KAMKUS COLLEGE OF LAW

LL.B.3rd SEM
PAPER CODE (K-3004)
LAW OF PROPERTY AND EASEMENT

SYLLABUS

The course shall comprise of the following :

1. Preliminary (Sections 1 - 4)
2. Transfer of Property whether movable or immovable (Sections 5 – 37),
Transfer of Immovable Property [Sec 38 – 53(A)]
3. Sales of Immovable Property (Sec 54 - 57)
4. Mortgages of Immovable Property and charges (Sections 58 – 104)
5. Leases of Immovable Property (Sections 105 – 117)
6. Exchanges (Sections 118 - 121)
7. Gifts (Sections 122 - 129)
8. Transfer of Actionable Claims (Sections 130-137)
9. The Indian Easement Act

BOOKS RECOMMENDED
Diwan Paras, Transfer of Property.
Lahri S.M., Transfer of Property.
Mulla D.F., Transfer of Property Act.
Shah S.M., Lecturers of Transfer of Property.
Shukla S.N., Transfer of Property.
Shukla V.N., Transfer of Property.
Sinha S.N., Transfer of Property.
Tripathi G.P., Transfer of Property.

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LONG ANSWER TYPE QUESTIONS

Q 1) DEFINE THE “TRANSFER OF PROPERTY”. DISCUSS THE ESSENTIALS OF VALID

TRANSFER.

ANS: INTRODUCTION
The Transfer of Property Act 1882 is an Indian legislation which regulates the transfer of property in India. It
contains specific provisions regarding what constitutes a transfer and the conditions attached to it. It came into
force on 1 July 1882.
According to the Act, ‘transfer of property’ means an act by which a person conveys the property to one or
more persons, or himself and one or more other persons. The act of transfer may be done in the present or for
the future. The person may include an individual, company or association or body of individuals, and any kind
of property may be transferred, including the transfer of immovable property.

The object of the Transfer of Property Act is to define and amend law relating to Transfer of Property by act of
parties and not to transfer by operation of law. A Transfer of Property is a contract hence all necessary
requirements to constitute valid contract are to be fulfilled.

A property is a bundle of rights. It includes movable, immovable, tangible and intangible assets. When a
property is transferred, all the rights along with the property are also transferred. However arrangements may
be made by which some of the rights may be transferred but not all. A transfer of future property is not valid in
India but conveyance of such property may be valid as a contract to assign. When the property comes into
existence, the equity festers upon the property and the contract to assign becomes a complete assignment.

MEANING AND DEFINITION OF TRANSFER OF PROPERTY [SECTION 5]

The term ‘transfer’ means a contract plus conveyance. It is a process or an act by which something is made
over to another.
Under Transfer of Property Act, 1882 Section 5 defines ‘Transfer of Property’. According to this section,
transfer of property means an act by which a living person conveys the property in present or in future:
1. To one or more other living persons, or
2. To himself, or
3. To himself or one or more other living persons, and to transfer such property is to perform such act.

The word “property” has not been defined in the Act, but it has a very wide meaning and includes properties of
all descriptions. It includes movable properties such as case, books, etc., and includes immovable properties
also such as lands or houses. It also includes intangible properties such as ownership, tenancy, copyrights, etc.

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 The word ‘transfer’ has also very wide meaning. It may be either transfer of all the right and interests in the
property or transfer of one or more of subordinate right in the property.

KINDS OF TRANSFER
The Act contemplates the following kinds of transfers:
1) Sale: Sale is an out-and-out transfer of property.
2) Mortgage: In mortgage, there is a transfer of limited interest in property.
3) Lease: A lease is a transfer of a right to enjoy immovable property for a certain time or in perpetuity.
4) Exchange: Exchange is like a sale, but differs from it as regards the consideration. In sale, the consideration is
money, while in exchange, the consideration is another thing.
5) Gift: In a gift, there is no consideration.

In Harish Chandra v. Chandra Shekhar, AIR 1977 All 44, it was held that a release-deed is a conveyance, hence
a transfer of property. If the release deed states that the releaser was the owner and it shows an intention to transfer
his title and its operative word sufficiently was the conveyed the title it would amount to transfer.

ANALYSIS OF SECTION 5 OF TRANSFER OF PROPERTY, 1882

1) Transfer of ‘inter vivos’ alone are included as transfer from living person/s to living person/s.
2) Transfer can be present or future but transferor must be living person. Shamsuddin vs Abdul Hussain. (
Exception: Section 13 Transfer to an unborn Person)
3) Living person include juristic persons like company and other like associations of individuals whether
registered or not.
4) Other laws governing transfer are not affected by TPA.
5) There must be an ‘act of conveyance’. Property must be handed over to the other person. This can be
expressed or implied.
6) Act not exhaustive of all kinds of transfers. It deals with sale, gift, mortgage, lease and exchange.

ESSENTIALS OF A VALID TRANSFER

1) Transfer must be between two or more living Persons (Section 5): The Transfer must be inter vivos.
Therefore there cannot be a transfer to person not in existence at the time of transfer. The living person
including company or Association or body of individuals whether incorporated or not.
2) Property must be Transferable (Section 6): Property of any kind of may be transferred, accepts as
otherwise 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. These are restrictions on the Transfer of Property and
any transfer in contravention of any of the clauses given in Section 6(a) to (i) is null and void.
3) Persons competent to transfer (Section 7): Every person is competent to contract and entitle to
transferable property, or authorized to dispose of Transferable property not his own, is competent to transfer
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 such a property either wholly or in part, and either absolutely or conditionally, in the circumstances to the
extent and in the manner, allowed and prescribed by any law for the time being in force.
4) Transfer must be made in the mode prescribed by the Act (Section 9): Section 9 of Transfer of property
provides that for oral transfer, A Transfer of Property may be made without writing in every case in which
writing is not expressly required by law.
5) Consideration or object of the transfer must be lawful: No transfer can be made for an unlawful object
or consideration as provided in Section 23 of the Indian Contract Act, 1872.
6) Transfer must not be opposed to the nature of the interest affected thereby: If the nature of property to
be transferred does not admit of such transfer, it cannot be transferred. (Section 6(h)

PERSONS COMPETENT TO TRANSFER (SECTION 7)

Competency to contract has been defined under section 11 of the Indian Contract Act, 1872.
Section 11 says that every person is competent to contract:
a) Who is of the age of majority according to the law to which he is subject,
b) Who is of sound mind, and
c) Is not disqualified from contracting by any law to which he is subject.

AGE OF MAJORITY
Generally the age of majority is 18 except when a guardian of minor’s person or property has been appointed
by the court in which case it is 21. The age of majority is to be determined according to the law to which a
person is subject.

Mallikarjuna vs. Mareppa, AIR 2008 a person purchased certain property in the name of his minor son and
subsequently resold it while the son was still minor. Court permission was necessary under section 8 of the
Hindu Minority and Guardianship Act, 1956 but no such permission was taken. The provision being
mandatory the sale was held to be void.
Minor as a transferor: a minor’s contract is void. Raja Balwant Singh vs. Rao Maharaj Singh a transfer of
property by a minor is void.

Minor as a transferee: There is no specific provision of law incapacitating a minor from holding property
under a transfer in his favour.

SOUND MIND

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Under section 12 of the Indian Contract Act, a person is of sound mind of the purpose of making contract if he
is capable of understandings it and of forming a rational judgment as to its effect upon his interest. A contract
made by a person of unsound mind is void.

A person who is usually of unsound mind but occasionally of sound mind may make contract when he is of
sound mind.

DISQUALIFIED PERSON
An insolvent and alien enemy is disqualified from contracting. A transfer by a de facto Guardian of minor’s
property is invalid and will be hit by Section 11 of Hindu minority and guardianship Act, 1956. Johri vs
Mahila Darupati, AIR 1991.

PERSONS AUTHORIZED TO DISPOSE OF PROPERTY NOT HIS OWN

If the transferor has no title to the property, he must have authority to transfer it. For e.g. an agent acting under
power of attorney.

Chittu Singh vs. Chatan Singh, 1923 a person who has no right at all to have possession cannot make any
valid transfer.
Also, the power of such person cannot exceed the power of the person who has so appointed him.

Q 2) WHAT PROPERTIES MAY BE TRANSFERRED ACCORDING TO THE TRANSFER OF

PROPERTY ACT?

ANS: WHAT MAY BE TRANSFERRED (SECTION 6)

The transferability of property if the general rule and non-transferability is an exception. Transferability of
property is based on the maxim alienation rei prae fertur juri accrescendi which means to say that alienation
is favoured by the law rather than accumulation. The general policy of law is to promote free alienation and
circulation of property rather than accumulation.
Section 6 of the transfer of property act, 1882 says that property may be transferred excepting the exceptions
given in this section. This section consists of exception in clause (a) to (i), it is

EXCEPTIONS
Section 6 says that the property of any kind may be transferred, except as otherwise provided by the act or by
any law for the time being in force. These exceptions are discussed below:
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 Kansing Kalusing Thakore vs. Rabari Maganbhai Vashrambhai (2006)
Transfer of the property can be prohibited only by provisions of law and not by a judgement or direction.
Restriction contained in a tenancy legislation can be waived by the competent authority.
1) Clause (a): Spes successionsis: Spes Succession means exception of succession, it is a possibility of getting
property in future through succession. Under this clause, spes succession include:
i) Chance of an heir apparent succeeding the an estate,
ii) Chance of a relation obtaining a legacy on the death of a kinsman, or
iii) Any other mere possibility of a like nature.

This clause says that spes succession is not transferable.

i) Chances of an Heir Apparent: Heir apparent is not a legal heir but apparently an heir. Heir apparent is
that person who would be the heir if he survived the propositus and if the propositus dies intestate.
Propositus is a deceased person whose property the heir-apparent is going to inherit. When the propositus
dies intestate, i.e. without making any will, the heir will inherit the property.
ii) Legacy: Clause (a) provides that the chance of a relation obtaining a legacy on the death of a Kinsman is
not transferable. Legacy means expectancy of getting certain property under a will. A will becomes
operative only after the death of the testator, i.e, the person who has made the will. Legatee under the last
will only will get the legacy. Expectancy to receive legacy is uncertain because the legatee may or may not
survive the testation and the testator may have changed the name of the legatee in his last will. Therefore,
the chance of a legacy has been made non-transferable.
iii) Any other possibility of a like nature: Clause (a) excludes any other possibility of s like nature from the
purview of transferability. If there is any other possibility property or interest which is as uncertain as specs
succession or legacy, that too will not be transferable. Any property which is merely a future uncertain
possible interest should not be made a transferable property.

Where an heir apparent received advantage for giving up his future right of property, it was held that he could
not be allowed benefit of the doctrine of spes successions. He became estopped from claiming share in the
inheritance.

2) Clause (b): Right to Re-entry: Clause (b) constitutes second exception to the general rule of transferability. It
says that a mere right of re-entry for breach of a condition subsequent cannot be transferred to anyone except
the owner of the property affected thereby. This is the right which a lessor keeps reserved for himself after
parting with the whole estate.
3) Clause (c): Right to Easement: An easement cannot be transferred apart from the dominant heritage,
easement is a right which exists for beneficial enjoyment of a land and is exercised upon the land of another
person. Easement is an incident of ownership, it is a right attached with the property and has no independent
existence. Hence it cannot be transferred.
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4) Clause (d): Restricted Interest: It says that an interest in property restricted in its enjoyment to the owner
personally cannot be transferred by him. This means that a person’s right or interest which is only for his
enjoyment cannot be transferred by him.

R. Rajegowda vs. H.R Shankere Gowda, Air (2006)

A person having life interest in property cannot bequeath it by executing a Will; a document evidence partition
between father and son under which an interest in the property was allotted to the father for his maintenance,
an absolute right of alienation was not given , hence, no right to bequeath by making will.
K. Balakrishna vs. K. Kamalam, Air 2004
The restriction on transferability contained in the clause are not applicable to a will, because it is not equivalent
to transfer.
5) Clause (dd): Right to Future Maintenance: It is for the personal benefit of the person to whom it is granted,
therefore, it cannot be transferred. This right to future maintenance may have been secured by a charge on the
property or its income, or in any other manner. Although the right of maintenance is not transferable, the
arrears of maintenance can be transferred. The right of maintenance is a personal right of a Hindu widow
which is incapable of assignment but arrears of maintenance can be attached and sold like any other debt.
6) Clause (e): Right to Sue: A mere right to sue cannot be transferred. Right to sue for a definite sum of money
is an actionable claim and can be transferred but right to sue for indefinite sum of money is not transferable.
Right of action for damages in tort or breach of contract are bare rights to sue, and therefore, cannot be
transferred.
7) Clause (f): Public office: This clause provides that a public office cannot be transferred, nor the salary of a
public office, whether before or after it has become payable. These interests are made non-transferable to
ensure the dignity of the office held by him and proper performance of his duties.
8) Clause (g): Stipends and Pensions: It provides that the stipends allowed to military, naval, air-force, and civil
pensioners of the government and political pensions cannot be transferred, a will can be executed only in
respect of an estate.

Sundariya Bai Chaudhary vs. Union of India, Air 2008

The family pension of the deceased was not in the nature of an estate and it being not transferable could not be
bequeathed by a will. The court added that other benefits like provident funds, gratuity and other retrial dues
and extra-remunerations would be in the category of an estate.
9) Clause (h): Nature of Interest, Unlawful Object, Disqualification of transferee
i) In so far as it is opposed is the nature of the interest affected thereby; or
ii) For an unlawful object or consideration within the meaning of section 23 of the Indian Contract Act, 1872 ;
or
iii) To a person legally disqualified to be transferee

OPERATION OF TRANSFER [SECTION 8]

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Section 8 dealing with effects of transfer provides that unless a different intention is present a transfer of
property passes all the interests which the transferor is then capable of passing in the property and its legal
incidents to the transferee.

Bishwanath Prasad Singh vs. Rajendra Singh, Air 2006

The object of this section is to clearly define what are the legal incidents of each particular class of property
which pass along with the property when it is transferred.
Section 8 states on the transfer of property not only all the interest of the transferor in the property passes to the
transferee but also his interest in the legal incidents of the property.
Ram Gopal vs. Nand Lal, 1950
The Supreme Court held that having regard to section 8 of the Transfer of Property Act, a transfer passes the
entire estate of the transferor when no restriction is indicated by the deed and in Hindi law, there are texts
requiring a gift to a female to be constructed only as a limited gift.

Nathu Lal vs. Durga Prasad, AIR 1954

A women obtained property under the will of her father. On her death, the plaintiff, who was her sister’s son,
claimed the property as reversioner on the ground that she had only a limited estate. The second claimant was
the woman’s husband who claimed to succeed the property as heir to her stridhan. The High Court of
Rajasthan held that the woman had only limited estate and gave a decree to the plaintiff. The Supreme Court
reversed the decision and held that an absolute estate had passed to the legatee. It was observed that there is no
difference between the case of a female and the case of a male and the fact that the done is a women does not
make the gift less absolute where the words are sufficient to convey an absolute estate to a female.

