

What are the rights and liabilities of Mortgagee, who is in possession of mortgaged property ?
Explain.
Rights and liabilities of the Mortgagee
Who is a Mortgagee?
A mortgagee is a person on whose favour the interest of the immovable property is transferred.
For example, S loans G, S wants her amount to be secured. For that, G has transferred an interest in his
immovable property to S. G authorizes S to sell his property in case of loan default. Here, S is the
Mortgagee, and G is the Mortgagor.
Lender = Mortgagee
Borrower = Mortgagor
Rights of Mortgagee
The Mortgagee is the person to whom the property is transferred. He holds catena of rights against the
property and the Mortgagor as well.
Following are the rights of Mortgagee in a contract of mortgage,
1. Right to foreclosure
Section 67 of the Transfer of Property Act, 1882 vested the Mortgagee with the right of foreclosure. This
right emancipates the Mortgagee to take the collateral on loan when the loan payments have defaulted.
The two pivotal rights that terminate a mortgage are the right to foreclosure and the right to redemption.
Both the rights are co-extensive despite the fact that the former is provided for the Mortgagee (who claims
to recover his outstanding loan money that has became due), whereas, the latter is for Mortgagor (who
has paid the money back and is now entitled to take back the mortgaged property).
The Section defines foreclosure as “A suit to obtain a decree that a mortgagor shall be absolutely
debarred of his right to redeem the mortgaged property is called a suit for foreclosure.” Thus, for
foreclosure of a property, the Mortgagee can obtain a decree from the competent court that debars the
Mortgagor from exercising his redemption right over the property. By the obtained decree, the Mortgagee
can place a complete bar over the Mortgagor’s right to redeem the property.
Illustration:
If a Bank loans X against the security of his immovable property. The mortgage has been created, and
the time for repayment of mortgaged money has also been fixed. Regardless, X failed to repay the loan,
thereby, debt becomes due. Consequently, the right of foreclosure is readily obtainable by the Mortgagee
(here, bank) as X hasn’t paid the principal amount with interest on the due date.
Conditions to exercise the right of foreclosure
Money must be due for payment i.e. Stipulated time for repayment of the loan has expired, regardless,
the payment is still pending.
The mortgage deed should not contain any clause that waives the Mortgagee’s right to foreclosure.
The decree of redemption should not be obtained by the Mortgagor prior to this claim.
In the case of K. Vilasini v. Edwin Periera[2], it was held that an order permitting foreclosure can only be
passed upon ascertaining the nature of the mortgage and the parties’ right under it.
2. Right to sue
Pursuant to Section 68 of the Transfer of Property Act, the following are circumstances, under which a
Mortgagee can sue for mortgage money,
Default in repayment – The Mortgagor had failed to repay the mortgage money, which he has to pay.
Destruction of the mortgaged property – The immovable property has wholly or partially been destroyed.
But, it is not because of the wrongful acts of parties to the mortgage.
Insufficient security – The security is insufficient within the meaning of Section 66 of the Act, as The
Mortgagor had failed to provide sufficient security in spite of being given a reasonable opportunity to do
so.
Deprivation of security – The Mortgagee has dispossessed his security due to the wrongful act of the
Mortgagor.
Non-delivery of the possession – The Mortgagee is entitled to possess the mortgaged property but
deprived of the same as Mortgagor failed to deliver it.
Securance of the possession – The Mortgagee has entitled to possess the mortgaged property without
the disturbance from the side of the Mortgagor or any other person claiming that he has a superior title
over the mortgaged property.
3. Right to sell
Unlike the aforesaid provisions, this Section 69 of the Act emancipated the Mortgagee to sell the
mortgaged property without the court intervention. As per this Section, the Mortgagee or his
representative is authorized to sell the mortgaged property after the repayment becomes due, but this
right is limited to the following three cases,
Where the mortgage is an English mortgage i.e. parties to the mortgage do not belong to the community
