Property law

Transfer of proper Act 1882 and Easement Act 1882

Unit-I

Qs Concept and meaning of property, kind of property

Ans Property has a very wider meaning in its real sense. It not only includes
money and other tangible things of value, but also includes any intangible right
considered as a source or element of income or wealth. The right and interest
which a man has in lands and chattels to the exclusion of others. It is the right to
enjoy and to dispose of certain things in the most absolute manner as he pleases,
provided he makes no use of them prohibited by law. The sea, the air, and the like,
cannot be appropriated; every one may enjoy them, but no one has any exclusive
right in them. When things are fully our own, or when all others are excluded from
meddling with them, or from interfering about them, it is plain that no person
besides the proprietor, who has this exclusive right, can have any claim either to
use them, or to hinder him from disposing of them as he pleases; so that property,
considered as an exclusive right to things, contains not only a right to use those
things, but a right to dispose of them, either by exchanging them for other things,
or by giving them away to any other person, without any consideration, or even
throwing them away.

Meaning of property

In general sense, property is any physical or virtual entity that is owned by an

individual or jointly by a group of individuals. An owner of the property has the
right. Human life is not possible without property. It has economic, socio-political,
sometimes religious and legal implications. It is the legal domain, which institutes
the idea of ownership. The basic postulate of the idea is the exclusive control of an
individual over some ‘thing’. Here the most important aspect of the concept of
ownership and property is the word ‘thing’, on which a person has control for use.
To consume, sell, rent, mortgage, transfer and exchange his property. Property is
any physical or intangible entity that is owned by a person or jointly by a group of
people. Depending on the nature of the property, an owner of property has the right

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to consume, sell, rent, mortgage, transfer, exchange or destroy their property,
and/or to exclude others from doing these things.

There are some Traditional principles related to property rights which includes
include:

1. Control over the use of the property.

2. Right to take any benefit from the property.

3. Right to transfer or sell the property.

4. Right to exclude others from the property.

Definition of property

There are different definitions are given in different act as per there uses and needs.
But in the most important act which exclusively talks about the property and rights
related to property transfer of property act 1882 has no definite definition of the
term property. But it is defined in some other act as per their use and need. Those
definitions are as follows:

Section 2(c) of the Benami Transactions (Prohibition) Act, 1988 defines property
as: “Property” means property of any kind, whether movable or immovable,
tangible or intangible, and includes any right or interest in such property.

Section 2 (11) of the Sale of Good Act, 1930 defines property as: “Property”
means the general property in goods, and not merely a special property.

Kinds of property

Broadly Property is divided into three kinds those are as follow:

Movable and Immovable property

Movable property

The definition of movable property is given differently in many acts. Some of the
definitions are as follows: Section 3 (36) of the General Clauses Act defines
movable property as:

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'Movable property shall mean property of every description, except immovable
property."Section 2 (9) of the Registration Act, 1908 defines property as:

'Moveable property' includes standing timber, growing crops and grass, fruit upon
and juice in trees, and property of every other description, except immovable
property."

Section 22 of IPC defines property as:

The words “moveable property” is intended to include corporeal property of every

description, except land and things attached to the earth or permanently fastened to
anything, which is attached to the earth. Things attached to the land may become
moveable property by severance from the earth. for example Cart–loaded of earth,
or stones quarried and carried away from the land become movable property.

Immovable property

The Term "Immovable Property" occurs in various Central Acts. However none of
those Acts conclusively define this term. The most important act which deals with
immovable property is the Transfer of Property Act (T.P.Act). Even in the T.P.Act
this term is defined in exclusive terminology.

1.According to Section 3 of that Act, "Immovable Property" does not include

standing timber, growing crops or grass. Thus, the term is defined in the Act by
excluding certain things. "Buildings" constitute immovable property and
machinery, if embedded in the building for the beneficial use thereof, must be
deemed to be a part of the building and the land on which the building is situated.

ii. As per Section 3(26) of the General Clauses Act 1897, "immovable property"
"shall include land, benefits to arise out of land and things attached to the earth, or
permanently fastened to anything attached to the earth". This definition of
immovable property is also not exhaustive;

iii. Section 2(6) of The Registration Act,1908 defines "Immovable Property" as

under: "Immovable Property includes land, building, hereditary allowances, rights
to ways, lights, ferries, fisheries or any other benefit to arise out of land, and things
attached to the earth or permanently fastened to anything which is attached to the
earth but not standing timber, growing crops nor grass". The definition of the term

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"Immovable Property" under the Registration Act 1908, which extends to the
whole of India, except the State of Jammu and Kashmir, is comprehensive. The
above definition implies that building is included in the definition of immovable
property. The following have been held as immovable property.

I. A right to collect rent,

II. life interest in the income of the immovable property,
III. right of way,
IV. a ferry, fishery,
V. a lease of land.

iv. The term "Immovable Property" is defined in other Acts for the purpose of
those Acts. As per Section 269UA(d) of the Income Tax Act, 1961, Immovable
Property is defined as under :

Any land or any building or part of a building, and includes, where any land or any
building or part of a building is to be transferred together with any machinery,
plant, furniture, fittings or other things, such machinery, plant, furniture, fittings
and other things also. Any rights in or with respect to any land or any building or
part of building (whether or not including any machinery, plant, furniture, fittings
or other things therein) which has been constructed or which is to be constructed,
accruing or arising from any transaction (whether by way of becoming a member
of, or acquiring shares in, a co-operative society, or other association of persons or
by way of any agreement or any arrangement of whatever nature, not being a
transaction by way of sale, exchange or lease of such land, building or part of a
building.

Tangible and Intangible property:

Tangible property

Tangible property refers to any type of property that can generally be moved (i.e.,
it is not attached to real property or land), touched or felt. These generally include
items such as furniture, clothing, jewellery, art, writings, or household goods.

Intangible property:

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Intangible property refers to personal property that cannot actually be moved,
touched or felt, but instead represents something of value such as negotiable
instruments, securities, service (economics), and intangible assets including chose
in action

Intellectual property

Intellectual property is a term referring to a number of distinct types of creations of

the mind for which property rights are recognized—and the corresponding fields of
law. Property does not just comprise of tangible things like houses, cars, furniture,
currency, investments etc and such assets are not the only kind that can be
protected by law. There are many other forms of intangible property known as
intellectual property that have been recognized under the law and granted
protection against infringement. Under intellectual property law, owners are
granted certain exclusive rights to a variety of intangible assets, such as musical,
literary, and artistic works; discoveries and inventions; and words, phrases,
symbols, and designs. Patents, trademarks and copyrights, designs are the four
main categories of intellectual property.

Patents

Patents are used to protect new product, process, apparatus, and uses providing the
invention is not obvious in light of what has been done before, is not in the public
domain, and has not been disclosed anywhere in the world at the time of the
application. The invention must have a practical purpose. Patents are registrable
nationally; the patent granted by European Patent Office is a “bundle” of national
patents. No EU-wide single patent system exists to date, although the Community
Patent is in the final stages of enactment. Registration provides a patentee the right
to prevent anyone making, using, selling, or importing the invention for 20 years.
Patents are enforced by court proceedings. In addition, the Regulation on
Supplementary Protection Certificates (SPCs), grants “patent extensions” of up to
5 years to pharmaceutical and plant products, providing as much as 25 years of
patent life for originator medicines.

Trade Marks

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A symbol (logo, words, shapes, a celebrity name, jingles) used to provide a product
or service with a recognisable identity to distinguish it from competing products.
Trademarks protect the distinctive components which make up the marketing
identity of a brand, including pharmaceuticals. They can be registered nationally or
internationally, enabling the use of the symbol ®. Trade mark rights are enforced
by court proceedings in which injunctions and/or damages are available. In
counterfeiting cases, authorities such as Customs, the police, or consumer
protection can assist. An unregistered trade mark is followed by the letters ™. This
is enforced in court if a competitor uses the same or similar name to trade in the
same or a similar field.

Copyright
Copyright is used to protect original creative works, published editions, sound
recordings, films and broadcasts. It exists independently of the recording medium,
so buying a copy does not confer the right to copy. Limited copying
(photocopying, scanning, downloading) without permission is possible, e.g. for
research. Publication of excerpts or quotes needs acknowledgement. An idea
cannot be copyrighted, just the expression of it. Nor does copyright exist for a title,
slogan or phrase, although these may be registered as a trade mark. Copyright
applies to the Internet with web pages protected by many different copyrights, so
that permission should be asked to copy or print a page, or insert a hyperlink to it.
Material cannot be posted on a Web site (Intranet included) without permission
from the copyright holder. Copyright is not registrable because it arises
automatically on creation. Copyright is protected in the EU for 70 years after the
author’s death for creative works, 50 years for broadcasts, etc and 25 years for
published editions. Use of © is not required in most of Europe. Copyright is
enforced by court proceedings.

Design Registration

Design registrations are used to protect products distinguished by their novel shape
or pattern. They are available for one-off items. The design itself must be new,
although a 1 year grace period is allowed for test-marketing. Registration is not
possible where the new form is dictated by function. The design is registrable
either nationally or under an EU-wide single right. It can also be protected by
copyright.

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Conclusion
The existence of concept of property is from the ancient period. This concept has a
very broad history. There are many philosophies laid down by many thinkers like
Bentham, Laski. These philosophies are very helpful in understanding the concept
of property. The main finding was that the term property is defined in different
ways in each act as to its use. As in Sale of Goods act 1930 it is defined differently
than in Benami Transactions (Prohibition) Act, 1988. In transfer of property act
which is most important act which deals with property does not have definition of
the term property. There are many kinds of property as to it uses. In today’s era,
not only the things which can be seen or touched but also the things which cannot
be touched or seen come in the purview of property. Such as idea innovation,
composition etc. These properties are known as intellectual property.

Qs. Transfer of property by the act of parties (section 5-21)

Ans. The word “transfer of Property” is very important in transfer of Property Act,
1882, because the very title of this act is “transfer of property.”

Definition: though the definition of “property” is not given in Transfer of Property

Act but section 5 of act defines “Transfer of Property” as-

“an act by which a living person conveys property, in present or in future, to one
or more other living persons, or to himself and to transfer property is to perform
such act” {section 5 of Act}.

Thus, transfer of Property” means ‘transfer of Property’ by a living person to

another living person in present or in future.

“Corporation of Calicut V/s K. Shriniwasan” (A.I.R. 2002 S.C. 2051), the Supreme
Court defined transfer of property.

“Transfer connotes creation of some interest in immoval property.”

Essentials:

From the above definition the following essentials of transfer of property appear-

I. Existence of property

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 II. Transaction between living persons.
III. Transfer of property.

Property- the first essential element for transfer of property is that there must be a
property. The word property has not been defined under Act. Ordinarily property
means a substance or matter but according to this act it means any ownership right
or possession is property.

In Union of India Vs Bhagwant Singh ILR (1965) 18 Punjab- it was held that it is
not necessary that property should be transferable, like right of pension mere it is
not necessary that the property is in existence. The following are deemed as
property-

I. Right of redemption of a mortgage.

II. Right to worship idol in Hindu religion.
III. Post of Shebait.
IV. Vested Interest.
V. Hat or bazaar.
VI. Contingent interest.
VII. Copyright.
VIII. Share in property.
IX. Right of recovery of due amount of rent.
X. Right of pasture of animals in the grazing land.

But right to sue, right to appeal, right to get future maintenance, Annuity, etc. are
not included in property.

Living Person- second essential element of transfer of property is the transfer of

property between the living persons i.e. (it is necessary that) the transferor and
transferee, both should be alive. Here it is also to mention that living person does
not only mean person but also includes a legal person like a company or
association or body of individuals whether incorporated or not, etc. (Weavers Mill
Limited Vs Vaulkies Ammall, AIR 1969 Chennai 462).

Transfer –The third essential element of transfer of property is Transfer’.

Meaning of the word “transfer” is ‘transfer by one person to other person’. For the
purpose of this act, Sale, Mortgage, lease and Charge are considered the medium

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of transfer. But an agreement, surrender, Partition etc. are not included in the
transfer. (A. Akoolamma Vs Gazella P. Reddy, A.I.R. 1995 Andhra Pradesh
166).