According to section 8, on the transfer of a property not only all the interests of the transferor in the property
pass to the transferee but also his interests in the legal incidents of such property. An incident is a thing
necessarily depending upon or appertaining to, or following another that is more worthy as rent to incident is a
reversion.
1) Land: Generally the transfer of land would include transfer of everything annexed to it permanently.
Therefore, the transferee would get not only the surface of the land but also the easement annexed to it and
also the minerals beneath the surface unless there is a contrary intention. According to this section, the legal
incidents of a land include everything attached to it, rents and profits accruing after the transfer of land and
all the easement related to the land. All the houses, structure and trees standing on the land are transferred
along to the land by necessary implication. Where property to be transferred is land its legal incidents will
include:
i) Easement attached to it
ii) Rent & Profit occurring after the Transfer
iii) All the things attached to the earth

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 Jai Narayan Misra vs. Hashmathunnisa Begum, AIR 2002
Where one partner contributed land and the other constructed theatre and a clause in the partnership deed
provided that the partnership will continue foe certain number of years. The court rejected the contention
that the deed was a licence to use the land. A partnership deed usually does not have the effect.

Ram Chandra vs. Kalyan Singh, AIR 2006

Trees were planted on land in question subsequent to the agreement ,the seller objected saying that standing
trees could not be transferred in execution proceedings, this was held to be not tenable as under section 8
that property also passes to the transferee which is capable of passing with the land.
2) Machinery: All the movable and immovable parts of the machinery essential for using it are to be transferred.
Where machinery is attached to the earth, it is transferred along with the land transferred. The incidents of
machinery include all the movable parts of the machinery like nuts, bolts, etc.
3) Home/House: Legal incidents of a house are easements like right to way, right of support, permanent fixture
like bars, windows, keys, locks, etc. which are part of the house and provided for permanent use. Besides
these, rents accruing after the date of transfer are also transferred along with the house.
4) Debt: Where the property to be transferred is a debt or other actionable Claim, those securities will be with
that particular debt transferred to the transferee. Where property transferred is a debt or an actionable claim,
securities of it will also pass to the transferee as legal incident of the property transferred on the basis of the
principle that every principal thing attracts accessories towards it. In this section, the word ‘debt’ refers to only
those debts which come within the general definition of actionable claims.

Ganpat Rai vs. Sarupi, 1878

Where a money-decree is obtained for a secured debt and then transferred, the securities will not pass with the
decree and purchaser could not claim to enforce securities.
5) Money: Where the property to be transferred is money or other property yielding money its legal incidents will
include its income and interests occurring after the transfer.

The general rule regarding transfer is that the transferor conveyed all that he was possessed of in the property
transferred. A person cannot transfer something to another by doing acts which he himself is not entitled to do.
A transferee cannot have a better title than what the transferor himself had in the thing transferred. If the
transferor has held the property with certain limitations, the transferee would get it too with those limitations
and not without them.

The provision of this section are not applicable to mortgage debts because such debts are not actionable claims.
However, a charge annexed passes on to the transferee in the assignment of a debt. A promissory note is a
conditional payment of the debt. If a mortgage holds a promissory note for a part of the debt and retains it after
transferring the mortgage, he will be restrained from suing on it pending a suit for redemption.

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Q 3) WHO IS AN “OSTENSIBLE OWNER? WHEN IS TRANSFER FROM AN OSTENSIBLE OWNER
PROTECTED AGAINST THE REAL OWNER?

ANS: OSTENSIBLE OWNER

The Transfer of Property Act, 1882, was passed with the purpose of making transfer of property easier and
makes it accessible to the population at large. This Act lays down certain general principles as to transfer of
property which has to be followed. Transfer of a property by and ostensible owner is such a concept which was
incorporated to protect the rights of innocent third parties vis-à-vis the property owners. This principle was
first used in the much celebrated case of Ramcoomar Koondoo v. John and Maria McQueen by the Judicial
Committee.

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 from the third party and that the transfer was
a legitimate transfer in the eyes of the law. This wordings used in this case can be seen in the Section 41 of the
Act which deals with Ostensible owner.

SECTION 41 OF THE TRANSFER OF PROPERTY ACT

Section 41 of the Act deals with ostensible owner and it has been defined as:
“TRANSFER BY OSTENSIBLE OWNER: Where, with the consent, express or implied, of the persons
interested in immovable property, a person is the ostensible owner of such property and transfer the same for
consideration, the transfer shall not be voidable on the grounds that the transferor was not authorized to make
it: Provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make
the transfer, has acted in good faith.”

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 The section lays down certain requirements to avail the benefit of this section. They are:
1) The primary condition is that the person who is transferring the property should be ostensible owner.
2) There should be consent from the real owner, which can be implied or express in form.
3) The ostensible owner should get some consideration in return of the property.
4) Reasonable care has to be taken by the transferee about the authority of transferor to the property and the
transferee had acted in good faith.
5) It goes without saying that this section is applicable only to transfer of immovable property and not in case
of movable property.

1) ‘Ostensible Owner’: Ostensible owner is not the real owner but who can represent himself as the real
owner to the third party for such dealings. He has acquired that right by the wilful 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.

2) 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

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 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.

3) 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.
4) 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 to check 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
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 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.
5) 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
Mahmomedans, 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.”
6) 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.

Q 4) DEFINE GIFT. GIVE ITS ESSENTIALS AND DISCUSS IF A GIFT CAN BE REVOKED AFTER
BEING VALIDLY MADE, IF SO, UNDER WHAT CIRCUMSTANCES?

ANS: INTRODUCTION
13
A gift is generally considered as the exchange or transfer of ownership of any property from one person to
another where the sender willingly transfers his/her property to the receiver without any compensation i.e.,
without considering any monetary value. A gift is often called a form of reward. It may be given by sender to
receiver during any events like Wedding Ceremony, Birthday Party etc. A gift may be in the form of moveable
property or immovable property. When the sender will have intention to deliver any gift to the receiver of that
gift and when the receiver will accept that gift without any consideration from sender by law then this gift
should be recognized as a legal gift by law. A gift may become revoked and void by law when the essential
elements of a gift are not implemented properly.

Analysis of Definition of a Gift by Law:

The term “Gift” is considered as the transfer of property in the eye of law. Without proper giving and taking
process between donor and done, the legal aspects of a gift will be collapsed.

According to Section 122 of Transfer of Property Act,1882

“A Gift is the transfer of certain existing movable or immovable property made voluntarily and without
consideration, by one person, called the donor or guarantor or sender, to another, called the donor, and
accepted by or on behalf of the donee or guarantee or receiver.”
Any gift may be void and suspended if the rules and regulations of giving and taking a gift are not observed
properly. For Example, if the receiver or donee of any gift dies before accepting it although the sender or
donor have done proper intention and delivery to give that gift to the donee then that gift may be void by law
because of lack of acceptance of the donee.

But, the term “Gift” is defined differently in Mohammedan Law (Muslim Law in India) from Transfer of
Property Act, 1882.

According to Mohammedan Law (Muslim Law in India),

“A gift is a transfer of property or right by one person to another in accordance with the provisions given in
the Mohammedan law and includes-
a) A Hiba, an immediate and unconditional transfer of the ownership of some property or of some right,
without any consideration or with some return (ewaz); and
b) An Ariat, the grant of some limited interest in respect of the use or usufruct of some property or right.”

If any property or right is made as a gift without consideration with the object of acquiring religious merit, then
it is called “Sadaqah” by Mohammedan Law. For Example, Mr. M has gifted 5 acres of land to ISLAMIC
Foundation for establishing a Mosque and Madrasa Complex.

14
 In Mohammedan Law, The terms “Hiba” and “Gift” are often indiscriminately used but the term “Hiba” is
only a kind of transaction which are covered by the general term “gift” which is a transfer without
consideration. “A gift given by any Muslim in favor of his co-religionist must be under the Mohammedan
Law. A gift is not a contract or an agreement (though in original Muslim law it is called a contract) but the
principle may be applicable even to gift.”

A gift should be legally approved by Mohammedan Law when the donor of the gift has intention to give gift to
the donee with proper delivery and when the done will accept it.

TYPES OF GIFTS
Gift has various types. These are:
1) Lifetime Gifts: When the donor has intention to deliver any gift to the donee during lifetime period of the
donor then that gift shall be considered as Lifetime Gifts. Lifetime Gifts are mainly given to the donee by the
donor on the basis of some occasions like Birthday Party, Wedding Ceremony etc. For example, Mr. V wants
to give a Nokia Smartphone to his son Master Q during 21st birthday celebration of Master Q as a lifetime gift.
2) Deathbed Gifts: Deathbed gifts are future gifts which shall be expected to deliver to the donee after the death
of the donor on the basis of intention made by the donor. These gifts are also considered as donations made by
donor to the donee. So, any deathbed gift shall not be effective until the death of the donor. For example, Mr.
V wants to donate Rs. 1 Crore after his death to Q Orphanage Trust as a deathbed gift.
3) Onerous Gift: Any gift which is made with a burden or obligation imposed on the done by the donor on any
immovable property is called onerous gift. This gift also called the exchange of debt of an object from the
donor to the donee. This gift is generally illegal but if the donee has no obligation to carry the burden of the
gifted object then that gift may become valid on the basis of Section 127 of Transfer of Property Act, 1882.
For example, Mr. Q wants to give his one of the building of Gulshan as a gift to Mr. E which has been
mortgaged to N bank for Rs. 2 Crore. If Mr. E wants to take burden of the mortgaged loan of that house by
acceptance then this gift may be valid or otherwise it is illegal.

ESSENTIAL ELEMENTS OR CONDITIONS OF A GIFT

Some essential elements or conditions are required to make a gift legally approved. These are:
1) Absence of Consideration: A gift should be legally approved when the donor or guarantor gives the gift to the
donee or guarantee without any consideration i.e., without taking any compensation or monetary value. For
example, Mr. X wants to gift his private car to his employee Mr. Y for his good job performance without
taking any cash or monetary value for that car.
2) Parties of a Gift: According to law, there should be two legal parties for giving and taking a gift. These are:
i) Donor or Guarantor: The person who is involving in giving a gift is known as donor or guarantor. For
example, Mr. X has given a Nokia N8 Smartphone as a gift to Mr. M at his birthday. Here, Mr. X is the
donor of the gift of Nokia N8 Smartphone.

15
 ii) Donee or Guarantee: The person who is involving in taking a gift from donor is known as donee or
guarantee. For example, Mr. X has given a Nokia N8 Smartphone as a gift to Mr. M at his birthday. Here,
Mr. M is the donee of the gift of Nokia N8 Smartphone.

3) Subject-matter of the gift: The object which is to be given as a gift to the done by the donor is considered as
the subject matter of the gift. The subject matter of the gift must be in form of moveable property or
immovable property. A future property shall not be considered as the subject matter of the gift.
i) Moveable Property as a Gift: Moveable property is a kind of object which can be moved from one place
to another. It can also be called personal property or private property. Any donor can legally gift his/her
personal moveable property to the donee. It may be tangible in nature such as Mobile Phone, Private Car
etc or intangible in nature such as Share, Bond etc.
ii) Immoveable Property as a Gift: Immoveable property is a kind of object which cannot be moved or
transferred from one place to another. For example, Land, Building etc. real estate based object. Any
donor can legally gift immoveable property to the donee by a written deed or agreement without taking any
compensation.
4) Intention or Declaration of the donor: When the donor of any gift will have the intention or declaration to
give any moveable or immovable property as a gift to the done then that gift will be legally approved. If the
donor wants to give a gift in future to the donee, then he/she have to make a promise to the donee by making a
legal contract or agreement. For example, Mr. B has an intention to give a HP Laptop to his son Master C
(currently 16 years old) during 18th birthday celebration of Master C. Thus, Mr. B can’t give HP Laptop as a
gift to his son until his son’s 18th birthday appears.
5) Proper delivery or Transferability of the gift: A gift should be legally valid when the donor of any gift shall
deliver or transfer the gift according to his/her intention to the done within the promised time. For example,
Mr. B who has an intention to give a HP Laptop to his son Master C (currently 16 years old) during n birthday
celebration of Master C should be legally valid when that laptop will be delivered or transferred to his son on
18th birthday of his son.
6) Acceptance of the gift by the donee: When the donee of any gift will accept the gift from intention and
delivery made by the donor on the promised time then that gift should be legally valid. Otherwise, that gift
should be legally invalid. For example, Mr. B who has an intention to give a HP Laptop to his son Master C
(currently 16 years old) during 18th birthday celebration of Master C should be legally valid when his son will
accept that laptop from his father on his 18th Birthday through proper delivery or transfer of the HP Laptop.
7) Taxability of the Gift: The tax which is to be paid by donor of any monetary value of a gift during purchase
of that gift except for donation and religious purpose is called Gift tax. A gift may not become valid after
performing proper delivery and acceptance between donor and donee because of absence of tax on a gift. Gifts
up to Rs 50,000 per annum are exempt from tax in India. In addition, gifts from specific relatives like parents,
spouse and siblings are also exempt from tax. Gifts in other cases are taxable. Tax on gifts in India falls under
the purview of the Income Tax Act as there is no specific gift tax after the Gift Tax Act, 1958 was repealed in
1998.

REASONS OF REVOKING OR SUSPENDING OR VOIDING A GIFT BY LAW

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A donee or donor can revoke or suspend any future gift but a gift which is already delivered and accepted
cannot be revoked or suspended or void. According to Section 126 of the Transfer of Property Act, 1882,
“Any gift may become revoked or suspended or void for following reasons:
1) If donee want to get a gift like Laptop from donor on a specific event like Birthday but the donor has not
have intention to give any Laptop on birthday of the done but has been forced to give that gift then that gift
shall become legally revoked or suspended or void.
2) If the donee does not want to get any gift from the donor but has been forced to get that gift by the donor
then that gift shall become legally revoked or suspended or void.
3) If the subject matter of the gift is illegal and full of debts then that gift shall become legally revoked or
suspended or void.
4) If both donor and donee have intention to suspend any gift then that gift shall become legally revoked or
suspended or void.
5) If any gift is presented to the donee with misrepresentation and fraud information made by the donor then
that gift shall be legally revoked or void or suspended.
6) If any gift contains compensation or consideration made by donor or donee then that gift shall be legally
revoked or void or suspended.
7) If the donor of any gift dies before delivery then that gift shall be legally revoked or void or suspended.
8) If the donor or the donee of any gift is minor or disqualified person then that gift shall be legally revoked or
void or suspended.

Thus, any gift may become legally void or suspended or revoked.