of Hindu, Muslim, or any other race or sect notified by the state government.
Where the Mortgagee is government, and such Mortgagee’s power of sale without the intervention of the
court has conferred by an express provision of the mortgage deed.
Where the mortgaged property is situated at Madras, Calcutta, Bombay, or any other towns specified in
the official government gazette.
4. Right to appoint a receiver
Section 69A of the Transfer of Property Act dealt with the appointment of a receiver by the Mortgagee.
Clause (3) of the Section defines the receiver as the agent of the mortgagor. Withal, he will be made
liable for all the acts and defaults of the receiver, unless and until it is the resultant of the Mortgagee’s
intervention. But, how the appointment of the receiver has been considered as the right of the
Mortgagee?
Primarily, the mortgaged property belongs to the Mortgagor. Therefore, he has the right to look after that
mortgaged property through the appointment of a receiver. In the first instance, the Mortgagor has to
appoint a receiver, and his name must be mentioned in the mortgage deed. But, this Section vests
Mortgagee with the right of appointment a receiver upon the dead or refusal of receiver nominated by the
Mortgagor.
If the Mortgagor does not give his consent on the names nominated by the Mortgagee, he can request the
court to appoint a receiver.
5. Right to accession
Section 70 of the Act provides that the mortgagee is entitled to avail the accession made to the
mortgaged property after the mortgage date. Again, this right will be shunned following the prevalence of
a contract to the contrary.
6. Right to a renewed lease
As per Section 71, if the Mortgagor obtains a renewal of the lease since the mortgaged property is a
leasehold property. The Mortgagee has entitled to take benefits of the new lease as the property is still in
his possession, and the Mortgagor has not redeemed it yet.
7. Right of the Mortgagee to spend money on mortgage-Property
If ever, Mortgagee happened to spent on the mortgaged property so as to preserve it from destruction or
for other reasons given under Section 72 of the Act, he may add such expenses to the principal money at
the same rate of interest. In the absence of a fixed rate of interest, it is payable at the rate of 9% per
annum.
8. Right to proceeds of revenue sale or compensation on acquisition
The Mortgagee has the right to claim for the mortgage money, wholly or partly, if the Mortgagor had failed
to settle the payment backlogs viz. Revenue arrears, rent due, or other charges attached to the
mortgaged property.
Liabilities of Mortgagee
Since the Mortgagee is the person, who loans Mortgagor against the security of the mortgaged property,
during the continuance of the mortgage he takes possession of the property, he must look after the same
till then the right of redemption is exercised by the Mortgagor. Thus, besides the rights, the Mortgagee is
bound to discharge certain duties until he relinquishes the possession of the mortgaged property upon the
settlement of the outstanding money.
Section 76 elucidates the liabilities of Mortgagee in possession, and lists the following duties,
 Duty to maintain the mortgaged property.
 Duty to collect the profits associated with the property.
 Duty to pay government dues with the generated income from the property unless there is a
contract to the contrary.
 Duty to take necessary measures with his entire endeavour to keep the property undamaged.
 Duty to keep records of the revenue and expenditure of the property.
 Duty to carry out urgent and necessary repairs of the property.
If the Mortgagee fails to perform any of the aforementioned duties, he will be charged for the losses
incurred.
Conclusion
The Transfer of the Property Act is one collective and codified law that espoused the concept of
conveyance of property. By the virtue of this Act, the transfer of immovable property from one person to
another has made more righteous and just devoid of deception. Thereby, the parties taking part in the
transaction have been provided with certain rights and liabilities, specifically in a mortgage, both the
parties i.e. Mortgagor and Mortgagee have to abide by the provisions of mortgage deed and Transfer of
Property Act as well. The legislative intent of this Act is to proscribe the commission of fraud on
transactions.
Alternative answer