In case of ‘Arlappa Vs Jagannath’ (A.I.R. 2007 Karnatak 91), the partition has
not been considered as a transfer, because there is no transfer of property in
partition. The parties already have title of property. No new rights create by the
partition.

Family settlement is not a synonym of the partition. The status of family becomes
separate in the partition and the property of joint family becomes partitioned,
whereas under family settlement, measures are adopted for better use of the
property of joint family. No separation of the status of joint family in family
settlement but there is a separation of statute in partition.

What may not be transferred?- such properties which cannot be transferred are
mentioned in section 6 of the Transfer of Property Act, 1882. Such properties are
as under:

1. The chance of heir-apparent

2. Right of re-entry
3. Easement
4. An interest in property restricted in its enjoyment by its own owner
5. A right of future maintenance
6. Right to sue
7. Public office
8. Stipends
9. Transfer opposed to nature of interest.

Sale of lottery tickets does not involve sale of goods. (L.I.S Pallakall Court Vs
State of Kerala, A.I.R. 2007 Kerala 178)

The Kerala High Court has considered the decree as transferable property in the
case of ‘Krishna Kumar Vs Union of India’ (A.I.R. 2011 Kerala 166)

But in the case of Jaidev Sen Vs State of West Bengal A.I.R. 2010 NOC 256
Calcutta), the license of stamp vender has not been considered as property.

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(1). Chance of Heir Apparent

Only the property can be transferred under the Transfer of Property Act, and not
the possibility of property; because the probality may any time be proved
eradicated. For this reason, the following possibilities have been banned for
transfer under the provisions of Section 6(a) of the Act:

The chance of an heir succeeding to an estate,

The chance of a relation obtaining a legacy (a gift by will) on the death of a

kinsman, and

Any other mere possibility of a like nature.

Success of possibility is not certain. The possibility may be fruitful or may not be.
For example- A son is expected to get the property in succession from his father,
but if the son dies before his father then such possibility becomes baseless. For this
reason, the mere possibility is not considered as transferable.

(2). Right of Re-entry

The right of re-entry has also not been considered as transferable. This is mainly
related to the transactions of lease matters. By a mere right of re-entry is meant a
right to resume possession of land which has been given to another person for a
certain time. The right of re-entry cannot be transferred by itself apart from the
land.

According to Section 6(b), the right of re-entry is usually inserted in leases

empowering the lesser to re-enter upon the demised premises if the rent is in arrear
for a certain period or if there is a breach of covenants in the lease.

(3). Easement

It cannot be detached from the dominant heritage and transferred separately. The
section also does not refer to the release of an easement in favour of the owner of
the servant tenement because such a release effects, not a transfer, but an
interaction of the easement.

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(4). others interest in a property restricted in its enjoyment of owner

According to section 6(d) of the Act, no such property can be transferred in which
its enjoyment is restricted to owner. In other words it may be said that where any
convenience, benefit or right has been given to a person due to his own fame,
achievement or status, there the transfer of it cannot be done to other person. This
is purely a personal right.

The following kinds of interest have been held not to be transferable-

I. A right of pre-emption
II. A religions office like those of a Pujari, Mohunt, Mutawallo, Kaji, etc.
III. A right of getting maintenance
IV. A right of reside
V. A right of personal expenses. (Kharch-a-paandan)

(5). Right of Future Maintenance

A right to future maintenance is solely for the personal benefit, so it cannot be

transferred. It has been held in section 6(dd) that a right to future maintenance, in
whatsoever manner arising, secured or determined, cannot be transferred.

(6). Mere right to sue (e)

The ‘mere’ word implies that the transferee has acquired no interest other than a
bare right of action for damages in tort or breach of contract are bare rights to sue
and cannot be transferred. It has clearly been said in Section 6(e) that ‘a mere right
to sue cannot be transferred.’

(7). Public Office- Clauses. (f) and (g)

Since the public interested in the performance of the duties of a public officer, such
offices as well as the salaries attached to them are made inalienable.

In the case of ‘Postmaster General Vs Yennmel’ A.I.R. 1941 Mumbai 389) the
transfer of public office has been considered banned on the basis of public policy.
Office of Mutawalli, Sajjadansheen, etc. are considered the public office. These
offices cannot be transferred.

(8). Stipends
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According to Section 6(g) of the Act, stipends allowed to military, naval, air force
and civil pensioners of the govt. and political pensions cannot be transferred.

In the case of ‘Secretary of State Vs Khemchand’ {ILR (1880) 4 Mumbai 432) it

has been held that such stipends are given for the services rendered in past and not
for a right or office, so these are not transferable.

(9). Object of transfer being unlawful- clause (h)

According to Section 6(h), no transfer can be made-

In so far as it is opposed to the nature of the interest affected thereby, for example,
air, light, etc.

For an unlawful object or consideration within the meaning of section 23 of the

Indian Contract Act, 1872; for example, an object restricted by the law, malicious
object, object damaging the body of property, illegal and against the public policy
object, and

To a person legally disqualified to be transferee.

Qs. What do you understand by “Rule of double possibility” What are the
requisites for transferring an interest in favour of a person not in existence.

Section 5 of Transfer of Property Act 1882 defines the word “Transfer of

Property”. According to it, a property can only be transferred between two living
persons. It means it is compulsory that the transferor and transferee must be living
at the time of transfer. Transfer cannot be done in favour of unborn persons or
child in womb. But section 13 of the Act provides an exception. According to it
transfer can be done to unborn person for benefit to him.

Rule against double Possibilities- this rule is older than the rule of perpetuality and
it was propounded by “Hirvi V/s Michael {(1890)54 Chanceri Division 85].
According to it, “if a property is transferred to a living person for life and after it if
this property is transferred to unborn person and after his death, if it is transferred
to unborn person of the died person then the transfer with the first unborn person
will be void because there are two possibilities that – if first unborn person will not
born and if he borns than the second possibility remains that no one will born from
the person. These two possibilities are indefinite and it is called ‘rule against

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Double Possibilities’ at the expiration of that period and to whom, if he attains full
age, the interest created is to belong.

Thus according to this rule, a property can be transferred in favour of many

persons by a person but the vesting of interest in the property in the last transferee
cannot be avoiding after attaining the age of adulthood.

Illustration

‘A’ gives his house which is situated in Jaipur for life to ‘B’. after B’s death, the
house is transferred to unborn child of ‘B’ and after his death (B’s child’s), the
house is transferred to unborn child of B’s child. The rule against double
possibilities applies here because there is double possibility that no first child will
born to “B” and if he borns then no child will born B’s child. In such situation,
here, the transfer made in favour of second unborn son will be treated void and
non-effective.

Transfer in Favour of Unborn Person

Section 13(5) propounds exception of the rule against double possibilities.

According to it transfer can be done for the benefit of unborn person. The original
text is-

“where on a transfer of property, an interest therein is created for the benefit of a

person not in existence at the date of the transfer, subject to a prior interest created
by the same transfer, the interest created for the benefit of such person shall not
take effects unless it extends to the whole of the remaining interest of the transfer
in the property.”

Illustration: ‘A’ transfers property of which he is owner, to ‘B’ in trust for ‘A’
and his intended wife successively for their lives and after the death of the
successor, for the eldest son of the intended marriage for life and after his death for
A’s second son the interest so created for the benefit of the eldest son does not take
effect because it doesn’t intend to the whole of A’s remaining interest in the
property.

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According to above discussion, the transfer of property to unborn person or child
in womb can only be transferred when these two conditions are fulfilled-

I. The transfer must be subjected to the prior interest

II. The extension of transfer must be based on complete remaining interest of
property.

Transfer Subjected to Prior Interest:

It is necessary that transfer must be subjected to prior interest. It can be cleared

with following illustration.

‘A’ wants to transfer his property in favour of ‘D’ who is unborn at present. If ‘D’
borns then he will be son of ‘C’, grand-son of ‘B’ and great grand-son of ‘A’. here
‘A’ cannot transfer his property in favour of ‘D’ because he is unborn. So ‘A’ can
transfer for ‘B’ to life and then to ‘C’ for life and then finally transfer will done in
favour of ‘D’. here the benefit of ‘B’ and ‘C’ will be called prior interest and
transfer in favour of ‘D’ will be done under such prior interest.

Extension of transfer based on complete remaining interest of Property:

The second compulsory condition for the transfer of property in favour of unborn
person is that the transfer must be based on complete remaining interest of
property. It can be cleared with the following illustration.

The transfer done by ‘A’ in favour of ‘B’ and will be till life for ‘B’ and ‘C’ but the
transfer in favour of ‘D’ will be complete. The transfer done in favour of ‘D’
cannot be till life of ‘D’. If such act is done, it will illegal. In the simple words it
may be stated that complete remaining interest of property in favour of unborn
transferee, is necessarily to be done.

The following conditions are necessarily completed for the transfer in benefit of
unborn person:

If the transfer is done under prior interest of unborn child

Transfer must be based upon complete remaining interest of property.

Qs. What is the Rule against perpetuity. Is there any exception to this Rule?
Explain.
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Ans. ‘Rule against Perpetuity’ is important in transfer of property act. This rule is
based on public policy. The principle of public policy is that the transfer of
property must not be restrained perpetuity because it affects oppositely on business
and if also stops circulation of property. This principle of public policy is given
place in Transfer of property Act, 1882, section 14 as ‘Rule against perpetuity’.

Section 14 lays down the rule against perpetuity in the following terms.

“no transfer of property can operate to create an interest which is to take effect
after the lifetime of one or more persons living at the date of such transfer and the
minority of some persons who shall be in existence at the expiration of that period,
and to whom, if he attains full age, the interest created is to belong.

Thus, according to this rule, a property can be transferred in favour of many

persons by a person but the vesting of interest in the property in the last transferee
cannot be avoiding after attaining the age of adulthood.

“Ir. Re Ridley [L.R. (1879) 11 Chanceri Division 645] the rule against perpetuity is
demonstrated as “The rule against perpetuity” means restriction by law to acquire
property perpetually.

It can be cleared by following illustration. ‘A’ transfer a property to ‘B’, ‘C’, ‘D’s
favour till their life. Last transferee is eldest son of ‘D’ who is ‘E’. here when ‘E’
borns. No benefit of ‘E’ is vested in the property even (whether) he borns at the
time of transfer. But if it is arranged that so long as ‘E’ remains minor, no benefit
of him will be vested in the property. There it is expected against rule against
perpetuity that when ‘E’ become adult, his benefit will be vested. After he becomes
adult, the benefit of ‘E’ vested in property cannot be avoided. Here contingent
interest of ‘E’ will remain in property during his minority and it will convert into
vested interest as he will become adult. It is the ‘Rule against Perpetuity’.

Reason for perpetuity

As we have seen above that the rule against perpetuity was framed due to necessity
of restriction of transfer of property from being tied up for ever. The question is
that what are the main reasons of nature of perpetuity of transfer of property?
Generally, the following reasons are considered:

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 1) The person who acquires property is captivated by property and he wants
that the property shouldn,t be misused by, his successors. So he wants to
make the property perpetual by transfer in perpetuity.
2) Most persons wants that they could use the property for ever. Such persons
believe in prebirth and they desires that they will use the property in next
life. It empowers the perpetual transfer of property.
3) The feeling to save family property from selling or extravagancy also
prompts perpetuity.

To fail all these conceptions, the rule against perpetuity was propounded.

In “Stanley V/s Leif [(1732) 2 P.W.M.S. 686] , it was said that- perpetuity is
against law, disadvantageous for common property, injurious to business and
restrained circulation of property that it cannot be recognised on the basis of
equity.

From it the aim of rule against perpetuity becomes clear. The aim or rule against
perpetuity are-

a) Preventing accumulation of property.

b) Save business/ trade from loss.
c) Promote nation and society towards economic development.
d) To promote industrializations
e) To make family capable to fight against economic challenges.
f) To meet out the needs of masses.