17
Q 5) DEFINE NOTICE. WHAT ARE ITS DIFFERENT KINDS?

ANS: DEFINITION OF NOTICE [SECTION 3]

A person is said to have a notice of a fact when he actually knows that fact, or when, but for wilful abstention
from an inquiry or search which he ought to have made, or gross negligence, he would have known it (Section
3).

Section 3 of Transfer of Property Act enumerates three kinds of notices—

1) Actual or express notice
2) Constructive or implies notice
3) Imputed notice.

1) Actual Notice: A person is said to have actual notice/express notice of a fact if he actually knows it. It
must be definite information given in the course of negotiations by person interested in the property. A
person is not bound to attend vague rumors.
2) Constructive Notice: It is a notice which treats a person who ought to have known a fact, as if he actually
knows it. A person has constructive notice of all the facts of which he would have acquired actual notice
had he made those inquiries which he ought reasonably to have made. Constructive notice has roughly
been defined as knowledge which the court imputes to a person upon a presumption so strong that it cannot
be rebutted that the knowledge must be obtained.

Legal presumption of knowledge arises when:

1) Willful Abstention: There is willful abstention from an enquiry or search. It means willful or deliberate
abstention to take notice of a fact which a reasonable man would have taken in the normal cause of life. It is
such abstention from enquiry or search as would show want of bona fides in respect of a particular
transaction.

Illustration

1) ‘A’ contracts to sell his house to ‘B’. The house is on rent and ‘B’ knows that the tenants have been
paying the rents to ‘C’. ‘B’ has constructive notice of the right of ‘C’ to take rents from the tenants.
2) ‘A’ propose to sell his property to ‘B’, who at the same time knows that rents due in respect of the
property are paid by the tenants to a third person ‘X’. ‘B’ will be fixed with notice of the right of ‘X’.
3) ‘A’ refuses a registered letter, which contains information relating to property which ‘A’ proposes to
purchase. ‘A’ will be deemed to have notice of the contents of the latter.
2) Gross Negligence: Negligence means carelessness or omission to do such act which a man of ordinary
prudence would do. Doctrine of constructive notice applies when a person, but his gross negligence would
have known the fact. Mere negligence is not penalised. It should be high degree of neglect. In Hudston v.
Vincy, (1921) 1 Ch 98, Eve J. said, “Gross negligence does not mean mere carelessness, but means
carelessness of so aggravated a nature as to indicate a attitude of mental indifference to obvious risk.” It

18
 can be described as ‘a degree of negligence so gross that a court of justice may treat it as evidence of fraud,
impute a fraudulent motive to it and visit it with the consequences of fraud’.

In Ltoyds Bank Ltd. v. P.E. Guzders and Co. Ltd., (1929) 56 Cal 868, a person A deposited title deeds of
his house in Calcutta with Bank. N to secure the loan he had taken from the bank. Subsequently, ‘A’
represented the Bank that intending purchases of the house wanted to see the title deeds. The bank returned
the deeds to ‘A’ who deposited the deeds with the plaintiff bank in order to secure a loan. It was held that
the Bank ‘N’, on account of gross negligence in parting with the deed has lost its prior rights with respect of
the house.

In Imperial Bank of India v. U. Raj Gyaw, (1923) 50 IA 283, a purchaser was informed that the title deeds
were in possession of a bank for safe custody and omitted to make any inquiry from bank. It was held that
he was guilty of gross negligence and was deemed to have notice of the rights of the bank which had the
custody of the deeds.
3) Registration as notice: Explanation I to Section 3 provides that ‘where any transaction relating to immovable
property is required by law to be and has been effected by a registered instrument, any person acquiring such
property or any part, or share or interest in such property shall be deemed to have notice of such instrument as
from the date of registration, ‘Thus any person interested in the transaction which is registered under the
provisions of the Indian Registration Act, 1908 cannot plead that he has no notice of the transfer made under
the deed.

In order that, registration may be treated as constructive notice of its content, following conditions must be
satisfied:
i) The instrument must be compulsorily registrable.
ii) All the formalities prescribed under the Registration Act are duly completed in the manner prescribed.
iii) The instrument and particulars must be correctly entered in the registers.

After registration, document becomes a public document and the title can be confirmed in the Registrar’s
office.
4) Actual Possession as Notice of Title: Explanation II of Section 3 provides that, “any person acquiring any
immovable property or any share or interest in such property shall be deemed to have notice of the title, if any,
of any person who is for the time being in actual possession thereof. “Thus in order to operate as constructive
notice, possession must be actual, i.e., de facto possession. It amounts to notice of title in another, e.g., A
leased a house and garden to B who takes possession of the properties. A then sells the said properties to C. C
is deemed to have constructive notice of B’s rights over these properties, i.e., C cannot plead that he had no
knowledge (notice) of the fact of B’s possession on the properties [Deniels v. Davison, (1809) 16 Ves 240].

IMPUTED NOTICE
19
Explanation III to Section 3 provides that, “A person shall be deemed to have had notice of any fact if his agent
acquires notice thereof whilst acting on his behalf in the course of business to Which that fact is material:

Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof
as against any person who was a party to or otherwise cognizant of the fraud”

This is based on the maxim Qui facit per alium facit per se, i.e., he who does by another, does by himself. In
Mohori Bibee v. D. Gliosh, (1903) 30 Cal 539, held that although the principle was absent from Calcutta and
did not take part in the transaction personally, his agent in Calcutta stood in his place for the purposes of the
transaction and the acts and knowledge of the latter were the acts and knowledge of the principal.

Q 6) DEFINE SALE. DISTINGUISH BETWEEN SALE AND A CONTRACT OF SALE WITH

ILLUSTRATIONS.

ANS. DEFINITION OF SALE

Section 54 of the price Transfer of Property Act defines “Sale” as “sale is a transfer of ownership in exchange
for a price paid or promised or part-paid and part-promised.

SALE HOW MADE

Such transfer, in case of tangible immovable property of the value of one hundred rupees and upwards or in the
case of revision or other intangible things, can be made only by registered instrument.

In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made
either by a registered instrument of by delivery of the property.

Delivery of tangible immovable property takes place when the seller place the buyer or such person as he
directs, in possession of the property.”

ESSENTIALS OF A VALID SALE

According to Section 54, following are the essentials of a valid sale—

1) The Parties, i.e., the seller and the purchase, must be competent. They are also called vendor and vendee,
respectively. They must be competent to contract, i.e., must of sound mind and have attained the age of
majority. The seller must also have right to sell the property and purchase may be any person not
disqualified to purchase a property under any law enforced in India.
20
2) There must be a subject-matter of sale. Transfer of Property Act deals with sale of immovable property.
The transfer of ownership of immovable property is dealt with under this Act while sale of movable are
dealt with under the Sale of Goods Act, 1930.

Immovable property may be either tangible, such as land, house, things attaches to earth, etc., or it may be
intangible immovable property, such as right of ferry or fisheries, or right to a mortgage debt etc. But the
immovable property must be in existence on the date of execution of sale.

3) Price or money consideration—Price is an essential ingredient of a sale. A sale is a transfer of ownership

in exchange of money. Payment of price is not necessary for completion of the transfer but its reference is
necessary. It may be paid at the time of execution or promised to pay or same part of it may paid at the time
of execution and rest may be promised to be paid in future.
4) Conveyance: In sale, property must be transferred from seller to purchaser. According to Section 54 there
must be a registered conveyance in the case of:

(a) tangible immovable property of the value of Rs. 100 and upwards; or

(b) a reversion of an intangible thing of any value.

In case of tangible immovable property of a value less than Rs. 100, there must either be,

(a) a registered conveyance, or

(b) delivery of property.

SALE AND CONTRACT FOR SALE

Section 54 of the Act defines ‘sale’ as a transfer of ownership in exchange for a price Paid or promised or part
paid and part promised.

Section 54 also defines ‘contract for sale’ as, “a contract for the sale of immovable property B a contract that a
sale of such property shall take place on terms settled between the parties,”

Thus a sale may be preceded by a contract for sale. A contract for sale is merely a document creating a right to
obtain another document namely, a duly executed sale deed. On the Other hand, a sale of immovable property is
a transfer of ownership.

21
A sale passes an absolute interest in the property to the purchaser, but a contract for sale does not of itself create
any interest in, or charge upon the property in favour of the buyer. It does not convey any little to the purchaser.

A sale must be registered, if it deals with the conveyance of tangible immovable property of the value of Rs.
100 or more, or a reversion or any intangible things.

A contract for sale need not be registered at all.

SALE AND EXCHANGE

According to Section 54 of the Act, a sale is a transfer of ownership in a property in exchange for a price. On
the other hand exchange is a transfer of ownership in property in exchange of ownership of another property.
Section 118 of the Act defines exchange as, “when two persons mutually transfer the ownership of one thing for
the ownership of another, neither thing or both thing being money only, the transaction is called exchange.

Thus in both, there is transfer of absolute interest in the property, but real difference is that in sale, the
consideration is money, whereas in exchange, it is another property or anything of value.

SALE AND GIFT

In both sale and gift, there is transfer of ownership of an immovable property. However the difference between
the two is that where in sale, the ownership is transferred in exchange for a price, in gift, the immovable
property is transferred with any consideration.

In sale, if the valuation of immovable property is Rs. 100 or more, than it is to be effected only by registered
instrument. But in case of a gift of an immovable property, it must be made only by registered instrument
irrespective of the valuation of the property.

RIGHTS AND DUTIES OF SELLER AND BUYER (SECTION 55)

Sellers Duties and Rights

1. Sellers duties before sale—

i) The seller is bound to disclose to the buyer any material defect in the property or title, of which seller
is, and buyer is not aware, and which buyer could not with ordinary case discover. [Section 55(1)(a)]
ii) The seller is bound to the buyer on his request for examination of all documents of title relating to the
property which are in the seller’s possession or power. [Section 55(1) (b)]

22
 iii) the seller is bound to answer to the best of his information all relevant question put it him by him by the
buyer in respect to the property or the title there. [Section 55(1) (2)]
iv) The seller’s next duty is to execute the conveyance. He is bound 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 proper time of place. [Section 55 (1) (d)]
v) Seller is bound to take case of the property and documents of title. Between the date of contract of sale
and the delivery of the property, he is bound to take as much case 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. [Section 55(1) (c)]
vi) It is the seller’s duty before the completion of sale to pay all the outgoings. Before completing of sale,
the seller continues to the owner of the property, thus the Government dues, etc., are to be paid by him.
[Section 55(1)(g)]

2. Seller duty after sale—

i) After completion of the sale, it is the seller’s duty to gave possession to the buyer. The seller is bound to
give, on being so required, the buyer or such person as he directs, such possession of the property as its
nature admits. [Section 55(1)(f)1]
ii) It is the seller duty to covenant for title. Section 55(2) of the Act provides that—
"The seller’s be deemed to contract with the buyer that the interest which the seller professes to transfer
to the buyer subsist and that he has power to transfer the same. (This is also known as implied covenant
for title): Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed
to contract with the buyer that the seller has done no act whereby the property is encumbered or whereby
he is hindered from transferring it.

The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of
the transferee as such, and may be enforced by every person in whom that interest is for the whole or
any part thereof from time to time vested.”
iii) It is the seller duty to deliver title-deeds on receipt of the price. Section 55(3) of the Act provides that,
where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the
buyer all documents of title relating to the property which is in the seller’s possession or power.
However, the proviso to Section 55(3) lays down that:

• Where the seller retains that part of the property with him, which of greatest value and, such
property is included in the documents, the seller is entitled to retain all the documents with him.
• Where the whole of such property is sold to several buyers the persons who purchase the largest part
of the property would be entitled to retain all the documents.
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3. Seller’s Right before Sale—Section 55(4)(a) provides that ‘the seller is entitled to the rents and profits of
the property till the ownership thereof passes to the buyer’. ‘Thus, before completion of the sale, the seller is
entitled to all the rents, profits or another benefit. interests of the property’.
4. Seller’s Right after Sale—If after completion of sale, the price or any part of it remain unpaid, the seller
acquires a lien or charge on property. Accordingly to Section 55(4)(b) if price remains unpaid, the seller
cannot refuse delivery of possession for can claim back the possession if already given to buyer, but he
(seller) is given a right to recover unpaid purchase money from and out of the property.

Buyer’s Duties and Rights

1. Buyers duties before sale—

i) Before completion of sale, it is the duty of the buyer to disclose, facts which materially increases the
value of property, Section 55(5)(a) of the Act provides that, "the buyer is bound 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.
ii) The buyer is bound to pay or tender the purchase money to seller [Section 55(5)(b)].

2. Buyer’s Duties after Sale—

i) Where the ownership of the property has passed to the buyer, the buyer is bound to bear any loss arising
from the destruction, injury or decrease in value of the property not caused by the seller. [Sec[Section
55(5)
ii) According to Section 55(5) (d) after the completion of sale, the buyer is liable to pay the outgoings, e.g.,
Government dues, rents, revenue or taxes, as the buyer becomes the owner of the property.

3. Buyer’s Right before Sale: Section 55(6)(a) of Act provides that the buyer is entitled to (unless he has
improperly declined to accept delivery of property):

In the case of tangible immovable property of a value less than one hundred rupees, such transfer may
be made either by a registered instrument of by delivery of the property.

Delivery of tangible immovable property takes place when the seller place the buyer or such person as
he directs, in possession of the property.”

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Q 7) Transfer of property act deals with ‘Inter-vivos (between living persons) transfer yet under the act
transfer of property can be made to an “unborn person”. Is it an exception of the provision of the Act?
Discuss.

ANS. INTRODUCTION
“A person not in existence has a specific reference to one who may be born in the future but does not have a
current existence”.

Even though a child in the womb is literally not a person in existence, but has been so treated under both Hindu
Law and English Law, discussed elaborately as under.

STATUS OF UNBORN CHILD

There is nothing in the law to prevent a man from owning property before he is born. His ownership is
necessarily contingent, indeed, for he may never be born at all; but it is none the less a real and present
ownership. A child in its mother’s womb is for many purposes regarded by a legal fiction as already born, in
accordance with the maxim nasciturus pro jam nato habetur.

In the words of Coke, “the law in many cases hath consideration of him in respect of the apparent expectation
of his birth.”

Thus, in the law of property, there is a fiction that a child en ventre sa mere is a person in being a life chosen to
form part of the period in the rule against perpetuities. The New York Appellate Division has recently laid
down obiter the doctrine that a child may recover for prenatal injuries. Nugent v. Brooklyn Heights R. Co., i39
N. Y. Supp. 367 (Sup. Ct., App. Div.).’
In determining whether a child en ventre sa mere is a legal person with capacity for rights, it is helpful to
examine the treatment accorded him in other departments of the law. He takes under a devise to children
“living” or “born” at a given time. This does not, however, involve the recognition of a child en ventre sa mere
as a separate existent entity, but is purely a rule of construction based on the ground that “such children come
within the motive and reason of the gift.”