Rights of mortgagee under Transfer of Property Act

 Right to foreclosure :
 Section 67 of the Transfer of Property Act, 1882 endowed the Mortgagee with the right of
foreclosure which emancipates the Mortgagee to take the collateral on loan when the loan payments
have defaulted.
 It is one of the two pivotal rights that terminate a mortgage are the right to foreclosure and the right
to redemption.
 Both the rights are co-extensive despite the fact that the former is provided for the Mortgagee,
whereas, the latter is for Mortgagor.
 Right to sue : According to the Section 68 of the Transfer of Property Act, the following are
circumstances, under which a Mortgagee can sue for mortgage money,
 Default in repayment – If the Mortgagor fails to repay the mortgage money.
 Destruction of the mortgaged property – If the immovable property has wholly or partially been
destroyed.
  Insufficient security – If the Mortgagor fails to provide sufficient security even after a reasonable
opportunity to do so.
 Deprivation of security – If the Mortgagee has dispossessed off his security due to the wrongful act
of the Mortgagor.
 Non-delivery of the possession – If the Mortgagor has failed to deliver the mortgage property to the
mortgagee.
 Securance of the possession – The Mortgagee is entitled to possess the mortgaged property without
the disturbance from the side of the Mortgagor or any other person claiming that he has a superior
title over the mortgaged property.
 Right to sell: Section 69 of the Act provides the right to the Mortgagee to sell the mortgaged
property without the court intervention. As per this Section, the Mortgagee or his representative is
authorised to sell the mortgaged property after the repayment becomes due, but this right is limited
to the following three cases,
 Where the mortgage is an English mortgage i.e. parties to the mortgage do not belong to the
community of Hindu, Muslim, or any other race or any other notified by the state government.
 Where the Mortgagee is government, and such Mortgagee’s power of sale without the intervention
of the court has conferred by an express provision of the mortgage deed.
 Where the mortgaged property is situated at Madras, Calcutta, Bombay, or any other towns
specified in the official government gazette.
 Right to appoint a receiver: Section 69A of the Transfer of Property Act deals with the appointment
of a receiver by the Mortgagee. Clause (3) of the Section defines the receiver as the agent of the
mortgagor. He will be made liable for all the acts and defaults of the receiver, unless and until it is
the resultant of the Mortgagee’s intervention.
 Right to accession: Section 70 of the Act provides that the mortgagee is entitled to avail the
accession made to the mortgaged property after the mortgage date.
 Right to a renewed lease: As per Section 71, if the Mortgagor obtains a renewal of the lease since
the mortgaged property is a leasehold property.
 Right of the Mortgagee to spend money on mortgage-Property: If ever, the Mortgagee happened to
spend on the mortgaged property so as to preserve it from destruction or for other reasons given
under Section 72 of the Act, he may add such expenses to the principal money at the same rate of
interest. In the absence of a fixed rate of interest, it is payable at the rate of 9% per annum.
 Right to proceeds of revenue sale or compensation on acquisition: The Mortgagee has the right to
claim for the mortgage money, wholly or partly, if the Mortgagor had failed to settle the payment
backlogs which may be Revenue arrears, rent due, or other charges attached to the mortgaged
property.
Liabilities of Mortgagee:
Section 76 lists the following liabilities of Mortgagee in possession:
 Duty to maintain the mortgaged property.
 Duty to collect the profits associated with the property.
 Duty to pay government dues with the generated income from the property unless there is a contract
to the contrary.
 Duty to take necessary measures with his entire endeavour to keep the property undamaged.
 Duty to keep records of the revenue and expenditure of the property.
 Duty to carry out urgent and necessary repairs of the property.

Differentiate between Marshalling and Contribution.