Requirement of the rule of perpetuity

Expectation against rule of perpetuity or the applicability of the rule requires

following conditions:

(a) An ultimate beneficiary is compulsory for it. Such person can only be an
unborn person
(b) The transfer of property or vesting of benefit in property can only be avoided
till such ultimate beneficiary remains minor It is not possible after minority.
(c) Creation of a prior interest is compulsory for the vesting of ultimate
beneficiary in property (section 13 tells about it.

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 (d) These rule applies on the selling of property, transfer for the donation. It
doesn’t apply on separation, submission, family management.
(e) The rule applies on such transfers which are capable of creating benefit in
property. The creations of benefits outside property are out of its
applications.

In all, it may be said that the main object of the rule against perpetuity is that the
transfer or property or vesting of benefit in property may not be avoided after
ultimate beneficiary become adult.

Exceptions

The exceptions to the rule against perpetuity may be summed up as follow—

(I) This rule does not apply on personal contract, because in is not related to
property but related with persons. This rule is not applicable on the
arrangement of appointment of retinue from generation to generation as
Pujari of temple.
(II) This rule does not apply to the transfer of property to achieve the objects
linked with the public interest like, education, health, medical, religion,
donation, etc.
(III) This rule does not apply to the transaction like pre-emption, agreement to
sale.
(IV) This rule also not applies to lease made with a condition of renewal.

Qs. What do you understand by ‘Vested interest’ and ‘Contingent interest’?

What is the difference between the two?

Ans. Vested Interest- vested interest is very important in transfer of property and
creation of benefits. The right to consume or use property can be acquired by
vested interest. Literally, it means “the vesting of benefit in property”.

Section 19 of transfer of property act provides about “Vested Interest”. According

to it “Where on a transfer of property, an interest therein is created in favour of a
person without specifying the time when it is to take effect, or in terms specifying
that it is to take effect forthwith or on the happening of an event which must
happen, such interest is vested, unless a contrary intention appears from the terms
of the transfer.

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It is clear from the above definition that the vesting of interest can be done by three
kinds-

1) Without specifying the time when it is to take effect, or

2) Providing that it will be effective immediately,
3) Definitely effective immediately after an incident.

It can be cleared with the following illustration-

‘A’ transfers his house to ‘B’ but it cannot be said that when the transfer will be
effective. It is the first stage of vested interest. But if it is said that the transfer will
be effective immediately then it will be considered second stage of vested interest
and if it is said that the transfer will be effective after death of certain person then
such transfer will be effective on death under third stage because death is
necessary.

It is mentionable that the vested interest doesn’t end with the death of transferee. It
is able to give in succession. Not only this but the right of vested interest is
transferable.

Kinds of Vested Interest

a) Vested interest with possession

b) Vested interest without possession

In vested interest with possession, the possession and ownership of property is

transferred to transferee while in vested interest without possession, the ownership
of a property is transferred immediately but possession is transferred after it.

Illustration: ‘A’ transfers his house to ‘B’ for life and after his (B’s) death
transferred to ‘C’. Here the transfer in favour of ‘B’ is vested interest with
possession and the transfer in favour of ‘C’ is vested without possession.

Expected Conditions for Vested Interest

a) The transferee must be a definite and registered person

b) The form, position and limitations of the interest which is to be vested must
be clear.

18
 c) When it is in the condition to be effective immediately after the end of
previous benefits
d) It doesn’t depend upon any indefinite incident.

The Characteristics of Vested Interest

Vested interest has its own peculiarities, like-

a) Vested interest is transferable. It is acquired to the successors of transferee

after his death. It is immaterial or unsubstantial that the possession of
transferee, or not, of property before death,
b) Vested interest is not based upon precedent condition. In it, the rights are
created immediately. Whether the consumption is postponed.
c) It is inheritable viz. it can be acquired in succession.
d) It is attachable [Sunday Bibi V/s rajendra Narain) A.I.R. 1925 Awadh
389].

Contingent Interest

It is different from vested interest. It is such benefit of interest which occurs on

happening or not happening of a indefinite incident. Viz. when the vested interest
created by transfer of property does not depends upon occurring or not occurring of
special incident, then it is called contingent interest.

When such incident occurs or whose occurring becomes impossible then the
contingent interest becomes vested interest.

Contingent interest is defined in section 21 of Transfer of Property Act 1882 as

“Where on a transfer of property, an interest therein is created in favour of a person

to take effect only on the happening of a specified event, or if a specified uncertain
event shall not happen, such person thereby acquires a contingent interest in the
property. Such interest becomes a vested interest, in the former case, on the
happening of the event, in the latter, when the happening of event becomes
impossible.

It can be cleared by following illustration.

19
 ‘A’ transfers his property to ‘B’ on this condition that the interest of ‘C’ will be
vested in the property when after b marriages with ‘C’. it is contingent interest.
Now if ‘B’ marriages with ’C’ and this contingent will be transferred into vested
interest. But the transfer must be done with the condition that if ‘B’ will not marry
with ‘C’, then his interest will be vested in the property. It is contingent interest.
Here, on the death of ‘C’ or marriage with other, vested interest will be created of
‘B’ in the property.

Expected Conditions for Contingent Interest

1) The contingent must be based upon preceding condition. Viz the

effectiveness is expected to depend upon occurring or not occurring of any
incident.
2) It is compulsory that these incident must be indefinite viz. the incident
should be of this type that may happen or may not.

Exception to Contingent Interest

There is an exception of contingent interest. Where in any matter of transfer of

property, a person becomes entitled of interest after acquiring a particular age,
there giving income of property to the person or arranging this income for the
benefit of him is not contingent interest.

Difference between Vested Interest and Contingent interest

1) Vested interest is definite while contingent interest is indefinite.

2) In vested interest, the transferee acquired interest in transfer of property
without fulfilling condition while in contingent interest the interest can only
be acquired with happening or not happening of an indefinite incident.
3) In vested interest, the vested interest does not become of no avail on the
death of the transferee before acquiring possession, while in contingent
interest, the contingent interest fails on the death of transferee before
occurring or not occurring of any incident.
4) In vested interest, the property goes to the succession of transferee if he dies
before acquisition of possession of property, while in contingent interest, the
succession do not get property on the death of transferee before occurring or
not occurring of an incident.

20
 5) The vested interest cannot end or change afterwards when it is created once
while contingent interest can convert into vested interest.
6) The vested interest is attachable while contingent interest is not.
7) The vested interest is transferable while contingent interest is not
transferable.
8) Vested interest is hereditary while contingent interest is not.

Qs. Doctrine of Election (section-35)

Ans. Rule of election is propounded in section 35 of Transfer of Property Act

1882. It is called ‘Doctrine of Election’ also.

The necessity to adopt this principle occurs when two options are available before
a person by written or by document and he has the right to choose one option from
the two, or such two situations occurs in which one is to be selected and others is
to be left or both options cannot be used together.

The text of section 35 is thus “there if a person to transfer such property of which
he has no right to transfer and he provides an interest to the owner of property for
such transaction, there such owner must be elected who will confirm such transfer
or have consent to it and after it, he will relinquish such provided interest and such
relinquishment will be reverted to transferor or his representative.

It can be cleared with following illustration-

A field in Sultanpur is property of ‘C’ and its value is Rs. 800 rs. ‘A’ transfer this
field to ‘B’ by an instrument of gift and gives rs. 1000/- to ‘C’. ‘C’ desires to keep
the field for himself and he forfeits the gift of 1000/-.

The basic rule of the Rule of Election is that any person cannot approve and
disapprove the rules at same time. He has to select one option from the two. In “C.
Bipthumma Vs V. Shankar Narain (A.I.R. 1965 S.C. 241) the supreme court
held that, “if a person accepts an interest under testamentary document then he has
to accept every part of document and he has to reject such regulations which are
against the document. It is the main fundamental ‘Rule of Election’.

In simple way, it may be stated that if a person is getting benefit under a deed, or
will, or other instrument then he has to adopt the whole contents of that instrument,

21
confirm to all its provisions. It is not possible that he accepts only for the benefit
and rejects for liabilities. This is the main basis of doctrine of election.

In “Bhauram v/s Baijnath Singh” (A.I.R. 1961 S.C. 1327) the Supreme Court
decided that “A person cannot accept and reject a transaction simultaneously. That
is, it is not possible that he will accept interest and reject liability.

Essential Elements:

The doctrine of election is wide and distributed in various sections. In each section,
there is one element of it which indicates that for applicability of doctrine of
election, what is required.

These elements are as follow:

(1). When Property is Transferred Unauthorisely- election is required when

property of someone is transferred by other person unauthorisely. In these matters,
the option remains with the owner of property that either he accepts such transfer
or rejects it.

(2). When interest in vested in transferred property of the person who is

electing- it is compulsory for the applicability ‘Rule of Election, that the interest of
the person who is electing must be vested in the transferred property. If no interest
or ownership is vested, then there is no need of election.

(3). When authorised and unauthorised transfer is done under same

transaction- it is also compulsory for the application of ‘Rule of election’ that
authorised and unauthorised transfer are done under same transaction. It is
expected that both transfer depends upon each other. If both are separate and
independent the rule will not apply.

Illustration: ‘A’ transfers his property to ‘B’ by executing a document. ‘A’

transfers the property of B to C by another deed. Here both transfers are separate
and independent. In this case first transfer will be legal and second will be illegal.
In such cases, the election doesn’t required.

In this matter “Mohammad Afzal Vs Gulam Qasim (1903) 30 Kolkata 843) is an

important case. In this case, after death of ‘Nawab’ of tonk, the government
handed the property to eldest son of Nawab and gave some money to the younger

22
brother. Nawab had already given some villages to younger son instead of post.
The question raised that whether the younger son could select one of the gift from
the two gifts. It was decide that the ‘Rule of Election’ was not applicable in the
case because both gifts were separate and independent.

(4). When the transferor was aware or not aware about the ownership of
transferred property- it is not necessary for the applicability of rule that the
unauthorised transferor of property did know or not know about possession of the
property. In such cases, it is not compulsory to prove that the transferor was in
know at the time of transfer of property that he is not owner of the transferred
property.

(5). When the interest is provided directly or indirectly- the rule doesn’t apply
in the cases, where the interest is provided indirectly and person who is provided
interest are of different status. In such cases, he can accept interest in one status
and rejects other status.

Methods of Election-

Election can be done in two kinds:

Election by direct form, and

Election by conduct.

When the person who is electing doesn’t accept the deed clearly by orally or by
written form but when he accepts the interest provided by the deed it will be
considered that he has elected in his favour. It is implied method of election.

Exceptions of Election:

I. There are certain exceptions of the doctrine of election or in the following

circumstances this doctrine does not apply:
II. When any transfer in the two transfer of property is illegal for example,
Transfer done against rule of perpetuity.
III. Where the indenture of transfer of property and interest provided to the
owner are different.
IV. Where a person doesn’t get interest directly under transaction.
V. Where the case is related to government grant.

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VI. Where the result of transfer of property are not equitable.
VII. Where the election by clear declaration is not compulsory.

Unit-II

Qs Sale of immovable property (section 54); (sale, contract of sale)

Ans. Sale is important in transfer of property. It is, most prevailing transfer. By it

the ownership of any property is transferred to other person. Section 54 of transfer
of property Act 1882 provides for it.

Definition

According to section 54, “Sale is a transfer of ownership in exchange for a price

paid or promised or part paid and part promised”.

Thus sale means Sale is a transfer of ownership in exchange for a price. Such price
has either been given already or promised to give. It means that the transaction of
sale can happen on cash payment or on debt.

Illustration

A sales his house to ‘B’ for Rs. one lack. He gets 50,000/- in cash and accepts that
he will get 50,000 afterword. It is sale under section 54.

B.R. Koteshwar Rao v/s G. Rameshwari Bai (A.I.R. 2004 Andhra pardesh
high court) High court decided that after the sale is complete the property transfer
to buyer from seller.