Similarly he comes within the Statute of Distributions and is included in the terms of Lord Campbell’s Act
allowing suit by children for the death of their father. In a sense, it may be said that an unborn child is treated
as living for the purpose of the Rule against Perpetuities I and the revocation of wills.

A more accurate statement of the result of the cases is that the limitation imposed by the Rule against
Perpetuities is twenty-one years and the lives of persons conceived at the time of the gift plus the period of

25
gestation of the donee; and that a will is revoked by the subsequent marriage of the testator and the conception
of a child afterwards born alive.

In like manner it is more nearly correct to say that in the case of children en ventres ses meres an exception is
made to the rule that contingent remainders must vest before the termination of the preceding estate,’ than that
the law of real property here recognizes the unborn child as an existent person .

THE LAW OF PROPERTY

There is a fiction that a child en ventre sa mere is a person in being for the purpose of:
(1) acquisition of property by the child itself, or
(2) being a life chosen to form part of the period in the rule against perpetuities.
The principle is well settled now, although the older authorities show some disagreement.
In (1), the basis of the rule is not that in a gift to “children” the natural or ordinary meaning of “children” is
such as to include a posthumous child, but that an artificial sense must be given to the word, because “the
potential existence of such a child places it plainly within the reason and motive of the gift”; this is, of course,
assuming that the donor has not expressed or implied in the document an intention to confine the gift to
children living at the date at which the gift takes effect.

To put the matter in another way, if the donor had thought about it at all, he would almost certainly have said
that he wished to include his posthumous children among the beneficiaries. There is no fiction as to his
intention, but the law can give effect to that intention only by the fiction that the child en ventre sa mere is
actually born, provided it is in fact subsequently born alive.

The fiction is applicable in (1) only if it is for the benefit of the child, not where it may be detrimental to him.
But in (2), i.e., in connexion with the perpetuity rule, the fiction holds whether it be for the advantage of the
unborn child or not. Even with respect to the benefit in (1), it must be for the child’s direct benefit; e.g., if there
be a gift to X for life, with a limitation over to X absolutely if X leave issue, but, if he leave none, then to Y,
and if X die leaving a child en ventre sa mere, the property will go to Y; for the gift conferred no direct benefit
on X’s child unborn at X’s death. Such was the decision of the house of lords in Elliot v. Joicey, and it evoked
a considerable amount of adverse criticism.

TRANSFER OF PROPERTY TO AN UNBORN CHILD

Section 13 of the Transfer of property Act read as follows:
“Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the
date of transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of

26
such person shall not take effect, unless it extends to the whole of the remaining interest of the transfer in the
property.”

Section 13 gives effect to the general rule that a transfer can be effected only between living persons. There
cannot be a direct transfer to a person who is not in existence or is unborn. This is the reason why section 13
uses the expression transfer ‘for the benefit of’ and not transfer ‘to’ unborn person. A child in the mother’s
womb is considered to be competent transferee.

Therefore, the property can be transferred to a child in the mother’s womb because the child exists at that time
but not to an unborn person who does not even exist in the mother’s womb. Every transfer of property involves
the transfer of interest. As soon as the property is transferred, the transferor is divested of that interest and the
interest is vested in the transferee. For vesting of interest, therefore, it is necessary that the transferee must be
in existence.

Otherwise the interest will remain in abeyance till the transferee comes into existence. This is against the very
concept of an interest. Section 13 provides that the property cannot transfer directly to an unborn person but it
can be transferred for the benefit of an unborn person. For transfer of property for the benefit of unborn person
two conditions are required to be fulfilled:
1) Prior life interest must be created in favor of a person in existence at the date of transfer, and
2) Absolute interest must be transferred in favor of an unborn person.

PRE-REQUISITES FOR A VALID TRANSFER OF PROPERTY TO AN UNBORN PERSON

Section 13 provides a mechanism for a specific mechanism for transferring property validly for the benefit of
unborn persons. The procedure as follows:
1) The person intending to transfer the property for the benefit of an unborn person should first create a life
estate in favor of a living person and after it, an absolute estate in favor of the unborn person.
2) Till the person, in whose favor a life interest is created is alive, he would hold the possession of the
property, enjoy its usufruct i.e. enjoyment the property.
3) During his lifetime if the person, (who on the day of creation of the life estate was unborn) is born, the title
of the property would immediately vest in him, but he will get the possession of the property only on the death
of the life holder.

CREATION OF A PRIOR LIFE INTEREST

As far as the creation of a prior interest is concerned, first, the property is given for life to a living person. It is
not necessary that life interest should be created in favor of only one living person. The transfer is competent to
create successive life interests in favor of several living persons at the same time.
27
For instance, A transfer property to B for life, and after him, to C, and then to D again for their lives
and then absolutely to B’s unborn child UB.

A ———————————B (life interest)

———————————-C (life interest)

———————————-D (life interest)

———————————-UB (Absolute interest) [fig (i)]

On B’s death, the possession would be taken by C and on C’s death, by D. On D’s death, the possession would
go to B’s child, who should have come in existence by this time. If he not there, the property would revert back
to A, if he is alive, else to his heirs.

NO LIFE INTEREST FOR AN UNBORN PERSON

As far as the unborn is concerned, no life interest can be created for the benefit of an unborn person. Section
13, specifically prohibits that, by the use of the expression, ‘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. It
means that the transfer must convey to the unborn person, whatever interest he had in the property, without
retaining anything with him. Thus, no limited estate can be conferred for the benefit of the unborn person. If
limited interest in the property is settled for him, the same would be void.

For instance, A creates a life estate in favor of his friends B, and a life estate for the benefit of B’s
unborn first child UB1 and then absolutely to B’s second child UB2.

A ———————– B (Life interest)

———————– UB1 (Life interest)

———————– UB2 (Absolute interest) [fig (ii)]

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The second figure is of limited interest in the property for the benefit of an unborn person and would therefore
be void and incapable of taking effect in law. After the death of B, here, the property would revert back to A or
his heirs as the case may be, as even though the transfer for the benefit of UB2 appears to be proper, as it is
dependent on a void transfer that cannot take effect in law; a transfer subsequent to, or dependent on a void
transfer can also not take effect.

Thus, where a father gave a life interest in his properties to his son and then to his unborn child absolutely, it
was held that the settlement was valid. But where the interest in favor of the unborn child was a life interest the
settlement would be void, and a subsequent interest would also fail.

Similarly, where there is a possibility of the interest in favor of the unborn child being defeated either by a
contingency or by a clause of defeasance, it would not be a bequest of the whole interest, and would be
therefore be void.

In the example cited above, in figure (ii), suppose UB1 dies before B and UB2 is alive when the life estate in
favor of B comes to an end. Even then, the transfer of the benefit of UB2 will not take effect as the validity of
the transfer has to be assessed from the language of the document and not with respect to probable or actual
events that may take place in future. It is the substance of the transfer that will determine whether it is
permissible under the law or not and not how the situation may emerge in the future.

In Girish Dutt v. Data Din, A made a gift of her property to B for her life and then to her sons absolute. B had
no child on the date of execution of the gift. The deed further provided that in case B had only daughters, then
the property would go to such daughters but only for their life. In case B had no child then after the death of B,
the property was to go absolutely to X.

The deed on paper provided a life estate in favor of B’s unborn daughters: which is contrary to the rule of
Section 13. However, B died without any child, and X claimed the property under the gift deed. The court held
that where a transfer in favor of a person or his benefit is void under section 13, any transfer contained in the
same deed and intended to take effect or upon failure of such prior transfer is also void. In determining whether
the transfer is in violation of section 13, regard has to be made with respect to the contents of the deed and not
what happened actually.

Here as the transfer stipulated in the contract that was void, the transfer in favor of X also became void. Hence,
X’s claim was defeated.

CASE LAWS
Sopher’s case
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In the case of Sopher v Administrator General of Bengal a testator directed that his property was to be divided
after the death of his wife into as many parts as there shall be children of his, living at his death or who shall
have pre-deceased leaving issue living at his death. The income of each share was to be paid to each child for
life and thereafter to the grand-children until they attained the age of 18, when alone the grand-children were to
be absolutely entitled to the property.

The bequest to the grand-children was held to be void by Privy Council as it was hit by Section 113 of the
Indian Succession Act which corresponds to section 13 of Transfer of property Act. Their Lordships of the
Privy Council observed that: “If under a bequest in the circumstances mentioned in Section 113, there was a
possibility of the interest given to the beneficiary being defeated either by a contingency or by a clause of a
defeasance, the beneficiary under the later bequest did not receive the interest bequeathed in the same
unfettered form as that in which the testator held it and that the bequest to him did not therefore, comprise the
whole of the remaining interest of testator in the thing bequeathed.

Ardeshir’s Case
In Ardeshir v. Duda Bhoy’s case D was a settler who made a settlement. According to the terms of the
settlement, D was to get during life, one-third each was to go to his sons A and R. After D’s death, the trust
property was to be divided into two equal parts. The net income of each property was to be given to A and R
for life and after their death to the son’s of each absolutely.

If A and R were each to pre-deceased D without male issue, the trust were to determine and the trust property
were to the settler absolutely. The settler then took power to revoke or vary the settlement in whole or in part
of his own benefit. It was held that R’s son who was not born either at the date of settlement or his death did
not take any vested interest and the gift to him was invalid. A’s son who was alive at these dates did not also
take a vested interest.

Applicability of Sopher and Ardeshir rulings in India

The decision in Sopher’s case and Ardeshir’s case were applied by Bombay High Court in Framroz
Dadabhoy v Tahmina, in this case, bai Tahmina settled a certain sum upon trust in favor of herself for life and
after her death and subject to the power of appointment by codicil or Will among her issues born during her
lifetime in trust for all her children who being sons shall attain the age of 18 or being daughters shall attain that
age or marry under that age being daughter’s, in equal sums.

It was held by their Lordships that the decision in the Sopher’s case could not be applied to the trusts of a
settlement which were transfer inter-vivos. It was held that the words ‘extend to the whole of remaining
interest of the transferor in the property’ in section 13 of the Transfer of Property Act were directed to the
extent of the subject-matter and to the absolute nature of the estate conferred and not to the certainty of vesting.

30
RULE AGAINST PERPETUITY
Perpetuity means an uncertain period or time or indefinite period. 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.

Origin
Perpetuity may arise in two ways
(a) By taking away the power of alienation from the transferor
(b) By creating a remote interest in the future property.
A condition restraining the transferee’s power of alienation is void as per Section 10 of the Act. And a
disposition to create a future remote interest is prohibited under Section 14 of the Act.

Object
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 that ultimately is good for the society. Thus, the object of this section is to see that
the property is not tied- up and to prevent the creation of perpetuity.

Following conditions must be satisfied to attract Section 14:

1) There must be a transfer of property.
2) The transfer should be to create an interest in favour of an unborn person.
3) Interest created must take effect after the lifetime of one or more persons living at the date of such a
transfer and during the minority of the unborn person.
4) The unborn person must be in existence at the expiration of the interest of the living persons.
5) The vesting of the interest in favour of the ultimate beneficiary may be postponed only up to the life or
lives of living persons plus the minority of the ultimate beneficiary but not beyond that.

EXTENT OF PERPETUITY PERIOD

Position in India –
Life or any number of lives in being + period of gestation + minority period of the unborn beneficiary.

English Law –
Life or lives in being + period of gestation + minority period.

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DIFFERENCE BETWEEN INDIAN AND ENGLISH LAW
The minority period in India is 18 years whereas it is 21 years under English law.
The period of gestation should be an actual period under Indian Law but it is a gross period under English law.
Under Indian law, the property should be given absolutely to the unborn person whereas in English law, need
not be absolutely given.
The unborn person must come into existence before the death of the last life estate holder as per Indian law
whereas he must come into existence within 21 years of the death of the last life estate holder in case of
English law.

EXCEPTIONS
1) Transfer for public benefit. Where property is transferred for the benefit of the people in general, then
it is not void under this rule. e.g. for the advancement of knowledge, religion, health, commerce or
anything beneficial to mankind.
2) Covenants of Redemption. This rule does not offend the covenants of redemption in the mortgage.
3) Personal Agreements. Agreements that do not create any interest in the property are not affected by
this rule. This rule applies only to transfers where there i transfer of interest.
4) Pre-emption. In this, there is an option of purchasing a land and there’s no question of any kind of
interest in the property, so this rule does not apply.
5) Perpetual Lease. It is not applicable to the contracts of perpetual renewal of leases.
6) This rule is not applicable to mortgages because there is no creation of the future interest.

RULE UNDER HINDU LAW AND MUSLIM LAW

Prior to the enactment of the TP Act, the rule under Hindu and Muslim law was that a gift to a person who was
not in existence, was void. The position under Muslim law continues to be the same. However, for Hindus, the
rule was modifies by a series of enactments to bring it conformity with Section 13 of the TP Act.

Parallel provisions have also been provided under Indian Succession Act 1925, which permits bequest for the
benefit of an unborn person. Section 113 of Indian Succession Act 1925(IS Act), applies to legacies created for
the person not in existence and contain a provision almost identical to Section 13 of the TP Act.

RULE AGAINST ACCUMULATION

Section 17 of the Act speaks about the “Accumulation of Income of property or Direction for Accumulation”.
A direction for the accumulation of income of property amounts to limiting the beneficial enjoyment of
property. Such direction is void as per Section 11 of the Act but Section 17 is an exception.

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Section 11 is applicable where there are absolute transfers whereas Section 17 applies to all kinds of transfer.
e.g., A settler by deed directs accumulation for 25 years and himself lives for 40 years, from the date of
transfer. The accumulation for 25 years is good.
This Section is akin to Section 117 of the Indian Succession Act, 1925.

Permissible period for Accumulation is as per law:

i) Life of the transferor; or
ii) Period of 18 years, whichever is longer. Any condition beyond this period is void and not operative. The
direction can be for the whole or part of the income.

Illustration: X transfers his property to Z with a direction that the income of the said properties shall
accumulate during X’s life and shall be given to M. The direction here is valid only up to the life of Z and not
after his death.

EXCEPTIONS
1) Payment of Debts. This rule is not applicable where the purpose for accumulation is the payment of
debts incurred by the transferor or any other person having an interest in the transfer.
2) Accumulation for raising portions. It means providing a share of the income for maintenance. It does
not apply to cases where the accumulation of income is for providing portions to children or for some
remote issue of the transferor or any other person interested in the transfer.
3) Maintenance of property. Accumulation for the proper maintenance and preservation of the property
shall not be void even if it exceeds the life of the transferor or 18 years from the date of transfer.

CONCLUSION
A child in the womb is literally not a person in existence, but has been so treated under both Hindu Law and
English Law child in its mother’s womb is for many purposes regarded by a legal fiction as already born, in
accordance with the maxim nasciturus pro jam nato habetur.