Introduction to Doctrine of Marshalling and Contribution
Marshalling means arranging things, systematize, or regulate things which mean the things arranged in a
proper manner or order. In the Transfer of Property Act, section 56, 81 and 82 deals with the doctrine of
marshalling and contribution. According to section 56 of the transfer of property act, the marshalling
applies on seller and buyer. Section 56, the rule of marshalling by the subsequent purchaser only deals
with the sale not mortgage. Section 56 incorporates the rule of marshalling by a purchaser. And for a
mortgage, section 81 is the rule of marshalling in which the subsequent mortgagee has the right to claim
to marshal. The right of marshalling securities is not absolute.
The rule of contribution described in section 82 of the transfer of property act. The meaning of the rule of
the contribution means providing money for a common fund. The doctrine of marshalling and contribution
are very vital section (81, 82) for the transaction of the mortgage.
Doctrine of Marshalling
Marshalling means arranging something. Section 81 of the transfer of property act says that if the owner
of two or more properties mortgages them to one person and other property mortgages to other people,
the new mortgagee is in the absence of a contract to the contrary, entitled to have the mortgaged debt
satisfied out of the properties not mortgaged to him, so far as the same will extend, but not to prejudice
the rights of the prior mortgagee or persons claiming under him or of any other person who has for
consideration acquired an interest in any of the properties. The right given to the subsequent mortgagee
under this section contemplates a situation where a mortgagor, mortgages more than two or more than
two properties firstly to a mortgagee and after that mortgages some of these properties to the other
person.
For example-
· X mortgages properties A, B and C to Y for securing a loan of 30,000 rupees.
· After that X mortgages property B to Z for securing another loan of 10,000 rupees.
In this Y is the first mortgagee on properties A, B and C which are securities for a loan of 30,000 rupees.
And property B mortgages to X for loan 10,000 rupees. Here Y is the prior mortgaged and Z is the
subsequent mortgagee. The right is given to Z (subsequent mortgagee) entitles him to say that the loan of
rupees 30,000, it should be satisfied out of sale proceeds of properties A and B only and it is not from C
which has been mortgaged to him. In the case, A and B could be sold for less than 30,000 rupees,
property C mat be sold to complete the amount. Although Z is a subsequent mortgagee and his claim is
not before the Y but Z has right of marshalling or in other word he has right to arranging the securities in
his favour.
According to this, the subsequent mortgagee under section 81 has right of marshalling securities.
Here the right of marshalling securities is not absolute, it follows some conditions-
1. The mortgagees may be two or more than two-person and the mortgagor must be same.
2. Mortgagor mortgages two or more than two properties to another new mortgagee without prejudice the
prior mortgagee.
3. There exists not a contract to the contrary.
4. The new mortgagee entitled to have the mortgage debt satisfied out of the property.
5. At last new mortgagee must not be prejudiced to the first mortgagee as well as a third person or other
person claiming as the purchaser.
Section 82, Contribution to Mortgage-Debt
Contribution means providing money for the common fund. Section 82 of the transfer of property act deals
with the rules relating to the contribution of money towards mortgaged debt. It is the right of a person who
has discharged a common liability to recover proportionate share from others. The doctrine of contribution
requires that the persons under common liabilities that liabilities equitable.
Section 82 contemplates a situation in which there are two or more than two mortgagors who take a
common debt by mortgaging different properties in one property. The nature of the doctrine of contribution
is based on the principles of equity, justice and good faith or good conscience. Each mortgagor or debtor
must be liable to contribute to such common debt. When two or more properties of different persons are
mortgaged to secure a loan, the mortgagee has the right to recover the debt from the property of any one
person.
Rules of Contribution
1. The mortgaged property belongs to two or more persons.
2. One property is mortgaged first and then again mortgaged with another property.
3. Marshalling supersedes contribution.
Difference Between Doctrine of Marshalling and Contribution
Doctrine of Marshalling
 The right of marshalling is available to mortgagees.
  It settles right of subsequent mortgagees.
Doctrine of Contribution
 Contribution determines the right of one mortgagor against other mortgagors.
 It rights of mortgagors inter se.