Essential Element of Sale

From the above definition of sale following element of sale are clear;

1 Parties of sale

There are two parties of sale:

Seller

Buyer

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We can also call him transferor and transferee, that is seller is transferor and the
buyer is transferee.

Seller is a person who sells the property. The seller must a competent person. T.P.
Act section 7 provides that competent person is-

I. Who is adult
II. Who is sound-mind; and
III. Who has the right of sell the property either he must be owner of property or
have the authority to sell it.
IV. The soundness mind of seller means his capacity to understand the nature of
transaction

Mohari Bibi v/s Dharma Das Ghosh (1930) it was decided that minor cannot sale
property because he is not able for contract.

As for as buyer concerned, buyer can be any person who have the capacity to buy.
The minor person can be buyer or transferee.

2 Subject-matter of sale

The subject matter of sale must be immovable property because section 54 only
apples on sale of immovable property. The provisions of ‘Sale of Goods Act’ do
not apply on the sale of immovable property.

The immovable property is defined in section 3 of this act. According to it growing

crops, standing timber and grass are not immovable property so these cannot be
subject-matter of sale

Anand Bahera v/s State of Orissa A.I.R 1956 S.C it was held that land and benefit
from land are considered immovable property. So fishing from river and right to
carry them are considered benefits from land so these are considered transferable.

3 Transfer of ownership

Transfer of ownership is necessary in sale. This transfer happens from seller to

buyer. Such transfer must be voluntary. The object and consideration of transfer-

I. Must not against law

II. Not against public policy or morality
25
III. Not under fraudulent, misstatement, torture and under influence.

4 Considerations

Consideration or value is essential element of sale. A transfer without

consideration cannot be a sale. Money has not been defined under the transfer of
property Act. Hence the definition money given in the Sale of Goods Act has been
recommended to adopt.

State of Chennai v/s Gegan Dunkerley and Co. (A.I.R 1958 S.C) the Supreme
decided that money is compulsory as consideration in transaction of sale. If
consideration is not in form of money but in form of goods then such transaction
will not be sale but it will be exchange or Barter.

How the Sale is done

Section 54 of T.P Act 1882 describe about the methods of Sale According to it the
immovable property of Rs. 100/- or more can only be sold by registered deed and
the immovable property of less than Rs. 100/- can be sold either by registered deed
or delivery of possession.

Difference between sale and Agreement to Sale

According to section 54 a contract for the Sale of immovable property is a contract

that a sale of such property shall take place on terms settled between the parties. It
does not of itself create any interest in or charge on such property. The following
difference is found in both-

I. Sale is executed contract while agreement to sale is executory contract.

Where something remains to do, that is called an executory contract, where
in executed contract nothing has to be done.
II. In sale, the ownership is transferred from seller to buyer where as in
agreement to sale, the benefits are not created in property viz. ownership is
not transferred.
III. The sale never dissolve while the agreement to sale can be dissolved.

Qs. Rights and liabilities of Buyer and Seller

26
Ans. Section 55 of T.P. Act 1882 describes rights and liabilities of buyer and
seller. These rights and liabilities are as under—

1 Rights of seller

Disclose all material defects in the property

It is the duty of seller to disclose to the buyer any material defect in the property or
in the seller's title thereto of which the seller is, and the buyer is not, aware, and
which the buyer could not with ordinary care discover.

Produce all documents

It is the duty to produce to the buyer on his request for examination all documents
of title relating to the properties which are in the seller's possession or power.

To provide all information relevant to the property

It is the duty of seller to answer to the best of his information all relevant questions
put to him by the buyer in respect to the property or the title thereto.

To execute conveyance deed

on payment or tender of the amount due in respect of the price, to execute a proper
conveyance of the property when the buyer tenders it to him for execution at a
proper time and place.

Delivery of property

between the date of the contract of sale and the delivery of the property, to take as
much care of the property and all documents of title relating thereto which are in
his possession as an owner of ordinary prudence would take of such property and
documents.

Delivery of possession

It is the duty of seller to give, on being so required, the buyer, or such person as he
directs, such possession of the property as its nature admits.

To pay all public charges and rent

27
It is the duty of seller pay all public charges and rent accrued due in respect of the
property up to the date of the sale, the interest on all encumbrances on such
property due on such date, and, except where the property is sold subject to
encumbrances, to discharge all encumbrances on the property then existing.

Bound to deliver all documents

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
are in the seller's possession or power.

2 Rights of seller

According to the provisions of section 55 of the transfer of property act 1882

following are the rights of seller

Right to get rent and profit

The first right of seller is to get rent and profit. The ownership of property is not
transferred to buyer till the seller have the right to get rent and profit.

Rights to get interest on unpaid buying money

where the ownership of the property has passed to the buyer before payment of the
whole of the purchase-money, to a charge upon the property in the hands of the
buyer, any transferee without consideration or any transferee with notice of the
non-payment, for the amount of the purchase-money, or any part thereof remaining
unpaid, and for interest on such amount or part from the date on which possession
has been delivered.

3 Right of Buyer

T.P. Act 1882 describes the right of buyer these are—

Right to get Benefits and Rents

Where the ownership of the property has passed to him, to the benefit of any
improvement in, or increase in value of, the property, and to the rents and profits
thereof.

Rights to get interest

28
Where the buyer has paid buying money to the seller, then the buyer is entitled to
get interest from the date of payment till the date of acquiring possession.

4 Liabilities of Buyer

Liabilities to disclose facts

It is the duty of buyer 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.

Liabilities to payment of purchase money

It is the duty of buyer to pay or tender, at the time and place of completing the sale,
the purchase-money to the seller or such person as he directs:

PROVIDED that, where the property is sold free from encumbrances, the buyer
may retain out of the purchase-money the amount of any encumbrances on the
property existing at the date of the sale, and shall pay the amount so retained to the
persons entitled thereto.

Duty to bear damages

Where the ownership of the property has passed to the buyer, to bear any loss
arising from the destruction, injury or decrease in value of the property not caused
by the seller.

Liability to pay due amount

where the ownership of the property has passed to the buyer, as between himself
and the seller, to pay all public charges and rent which may become payable in
respect of the property, the principal moneys due on any encumbrances subject to
which the property is sold, and the interest thereon afterwards accruing due.

Qs. What is the mortgage and various kind of mortgage. Right and Liabilities
of the mortgagor and mortgagee.

Ans. Mortgage has an important role in the transactions of immovable property. It

is prevailing in day to day life. For fulfilling the own needs, to obtain a loan,

29
generally, transactions having mortgage are used to. The provisions related
‘Mortgage’ are made under sections 58 to 98 of the Transfer of Property Act.

The word ‘Mortgage’ has been defined under section 58(a) of the Transfer of
Property Act. According to it-

A mortgage is the transfer of an interest in 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.

The transferor is called a mortgagor, the transferee a mortgagee; the principle

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.

The mortgage is said to be a transfer of an interest in a specific immovable

property. The purpose of mortgage is to secure the payment of money advanced as
loan, an existing or future debt.

In mortgage some rights are transferred to the mortgage while some others remain
with the mortgagor.

Example- where A lends Rs. 50,000/- from b and Mortgages his land to B until he
pays off his debt.

The following illustration clears it ‘A’ takes Rs. 50,000/- from ‘B’ as loan and
keeps his house as security, it is mortgage. This house will to ‘B’ as mortgage
unless the debt is paid. In “Gopal v/s Purshotam” {(1883)5Allahabad 121}, Justice
Mahmood called it best definition of mortgage.

In “Rajkumari Kaushalya Devi vs Baba Pritam Singh (A.I.R.1960 S.C. 1030),

the Supreme Court considered mortgage as an auxilliary element of right of
recovery.

Essential Elements of Mortgage-

From the definition of mortgage, following essential elements are clear-

30
(1). Parties of Mortgage- there are two parties of mortagage: 1. Mortgagor,
2.Mortgagee. The person who transfers his property is mortgagor and to whom the
property is transferred is mortgagee The mortgagor must be adult and sound mind.
In “Mohri Bibi vs Dharmadas Ghosh [(1903)30 Kolkata 539] it was said that minor
person is not competent for the mortgaging.

(2). Immovable property- the mortgaged property must be immovable. Movable

property cannot be subject matter of mortgage and the property is expected to
specific.

(3). The Transfer of Interest- the transfer of interest is compulsory for

mortgaging. In Mohan Lal vs Indumati [(1917)39, Allahabad 244] it was decided
that transfer without interest cannot be mortgaged.

But it also notable that in ‘Mortgage’, the interest is only transferred not
possession.

(4). Consideration- it is also compulsory for mortgaging. Mortgaging cannot be

done without consideration.

The consideration may be –

I. Money given as loan

II. Money given on debt
III. Present or future debt

Follow of such agreement in which liability related to money is created.

(5). The object must be to secure debt- in “Nidha vs Murli Dhar” [(1903)25
Allahabad 115] it was decide that if the transfer is to discharge any debt, there it
will not be considered as transaction of mortgage.

(6). Mortgage money- debt money is called mortgage money in mortgage and it is
the consideration.

In the case of Revanna vs Sanna (A.I.R. 1958 Maysore 32), the amount of
interest has also been considered inclusive in mortgaged money and have a charge
on the mortgage.

31
DEWQSignatures of both i.e. mortgagor and mortgagee are not necessary on
mortgage deed. Such a mortgage deed can be considered effective where the
signature of mortgagor is there and such deed is registered. In addition to this, that
is witnessed by two witnesses. Registration is necessary in case of immovable
property of more than one hundred rupees value.

Kinds of Mortgage:

Mainly mortgages are of 6 types-

1. Simple mortgage
2. Mortgage by conditional sale
3. Usufructuary mortgage
4. English mortgage
5. Mortgage by deposit of title deeds
6. Anamolous mortgage.

Simple mortgage- where, without delivering possession of the mortgaged

property, he mortgagor binds himself personally to pay the mortgage-money, and
agrees, expressly or impliedly, that, in the event of his failing to pay according to
his contract, the mortgagee shall have a right to cause the mortgaged property to be
sold and the proceeds of sale to be applied, so far as may be necessary, in payment
of the mortgage-money, the transaction is called a simple mortgage and the
mortgagee a simple mortgagee.

Mortgage by conditional sale- a mortgage by sale with a condition attached to it,

is such a mortgage where to secure the mortgage property, the mortgage-property
has sold apparently. It is such a transaction, in which mortgage and sale both are
included.

It is an appearance of sale but is really not a sale and remains effective. In case of
breach of the condition of repayment within a stipulated period, the transaction is
closed and becomes one of absolute sale to be enforced by the process known as
foreclosure.

Thus, the mortgage by conditional sale is such a mortgage where, the mortgagor
ostensibly sells the mortgaged property-

32
 I. On condition that on default of payment of the mortgage-money on a certain
date the sale shall becomes absolute, or
II. On condition that on such payment being made the sale shall become void,
or
III. On condition that on such payment being made the buyer shall transfer the
property to the seller, the transaction is called a mortgage by conditional sale
and the mortgagee by conditional sale.
IV. Provided that no such transaction shall be deemed to be a mortgage, unless
the condition is embodied in the document which effects or purports to
effect the sale.

Usufructuary Mortgage- a usufructuary mortgage is one in which-

Delivery of possession, or an express, or implied undertaking on the part of the

mortgage is delivered to the mortgage, and

For delivery of possession, one has to bind himself, and

The mortgage is authorised to retain possession until payment of the mortgage

money, to receive the rents and profits accruing from the property and to
appropriate the same in lieu of interest or in payment of the mortgage-money.

Actually, this mortgage is stated as usufructuary mortgage for the reasons that the
mortgagee is free to use the mortgage property under such mortgage.

Following are the main characteristics of this mortgage:

I. The possession of mortgage-property is delivered to mortgagee under it by

the mortgagor. Delivery of possession is first and most important condition
of this mortgage (Bachhan Singh Vs Varyam Singh, A.I.R. 1961, Punjab
477)
II. The mortgagee has a right to use mortgage-property and also has a right to
receive rents and profits.
III. The rents and profits are appropriated in the accounts of mortgage money
and/ or interest.
IV. No personal liability is incurred by the mortgagor for repayment of
mortgage-money. No suit can be instituted against him in this regards. (Ram
Narayan Singh Vs Adhindra Nath, A.I.R. 1916 PC 119).