Section 13 provides that the property cannot transfer directly to an unborn person but it can be transferred for
the benefit of an unborn person. For transfer of property for the benefit of unborn person two conditions are
required to be fulfilled: Prior life interest must be created but not for an indefinite period in favor of a person in
existence at the date of transfer, and Absolute interest must be transferred in favor of the unborn person.

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Q 8) DEFINE MORTGAGE THE ESSENTIALS OF MORTGAGE. HOW MORTGAGE IS EFFECTED?

ANS. INTRODUCTION

Mortgage is 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.

CHARACTERISTICS OF MORTGAGE

A mortgage can be affected only on immovable property, the immovable property includes land, benefits that
arise out of things attached to the earth like trees, buildings, and machinery. But a machine which is not
permanently fixed to the earth and is shiftable from one place to another is not considered to be immovable
property.

A mortgage is the transfer of an interest in the specific immovable property and differs from sale wherein the
ownership of the property is transferred. Transfer of an interest in the property means that the owner transfers
some of the rights of ownership to the mortgagee and retains the remaining rights with himself. For example, a
mortgagor retains the right to redeem the property mortgaged.

The object of transfer of an interest in the property must be to secure a loan or performance of a contract which
results in monetary obligation. Transfer of property for purposes other than the above will not amount to the
mortgage. For example, a property transferred to liquidate prior debt will not constitute a mortgage.

The property to be mortgaged must be a specific one, i.e., it can be identified by its size, location, boundaries
etc.

The actual possession of the mortgaged property need not always be transferred to the mortgagee.

The interest in the mortgaged property is re-conveyed to the mortgage on repayment of the loan with interest
due on.

In case the mortgager fails to repay the loan, the mortgagee gets the right to recover the debt out of the sale
proceeds of the mortgaged property.

DIFFERENT TYPES OF MORTGAGE

The six types of mortgages are;

1) Simple mortgage,
2) Mortgage by conditional sale,
3) Usufructuary mortgage,
4) English mortgage,
5) Mortgage by deposit of title deeds, and
6) Anomalous mortgage
34
These are described below;

1) Simple mortgage – A simple mortgage is one where without delivering possession of the mortgaged
property, the mortgager binds himself personally to pay the mortgage money and agrees expressly or
impliedly that in the event of his failure to pay according to his contract, the mortgagee shall have a right to
cause the mortgaged property to be sold and the proceeds of the sale to be applied so far may be necessary,
in the payment of the mortgage money. However, the mortgagee cannot directly sell the property. The sale
must be through the intervention of the court.

The mortgagee will have to obtain first a decree from the court for the sale of the mortgaged property since
the words used are “cause the mortgaged property to be sold”.

2) Mortgage by conditional sale – Mortgage by conditional sale is one where the mortgagor ostensibly sells
the mortgaged property on the condition that –
i) On default of payment of the mortgage money on a certain date the sale shall become absolute, or
ii) On such payment being made the sale shall become void, or
iii) On such payment being made the buyer shall transfer the property to the seller.

3) Usufructuary mortgage – A usufructuary mortgage is one where the mortgagor delivers or agrees to
deliver the possession of the mortgaged property to the mortgagee and authorizes him –

i) To retain such possession until payment of the mortgage money,

ii) To receive the whole or any part of the rents and profits accruing from the property, and
iii) To appropriate such rents or profits;
a) in lieu of interest, or
b) in payment of the mortgage money, or
c) partly in lieu of interest and partly in lieu of the mortgage money.

4) English Mortgage – English mortgage has the following characteristics:

i) The mortgagor makes a personal promise to repay the mortgage money on a certain day.
ii) The property mortgaged is transferred to the mortgagee absolutely. The mortgagee, therefore, is entitled
to take immediate possession of the property. He/She may, under certain circumstances sell the
mortgaged property without the intervention of the court.
iii) The transfer is subject to this condition that the mortgagee will re-transfer the property to the mortgagor
upon making payment of the mortgage money as agreed.
iv) Mortgage by deposit, of title deeds
v) Where a person delivers to a creditor or his/her agent documents of title to immovable property, with the
intention to create a security thereon, the transaction is called a mortgage by deposit of title deeds.
vi) This mortgage does not require registration. It is the most popular with banks.

5) Anomalous mortgage – A mortgage other than any of the mortgages explained so far is an anomalous
mortgage. Such a mortgage includes a mortgage formed by the combination of two or more types of
mortgages as explained above.

It may, therefore, take various forms depending upon custom, local usage, or contract.

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LEGAL MORTGAGE AND EQUITABLE MORTGAGE – ADVANTAGES AND DISADVANTAGES

On the basis of the transfer of title to the mortgaged property, mortgages are divided into types namely:

1. Legal Mortgage
2. Equitable Mortgage

1. Legal Mortgage – In a legal mortgage, the legal title to the property is transferred in favor of mortgagee by
a deed. The deed is to be registered when the principal money is Rs.100 or more. On repayment of the loan,
the legal title is retransferred to the mortgagor. The method of creating charge is expensive as it involves
registration charges and stamp duty.
2. Equitable Mortgage – An equitable mortgage is affected by delivery of documents of title to the property to
the mortgagee. The mortgagor through Memorandum of deposit undertakes to grant a legal mortgage if he
fails to pay the mortgage money.

Advantages

i) No registration is required for an inequitable mortgage and so stamp duty is saved.

ii) It involves minimum formalities.
iii) The information regarding such mortgage is kept confidential between the lender and borrower. So the
reputation of the borrower is not affected.

Disadvantages

i) If the mortgagor fails to repay, the mortgagee must get a decree for the sale of the property. Getting a
degree is expensive and time-consuming.
ii) The borrower may hold the title deeds not on his own account, but in the capacity of a trustee. If an
equitable charge is created, the claim of the beneficiary under the trust will prevail over the equitable
mortgage.
iii) There is the risk of subsequent legal mortgage in favor of another party. If the equitable mortgagee parts
with the security, even for a short period, the debtor may create a second legal mortgage over the same
property.

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 EASEMENT

Q.1. WHAT DO YOU MEAN BY DISTURBANCE OF EASEMENT? WHAT ARE THE REMEDIES IN
SUCH CASE?

ANS. MEANING OF EASEMENT

An easement is a privilege, without which the owner of one tenement has a right to enjoy in respect of that
tenement in or over the tenement of another person, by reason where of the latter is obliged to suffer or refrain
from doing something on his own tenement for the advantage of the former.

CHARACTERISTICS FOR AN EASEMENT

The following six characteristics are essential for an easement-

1) There must be a dominant and survient tenement

2) An easement must accommodate the dominant tenement
3) The rights of easement must be possessed for the beneficial enjoyment of the dominant tenement.
4) Dominant and survient owners must be different persons.
5) The right should entitle the dominant owners to do and continue to do something or to prevent and continue
to prevent something being done, in or upon, or in respect of, the servient tenement; and
6) The something must be of a certain or well defined character and be capable of forming the subject matter
of a grant.

It forms a part of right of way is an affirmative easement – It entitles the owner of a right to do a certain act and
to continue to do it, namely pass over the land of the servient owner. From this point of view it is called a
positive easement. But a right of way also prevents the servient owner from building of his land, or doing any
other act in the enjoyment of his proprietary rights on the land, which would interfere with the right of way. In
fact, every right of easement imposes on the servient owner a restrictive use and enjoyment of his own land by
him so that it may not interfere with the enjoyment of the right of easement by the dominant owner. Easements
are classified into positive or negative according to the predominating factor of the particular exercised.

RIGHT TO WAY

A right of way is a right to pass over the soil of another person uninterruptedly. Rights of way do not fall under
the denomination of natural rights. They are discontinuous easement, and may be acquired in the same way as
the other easements are acquired. There are two classes of right of way

(a) Public rights of way - Public rights of way which exist for the benefit of all people. They are called
highway.

Their origin is in dedication express or implied.

(b) Private rights of way – These are vested in particular individuals or to owners of particular tenements: their
origin is grant or prescription or belongs to certain classes of persons or certain portions of the public, such as
the tenement of a manor, or the inhabitants of a parish or village, their origin is custom.
37
A right of way may be created by express grant or by immemorial custom, necessity or by prescription, or by
statute or through private dedication. Simply because the user of the land without permission of the owner was a
criminal, it does not prevent in the acquiring of the right of way by prescription if the user continued for the
statutory period. As to the nature of rights of way, they may be general in character or other words usable for all
purposes and at all times or the right to use them may be limited to particular purposes e.g. for sweepers, or to
certain times.

Thus right to way may be limited to agricultural purposes only and the existence such a right is not itself
sufficient evidence of general right for all purposes – to carry lime or stone from a newly opened quarry, or it
may be limited to the purpose of driving cattle, or carriages or of the passage of boats, or it may be a horse way
or merely a way for foot passengers, or the right of user may be limited to such times as a gate is open, or to
certain hours of the day, or when the crop are off the land.

A right of way acquired by prescription for agricultural purposes can be used for other purposes provided that
the burden on the servient tenement is not increased by such user. When a right of way is granted by
conveyance for access and use of a particular land, it cannot be extended and utilized for cultivation of another
adjoining land.

PUBLIC RIGHT OF WAY

Public right of way exists over highways or navigable rivers. A highway is a road over which the public at large
possess a right of way. The highway may cover not merely the metalled portion but also the side lands. A public
highway may lead from one place to another. The public have right to free use any portion of the highway. The
ownership of the highway is with the owners of the land adjoining the highway, but by a statute the ownership
is vested in municipal bodies. The vesting of the highway or a public street in a municipality in only for
management and maintenance: the vesting of a highway or a street also includes so much of the soil below ad of
the space above the surface as is necessary to enable it to adequately maintain the highway or the street.

Every person who occupies land adjoining a highway has a private right of access to the highway from his land
and vice versa. The right to access is different from the right of passage over it. The former is a private right and
the latter is a public right. The right over a public highway cannot be limited to any class or section of the
public. An attempt to dedicate a highway to a limited portion of public is no dedication at all. The right to use a
thoroughfare should be in a reasonable manner without any wanton disregard of the legal rights of others or a
riotous demonstration to provoke animosities. But the subject to control of appropriate authorities and public
order, a citizen has a right to take processions through a public street, and even to hold a public meeting at a
proper time and place on such a street. Any wrongful interference with a right of way constitutes a nuisance.

CLASSIFICATION OF WAYS

The classification of private rights of way which was formerly regarded as of importance is now of no practical
utility There are no exact categories under one or other of which every private right of way must fall, as was
formerly supposed. The nature and extent of the right depends upon all the circumstances of each particular

38
case, and the former rigid classification no longer suit the various kinds of ways as they are now regarded by the
law.

GENERAL RIGHT OF WAY

The distinction between general and limited rights of way is still of some importance. The term “general right of
way” is applied to private rights of way upon which there is no restriction other than the necessary
qualifications which nature or the law requires with regard to all private rights of way. The term is misleading in
that it is more applicable to a public highway for all kinds of traffic than to private right of way, which is
necessarily qualified by law in several respects, for all private right of way, no matter how general they may be,
can only be used by the owners and occupiers of the dominant tenement and their licensees, and only for the
purpose connected with the dominant tenement. Also in the great majority of cases, they may only be used for
the purpose of the dominant tenement as that tenement existed at the time of the creation of the easement. In
this respect the scope of an easement may be wider on the construction of an express grant creating it than
measured by the actual user where it arises by prescription.

The true significance of the term “general right of way” lies in its use in contradistinction to the special
limitations expressed or inferred upon the user of any particular right of way over and above the limitations thus
imposed by general law. Thus, special limitation may be placed upon the user in respect of time; for instance,
the user may be limited to certain times in the day , to certain seasons or periods or to the duration of the
purposes for which it was created. It may be limited also in respect of the part of the area of the servient
tenement over which it may be exercised. Another and the most common form of limitation is in respect of the
mode in which the way may be used, that is to say, in respect of the nature of the traffic. In this respect it may
be limited to foot passengers to motor traffic, to carriers and wheeled traffic, excluding cattle and other animals,
to agriculture traffic, to men driving cattle and other animals, or to traffic of some other particular nature. The
user of the way may be limited in respect of its special purposes or of the persons who are entitled to use it.

PERSONS ENTITLED TO USE RIGHT OF WAY

Apart from statute, the determination of the question that who may use a right of way depends upon the nature
and extent of the right. If the right is created by grant, the persons or classes or persons entitled to use it may be
expressly limited by the terms of the instrument, a grant of this kind being construed, not strictly, but in
accordance with the apparent intention of the parties.

As a general rule the persons or classes of persons who may use the right must be ascertained by construing the
instrument having regard to the general circumstances surrounding the exception of the grant. The most
important of these circumstances are the nature of the place over which the right is granted, and the nature of
the dominant tenement, and the purposes for which that tenement is, in the contemplation of the parties,
intended to be used. In the ordinary case of a grant of a right of way to a house which may only be used as a
private dwelling house, the way be used by, and the right extends to the grantee, and to members of his family,
visitors, guests, employees and the trades people, even though none of these persons is expressly mentioned in
the grant. The owner of the dominant tenement may use a right of way to it, even though he is not in possession,
for the purpose of viewing waste, demanding rent, removing, an obstruction or other similar purposes.

DISTURBANCES OF RIGHT OF WAY

39
Any wrongful interference with a right of way constitutes a nuisance. As, however, a right of way never entitles
the grantee, or those lawfully using the way under the grant, to the exclusive use of land over which the way
exists, not every obstruction if the way amounts to an unlawful interference, and no action will lie unless there
is a substantial interference with the easement granted. The effect of a grant of a right of way differs in this
respect from a grant of the soil of the way, for in the latter case the slightest interference is a trespass.

The question whether any particular interruption amounts to an unlawful interference depends upon the nature
of the right of way and of the place, and upon the circumstances of the case. Any disturbances of a way is
unlawful which renders the way unfit for the purpose for which it was granted, to the injury of the person
entitled to the way. Thus, there would be an unlawful interference if the way is so damaged by vehicular or
other traffic that the grantee is unable to use it; or if the way is either wholly or partially obstructed by being
built upon; or if the servient tenement is ploughed up so that the way cannot be used. The nature of the remedy
is the same whether the way was created by express grant or by way of reservation, or is claimed under the
doctrine of prescription.

REMEDIES

The person entitled to a right of way may sue for an injunction to restrain obstruction of the way or for
damages. If he in fact suffers no damage by the obstruction, nominal damages will be awarded only, and an
injunction will be refused.