Differetiate between License, Lease and Easement:

Definitions of the Terms :
License: As per section 52 of the Indian Easement Act, 1882
“Where one person grants to another, or to a definite number of other persons, a right to do, or continue
to do, in or upon the immovable property of the grantor, something which would, in the absence of such
right, be unlawful, and such right does not amount to an easement or an interest in the property, the right
is called a license."
Lease: As per section 105 of the Transfer of Property Act, 1882
“A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time,
express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of
crops, service or any other thing of value, to be rendered periodically or on specified occasions to the
transferor by the transferee, who accepts the transfer on such terms. Lessor, lessee, premium and rent
defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the
premium, and the money, share, service or other thing to be so rendered is called the rent.”
Easement: As per section 4 of the Indian Easement Act, 1882
“Easement" defined. -An easement is a right which the owner or occupier of certain land possesses, as
such, for the beneficial enjoyment of that land, to do and continue to do something, or to prevent and
continue to prevent something being done, in or upon, or in respect of, certain other land not his own.
Dominant and servient heritages and owners. The land for the beneficial enjoyment of which the right
exists is called the dominant heritage, and the owner or occupier thereof the dominant owner; the land on
which the liability is imposed is called the servient heritage, and the owner or occupier thereof the servient
owner.”
Difference between License, Lease, and Easement :
License:
Section 52 of the Act, interpreted as - It can be said that when a person is given the right to use a
particular property for certain use, while the possession and control of the property are with the owner, the
person will be considered as the licensee. A license can be granted to only a definite number of people,
as a license is a personal right given to the licensee.
It is nothing but a contract in which a property owner lets an individual or an entity (like a company,
government, or a school) use real property for a specific purpose. Usually, licenses are personal to the
licensee (the individual or entity) and if the licensee attempts to transfer it, licenses usually terminate.
They are typically revocable and may be exclusive or non-exclusive.
Essentials of License are as follows :
1.A license does not create an interest in the property. It acts only as permission which created a
personal right with regards to the property.
2.A license authorises certain acts on the property which would be otherwise unlawful.
3.A license cannot be assigned or transferred to some third party.
Lease:
Section 105 of the Transfer of Property Act, 1882 states that a lease which states that it is a transfer of
immovable property for a particular time period for a consideration of which the transferee has accepted
the terms surrounding the agreement.
It is a contract, where a landlord agrees to give a tenant the exclusive right to inhabit or occupy real
property, such as a house, apartment or office. A lease usually has a specific term and, like all contracts,
the tenant is going to give the landlord some sort of consideration - money, horses, etc.
One of the modes of transferring property for a particular period of time is Lease. Lease is a transfer of an
interest in the property for a stipulated period of time without transferring the ownership of that property. In
a lease, right of possession is transferred instead of the right of ownership.
Transferor here is called the lessor and the transferee i.e. the one enjoying the property for a period is
called lessee.
Essentials of Lease are as follows:
1.The parties in a lease agreement should be competent to enter into a contract. Lesser should be
entitled to a property and have absolute rights over that property.
2.Ownership rights are not transferred in a lease, only the possession of the property is transferred.
3.Consideration for a lease can be taken in the form of a rent or premium.
4.Lessee, who is to get the interest in the property after lease, has to accept the lease agreement along
with the time period and terms & conditions imposed on the transfer.
5. Lease always takes place for a particular time period which is to be specified in the lease agreement. It
can be relaxed at the option of the lessor.
Easement:
When a person is having a right over the land of another for the enjoyment of his own property that right
over the property of another is called ‘Easement’.
Essentials of Easement are as follows:
1.For Easement, there is necessity of two properties that is Dominant and Servient heritage. Dominant
heritage means, that the land for whose beneficial enjoyment rights are exercised. Servient heritage
means that land on which liabilities are imposed. Dominant and Servient heritage must be separate.
2.Right over immovable property
3.Two separate properties
4.Easement must be attached with the property.
5.Easements are ordinarily available against the entire world, hence they are considered as right in rem.
6.The easement must be for the beneficial use of the property.
7.It is necessary that dominant and servient heritage must be separate.
Illustrations:
1.A, as the owner of a certain house, has the right to go on his neighbour B's land, and to take water for
the purposes of his household, out of a spring therein. This is an easement.
2.A dedicates to the public the right to occupy the surface of certain land for the purpose of passing and
re-passing. This right is not an easement.
Conclusion:
If the right to use the property will belong solely and exclusively to the user, even against the property
owner, you have a landlord/tenant arrangement and a Lease is proper. If the use or occupancy of the
property will be shared by more than one person or entity, then a License or an Easement is proper. If the
use is long term, like a sewer, cable, flower garden or access road, an Easement is the way to go.