33
V. No time limit is fixed in this mortgage. The mortgagee has possession of the
property till the principal and interest are defrayed by the mortgagor.

(4). English Mortgage- it is a transaction in which the mortgagor binds himself to

repay the mortgage money on a certain date and transfers the mortgage property
absolutely to the mortgagee, but subject to condition that the mortgage will transfer
it to the mortgagor upon payment of mortgage-money as agreed.

The following characteristics have been defined in the case of Narayan Vs

Venkatramanna [(1902)25 Chennai 220]

The mortgagor takes liability upon himself to repay the mortgage-money on a

certain date.

The delivery of possession of mortgaged possession is made absolutely to the

mortgagee, and

On the payment of mortgage money on the schedule date, the possession of the
mortgaged-property re-transfers to the mortgagor.

Although the right of redemption is existed with the mortgagee in English

mortgages but he does not get complete ownership. The maxim that ‘once a
mortgage is always a mortgage’ is the main basis of this mortgage.

(5). Equitable Mortgage- this is also known as mortgage by deposite of title deals.
Under it, the documents to title to immovable property with intent to create a
security of mortgage-money are delivered or deposited to the mortgagee by the
mortgagor.

Following characteristics are laid down in the case of Behram Vs Sorabhji-

I. Existence of a debt;
II. Deposition of the title deeds, and
III. An intention that the deeds shall be security for the debt.

Such documents may be in possession of the mortgagee prior to transactions of

mortgage. These are deemed to be deposited to mortgagee at the time of mortgage.

(6). Anomalous Mortgage- such mortgage which is not simple mortgage,

mortgage by conditional sale, usufructuary mortgage and English mortgage or
34
equitable mortgage, is called anomalous mortgage. Sometimes mortgage is like
such which contains the contents of two or more mortgages, such mortgage is also
called anomalous mortgage. Following mortgages are considered as anomalous
mortgage:

Usufructuary mortgage without delivering possession

Having responsibility personally for payment of mortgage-money, doing

usufructuary mortgage.

Usufructuary mortgage with a condition of sale. [Narshing PratapVs Mohammad

Yakub (1929)4 Lukhnow 363]

There are three important provisions made in section 60 of T.P. Act 1882:

1. Right of Redemption
2. Clog of Redemption
3. Once a mortgage, always a mortgage.

(1). Right of Redemption- section 60 of Act describes the right of redemption.

The word ‘redemption’ means “to make free or get back the mortgaged property by
paying mortgage debt.

Redemption is a right of mortgage by which the mortgaged property is kept as

security and the property is returns to mortgagor.

Section 60 of the Act reads as below-

At any time after the principal money has become due, the mortgagor has a right
on payment or tender, at a proper time and place, of the mortgage-money, to
require the mortgagee-

To deliver to the mortgagor the mortgage-deed and all documents relating to the
mortgaged property which are in the possession or power of the mortgagee.

Where the mortgagee is in possession of the mortgaged property, to deliver

possession thereof to the mortgagor, and

At the cost of the mortgagor either ro re-transfer the mortgaged property to him or
such third person as he may direct, or to execute and (where the mortgage has been

35
effected by a registered instrument) to have registered an acknowledgement in
writing that any right in derogation oh his interest transferred to the mortgage has
been extinguished.

Essential Elements

From the above definition following essential elements of right of redemption are
viewed:

Legal Validity of Mortgage- the first compulsory element for the applicability of
right of redemption is legal validity of mortgage. In “Vishnu Kaya Vs Vishnu
Maya (A.I.R. 1980 Sikkim 1). It was decided by the Sikkim High Court that,
where registration of mortgage is necessary, there the mortgage without
registration will be considered illegal and the mortgagor does not become entitled
for getting compensation on the basis of mortgage.

Due of Principal- the mortgagor can redeem the mortgage any time after the
mortgage money is paid and he cannot be avoided from it except decree of court or
any act of court.

Payment of Due Money- The third essential condition of applicability of the right
of redemption is the payment of due money. The payment of due money can be
done to mortgage himself or to his agent.

But it is compulsory that such payment must be done without condition and at
proper time and place.

Filing of Suit- it is compulsory for the redemption of mortgage. The use of right of
redemption cannot be done without filing a suit. The suit of redemption can be
filed by mortgagor or by any transferee from his side.

It was decided in the case of “Pranil Kumar Vs Kishori Lal) that the purchaser of
the property by auction can also file a suit of redemption because he has his
interest in such property.

In the case of Vora amen Bhai Ibrahim Vs Vora Teharall Mohammadee (A.I.R.
1998 Gujarat 31) it has been held by the Gujarat High Court that the suit for

36
redemption of mortgage can be filed upto a period where the right of redemption
does not end.

(2). The doctrine of Clog on Redemption and once a mortgage, always a mortgage-
two important principles have been propounded in section 60 of the Transfer of
Property Act, 1882:

Clog on redemption, and

Once a mortgage, always a mortgage.

It is mentionable here that the right of redemption is a right free from

restrictions and always remains. In other words, it can be said that the mortgage is
always redeemable. It can neither be finished nor making limits.

In “Rama Shankar Singh Vs Silvers Screen Corp. Pvt. Ltd. (A.I.R. 1998 Kolkata
46) it was decided that the right of redemption of mortgagor cannot be finished.

It is known that the main object of mortgage is to secure the repayment of

mortgage-money. Hence, the mortgage exists till the repayment of debt
irrespective of the matter passing of the date of repayment. The right or redemption
neither can be extinguished nor be made limited/ restricted.

Exception

Some exceptions are also these for the rule – The right of redemption of mortgage
cannot be extinguished. Under the following circumstances, this right can be
limited/ restricted-

The right of redemption cannot be finished in mortgage deed of agreement but

after it, it can be finished by submission of right of redemption, or by sale, or by
any method by free transaction.

The right can be finished by the decree of the court. The mortgagor only has the
right to get such decrees. The right of redemption can be awaited till exercising ,
after that a decree for forefeiture of the right of redemption can be passed by the
court.

If the right of redemption and interest of mortgage vested in one person then the
right is finished.
37
If the mortgaged property is vested in state or if the mortgaged property
acquisitioned by government the right ends.

(3). Once a mortgage, always a mortgage- the rule of opposition on the right of
redemption is based on the maxim- once a mortgage, always a mortgage. Mortgage
always remains as a mortgage, no change or revision can be done in it. Such right
of redemption or mortgage cannot be put to an end or cannot be limited.

In this regard, the case of “Knocks Vs Roulds” (1992 Sc 24)is a good example,
where under Lord Devy lid down while making an amendment in the above
principal that-

“Once a mortgage, always a mortgage and nothing but a mortgage.”

Thus, the words ‘and nothing but a mortgage’ had been added in the above maxim
by Lord Devy. It has been held in the case of ‘Knocks vs Roulds’ that- The right
of redemption of mortgage cannot be failed by any activity, that is, it cannot be
made non-redeemable. If any, exercise is made then it will null and void. If any
condition is imposed by the parties then it will also be void. in the instant case, the
Goodwill and premises were mortgaged by Mr. rice to Knocks company and a
condition was laid down that on payment of mortgage-money and interest by Mr.
Rice, he will have the right to get back the mortgaged property. The Court stated
that mortgage deed creates mortgage and such mortgage always remains a
mortgage. But, limitation of right of redemption after mortgage by a contract will
not be considered an opposition.

It is to mention here that a condition of converting mortgage in to sale is also void

for the reason of opposition on the right of redemption. A condition that in case of
non-payment of mortgage money, the mortgagee will held the mortgage-property
as a lease, in the mortgage deed has also been considered illegal and ineffective.
Similarly, in case of usufructuary mortgage for a defined period laying down a
condition that o non-payment of principle the mortgage will be sold, is illegal.
Such a condition also been considered illegal, where penalty is imposed for non-
payment of mortgage money in a defined period.

At all he intention is that mortgage has the right of redemption of mortgage are co-
existence, whether the right of redemption has been mentioned or not.

38
On the whole, the mortgage and right of redemption are co-existence, whether the
right of redemption is described or not the whole, the meaning is that once a
mortgage is done, it will always a mortgage

It cannot be transferred in any other transactions

The right of redemption neither be ended nor can be limited or restricted.

Rights and Duties of the Mortgagor and Mortgagee

Section 60 to 77 of the Transfer of the Property Act deals with the rights and duties
of the mortgagor and mortgagee.

Rights of Mortgagor:

The mortgagor has the nine rights.

They are:-

1. Section 60 of the Act, the mortgagor has the right of redemption of the
mortgaged property after payment of mortgaged money. He can take delivery of
possession of the mortgaged property and the return of all the title deeds.

2. Section 60 A of the act, the mortgagor has the right to direct the mortgagee to
transfer the mortgaged property to a third party instead of transferring it to the
mortgagor.

3. Section 60 B of the act, the mortgagor has the right to inspect the documents in
the possession of the mortgagee. But it must be only at a reasonable time. He can
take copies from such documents.

4. Section 63 of the act, the mortgagor has the right to the properties accrued by
natural means like accretion, etc. This right is called "Right of Accession".

5. Section 65 A of the act, the mortgagor has the power to make lease also, but it
must be with the consent of the mortgagee. Such lease must satisfy the prescribed
conditions.

6. Section 66 of the act, the mortgagor has the right to reasonable waste of the
property but he must not make permanent injuries of destruction of the property or

39
reduce its value. If he does so, then he must give additional security to the
mortgagee.

7. Section 63 A of the act, the mortgagor has the right to claim improvement made
by the mortgaged properties.

8. The mortgagor can avoid consolidation by the mortgagee in the mortgaged

properties.

9. The mortgagor has the right to deposit the mortgage money in the court,if there
is any suit relating to the property.

Duties or Liabilities of Mortgagor:

1. The mortgagor must indemnify the mortgagee for the defective title to the
property. If any third person interferes, the mortgagor must compensate the
mortgagee for the expenses incurred by him in protecting the title.

2. The mortgagor must compensate the mortgagee for payment of all taxes and
public charges .Similarly when the property the mortgagor must pay all taxes and
public charges.

3. When the mortgaged property is leased, the mortgagor must direct the rent
payable under the lease, etc., to the mortgagee.

Rights of Mortgagee:

1. Section 67 of the act. At any time after the mortgage money has become due, the
mortgagee has the right to obtain from the court, a decree for foreclosure.

2. The mortgagor has the right to sue for the mortgage money in the following four
cases, section 68 of the act.

a. when the mortgagor binds to repay the money.

b. When the mortgagor's property is wholly or partly destroyed by any cause other
than the wrongful act or default of the mortgagee.

c. When the mortgagee is deprived of the whole or part of his security.

40
 d. When the mortgagee was entitled to possession of the mortgaged property and
the mortgagor has failed to deliver it.

3. The mortgagee has the power to sell the mortgaged property without the
intervention of the court, on default of payment of mortgage money by the
mortgagor in the following three cases, Section 69 of the act.

a. When the mortgage is English mortgage between Non Hindus, Non Muslims,
Non Mohammedans and member of the race or sect notified by the State
Government to the Official Gazette.

b. When Government is the mortgagee, with the express provision of sale without
intervention of teh court.

c. When the mortgaged property is situated at Calcutta, Madras, Bombay or any

other gazette town or area.

4. The mortgagee has the right of accession to the increased mortgaged property.

5. The mortgagee has the right of accession to the increased properties for renewal
of security.

6. If the mortgaged property is under lease, the mortgagee is entitled for renewal
of the lease for purpose of security.

7. The mortgagee has the right for reimbursement with interest for the money
spent for purposes like preservation of mortgaged property etc...,

8. When a property is mortgaged for successive debts to successive mortgagees a

mesne mortgagee has the same rights against mortgagee posterior to himself as he
has against the mortgagor.