A person who in purported exercise of a right of way makes an excessive user of the servient tenement commits
a trespass and may be restrained from doing at the instance of the servient owner. What amount to excessive
user depends on the scope of the right according to the true construction of an express grant or according to the
user established by the prescription as the case maybe. A trespass committed in the manner described, however,
gives no cause of action to persons who are not entitled to use the way and are not interested in the servients
tenement, nor can the dominant owner claim for the physical damage to the way unless this substantially
interferes with his right to use it.

A person interested only in reversion or remainder in the dominant tenement cannot sue for the protection of the
right of way unless the obstruction is of such a nature that it either permanently injures the estate or operates as
a denial of right.

A person interested in reversion or remainder in the servient tenement cannot sue for trespass done under an
alleged right of way, because acts of this nature cannot operate as evidence of right against a person who has no
present remedy by which he can obtain redress.

RIGHT TO ACCESS OF LIGHT

At common law the owner of land has no right to light. Anyone may build up his own land regardless of the fact
that his doing so involves an interference with the light which would otherwise reach the land and building of
another person The right of light is acquired as an easement in augmentation of the ordinary rights incident to
the ownership and enjoyment of land.

40
The right to light is nothing more or less than the right to prevent the owner or occupier of an adjoining
tenement from building or placing on his own land anything which has the effect of illegally obstructing or
obscuring the light of the dominant tenement. It is in truth no more than a right to be protected against a
particular form of nuisance, and an action for the obstruction of light which has in fact been used and enjoyed
for twenty years without interrupting or written consent cannot be sustained unless the obstruction amounts to
an actionable nuisance.

An owner of ancient light is entitled to sufficient light, according to the ordinary notions of mankind, for the
comfortable use and enjoyment of his house as a dwelling-house, if it is a dwelling, or for the beneficial use and
occupation of the house, if it is a warehouse, a shop, or other place of business.

The right of light is an easement and may be acquired-

a) By grant or covenant, express or implied

b) By prescription under the Prescription Act in England, and the Indian Easement Act in India. These acts
necessitate an enjoyment without interruption for a period of twenty years to confer the right. But the dominant
owner does not by his easement obtain a right to all the light he has enjoyed. He obtains a right to so much of it
as will suffice for the ordinary purposes of inhabitancy or business according to the ordinary notions of
mankind, having regard to the locality and surroundings. A right to light by prescription to a room in a
residential house is not to be measured by the use of which has been put in the past

c) By reservation on the sale of the servient tenement. If a vendor of land desires to reserve any right in the
nature of easement for the benefit of his adjacent land which he is not parting with, he must do it by express
words in the deed of conveyance, except in the case of easement of necessity.

1. Nature of Easement of light- The easement of light is a negative easement or a species of negative
easement. It is a right acquired in augmentation of the ordinary rights incident to the ownership and enjoyment
of land, and may be defined as a right which a person may acquire, as the owner or occupier of a building with
windows or apertures, to prevent the owner or occupier of an adjoining piece of land from a building or placing
upon the latter’s land anything which has the effect of “illegally” obstructing or obscuring the light coming to
the building of the owner of the easement.

The easement of light used frequently to be spoken of as the easement of “light and air”, as though the right to
light and the right of air were inseparably connected. They are however, wholly distinct, and although orders for
the protection of light once included the protection of air as well, this practice has long since been abandoned.

2. Extent of easement of light- The easement of light does not consist of a right to have a continuance of all the
light which has previously come to the window of the dominant tenement. The test whether the interference
complained of amounts to a nuisance is not whether the diminution is enough materially to lessen the amount of
light previously enjoyed, nor is it entirely a question of how much light is left, without regard to what there was
before, but whether the diminution (i.e. difference between the light before and the light after the obstruction) is
such a really makes the building to a sensible degree less fit than it was before for the purposes of business or
occupation according to the ordinary requirements of mankind. The amount of light is sufficient according to
the ordinary notions of mankind increases as standards increase.

41
What the dominant owner is bound to show in order to maintain an action is that the interference is such an
obstruction of light as to interfere with the ordinary occupations of life. In other words, the nature and extent of
the right is to have that amount of light through the window of the dominant house which is sufficient,
according to the ordinary notions of mankind, for the comfortable use and enjoyment of the house as a dwelling
house, if it is a dwelling house, or for the beneficial use and occupation of the building if it is a warehouse, shop
or other place of business.

The rule that the easement of light does not give to the dominant owner a right to all the light coming to the
window of the dominant tenement applies whether the easement is based upon the doctrine of prescription at
common law or is claimed under the provisions of the Prescription Act 1832. A nuisance is however committed
by interference of light coming to the dominant tenement if it results in a substantial privation of light sufficient
to render the occupation of the house uncomfortable and to prevent the owner from carrying on his accustomed
business as beneficially as he formerly did.

3. Indian Law- No damage is substantial unless it materially diminishes the value of the dominant heritage, or
interferes materially with physical comfort of the plaintiff, or prevents him from carrying on his accustomed
business in the dominant heritage as beneficially as he had done previous to instituting the suit. In considering
the sufficiency of light, the light coming from other quarters should be considered. The extent of a prescriptive
right to the passage of light and air though a certain window is provided for by Section 28(c) of the Indian
Easements Act. An easement of light to a window only gives a right to have buildings that obstruct it removed
so as to allow the access of sufficient light to the window. In cases not governed by the Easements Act the
principle laid down in Bagram’s case will apply viz., The only amount of light which can be claimed by
prescription or by length of enjoyment, without an actual grant, is such an amount as is reasonably necessary for
the convenient and comfortable habitation of the house, but the test is whether the obstruction complained of is
a nuisance.

In cases of light, “Court ought not to interfere by way of injunction when obstruction of light is very slight and
where the injury sustained is trifling, except in rare and exceptional cases and where, the defendant is doing an
act which will render the plaintiff’s property absolutely useless to him unless it is stopped in such a case,
inasmuch as the only compensation, which could be given to the plaintiff, would be to compel the defendant to
purchase his property out and out, the court will not in the exercise of its discretion compel the plaintiff to sell
his property to the defendants by refusing to grant him an injunction and awarding him damages on that basis.

Between these two extremes, where the injury to the plaintiff would be serious where the court considers the
property may still remain with the plaintiff and be substantially useful to him as it was before and where the
injury is of one of a nature that can be compensated by money, the Courts are vested with a discretion to
withhold or grant an injunction, having regard to all the circumstances of the particular case before them. In
India the Court has discretion: It may, not shall, issue an injunction where the injury is such that pecuniary
compensation would not afford adequate relief.

In some cases a mandatory injunction will also be granted. Court will grant such injunction where a man, who
has a right to light and air which is obstructed by his neighbour’s building, brings his suit and applies for an
injunction as soon as he can after the commencement of the building, or after it has become apparent that the
42
intended building will interfere with his light and air. But the court should be satisfied that a substantial loss of
comfort has been caused and not a mere fanciful or visionary loss.

If plaintiff has not brought his suit or applied for an injunction at the earliest opportunity, and has waited till the
building has been finished, and then asks the Court to have it removed, a mandatory injunction will not
generally be granted.

RIGHT TO ACCESS OF AIR

An owner or occupier of land or building has no natural right to free passage air to his tenement over adjoining
open land. He has no natural right to prevent his neighbor from using his land in such a way as to obstruct that
free passage air. A right to the general passage of air not flowing in any defined channel may be the subject of
express grant but is not capable of being claimed as as easement by prescription, or by a lost grant. Thus no
action will lay for the obstruction the passage of wind to an old mill, or chimney. But a right to air through a
particular aperture in a house or building on the dominant tenement can be acquitted by prescription as an
easement or by express grant.

By implication of law and it may be acquired by prescription and under the doctrine of a lost modern grant.
There would appear to be no reason why it should not be an easement within the meaning of the Prescription
Act 1832 and be capable of being acquired by prescription under the provisions of that Act.

A right to the general passage of air not flowing in any defined channel may be the subject of express grant or
covenant, but is not capable of being claimed either by a prescription in common law or by grant or under the
Prescription Act 1832. Such claim is too vague and indefinite to be recognized in law.

1. Indian Law; Access and use of air to and for any building may be acquired under the Indian Easements Act
if it has been peaceably enjoyed without interruption for twenty years. The right to air is co-extensive with the
right light. The owner of house cannot by prescription claim to be entitled to the full and uninterrupted passage
of a current of wind. He can claim no more air than which is sufficient for sanitary purposes. There is no right
as a right to the uninterrupted flow of south breeze as such. There is no easement for free access of wind. In this
country a man who has enjoyed a right of air more or less pure and free will is reasonably protected against any
interference. The conditions here are different from those existing in England, so far as air is concerned. In
England more light is needed than here: whereas more air is needed here than England.

2. Infringement of the right

The right to the purity of air is not violated unless it interferes materially with the ordinary comfort of human
existence. It is only in rare and special cases involving danger to health, or at least something very nearly
approaching it, that the Court would be justified interfering on the ground of dimunation of air.

But under the Indian law where the easement disturbed is a right to the full passage of air to the opening in a
house, damage is substantial if it interferes materially with the physical comfort of the plaintiff, though it is not
injurious to his health. The Calcutta High Court has held that obstruction in cases not governed by Easement
43
Act must be such as to cause what is technically called a nuisance to the house, in other words, to render the
house unfit for ordinary purposes of habitation or business.

Conclusion

Thus concluding, an easement is a right which the owner of a property has to compel the owner of another
property to permit something to be done, or to refrain from doing something on the survient element for the
benefit of the dominant tenement. E.g. Right to light, right of way. The property in respect of which as easement
is enjoyed is the dominant element, and its owner, dominant owner, and that over which the right is exercised is
called the survient tenement, and its owner, a survient owner.

However unlike a lease, an easement does not give the holder a right of "possession" of the property. Thus
according to the researcher an easementary right is provided for specific relief from specific violations of
common basic rights. In the case of the right to way, any wrongful interference with the right of way constitutes
a nuisance. As, however, a right of way never entitles the grantee, or those lawfully using the way under the
grant, to the exclusive use of the land over which the way exists not every obstruction of the way amounts to an
unlawful interference, and no action would lie unless there is a substantial interference with the easement
granted.

In the case of right to access of light, it does not consist of a right to have a continuance of the same amount of
light throughout. In case of a diminution, the dominant owner is bound to show that the diminution has
interfered with his ordinary occupations of life and it results in a nuisance if it is sufficient to render the
occupation of the house uncomfortable, and prevent the owner from carrying his business as beneficially as he
formerly did.

In the case of right to access of air, it is co-existence with the right to light. The owner of the house cannot by
prescription claim an entitlement of the flow and uninterrupted passage of current of wind, neither is he entitled
to right of uninterrupted flow of breeze as such, and he can claim only such amount of air which is sufficient for
sanitary purposes. Hence, it is only in rare and special cases involving danger to health cases that the court
would justify as interfering with the right to diminution of light under the Indian law under the Indian
Easements Act, 1882.

44
Q.2. DEFINE AND DISTINGUISH BETWEEN AN ACTIONABLE CLAIM AND A MERE RIGHT TO
SUE.

ANS. ACTIONABLE CLAIM

Actionable claim is defined in Section 3 of the Transfer of Property Act as a ‘claim to any debt other than a
debt secured by mortgage of immovable property or by hypothecation or pledge of movable property or to any
beneficial interest in the movable property not in the possession, either actual or constructive of the claimant
which the civil courts recognize as affording grounds for relief, whether such debt, or beneficial interest be
existent, accruing, conditional or contingent.

Accordingly, this mean, it excludes not only a claim to any immovable property for a debt but also a debt
secured or any movable property in possession of the claimant. It follows, therefore that it is a claim for a
simple debt or liability and which can be realized by a legal action.

An actionable claim is called, in English Law, a chose in action or a thing in action as against a chose or
money in possession. It denotes incorporeal personal property of all disciplines and an interest in corporeal
personal property not in possession of the owner which accordingly can only be claimed or enforced in action.
Therefore, while the different types of movable property governed by the Sale of Goods Act can be called as
chose in possession, an actionable claim is also a type of movable property called chose in action. It is also a
movable property because a debt is a property and anything which is not immovable property is movable
property.

Actionable claim as defined in Section 3 of the Transfer of Property Act, as a chose in action is different from
two other such chooses in action namely the right or property by way of copyright, trade-mark, patent, or
design, and also to stocks and shares or debentures of a limited Company or the negotiable instruments under
the Negotiable Instruments Act, which also evidence a debt and which are recoverable by legal action.

Section 137 of the Transfer of Property Act clearly provides that sections 130 to 136 will not apply to stocks
and shares or debentures or to instruments which are negotiable or to mercantile documents of title to goods.
Marine Insurance claim is also excluded by Section 135 A of that Act and is dealt with in the Marine Insurance
Act, XI of 1933. They are also governed by independent separate statutes passed in respect thereof and are not,
therefore, governed by the Transfer of Property Act. That Act in Section 130 only provides for transfer of
actionable claims as defined and circumscribed by the Transfer of Property Act. As to transfer of the earlier
mentioned actionable claims separate provisions are made for transfer thereof by the statutes governing them.

Actionable claims within the meaning of Section 3 of the Transfer of Property Act, therefore, cover;
(i) Claims to unsecured debts and

45
(ii) Claims to beneficial interest in moveable property not in possession actual or constructive whether present
or future, conditional or contingent. Such actionable claims could be:
(a) A right to claim maintenance
(b) A right to arrears of rent
(c) A right to annuities
(d) Moneys payable under a contract for price or advance
(e) A right to claim benefit of a contract
(f) A partner’s claim for accounts and his share therein
(g) Insurance claim, other than marine insurance
(h) Salary in arrears
(i) Book debts
(j) A fixed deposit receipt, etc.

However, a mere right to sue is not assignable. Similarly, a decree is not assignable under this section, as no
legal action is required to be taken to recover the claim. The decree itself can be executed. Similarly any other
property which is not transferable, under Section 6 of the Transfer of Property Act is not assignable under
Section 130 of the Transfer of Property Act. Marine Insurance Policy, negotiable instrument and documents of
title to goods are specifically excluded by Section 135A and Section 137 of the Transfer of Property Act as
stated above.

Assignment: Every actionable claim or chose in action is assignable except in four cases:
(1) where the assignment is prohibited by law,
(2) where the terms of the contract under which the claim accrues prohibit such assignment,
(3) where the contract is of a personal nature, and
(4) where the assignment would increase the burden on the other party.

An actionable claim can be recovered by a legal action by the person who is the claimant or creditor. Section
130 of the Transfer of Property Act provides that a transfer of an actionable claim shall be effected by
execution of an instrument in writing, signed by the transferor or his duly authorized agent in favour of the
transferee and in that case all the rights and remedies of the transferor, whether by way of damages or
otherwise shall vest in the transferee, whether notice of such transfer is given to the debtor or not.
But when no such notice of transfer is given to the debtor and the debtor in ignorance of such transfer repays
the debt or claim to the original creditor or claimant, he would be discharged from the liability. On such
transfer the Transferee would get all the rights of the creditor including the right independently to recover the
46
debt without the original claimant’s consent or co-operation. The deed of transfer need not be signed by the
transferee and also does not require attestation or registration.