Differentiate between Sale and Exchange.

What is the difference between sale and exchange?
The only thing that differs between a sale and an exchange is the nature of the consideration involved. As
per Section 54 of the TPA, the consideration for the sale of immovable property must be in terms of
money (price). Whereas Section 118 of the TPA, which governs exchange, specifies that money can be a
consideration for the exchange of money only and not any other property. Ownership of any immovable
thing can be exchanged only by transferring ownership of another immovable thing and not otherwise.

Differentiate between Actual notice and Constructive notice.

Doctrine of Notice
The foundation of the doctrine of notice is knowledge of a fact. Knowledge here is not restricted to
absolute certainty but is inclusive of such a belief in the existence of the fact in question as would make a
reasonable and prudent man act, in the ordinary affairs of life. This knowledge can either be actually
possessed by a person or may be imputed to him by law.
For example, you might impute your ability to sing well to the thousands of dollars your parents spent in
voice lessons. In other words, you name the source. You can also impute a person, like imputing to a
teacher your love of learning — he or she helped you become more interested in school and your
classes.
The doctrine of notice necessitates either knowledge of a fact or proof that under the given
circumstances, one must have had knowledge of that fact. However, it is pertinent to note that knowledge
is not synonymous to notice. There can be a notice without express knowledge of that fact and there can
exist situations where knowledge of the fact does not amount to notice.
Thus, notice may be briefly defined as the legal cognizance of a fact.[1] In the Transfer of Property Act,
1882 the doctrine of notice is essential to determine the claims of two or more persons (against each
other) who are involved in an unconscionable transaction. When knowledge of a fact is actually
possessed by the party, it is called actual notice and when knowledge of a fact is not expressly given but
can be imputed to the party under certain circumstances, it is constructive notice.
Introduction
The concept of Notice for the purpose of The Transfer of Property is given under Section 3 of Transfer of
Property Act, 1882 (TPA). Notice means to have knowledge of something i.e. to know something. In law,
it means knowledge of a fact. It is used to decide on conflicting claims of two parties. In law, the Notice or
Knowledge of a fact affects one’s legal rights and liabilities.
Under Section 3 of TPA Notice can be; “Actual or express Notice” or “Constructive Notice”, or it may be
imputed to the transferee when information of the fact has been obtained by his Agent.
Express or Actual Notice
Actual notice means when a person actually knows about the existence of a fact. The fact must be
definite information given in the course of negotiations by a person interested in the property. The
information of fact should not be a rumour or hearsay and thus is not bound by such information.
In other words, actual notice takes place when the information is such that it would operate upon the mind
of a rational man and would make him act based on the knowledge so acquired.
Constructive Notice
According to Section 3, a person is said to have notice of a fact, which he would have known, but for his
“gross negligence” or “willful abstention from making an enquiry or search” does not know. However, it is
such knowledge which a person with ordinary prudence ought to have known. In other words,
constructive notice of facts are those facts which a person ought to have known, but because of gross
negligence or wilful abstention does not know it.
Thus in Constructive notice, there is a legal presumption, that a person should have known a fact as if he
actually knows it.
Therefore Constructive notice is knowledge of those facts which a court imputes on a person. If the
circumstances indicate that a reasonably prudent person ought to have known a particular fact related to
the transaction of transfer, then he will be deemed to know it.
Illustration: A sells the house by a registered document to B. He later enters into a contract with C to sell
him the same house. Law imposes a duty upon C to inspect the registers at the Registrar’s office, and if
he does that, he would come to know about the sale in favour of B. A failure to inspect the register will be
detrimental to the interests of C, as he would be imputed with constructive notice of the registered
transaction.