Liabilities of Mortgagee:

1. A mortgagee is bound to sue on behalf of all the mortgagees in respect of whom

the mortgage money has become due in the absence of express contract. During the
continuance of the mortgage, the mortgagee is bound.

2. To manage the property as a person of ordinary prudence would manage if it

were his own.

41
3. To use his best Endeavour to collect the rents and profits thereof.

4. In the absence of a contract to the contrary, to pay Government revenue and the
other charges of a public nature and all rents, out of the income of the property.

5. In the absence of a contract to the contrary, to make such necessary repairs as

the income of the property permits.

6. Not to commit ant act which is destructive or permanently injurious to the

property?

7. When the whole or any part of the property is insured against loss or damage by
fire, in case of such loss or damage to reinstate the insured property with the
money obtained from the insurance policy or to discharge the mortgage debt with
it,if the mortgagor so directs.

8. To keep clear, full and accurate accounts of all sums received and spent by him
as mortgaged and give them to the mortgagor when asked.

9. To debit receipts from the mortgaged property or where such property is

personally occupied by him a fair occupation rent thereof after deducting the
expenses of management ,the collection charges, revenue and costs of repairs, first
against the interest on the mortgage money and then against the principal.

10. To account for the receipts from the mortgaged property. Such accounting of
receipt from the property shall be taken in lieu of interest on the principal money
given to the mortgagor.

This article is very useful to Mortgagor and Mortgagee to know their rights and
liabilities of the property in the Transfer of the property act.

Unit-III

Qs. Lease (section 105-117) Definition, lease how made termination of lease

Ans. Lease has an important place in the series of transactions related to the
transfer of property. Alike sale and mortgage, this transaction is also too in vague.

42
The definition and essential elements of lease have been mentioned in section 105
of the Transfer of property Act, 1882.

Definition- lease is a transfer of the right to consume any immovable property for
expressed, implied, or perpetual, for which the person accepts to give some
consideration. In simple words, it may be said that when a person transfer the right
of enjoyment of an immovable property to the other person for consideration then
it is called a lease.

The lease has been defined under section 105 of the Transfer of Property Act as
follow:

A lease of immovable property is a transfer of a right to enjoy such property, made

for a certain time, express or implied, or in perpetuity, in consideration of a price
paid or promised, or of money, a share of crops, service or any other thing of
value, to be rendered periodically or an specified occasions to the transferor by the
transferee, who accepts the transfer on such terms.

Lesser, lessee, premium and rent defined: the transferor is called the lesser, the
transferee is called the lessee, the price is called the premium, and the money,
share service, or other thing to be so rendered is called the rent.

It is cleared from this illustration- “A gives his plot of land to ‘B’ for rent for 10
years @ rs. 1500/- P.M. this is lease.

Thus, lease is such transaction-

I. In which the right to enjoy property is transferred by one person to another.

II. Such property is immovable property.
III. The right of enjoyment is transferred expressed, implied or perpetually; and
IV. The consideration is given in place of enjoyment of property.

Essential Elements-

From the above definition of lease, its following elements are clear-

(1). Parties of Lease- two parties are compulsory for lease- first lesser and second
lessee. The person who transfer the property is called the lessor, to whom the
property is transferred, is called lessee.

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(2). Competent Parties- both the parties must be competent. Both must be adult
and sound of mind. The transferee cannot be a minor alike sale and mortgage.

In “Pramila Vs jogeshwar”, it was decided that the minor cannot be a lessee

because there are mutual liabilities of both the parties in the transaction of lease. So
the lessor should either be owner of the property or have an authority to lease.

(3) Subject-Matter of Lease- only immovable property can be subject matter of

lease, movable property is not. The immovable property should also be-

I. Transferable
II. Possessionable
III. Consumable/usable

Fisheries, ferries, market dues etc. may be subject matter of lease.

(4). Transfer of Property- an essential condition for lease is transfer of property.

It is called Demise in Anglo law, Demise means partial transfer, in lease, it is
partial transfer, no complete transfer.

(5). Consideration- it is necessary for transaction of lease. Without consideration,

lease cannot be done.

In “Commisioner, income Tax vs Panwari Tea Co. (A.I.R.1965 S.C. 1871) the
supreme court decided that consideration may be premium in form of premium or
rent. Premium is an agreed cost in consideration of property.

Rent means- “money or commodity given as substitute to consumption of

property to given by lessee or lessor. Rent may be money, crop, service or any
other valuable goods.

In the case of Vijiyaaran Vs Vikramdev (A.I.R. 1944 Chennai 518) it has been
stated by that Chennai High Court that the rent is required to be definite.
According to the decision taken in the case of ‘Dharmendra Nath Vs Jagdish’
(A.I.R. 1976 Allahabad107) the payment of rent can be made through chaque.

(6) Duration—The duration of lease must be expected to impliedly, perpetually or

expressly. Lease can be of three type in view of duration.

I. Lease for definite time

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 II. Current lease
III. Lease in perpetuity.

Determination of lease is compulsory in the lease of for definite time. If the

duration is not definite, the lease cannot be legal. Current lease may be year to year
or month to month. Such lease remains till not expired by notice. Parental/ancestral
lease generally is lease in perpetuity.

Determination of lease

The provisions for determination of lease are made under 111 of the transfer of
property Act 1882. According to determination of lease happens in following
circumstances—

1 Efflux of time

A lease created for a certain time naturally determines on the last day of the term
without any formality. Such a lease does not terminate if parties die during term.

2 By happening of a specified event

If the term of a lease is conditional on the happening of a certain event, the lease
determines when the event happens. For example a lease for life determines on the
death of lessee.

Great Northern Railway v/s Arnold (1916) it has been stated that where a lease has
been made in the period of war, there the lease determines as soon as war ends.

3 By termination of lessor’s interest

With the termination of interest of lessor in lease, the lease also determines. For
example where any property is under possession of mortgagee under mortgage and
he had given it on lease, there on redemption of mortgage, the lease determines,
because there remain no interest, in the property of lessor (mortgagee).

4 By Merger

When two estates merge into one or unite, it is called merger. In case of a lease,
merger occurs when the leasehold and the reversion are acquired by one and the
greater one. The principle is that the some person cannot be both a landlord and a

45
tenant. Or in the other words, there must be union of the entire interests of the
lessor and lessee.

5 By surrender

Another mode by which lease is determined is where the lessee with the consent of
lessor expressly surrenders or yields up his entire interest in the lease to the lessor.
No form or mode is prescribed for the surrender. Registration of surrender deed is
also not necessary Surrender may be expressly or impliedly i.e in any manner. By
deliverin the keys of lease property, the lease can be surrendered. Surrender of
lease is not necessary in writing. By delivering the possession of lease can be
presumed from the activities of parties.

6 By forfeiture

On forfeiture of lease, it determines. The lease can be forfeited when—

I. The lessee breaks an express condtion.

II. When lessee resources his character as such by setting up a title in third
person or in himself
III. Where lessee is adjudicated an insolvent and there is a condition in the lease
that the lessor could get re-entry on happening of such event.

7 On expiration of notice to quit

By giving intimation of following intention by one party of the lease to other party,
the lease can be extinguished—

I. Determination of lease
II. To quit the property of lease
III. Intention of quitting.

Tenancy at will can be determined at the will of any party. Fixed periodic tenancy
can be extinguished by informing under section 106.

Qs. Right and Liabilities of lessor and lessee.

Ans. In the absence of a contract or local usage to the contrary, the lessor and the
lessee of immovable property, as against one another, respectively, possess the

46
rights and are subject to the liabilities mentioned in the rules next following, or
such of them as are applicable to the property leased:-

(A) Rights and liabilities of the lessor

(a) The lessor is bound to disclose to the lessee any material defect in the property,
with reference to its intended use, of which the former is and the latter is not
aware, and which the latter could not with ordinary care discover;

(b) the lessor is bound on the lessee's request to put him in possession of the
property;

(c) the lessor shall be deemed to contract with the lessee that, if the latter pays the
rent reserved by the lease and performs the contracts binding on the lessee, he may
hold the property during the time limited by the lease without interruption.

The benefit of such contract shall be annexed to and go with the lessee's interest 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.

(B) Rights and liabilities of the lessee

(d) If during the continuance of the lease any accession is made to the property,
such accession (subject to the law relating to alluvion for the time being in force)
shall be deemed to be comprised in the lease;

(e) if by fire, tempest or flood, or violence of an army or of a mob, or other

irresistible force, any material part of the property be wholly destroyed or rendered
substantially and permanently unfit for the purposes for which it was let, the lease
shall, at the option of the lessee, be void:

(f) if the lessor neglects to make, within a reasonable time after notice, any repairs
which he is bound to make to the property, the lessee may make the same himself,
and deduct the expense of such repairs with interest from the rent, or otherwise
recover it from the lessor;

(g) if the lessor neglects to make any payment which he is bound to make, and
which, if not made by him, is recoverable from the lessee or against the property,

47
the lessee may make such payment himself, and deduct it with interest from the
rent, or otherwise recover it from the lessor;

(h) the lessee may even after the determination of the lease remove, at any time
whilst he is in possession of the property leased but not afterwards all things which
he has attached to the earth; provided he leaves the property in the state in which
he received it;

(i) when a lease of uncertain duration determines by any means except the fault of
the lessee, he or his legal representative is entitled to all the crops planted or sown
by the lessee and growing upon the property when the lease determines, and to free
ingress and egress to gather and carry them;

(j) the lessee may transfer absolutely or by way of mortgage or sub-lease the whole
or any part of his interest in the property, and any transferee of such interest or part
may again transfer it. The lessee shall not, by reason only of such transfer, cease to
be subject to any of the liabilities attaching to the lease;

(k) the lessee is bound to disclose to the lessor any fact as to the nature or extent of
the interest which the lessee is about to take of which the lessee is, and the lessor is
not aware, and which materially increases the value of such interest;

(1) the lessee is bound to pay or tender, at the proper time and place, the premium
or rent to the lessor or his agent in this behalf;

(m) the lessee is bound to keep, and on the termination of the lease to restore, the
property in as good condition as it was in at the time when he was put in
possession, subject only to the changes caused by reasonable wear and tear or
irresistible force, and to allow the lessor and his agents, at all reasonable times
during the term, to enter upon the property and inspect the condition thereof and
give or leave notice of any defect in such condition; and, when such defect has
been caused by any act or default on the part of the lessee, his servants or agents,
he is bound to make it good within three months after such notice has been given
or left;

(n) if the lessee becomes aware of any proceeding to recover the property or any
part thereof, or of any encroachment made upon, or any interference with, the

48
lessor's rights concerning such property, he is bound to give, with reasonable
diligence, notice thereof to the lessor;

(o) the lessee may use the property and its products (if any) as a person of ordinary
prudence would use them if they were his own; but he must not use, or permit
another to use, the property for a purpose other than that for which it was leased, or
fell or sell timber, pull down or damage buildings belonging to the lessor, or work
mines or quarries not open when the lease was granted, or commit any other act
which is destructive or permanently injurious thereto;

(p) he must not, without the lessor's consent, erect on the property any permanent
structure, except for agricultural purposes;

(q) on the determination of the lease, the lessee is bound to put the lessor into
possession of the property.

Qs. Marshalling and contribution (section 81 and 82) Redemption

Ans. Marshalling and contribution are very important in transaction of mortgage

section 81,82 of T.P. Act 1882 provides about it.

Marshalling- section 81 of the Act propounds the doctrine of marshalling, the

credit goes to the case of “Eldrich Vs Kapoor [(1803) 8V 382] to enter the
doctrine in Indian law. It was propounded that “It doesn’t depend upon one debtor
to disappoint other creditors. If a person mortgage his two or more properties to a
person and further, he mortgage one or more properties to other persons, here the
subsequent mortgage has the right to satisfy the precedent mortgage debt by the
property which is not in his possession.