The written instrument assigning a debt can be in any form, if the intention to transfer is clear. A mere letter to
the assignee by the claimant that he has assigned the debt to him is sufficient.

An assignment of a debt may be absolute or by way of security or even as a gift. The words with or without
consideration in the definition of actionable claims are used to cover even a gift.

An assignment becomes effective from the date of writing, unlike English Lawunder which it becomes
effective from the date of notice to the debtor.

The provision in the Transfer of Property Act regarding assignment of actionable claim does not apply to
claims under Marine Insurance Policy or Fire Insurance Policy or affect any provisions of the Insurance Aft,
1938.

Section 134 of the Transfer of Property Act also shows that assignment of the actionable claim by way of
charge is also possible to secure the debt due by the transferor to the transferee and provides how the debt
assigned when recovered is to be applied viz., first in payment of costs of recovery, secondly, in satisfaction of
the amount secured and thirdly, in payment of the balance if any to the transferor or other person entitled
thereto. Section 136 if the Transfer of Property Act above quoted does not apply to assignment by a charge or
security, though such assignment is also recognized in English Law as equitable assignment.

An actionable claim would include;

(a) Any debt due to or moneys recoverable by the transferor (except the moneys payable under a negotiable
instrument)
(b) Any movable property belonging to the transferor and not in his possession or power and which he has a
right to recover or receive and
(c) Any claim or benefit under a contract belonging to the transferor but without any liability attached thereto.

An Assignment can be made either by a formal document or even by a letter to the debtor of the transferor but
not orally. An irrevocable Power of Attorney to recover a debt and to adjust it towards the amount due to the
done is held as an assignment. An actionable claim can be assigned even as a gift that is without consideration
as Section 130 of the Transfer of Property Act in terms so provides.

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Apart from what is stated above, the following are held to be actionable claims:
(1) A debt due or to become due, or whether conditional or contingent
(2) Future rents
(3) Amounts payable under a deed
(4) Amount due under a policy of life insurance
(5) A letter of credit
(6) Right under a contract
(7) Beneficial interest in movable property
(8) Confirmed sale price
(9) Earnest money becoming repayable
(10) Deposit receipt
(11) Dividend due on shares, etc.
But a mere right to sue or claim for damages or profits are not assignable. As regards transfer of shares, stock
and debentures, the provision in respect thereof is made in the Companies Act.

As regards actionable claims in the nature of negotiable instruments, the Negotiable Instruments Act, makes
special provision for the transfer thereof by endorsement. It may however be stated that a promissory note
whether negotiable or not or other such instruments can be transferred by a separate instrument of transfer
instead of by mere endorsement.

An assignment of an actionable claim is not required to be registered under the Registration Act. It is desirable
that the document of assignment is executed both by the Assignor and the Assignee and in duplicate, one copy
remaining with the Assignor and other with the Assignee.

Q.3. Define charge. Distinguish it from the mortgage.

ANS. CHARGE
Section 100 of the Transfer of Property Act, 1882 (henceforth referred as “the Act”) defines a charge.
“Where immoveable property of one person is by act of parties or operation of law made security for the
payment of money to another; and the transaction does not amount to a mortgage, the latter person is said to
have a charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage
shall, so far as may be, apply to such charge.”

48
It says that where immovable property of one person is, by act of parties or operation of law, made security for
the payment of money to another, and the transaction does not amount to mortgage, the latter person is said to
have a charge on the property, and all the provisions hereinbefore contained which apply to simple mortgage
shall, so far as may be, apply to such charge.

“Nothing in this section applies to the charge of a trustee on the trust-property for expenses properly insured in
the execution of his trust, and, save as otherwise expressly provided by any law for the time being in force, no
charge shall be enforced against any property in the hands of a person to whom such property has been
transferred for consideration and without notice of the charge.”

The expenses incurred by the trustee are a charge upon the trust property but this charge, unlike other types of
charges, cannot be enforced by the sale of the trust property for it would have the effect of destroying the trust.
Section 32 of the Trust Act says that the trust may only reimburse itself for such expenses out of the income of
the trust estate and prohibit any disposition of the trust property without previous payment of his expenses.
The second exception lays down that no charge shall be enforced against any property in the hands of the
person to whom such property has been transferred for consideration and without notice of the charge. This
exception brings out the distinction between a charge and mortgage. The researcher also wishes to discuss the
distinction between a “charge and a lien” and “a charge and a simple mortgage” followed by the kinds of
charges in the second chapter of this paper followed by his conclusion.

Section 58 of TOPA defines what a mortgage is, “A mortgage is the transfer of an interest in specific
immoveable 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.

The transferor is called a mortgagor, the transferee a mortgagee; the principal money and interest of which
payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the
transfer is effected is called a mortgage-deed.”

Therefore a mortgage being just in rem can be enforced against the mortgaged property in the hands of any
transferee from mortgage irrespective of notice. Whereas a charge, on the other hand, is a just ad rem and can
be enforced against a transferor got consideration if he has taken the transfer with notice of charge.

Before Section 100 of the Act was amended by Act 20 of 1929, it was well settled that the section did not
prescribe any particular mode of creating charge. The amendment substituted the words: “all the provisions
hereinbefore contained which apply to a simple mortgage shall, so far maybe, apply to such charge”., for the
words “all the provisions hereinbefore contained as to a mortgagor shall, so far may be, apply to the owner of

49
such property, and the provisions of Section 81 & 82 shall, so far as may be, apply to the person having such
charge.”

The object of the amendment was to make it clear that the rights and liabilities of the parties in case of such
charge shall, so far as may be, the same as the rights and liabilities of the parties of a simple mortgage . The
amendment was not intended to prescribe to any particular mode for the creation of a charge. The Nagpur HC
came to a similar conclusion in Bapurao v. Narayan .It follows that the security bond was not required to be
attested by witness. It was duly registered and was valid and operative

DISTINCTION MORTGAGE AND CHARGE

The main points of difference between mortgage and a charge are as follows:
1) A mortgage is a transfer of an interest in specific immovable property but a charge is not. In a charge no
right in rem is created, but the right is something more than a personal obligation, for it is a just ad rem,
that is right of payment out of property specified, while a mortgage is a right in rem.
2) A charge may be created by act of parties or by operation of law; but a mortgage can be created only by
act of parties.
3) The creation of a charge does not necessarily imply the existence of a debt while it is always so in case
of a mortgage.
4) A mortgage is good against subsequent transferees and may be enforced against a bona fide purchaser
for value with or without notice, while a charge is good only against subsequent transferee with notice.
5) A charge created by operation of law does not require registration prescribed by Section 59 of the Act
for a mortgage. A charge created by act of parties requires registration irrespective of the amount
involved.

It should be noted that a transaction intended to be a mortgage but not reduced to writing and registration in
cases where such a formality is required cannot operate as a charge. In Govinda v. Dwarka Nath , it was
observed that: “if an instrument is expressly stated to be a mortgage, and give the power of realization of the
mortgage money by sale of mortgaged premises, it should be held to be a mortgage. The fact that necessary
formalities of the due execution were wanting would not convert the mortgage into a charge. If, on the other
hand, the instrument is not on the face to it a mortgage, but simply creates a lien, or directs the realization of
money from a particular property without reference to sale, it creates a charge.

DISTINCTION BETWEEN CHARGE AND LIEN

In law, a lien is a form of security interest granted over an item of property to secure the payment of a debt or
performance of some other obligation. The owner of the property, who grants the lien, is referred to as the lienor
and the person who has the benefit of the lien is referred to as the lienee.

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A charge may be created by the act of parties or by operation of law, but lien can arise only by operation of law.

A charge may not only empower its possessor in many cases to hold the property charged, if it is in his
possession, but also to enforce it in a court of law. A lien, on the other hand, is simply a right to possess and
retain property until some charge attaching to it is paid or discharged.

51
Q.14 DISCUSS THE LAW REGARDING A TRANSFER OF PROPERTY WHICH IS SUBJECT MATTER
OF SUIT PENDING IN A COURT.
or
EXPLAIN THE DOCTRINE OF LIS PENDIS.
ANS. DOCTRINE OF LIS PENDIS
The meaning of lis pendens is - ‘a pending legal action’, wherein Lis means the ‘suit’ and Pendens means
‘continuing or pending’. The doctrine has been derived from a Latin maxim “Ut pendent nihil innovetur” which
means that during litigation nothing should be changed.

The principle embodying the said doctrine is that the subject matter of a suit should not be transferred to a third
party during the pendency of the suit. In case of transfer of such immovable property, the transferee becomes
bound by the result of the suit.

The doctrine of Lis Pendens essentially aims at-

(i) avoiding endless litigation,
(ii) protecting either party to the litigation against the act of the other,
(iii) avoiding abuse of legal process.

Lis Pendens is captured under Section 52 of the Transfer of Property Act, 1882 (the “Act”). The Section
essentially prohibits alienation of immovable property when a dispute relating to the same is pending in a
competent court of law. It is based on the principle that the person purchasing an immovable property from the
judgment debtor during the pendency of the suit has no independent right to property to resist, obstruct or object
execution of a decree.[1]

APPLICATION OF SECTION 52 OF TRANSFER OF PROPERTY ACT – CONDITIONS TO BE

SATISFIED
The Supreme Court in a three Judge Bench in Dev Raj Dogra and others v. Gyan Chand Jain and others
construed the meaning of Section 52 of the Transfer of Property Act and laid down following conditions:
1. A suit or a proceeding in which any right to immovable property is directly and specifically in question
must be pending;
2. The suit or proceeding should be pending in a Court of competent jurisdiction;
3. The suit or the proceeding should not be a collusive one;
4. Litigation must be one in which right to immovable property is directly and specifically in question;
5. Any transfer of such immovable property or any dealing with such property during the pendency of the
suit is prohibited except under the authority of Court, if such transfer or otherwise dealing with the

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 property by any party to the suit or proceeding affects the right of any other party to the suit or
proceeding under any order or decree which may be passed in the said suit or proceeding.

Non-Applicability of Doctrine of Lis Pendens

Lis Pendens is not applicable in every case. There are certain instances wherein this doctrine does not apply:
1. A sale made by the mortgagee in the exercise of the power as conferred by the mortgage deed.
2. In matters of review;
3. In cases where the transferor is the only party affected;
4. In cases of friendly suits;
5. In cases where the proceedings are collusive;
6. In case of suits involving pending transfers by a person who is not a party to the suit;
7. In cases where the property has not been properly described in the plaint;
8. In cases where the subject matter of rights concerned in the suit and that which are alienated by transfer
are different.
9. Judicial Precedents

In Hardev Singh v. Gurmail Singh, the Supreme Court observed that Section 52 of the Act does not declare a
pendente lite transfer by a party to the suit as void or illegal, but only makes the pendente lite purchaser bound
by the decision of the pending litigation. Thus, if during the pendency of any suit in a court of competent
jurisdiction which is not collusive, in which any right of an immovable property is directly and specifically in
question, such immovable property cannot be transferred by any party to the suit so as to affect the rights of any
other party to the suit under any decree that may be made in such suit.
In T.G. Ashok Kumar v. Govindammal & Anr., the Supreme Court observed that if the title of the pendente lite
transferor is upheld in regard to the transferred property, the transferee’s title will not be affected. On the other
hand, if the title of the pendente lite transferor is recognized or accepted only in regard to a part of the
transferred property, then the transferee’s title will be saved only in regard to that extent and the transfer in
regard to the remaining portion of the transferred property will be invalid and the transferee will not get any
right, title or interest in that portion. If the property transferred pendente lite, is entirely allotted to some other
party or parties or if the transferor is held to have no right or title in that property, the transferee will not have
any title to the property.
In Jayaram Mudaliar v. Ayyaswami, the Supreme Court held that the purpose of Section 52 of the Act is not to
defeat any just and equitable claim, but only to subject them to the authority of the Court which is dealing with
the property to which claims are put forward. The Supreme Court went on to further explain the scope of lis
pendens as, ‘It is evident that the doctrine, as stated in section 52, applies not merely to actual transfers of rights
which are subject-matter of litigation but to other dealings with it by any party to the suit or proceeding, so as to
affect the right of any other party thereto.

Hence it could be urged that where it is not a party to the litigation but an outside agency such as the tax
collecting authorities of the Government, which proceeds against the subject-matter of litigation, without
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anything done by a litigating party, the resulting transaction will not be hit by Section 52. Again, where all the
parties which could be affected by a pending litigation are themselves parties to a transfer or dealings with
property in such a way that they cannot resile from or disown the transaction impugned before the Court dealing
with the litigation the Court may bind them to their own acts. All these are matters which the Court could have
properly considered. The purpose of Section 52 of the Transfer of Property Act is not to defeat any just and
equitable claim but only to subject them to the authority of the Court which is dealing with the property to
which claims are put forward.’

In Rajender Singh and Ors. v. Santa Singh and Ors., it was observed by the Supreme Court that the doctrine
of lis pendens was intended to strike at attempts by parties to a litigation to circumvent the jurisdiction of a
Court, in which a dispute on rights or interests in immovable property is pending, by private dealings which
may remove the subject matter of litigation from the ambit of the court’s power to decide a pending dispute or
frustrate its decree. Alienees acquiring any immovable property during pending litigation, are held to be bound
by an application of the doctrine, by the decree passed in the suit even though they may not have been
impleaded in it. The whole object of the doctrine of lis pendens is to subject parties to the litigation as well as
others, who seek to acquire rights in immovable property, which are the subject matter of litigation, to the
power and jurisdiction of the Court so as to prevent the object of a pending action from being defeated.
In Gouri Dutt Maharaj v. Sheikh Sukur Mohammed and Ors., it was held that broad principle underlying
Section 52 of the Transfer of Property Act,1882 is to maintain status quo, unaffected by act of any party to the
pending litigation.
In Ramjidas v. Laxmi Kumar and Ors., the Madhya Pradesh Court observed that the purpose of Section 52 is
not to defeat any just and equitable claim but only to subject them to the authority of Court which is dealing
with the property to which the claims are put forward.
In Lov Raj Kumar v. Dr. Major Daya Shanker and Ors., the Delhi High Court observed that the ‘principles
contained in Section 52 of Transfer of Property Act are in accordance with the principle of equity, good
conscience or justice, because they rest upon an equitable and just foundation, that it will be impossible to bring
an action or suit to a successful termination if alienations are permitted to prevail. Allowing alienations made
during pendency of a suit or an action to defeat rights of a Plaintiff will be paying premium to cleverness of a
Defendant and thus defeat the ends of justice and throw away all principles of equity’.