Define Charge with example and explain its essentials.

Differentiate between Charge and Mortgage.
According to section 100 of the Transfer of Property Act, 1882, when the immovable property of one party
is (by an act of parties or operation of law) pledged as security for the payment of money to another, and
the transaction does not constitute a mortgage, the later would acquire a charge over the property.
In simple terms, a charge is a claim against an immovable property acquired by one person (by the act of
parties or by operation of law) as security for payment to another, and the property is not mortgaged.
A charge on immovable property is created to secure payment of money. The payment is made out
of the property charged if it is not made by the person responsible for such payment. The charge does not
amount to a transfer of any interest in the property in favour of the charge holder.
Let us take an example.
X has two daughters, P and Q. X gives his entire property to P and puts a condition that P would be under
an obligation to pay Rs 10,000 out of the property every month to Q. This amount of money would
constitute a charge in favour of Q. If P sells the property to a third person (say Z), then Q can enforce her
right against the third person provided he (the third person, Z) has notice of this charge.
What Are the Essentials of Charge?
These are the three primary requisites of charge as per section 100 of TPA:
(i) Immovable property of one person is made security for the payment of money to another.
A charge can only be secured by specific immovable property; otherwise, the charge is null and void. A
clear intention must exist to use the property as a security for the payment.
(ii) By the act of parties or by operation of law.
An agreement between the parties creates a charge. There is no specific form of language or words that
must be used to create a charge. When the document indicates the intention of using the property as a
security for the payment of the money, without transferring any interest or right in the property, it will be
enough to create a charge.
A charge can also be created by the operation of law. This means the charge was imposed against the
parties, against their will, without their intention, but the law compelled them to comply with the obligations
of the charge.
For example: An order of the court creates a charge upon certain property of the husband to support her
deserted wife for the remainder of her life.
A charge is created by operation of law under section 55(4) of TPA in the case of the unpaid vendor.
(iii) This transaction does not amount to a mortgage.
Unlike a mortgage, a charge represents neither a transfer of property nor a transfer of rights but rather the
creation of a personal obligation or a right to payment out of a specified property. All mortgages have a
charge, but no charges are mortgages. It is important to note that the charge is subject to the same
provisions as a simple mortgage.

Charge denotes an impediment over the title of the property, i.e. when the charge is created on an asset,
the asset is not allowed to be sold or transferred. Basically, there are three ways through which charge is
created on the property, that are classified according to the movability of the asset, i.e. On movable
property, the charge is created by way of pledge or hypothecation, whereas when the charge is created
on an immovable asset, then it is known as Mortgage. The basic purpose of creating a charge is to gain
financial assistance from the lending institution. Charge is just a collateral, for the payment of the amount
due, whereas the Mortgage is the transfer of interest in the asset, as collateral.

BASIS FOR
MORTGAGE CHARGE
COMPARISON
Meaning Mortgage implies the transfer of Charge refers to the security for securing
ownership interest in a particular
the debt, by way of pledge, hypothecation
immovable asset. and mortgage.
Creation Mortgage is the result of the actCharge is created either by the operation of
of parties. law or by the act of the parties concerned.
Registration Must be registered under When the charge is a result of the act of
Transfer of Property Act, 1882. parties, registration is compulsory
otherwise not.
Term Fixed Infinite
Personal Liability In general, mortgage carries No personal liability is created, however,
personal liability, except when when it comes into effect due to a contract,
excluded by an express contract. then personal liability may be created.