But for this, two requirements are necessary- satisfaction of whole precedent-
mortgage debt by such an action and no ill or bad effect to any other person. This
doctrine has been inserted in Section 81. Section 81 reads as under-

“if the owner of two or more properties mortgages them to one person and one then
mortgages one or more of the properties to another person, the subsequent
mortgage is, in the absence of a contract to the contrary, entitled to have the prior
mortgage- debt satisfied out of the property or properties not mortgaged to him, so
far as the same will extend, but not so as to prejudice the rights of the prior

49
mortgagee or of any other person who has for consideration acquired an interest in
any of the properties.”

It can be cleared with the following illustration- ‘A’ owes three properties, J, K, L.
he mortgages these three properties to ‘B’, after interval of time, he (A) mortgages
‘K’ and ‘L’ to ‘C’ again. Here according to general rule, ‘B’ can satisfy his
mortgaged debt by all three properties J,K,L of A or if he desires, by one or more,
interest of ‘C’. so section 81 says that satisfaction of whole mortgaged debt of ‘B’
can be by ‘L’ then he should untouch J, K so that these may satisfy mortgage debt
of ‘C’.

The doctrine propounded in section 81 is based upon equity. The interest of both
the precedent and subsequent mortgagee safeguards by this doctrine. In the above
example, suppose the mortgage debt of ‘B’ is Rs. 30,000=00 and the recovery of
that debt can easily be from the mortgage property ‘L’ then there is no
appropriateness of recovery from the ‘J’ and ‘K’. the debt of both ‘B’ and ‘C’
satisfies from it.

But in case of non-satisfying the debt of ‘B’ from the property ‘L’ by at his own
error or by any other reason then he can only recover his mortgage debt from the
property ‘J’ and ‘K’.

He could not be bounded to recover his mortgage debt only from the property ‘L’.

In “Krishna Aiyyar Vs Muthu Kumar Swamiyar” [(1906) 29 Chennai 217] is a

good case. On this case, the doctrine of marshalling has been well elucidiated.

Essential conditions

For the applicability of the doctrine of marshalling, following three requirements

are essential-

a) There must be one debtor and all mortgages must be done by him. The
provisions of this section will not apply if there are separate debtor and
mortgagor [Venkayya Vs Venkat rammaiya A.I.R. 1930 Chennai 178].
b) Minimum two properties must be mortgaged to precedent mortgagee and
among them mortgaged to subsequent mortgagee.

50
 c) Precedent mortgagee can recover his mortgage money from the property
other than mortgaged to subsequent mortgagee.

It is remarkable that it is necessary for the applicability of the doctrine that the
subsequent mortgagee must aware about precedent mortgagee. [Deena V/s Nathu
(1902)26 Mumbai 538].

Contribution- this doctrine is based upon equity and public policy. It is based
upon maxim “Question commodum sentir debted onus. He who enjoys the benefit
must also the burden.”

The provision for contribution to mortgage-debt are made in section 82 of ther

Transfer of Property act,1882. Section 82 read s as under-

“where property subject to a mortgage belongs to two or more persons having

distinct and separate rights of ownership therein, the different shares in or parts of
such property owned by such persons are, in the absence of a contract to the
contrary, liable to contribute rateably to the debt secured by the mortgage, and, for
the purpose of determining the rate at which each such share or part shall
contribute, the value thereof shall be deemed to be its value at the date of the
mortgage after deduction of the amount of any other mortgage or charge to which
it may have been subject on that date.”

We can clear it with the following illustration. ‘A’, ‘B’, ‘C’ mortgage their own
properties to ‘E’ and get debt of Rs. 30,000 combiendly (as joint). Here all the
three properties are payable for the payment of such debt viz the payment will be
done from three properties. ‘E’ cannot recover complete debt from one property. If
he does so, however the rest properties will be liable to payment of their shares.
[Hari Raj Singh V/s Ahmaduddin Khan (1897) 19 Allahabad 545).

The main object of the contribution is to protect interest of mortgagor. It prevents

fradulous conduct of mortgagee or prejudiced conduct towards mortgagor. It also
stops the collusion between parties. The mortgagee in order to provide illegal
benefit to one mortgagor and loss to other mortgagors, cannot recover the whole
debt from one property.

Compulsory Conditions

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For the applicability of doctrine of contribution, following conditions are required
to be fulfilled-

1) Two or more properties are mortgaged and the owner of the properties must
different persons.
2) All such properties are liable to payment of debt.
3) The mortgaged must have recovered the whole debt from one of the
properties.

Effect of conflict in Marshalling and Contribution-

Now the question arises that – in case of any conflict between the doctrine of
marshalling and contribution, which will be prevailing? Its answer is clear.

It conflict rises between doctrine of marshalling and doctrine of contribution, then

the doctrine of Marshalling will predominant to doctrine of contribution.

It is clear from the following illustration. ‘A’ and ‘B’ are two owners of separate
properties ‘A’ mortgage his property to ‘E’ and ‘b’ mortgage his property to ‘F’.
then ‘A’ and ‘B’ both mortgage their properties to ‘H’.

After interval of time, ‘A’ again mortgage his property to ‘G’. in this condition the
property of ‘A’ and ‘B’ will be liable proportionally after mortgaged for ‘H’ and
the value rest after the substraction of the debt amount of ‘E’ from the property of
A and substraction of debt amount of ‘F’ from the property of ‘B’. but according to
the doctrine of marshalling of ‘G’, ‘H’ can make ‘B’ bound to recover the
mortgage debt. Thus, ‘F’ the right of marshalling will prevail over the right of
contribution.

Qs. Charge (section 100 to 104)

Ans.

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 Unit-IV

Qs. Creation of Easement (section 4 to 7)

Ans. Man is a social animal. He expects help and cooperation from each person of
the society. He has a wish that no person should interfere in his property and right
relating to the property subject. With this concept, the easement has originated.
The easement allows a permission and right to beneficial enjoyment of the
property to its owner or occupant.

Definition

Section 4 of T.P. Act 1882 defines Easement according to it, “An easement is a
right which the owner or occupier of a certain land possesses as such for the
beneficial enjoyment of that land to do and continue to do something or to prevent
and continue to prevent something being done in or upon in respect of certain other
land not of his own.”

In this way, the easement is such a right which allows an owner of property to
enjoy his property free and without any interferences of any other person. Along
with it restrict him to cause obstacles or hurdles in the property of neighbourer.

Illustration

A is a owner of a property. He can construct anything on his land but he cannot

construct any object which crates disturbance to his neighbour in using natural
facilities like light, air etc. getting air, and sunlight is B’s easement.

Ramcharan v/s Ram Ashray (A.I.R. 2008 MP) the Madhya Pradesh High court
while defining the easement has stated that the right of easily enjoyment of one’s
own property is the easement. The word ‘land’ used in section 4 includes House.
Further on these grounds used word ‘owner’ includes occupant.

C. Mohammad v/s Anantchari (A.I.R. 1988 Kerala) the Kerala High Court
described these following essential elements—

a) dominant and servitude property is compulsory

b) it must be used for the better beneficial consumption of dominant property
c) separate personalities of the owner of dominant and servitude owner.

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 d) right of owner of dominant property to do or not to do any act.
e) clarity and definite of easement.
f) accommodation of easement with dominant property.

Dominant Heritage and Servient Heritage

The land for the beneficial enjoyment of which the right exists is called the
dominant heritage, and the owner or occupier thereof the dominant owner; the land
on which the liability is imposed is called the servient heritage, and the owner or
occupier thereof the servient owner.

Essential Element

1). Dominant Heritage and Servient Heritage

The first essential element of easement is that there must be dominant heritage and
servient heritage. The heritage (property) is which there are some privileges, is
called dominant heritage and its owner is called dominant heritage and the property
upon which some liabilities are imposed, is called servient heritage. Two properties
are necessary for easement.

2). Dominant and servient Heritage to be separate

It is compulsory for easement that the dominant and serveint heritage must
separate properties. Easement is not created on the happening of one property in
two properties and it is also expected that the owner of the two properties must be
separate or different. Section 4 provides about it by the words “which is not his
own.”

3). Easement used as status of owner of land or occupant

The third essential element of easement is that the owner of the property must use
easement as status of owner. in other words, it may be said that the use of
easement can only be done by the person who is the owner of property. If someone
has no property, then there is no issue of use of easement so easement is attached
to land.

4). The use of easement done for the beneficial consumption

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It is necessary for dominant owner to use, it for the beneficial consumption of
dominant property. Beneficial consumption includes facilities, remote profits etc.

5). Non-available of easement to servitude owner

Easement is available to dominant owner, not to servitude owner.

6). Attachment of easement to property

Easement is a attached right to land or property. It is not related to person. It

accompanies property and transfer after transfer of property.

7). Easement Negative or Positive

Easement may be negative or positive. Action of dominant owner on servitude

owner of property is positive. While prohibiting owner of servitude owner of
servitude property is negative easement.

8). Right-in-rem of easement

Easement is the right-in-rem. This right is available not only against servitude
owner but also against whole word. If any person interferes in the easement of
dominant owner, then the dominant owner can file a suit against the third person.

Section 5 Continuous and discontinuous, apparent and non-apparent,

easements.

Easements are either continuous or discontinuous, apparent or non-apparent. A

continuous easement is one whose enjoyment is, or may be, continual without the
act of man. A discontinuous easement is one that needs the act of man for its
enjoyment. An apparent easement is one the existence of which is shown by some
permanent sign which, upon careful inspection by a competent person, would be
visible to him. A non-apparent easement is one that has no such sign. Illustrations

(1) A right annexed to B's house to receive light by the windows without
obstruction by his neighbour A. This is a continuous easement.
(2) A right of way annexed to A's house over B's land. This is a discontinuous
easement.
(3) Rights annexed to A's land to lead water thither across B's land by an
aqueduct and to draw off water thence by a drain. The drain would be
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 discovered upon careful inspection by a person conversant with such
matters. These are apparent easements.
(4) A right annexed to A's house to prevent B from building on his own land.
This is a non-apparent easement.

Section 6 - Easements for limited time or on condition.-An easement may be

permanent, or for a term of years or other limited period, or subject to periodical
interruption, or exercisable only at a certain place, or at certain times, or between
certain hours, or for a particular purpose, or on condition that it shall commence or
become void or voidable on the happening of a specified event or the performance
or non-performance of a specified Act.

Section 7 Easements restrictive of certain rights. -Easements are restrictions

of one or other of the following rights (namely):-

(1) Exclusive right to enjoy. -The exclusive right of every owner of immovable
property (subject to any law for the time being in force) to enjoy and dispose
of the same and all products thereof and accessions thereto.

(2) Rights to advantages arising from situation. -The right of every owner of
immovable property (subject to any law for the time being in force) to enjoy
without disturbance by another the natural advantages arising from its
situation.

Illustrations of the Rights above referred to

a) The exclusive right of every owner of land in a town to build on such land,
subject to any municipal law for the time being in force.
b) The right of every owner of land that the air passing thereto shall not be
unreasonably polluted by other persons.
c) The right of every owner of a house that his physical comfort shall not be
interfered with materially and unreasonable by noise or vibration caused by
any other person.
d) The right of every owner of land to so much light and air as pass vertically
thereto.

Qs. In what manner easement can be acquired and who can acquire
easement?

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Ans. Acquisition of easement- though Indian Easement Act 1882 doesn’t describe
the ways of acquisition of easement expressly but it seems by the provisions of
different sections. These are the ways by which easement can be acquired-

a) by Prescription
b) by Custom or usage
c) by Necessity
d) Transfer by prominent heritage
e) By Grant
(1) By Prescription- section 15 of Indian Easement Act 1882 provides about
acquisition of easement by prescription.

Prescription means acquiring of any right by enjoying the property of other person
by a person for a definite period. It can be said that use of any custom or usage
continuously unless it takes the force of law is called prescription. This is also
called customany easement.

According to Blackstone, “Prescription is such a medium of acquiring the real

estate under which any other person claim the property only on this ground that he
has used it for infinite period”.