SHORT ANSWER TYPE QUESTIONS:

Q. DOCTRINE OF ELECTION.
ANS. DOCTRINE OF ELECTION.
The doctrine of election is stated in Section 35 of the Transfer of Property Act alongside Section 180 to 190 of
the Indian Succession Act. It states that when a party transfers a property over which he does not hold any right
of transfer and entailed in that transaction is the benefit conferred upon the original owner of the property, such
title-holder must elect his option to either validate such transfer of property or reject it; upon rejection, the
benefit shall be relinquished back to the transferor subject nevertheless:

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“Where the transfer has been through gratuitous means and the transferor has become incapable of making a
new transfer.
In all cases where the transfer is for consideration”.
An illustration to further explain:
A owns a property that is worth Rs. 800. B professes to transfer the same to C through the Rs 1000 instrument
to A. But the A, the owner opts/elects to retain his property and thus, forfeits the gift of Rs 1000.

EXCEPTIONS
When the owner who is considering the election between retaining the property and accepting a particular
benefit, chooses the former, he is not bound to relinquish any extraneous benefit that he gains through the
transaction.

The acceptance of the benefit by the original owner shall be deemed to be as election by him to validate the
transfer, if he is aware of his responsibilities and the circumstances that might influence a prudent man into
making an election.

This knowledge of the circumstances can be assumed if the person who gains the benefit enjoys it for a period
of more than two years. Further discussion over this has been made under the heading of “Modes of Election”.

If the original owner does not elect his option within a year of the transfer of property, the transferor would
require him to elect his choice. Even after the reasonable time, if he still does not also still elect, the original
owner shall be assumed to have elected the validation of the property transfer as his choice.

In context of a minor, the period of election shall be stalled till the individual attains majority unless he is
represented by a guardian.

UNDERSTANDING THE PRINCIPLE

In simple words, a person utilizing the benefits of an instrument also has to carry the burden attached. This
doctrine is founded upon a model wherein a person persuades another to act in a manner to his prejudice and
derives any advantage from that, then he cannot turn around and claim that he was not liable to perform his part
as it was void. This doctrine is universal and is applicable to Hindus, Muslims as well as Christians.

So, this doctrine contains the principle that the exercise of a choice by a person left to himself of his own free
will to do one thing or another binds him to the choice which he has voluntarily made, and is founded on the
equitable doctrine that he who accepts benefit under an instrument or transaction of his choice must adopt the
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whole of it or renounce everything inconsistent with it. Thus, it is a general rule that a person cannot approbate
and reprobate. Also, the election is confined to the case of a gift or Will and does not apply in case of a legal
remedy.

CONDITIONS PRECEDENT FOR EQUITY OF ELECTION

A transfer of property by a person who has no right to transfer;
As a part of the same transaction, he must confer some benefit on the owner of the property and Such owner
must elect either to confirm such transfer or to dissent from it.

2. SPES SUCCESSIONIS.

ANS. MEANING OF SPES SUCCESSIONIS

Clause (a) of section 6 of the Transfer of Property Act excludes mere chance of an heir apparent of succeeding
to an estate from the category of transferable property. The technical expression for such a chance is ‘Spes
Successionis’. During the lifetime of a person, the chance of his heir apparent succeeding to the estate or the
chance of a relation obtaining a legacy under his will is a ‘Spes Successionis’(chance of succession). Such an
expectancy does not amount to an interest in property and cannot be made the subject matter of a transfer. The
paper aims at analyzing the position of the same while looking at a case study to understand why this is an
exception to the general rule and how it is different from other cases of a like nature.
Except as specified in various clauses of Section 6 of the Act, property of any kind may be transferred.
Therefore, general rule is that property of any kind may be transferred as laid down in Section 6 and the person
pleading non-transferability must prove the existence of any usage or custom which restricts the right of
transfer. Clause (a) of Section 6 of the transfer of property act discusses the chance of an heir apparent to
succeed to the property. A person having interest which is spes successionis i.e mere expectancy to succeed to
the property in future is not a right and is not capable of being transferred. Such a person cannot bring a suit on
the basis of such chance of succession. Similarly, a gift of spes successionis is invalid and confers no title on the
donee.

Where the transfer is not of the right of expectancy of an heir apparent but of the property itself, it cannot be
said to be a transfer of a mere chance to succeed. Thus, when a person is not heard of for a long time and is
believed to be dead, an agreement to transfer the property, entered into by his brother who is in enjoyment and
possession of the property in dispute, is not a transfer of the right of expectancy, but of the property itself and is
not hit by clause (a) of section 6.

3. TENANCY –BY HOLDING OVER.

ANS. MEANING OF TENANCY BY HOLDING OVER

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 The expression ‘holding over’ means retaining possession. There is a distinction between a tenant continuing in
possession of a property after the determination of lease without the consent of the landlord, and a tenant doing
so with the consent of the landlord.

The former is called a tenant by sufferance in common law. On the other hand, the latter is called a tenant
holding over a tenancy at will. In fact, a lessee holding over with the consent of the lessor is in a better position
than a mere tenant at will. The assent of the landlord to the continuance of the tenancy after the determination of
the tenancy agreement would create a new tenancy.

According to Section 116 of the Transfer of Property Act 1882, these circumstances would lead to tenancy by
holding over:
The lessee or underlessee of the property remains in possession after the determination of the lease granted to
the lessee.
The lessor or his legal representative either accepts rent from the lessee or underlessee, or assents to his
continuing in possession

There is absence of an agreement to the contrary

In such cases, the lease is renewed from year to year, or from month to month, according to the purpose for
which the property is leased.

4. SUBROGATION.
ANS. DOCTRINE OF SUBROGATION
The doctrine of subrogation is enunciated in Section 92 of the Transfer of Property Act. Subrogation means,
substitution. The doctrine of subrogation enables a person to stand in the shoes of a creditor whom he has paid
off and claim to be entitled to all the remedies open to that creditor in respect of the securities held by him.
There is legal and conventional subrogation. When the substitution of one creditor for another takes place by
agreement or act of parties, the subrogation is designated as conventional or consensual. The substitution of
creditors by operation of law is considered as legal subrogation. It gives the right to all persons, other than the
mortgagor, who have sufficient interest in the property to entitle them to redeem it. A conventional subrogation
can be given effect to only if it is evidenced by a registered instrument. A legal subrogation, on the other hand,
does not require registration. According to this section, there can be no partial subrogation.
5. ONEROUS GIFTS.
ANS. MEANING OF ONEROUS GIFTS
Onerous gift is based upon the maxim ‘qui sntit commodum sentire debet et onnus’ It means he who receives
advantage must bear the burden also.

DEFINITION OF ONEROUS GIFT

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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 accept it fully .
Where a gift is in the form of two or more separate and independent transfer to the same person of several
things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial
and the letter onerous.

ILLUSTRATIONS
A has share in X , a prosperous joint stock company , and also shares in Y , a Joint stock company i difficulties.
Heavy calls are expected in respected 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.

ONEROUS GIFT TO A 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 become so bound .

Conclusion
Thus a gift may not always be of a purely beneficial character but may at time be burdened with obligations e.g.
when shares in company subjects to heavy calls formed the subject matter of the gift . One cannot approbate and
reprobate the same transaction . thus one cannot accept beneficial part only by rejecting obligatory part of
transaction.
S. 127 is based on simple principle that one who wants the rose must not fair thorns . The donee has to elect or
accept the whole gift or not to accept anything at all.

Q. 16 DIFFERENCE BETWEEN CONTINGENT AND VESTED INTEREST?

ANS. VESTED INTEREST

1. An estate is said to be vested in ownership when it gives a present right to the immediate possession and
ownership of the property. While an estate which gives a present right to the further possession of property
is said to be “vested interest”.
2. In a vested interest, the transferee’s is already perfect.
3. The transferee owns the right absolutely.
4. The vested interest is heritable.
5. A vested interest is not defeated by the death of the transferee before the obtains possession. The property
passes to his heirs.
6. When an interest is vested, the transfer is complete and the transferee acquires all rights of a full owner.
7. It does not depend upon the fulfillment of any condition. It creates an immediate right through the
enjoyment may be postponed to a future date.
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8. The ownership is absolute.
9. The investiture fact from which a person derives the right is complete.

CONTINGENT OWNERSHIP
1. Contingent is that which awaits or depends on the happening of an event.
2. In a contingent interest, the title is not yet perfect. But it may become perfect. If happen certain condition
annexed to the deed.
3. The transferee owns it merely conditionally.
4. The contingent interest is not heritable.
5. A contingent interest is defeated by the death of the transferee before he obtains possession.
6. When an interest is contingent, the transfer is not complete.
7. It is solely depended upon the fulfillment of the condition so that if the condition is not fulfilled, the
property would not be passed.
8. The ownership is merely conditional.
9. The investiture fact from which a person derives the right is incomplete.

VERY SHORT ANSWER TYPE QUESTIONS

Q 1: What is “property”?
Ans: Property implies a bundle of rights over a thing. The scope of such rights is variable and can extend to
excluding everyone else from interfering with his enjoyment of that thing.

Q. What is “transfer of property”?

Ans: Transfer of property takes place when a living person conveys some property to some other person or even
to himself immediately or at some time in the future. Such living person may also be companies or any kind of
association of individuals.
It is to be noted that any conveyance of property as a result of family arrangement or partition is not transfer of
property

Q. What is a contingent interest?

Ans: It is possible to create an interest in a property in favour of a person, which shall come into effect only
when a specified uncertain event happens or does not happen. Such interest is known as a contingent interest.

Q. Who is an “ostensible owner”? Can such person transfer property?

Ans: An ostensible owner is distinct from real owner and refers to such persons who appear or professes in the
eyes of the public to be the real owner of the property.
Any transfer of property by such person is not voidable, merely on the ground that he was not entitled to make
such transfer if the transferee has acted in good faith and taken reasonable care to ascertain the status of the
transferor.
Q. What is “Sale”?

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Ans: “Sale” refers to the transfer of ownership in exchange for a price paid or promised to be paid at a future
date, or a part of the price is paid immediately with the remaining promised to be paid by a particular date in the
future.
The Transfer of Property Act, 1882 provides that sale of immovable property whose value is hundred rupees or
more can be made only by a registered instrument.

Q. What is “Hire-Purchase Agreement”?

Ans: In case of sale, the buyer immediately becomes the owner of the property but this is not so in the case of a
hire purchase agreement.
When the buyer may not be able to afford the entire price of a property, a hire-purchase agreement allows the
buyer to hire the goods for a monthly rent. When a sum equal to the original full price along with sufficient
interest has been paid in equal installments, the buyer may then exercise an option to buy the goods at a
predetermined price (usually a nominal sum) or return the goods to the owner.

Q. What is “marshalling in favour of purchaser”?

Ans: If the owner of two or more properties mortgages them to one person and then sells one or more of the
properties to another person the buyer is entitled to have the mortgage debt satisfied out of the properties not
sold to him so far as the same will extend.
Thus where a mortgagee has the means of satisfying his debts out of several properties he shall exercise his
right so as not to prejudice the purchaser of one of them as far as possible.

Q. What is a “mortgage”?
Ans: A mortgage is a transfer of an interest in immovable property as a security for a loan or an existing or
future debt or for performance of any engagement, which might give rise to a pecuniary liability.
If money is lent by a lender to a borrower backed by a security, the lender will be protected as even if the
borrower becomes insolvent the security is given precedence over the other creditors.
The person who transfers the interest is called the “mortgagor”.
The person to whom the interest is transferred is the “mortgagee”.

Q. What is the difference between a “mortgage” and a “charge”?

Ans: A “mortgage” is a conveyance of property, subject to a right of redemption, whereas a charge only gives a
right to payment out of a particular immovable property without transferring it.
A “mortgage” can be enforced against a bona fide purchaser for value whether with or without notice but a
charge cannot.

Q. What is the difference between a “mortgage” and a “lease”?

Ans: In “mortgage” some interest in the property is conveyed for securing payment of loan and a right of
redemption is reserved for the mortgagor. In a “lease” however physical possession of the property is conveyed
for use and occupation of the same by the lessee.
In lease, the property is not transferred by way security for the payment of money borrowed.
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Q. Can a mortgage take place without the delivery of property?
Ans: The mortgagor without delivering possession of the mortgaged property may bind himself personally to
pay the mortgage money and if he fails to pay the money back the mortgagee reserves the right to cause the
property to be sold and apply the proceeds towards the satisfaction of the debt. This kind of mortgage is called
“simple mortgage”.

Q. Can the rents, profits and other benefits be appropriated towards the satisfaction of the debt?
Ans: The mortgagee may retain possession of the mortgaged property and receive and apply the rents and
profits made available from the property during the same time towards the satisfaction of the debt. He is entitled
to retain such possession until complete payment of the mortgage money.
Such transaction is called a “usufructuary mortgage”.

Q. What is a suit for foreclosure?

Ans: When the mortgagee files a suit to prohibit the mortgagor from exercising any right whatsoever in relation
to the property including the right to redeem, it is known as a suit for foreclosure

Q. Does a “charge” involve any transfer of property?

Ans: A charge does not involve any transfer of property. Only a personal obligation to pay out of the specified
property is created. In case of a charge, the property is made security either by the act of the parties or by the
operation of law. However the transaction should not be a mortgage

Q. What is a lease?
Ans: A lease is the transfer of the right to enjoy the property. Such transfer might be for certain duration or in
perpetuity and usually is in consideration of the payment of rent

Q. When does a “tenancy at will” arise and when does it end?

Ans: A tenancy at will arises when a person occupies land or premises as a tenant with the consent of the
landlord on terms decided by either party.
The tenancy ends when either party does any act, which is incompatible with the continuance of the tenancy, for
instance, a demand by the landlord to quit, an assignment of the tenancy by the tenant etc. A tenancy also
automatically comes to an end on the death of the tenant

Q. Is it possible to alienate a tenancy at will?

Ans: A tenancy at will cannot be alienated. The landlord must give reasonable notice asking the tenant to quit.

Q. What is the difference between lease and license?

Ans: Though a license is similar to a lease in the sense that it allows a right to enjoy the immovable property of
the grantor yet it does not create any interest in the property.
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In order to determine whether a transaction is a lease or a license, the substance of the document should be
preferred to the form and importance should also be given to the intention of the parties.
It is a lease only if it creates an interest in the property. If it merely permits another to make use of the property,
it is a license

Q. What is an “English mortgage”?

Ans: When there is an absolute transfer of the property to the mortgagee with a provision in the mortgage
document that the mortgagee would have to re-transfer the property back to the mortgagor, the transaction is
known as an “English mortgage”.

Q. Is it possible to create a mortgage by mere delivery or deposit of title deeds?

Ans: It is possible to create a mortgage by mere deposit of the title deeds. However such deposit must be
backed with an intention to secure the debt with the said property.
Such a mortgage need not be written and registered. It is an oral transaction.

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