The following conditions must be fulfilled for the acquisition of easement by

prescription:

a) These rights must be consumed

b) Consumption must be done without consent
c) Done with peaceful way
d) Done directly
e) Used as right
f) Done without any disturbance
g) Consumed for 20 or more years continuously.
(2) By Custom or Usage- section 18 of Indian Easement Act says that- Easement
can be acquired by the effect of local custom. Such easement are called
custom easement.

Right of seclusion, feeding animals in grass-land, right to get water from well etc.
are good examples of customary easement.

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Actually, by doing any act for a long time on a property and that is on recognition
by the community, it becomes a custom and from it the customary easement
originates. But the custom is required to be a legal custom.

These are essential for the customary easement-

a) Ancient
b) Reasonability
c) Certainly
d) Continuity
e) According to morality and public-policy
f) According to regulations.
(3) By Necessity- section 13 of Indian Easement Act provides easement of
necessity on the compulsory necessity for the use or consumption of any right.
This easement is created on the distribution of heritage and for use of
distributed heritage it is very necessary. ‘most necessity’ is criteria for
easement of necessity.

In “Rama V/s Medha (A.I.R. 2002) Rajasthan 309), Punnaiya V/s karupakkal
(A.I.R. 2002 Chennai 443), Avinash V/s smt. Satya Devi (A.I.R. 2003 N.O.C.
487 J&K) it was decide that if any option is available, then easement of necessity
cannot be demanded only for facility.

(4) By Transfer of Dominant Heritage- according to section 19 of Indian

easement Act, the attached easement is transferred with the transfer of
prominent heritage and the transferee acquires such easement.
(5) By Grant- grant is also a way of acquisition of easement. For example, burial
of dead bodies is considered acquisition of easement.
In “Kailash Chandra V/s smt. Guddi” (A.I.R. 1990 H.P. 17), burial of dead
bodies of animals in other’s land is considered easement acquired by grant.
Who can acquire easement- section 12 of Indian Easement Act describes the
person who can acquire easement. These are-
a) Owner and occupant
b) Co-owner and
c) Lease holder

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 (a) Owner and occupant- Any easement can be acquired by the beneficial
consumption of immovable property, by the owner or occupant of whose
possession it is.
(b)Co-owner- if there are two or more co-owner of a property, then anyone
among them can acquire easement for the beneficial consumption of the
property with the consent or without consent of other owners. The acquired
easement in such way attached with the heritage and is used by all the co-
owners.
(c) Lease Holder- any lease holder of any immovable property can acquire
easement on the land included in lease for the beneficial consumption of
immovable property.

Extinction of right of Easement

The causes due to which a right of easement is extinguished have been described in
section 37 to 48 of Indian Easement Act. Some of them are as under-

(1) Extinction by dissolution of right of servient owner (section 37)- when,

from a cause which preceded the imposition of an easement, the person by
whom it was imposed ceases to have any right in the servient heritage, the
easement is extinguished (Section 37) e.g. A transfers Sultanpur to B on
condition that he will not marry C. B imposes an easement on Sultanpur. Then
B marries C. the B’s interest in Sultanpur ends and with it the above easement
will also be extinguished.
(2) Extinction by Release (section 38)- an easement is extinguished when the
dominant owner release it, expressly or impliedly, to the servient owner.
But it is to mention here that merely due to non use of easements, the
extinction of easement will not be understood. But it is also that adverse
possession will be considered an indication of the extinction of easement by
release.
(3) Extinction by Revocation- an easement is extinguished when the servient
owner, in exercise of power reserved in this behalf, revokes the easement
(section 39).
(4) Extinction on expiration of limited period or happening of dissolving
condition- an easement is extinguish where it has been imposed for a limited
period or acquired on condition that it shall become void on the performance or

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 non-performance of a specified act, and the period expires or the condition is
fulfilled (section 40).
(5) Extinction on termination of necessity- as easement of necessity is
extinguished when the necessity comes to an end (section 41).
Illustration –A grants B a field inaccessible except by passing over A’s
adjoining land. B, afterwards purchases a part of that land over which he can
pass to his field. The right of way over A’s land which B has acquired is
extinguished.
(6) Extinction of useless easement- an easement is extinguished when it becomes
incapable of being at any time and under any circumstances beneficial to the
dominant owner (section 42).
(7) Extinction by permanent change in dominant heritage- whereby, any
permanent change in the dominant heritage, the burden on the servient heritage
is materially increased and cannot be reduced by the servient owner without
interfering with the lawful enjoyment of the easement, the easement is
extinguished (section 43).
(8) Extinction on permanent alternation of servient heritage by superior
force- an easement is extinguished where the servient heritage is by superior
force so permanently altered that dominant owner can no longer enjoy such
easement (section 44).
Illustration – access to a path over which A has a right of way is permanently
cut of f by an earthquake. A’s right is extinguished.
(9) Extinction by destruction of either heritage- an easement is extinguished
when either the dominant or the servient heritage is completely destroyed.
Illustration – A has a right of way over road running along with foot of a sea-
cliff. The road is washed away by a permanent encroachment of the sea. A’s
easement is extinguished.
(10) Extinction by unity of ownership- an easement is extinguished when the
same person becomes entitled to the absolute ownership of the whole of the
dominant and servient heritages (section 46).
Reason is clear. Both heritages and the owners of them are required to be
separate one for the easement. When owner of both heritages becomes one
person then extinction of easement is natural.
(11) Extinction by non-enjoyment- a continuous easement is extinguished when
it totally ceases to be enjoyed as such for an unbroken period of twenty years.
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 A discontinuous easement is extinguished when, for a like period, it has been
enjoyed as such (section 47).
(12) Extinction of accessory rights- when an easement is extinguished, the
rights (if any) accessory thereto are also extinguished.
Illustration- A has an easement to draw water from B’s well. An accessory
thereto, he has a right of way over B’s land to and from well. The easement to
draw water is extinguished under section 47. The right of way is also
extinguished.

Qs. Extinction, Suspension and Revival of Easements (section 37 to 51)

Ans.

Qs Licences (sections 52 to 64)

Ans. Licence is a way to enjoy the property of another person. Normally, no

person can enjoy the property or another person without his permission. This
permission is called “Licence” in legal language.

The ‘Licence’ is defined in the section 52 of the Indian Easement Act, 1882.
According to it-

“where one person grants to another, or to a definite number of other persons, a

right to do, or continue to do, in or upon the immovable property of the grantor,
something which would, in the absence of such right, be unlawful, and such right
does not amount to an easement or an interest in the property, the right is called a
licence.”

In this way, a permission is given by one person to another person to do such work
at his land under the licence which otherwise makes that work illegal. In other
words, it may be stated that the licence authorises a person to do some work on the
land of other person. In licence, the owner of property permits to enjoy his
property without transferring the interest in property. In the licence does not get
any title but only gets a right to do some work.

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A right of fishing in lake and carrying them is a good example. But a right given to
the parties under the agreement of division is not a licence. (P. Perrumal Naidu
Vs Krishnaswami Naidu A.I.R. 1998 Chennai 148).

Licence may be granted by implication. For example, the husband of respondent

was residing in the disputed portion as a licensee. The respondent was also
continuously living with him, she remained to live in that portion even after the
death of licensee (husband). It was considered as a license by implication (Surjeet
kaur Vs Balvinder Kaur, A.I.R. 2006 Punjab and Haryana 23).

Essential Elements-

1) In license, right to do some acts is provided, ownership is not transferred-

in license, permission to do some acts is given, but the ownership is not
transferred. Licence is not related to ownership of land. It is a personal right
and in it only personal rights creates.
2) Licence legalise the Acts- licence makes the acts legal. It makes such acts
legal which are illegal in its absence. In simple words, it may be said that the
licence grants or allows permission to do some act on a property.
3) Licence is a Positive Right- licence is a positive right, provided by a person to
another person to do some acts. It permits to do some acts, not to prohibit.
4) Licence is neither Transferable nor Heritable- licence is a personal right.
So, it is neither transferable nor heritable.
5) Licence can be terminated at any time- licence can be terminated by the will
of provider because its creation is by consent. Even though the claim of its
renewal cannot be done in absence of contract. [S. Anjeyela V/s Regional
Manager Andhra Pradesh State Road Transport Corp. Vijaywada A.I.R.
1999, A.P. 403].

Difference between Licence and Easement:

1) Licence is a personal right which is not related to ownership of property

whereas easement is an attached right to easement.
2) Licence is provided only by permission, whether easement by consent.
3) Licence is not transferable whereas easement is transferable with property
due to attachment of property.

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 4) No benefit is created by the licence whereas easement creates benefit and
dominant owner can file a suit on the infringement of easement.
5) Licence is a positive right whereas easement can be positive or negative.

The difference between licence and easement is cleared in Purshottam Das

Kapoor V/s Natha Aheer (1975 A.L.J. 573).

Difference between Licence and Lease:

To know the difference between licence and lease, it will be expedient to define
“Lease”. Section 105 of T.P. Act 1882 is thus-

“A lease is a transfer of right to enjoy the immovable property made for a certain
time, express or implied or in perpetual consideration of a price paid or promised.

The difference between lease and licence is following-

a) In lease, whole benefit is provided to leasee whereas in licence, no such

interests are provided.
b) The benefits of lease are transferred to third person whereas licence is not
transferable due to the reason that it as a personal right.
c) Lease can be acquired in heredity whereas licence cannot.
d) Lease is not able to be cancelled, whereas licence is cancellable expect
some conditions.
e) Lease can file a suit against trepassers on his name whereas licence holder
cannot file a suit on his name.
f) Lease must be registered whereas licence is not.

In “Ajab Singh V/s Sheetal Puri” (A.I.R. 1993 Allahabad 138) it was said that
interest is transferred in lease whereas it is not so in license.

In “Corporation of Calicut V/s Shi Niwasan” (A.I.R. 2002 S.C. 2051), Supreme
Court distinguished between lease and license and said-“In lease, lease gets right in
leased property, whereas license holder doesn’t get any such right. In licence, the
licence holder only have possession of property while control remains grantor.

The Supreme Court while classifying the difference between lease and licence, has
stated in the case of Pradeep oil Corporation Vs Municipal Corporation of

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Delhi (A.I.R. 2011 SC 1869) that by licence no estate or interest in property is
created, lease on other hand would amount to transfer to property.

Revocation of Licence

Section 62 of I.E.Act 1882 provides about the elimination of licence. These are-

1) On the end of interest of Grantor- licence is cancelled when the interest of

grantor doesn’t remain in the affected property by licence.
2) Waiver by Licence Holder- licence is waived when the licence-holder
waives the licence. Such waiver may be expressed or implied.
3) End of duration- if there is a condition of the revocation of the licenec on
doing or not doing some act or if the licence is provided for limited time, then
such licenec is revoked on completion of the condition and/ or expiration of
time period.
4) On destruction of subject-matter- when subject-matter of the licence
destroys, the licence is automatically revoked, or whereby any superior force
there is such a permanent change in the subject-matter of licence that it cannot
be used again, the licence ceased automatically.
5) Vesting of ownership in licence Holder- when licence-holder himself
becomes absolute owner of property, then licence ceased. In such case the
licencee now enjoys property as owner.
6) On completion of Object- when any licence is provided for any special
object, then licence ceased if the object-
a) In completed
b) Is given up
c) Has become impossible
7) On not existence of eligibility- when a licence is provided on the base of
post, eligibility of licence holder, then such licence is eliminated on the end of
eligibility, post etc.
8) If not used for 20 years- where license is not used till 20 years continuously
and no following are there between licence provider or holder, then it
eliminates.
9) On the end of prominent interest- licenec itself eliminates after end of
interest of main licence because auxiliary licences are parts of main licence.
But such licenses cannot be revoked under the provisions of section 60 where-

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 a) The licensee has done construction work on the property
b) The licensee has spent so much money
c) Water and electricity connection has been obtained.
d) Other fees have been paid (Hari Mohan Vs Smt. Maya Devi A.I.R.
2012 Delhi 24)

It is described that license-holder cannot be suspended forcefull but if it is done,

then license-holder is only liable to get compensation (Corporation of Calicut
A.I.R. 2002 S.C. 2051).

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