DEFINITION OF IMMOVABLE PROPERTY

Section 3 of TPA defines immovable property as property does not include standing
timber, growing crops or grass. As per general clauses act immovable property
includes land, benefits arising out of land, things are attach to the land. In
accordance to the Section 2(6) of registration act, it could be defined as property
including land, building, hereditary allowances, rights to ways, lights, ferries,
fisheries or any other benefit to arise out of land and things attach to the earth.
Joining the definitions it could be summed up as, immovable property is -:
1. Land
2. Advantages emerging out of the land
3. Things connected to the earth
4. Things embedded in earth
5. Things attached to what is embedded in the earth
6. Things established in the earth, with the exception of standing timber,
developing harvest, grass.
In case of Smt. Shantabai v. State of Bombay that the right to enter the land, cut and
carry away wood for a period of 12 years is a benefit arising from land and thus
immovable property. For the situation in Anand Bahera v. Province of Orissa, it was
held that profit arising from land is movable property. The option to stroll on the
land and to draw fish from the lake and remove them is immovable property, as it is
the benefit emerging from the land. Grazing of cattle on the land is additionally
immovable property as it is profit emerging from the land.
The judicially recognized rights in immovable properties incudes the right to collect
rent for immovable property, hereditary office, right to ferry, right of fishery,
factory, building, walls, interest of mortgage immovable property, etc.
CONCEPT OF TRANSFER OF PROPERTY
Transfer of property is an act by which a living person can convey property, in
present or in future, to one or more other living persons, or even to himself or one or
more other living persons and to transfer property is to perform such an act. The
TPA is an act which governs and regulate the transfer of property in the Indian
subcontinent and covers movable and immovable, tangible and intangible assets.
The act deals with sale, mortgage, lease, exchange and gift.
Essentials of a valid transfer

 It must be inter-vivos: section 5 stipulates that transfer must be inter-vivos.

That is to say that the transfer must be made between the living persons. Both
the transferrer and the transferee must be living, it also includes company,
corporate or associations.
 The property must be transferable: the section 6 lays down that there are
property which cannot be transferred- such as Right to sue, Future right,
Easement rights, right of heir apparent, right to re-entry, restricted interest in
 the property, pension, public office, religious or public property, or otherwise
any other property or right which is prohibited by the statue or is unlawful.
 Persons should be competent to transfer: section 7 provides that the persons
should be competent to transfer, section 11 of Indian contract act a person is
competent to contract if he is of sound mind, must not be disqualified and
must not be a minor.
 Should be made in a prescribed form: it need not be made in writing
however, in certain property to transfer it must be in writing such as sale of
movable property valued over 100 rs., Sale of intangible must be in written
format, all mortgages which are valued over 100rs, transfer of actionable
claims, a gift of immovable property.
 Conditional transfer of property: section 25 of the act provides that property
can be transferred complying the condition mentioned. If the condition
becomes impossible the transfer would be held void.
Property of any kind may be transferred
In general it is true, however, a series of exceptions to this are present, a
differentiation between the property which is transferable and which non-
transferable and to know such a difference, it becomes important to know the link
between transfer of property and section 60 of CPC. Section 6 provides, property of
any kind may be transferred except as otherwise provided by this act or court of law.
These exceptions are enumerated as follows:
1. Spes succession- in the case of official Assignee v. Sampath Naidu, it was
observed by the court that a mortgage executed by an heir apparent is void
even if he subsequently acquired the property as an heir. Hence, from above it
can be concluded that the transfer of spes succession is void ab initio.
2. Right of re-entry- it means the right to resume the possession of the land
which would have been given to some other person for a certain period of
time. The important point is that the right to re-enter is a personal right and
the same cannot be transferred by the person, in any case, if the person
transfers this right to entry, to his creditors or anyone, then the same would
be void.
3. Easement- It is the right of the owner or occupier of certain land for his
enjoyment of the said land, or it even to restrict something from being done.
The easement cannot be transferred apart from the dominant heritage to
which by the nature of the right it is attached.
4. Restricted interest- that a person cannot transfer anything which is interest
restricted in its enjoyment to him as these rights are personal and thus, cannot
be transferred. E.g. right of pre-emption, religious office.
5. Right to future- the right to future maintenance is solely for the personal
benefit of the person whom granted and therefore very right cannot be
transferred.
6. Mere right to sue- in case of Sethupathi v. Chidambaram, where it was held
that a mere right to sue is something which cannot be transferred. Here the
 word ‘mere’ itself means that the transferee has developed no interest than
just bare right to sue.
7. Public office- place of a public office cannot be transferred and even the salary
of the police officer cannot be transferred.
8. Pensions- it is a sum, periodically payment by the government to an ex-
serviceman or to a person ceased to be in employment and it is non-
transferable
9. Nature of interest- no transfer can be made if it opposed to the nature of
interest affected thereby. Thus, things which are dedicated to public or
religion cannot be transferred. Any transfer for unlawful object or
consideration is not permissible.
10. Statutory prohibitions on the transfer of interest- this clause makes it clear
that a tenant having an untransferable right of occupancy cannot in any way
transfer his interest.
ACTIONABLE CLAIMS
Actionable claim means a debt or a claim on which action can be started in court of
law for comfort or relief. An actionable claim is a legal right that can be enforced
through a court of law. It is a claim that entitles a person to receive payment or
delivery of goods or services from another person. The person who has the
actionable claim is called the creditor, and the person who owes the debt is called the
debtor. Section 3 of the Act provides, the actionable claim means any claim to any
debt other than debt secured by the mortgage of immovable property or pledge or
hypothecation of movable property or a beneficial interest in movable property not
in possession of the claimant.
In general, an actionable claim can arise in two situations. First, when a debt is owed
to the creditor, and second, when a duty is owed to the creditor. In both cases, the
creditor has a legal right to demand payment or delivery of goods or services.
Types of Actionable claims

 Debt claims: a debt claim is the most common type of actionable claim. It
arises when a debtor owes money to the creditor and the creditor has a legal
right to demand payment of the debt.
 Rent claims: a rent claim arises when a landlord has a legal right to demand
payment of rent from the tenant.
 Salary claims: a salary claim arises when an employee has a legal right to
demand payment of salary from the employer.
 Dividend claims: a dividend claim arises when a shareholder has a legal right
to demand payment of dividends from the company.
 Insurance claims: an insurance claim arises when a policyholder has a legal
right to demand payment of an insurance claim from the insurance company.
Some examples of the actionable claims- claim for arrear rent, claim for rent to fall
due in future, the right to claim maintenance, claim the benefits of the contract and a
claim which decreed. Whereas, the claim for debt secured by mortgage or pledge or
hypothecation of movable property; damages for breach of contract; damages in tort;
mens profit; claim to copyright is not a actionable claim.
RULE AGAINST PERPETUITY
Perpetuity simply means “indefinite Period. When a property is being transferred in
such a way that it becomes inalienable in future for an indefinite period of time, this
is called transfer in perpetuity. Transfer in perpetuity may arise in two ways- (i)
transferor of property is deprived of the power of alienation. (ii) By creating future
improbable interest.
Rule of against perpetuity
Sir. D. Mulla, states “it is illogical to imagine a dead person below the grave controlling
properties above his grave.”
Rule against perpetuity has been dealt under section 14 of Transfer of Property Act,
1882.”, this rule is against a transfer which makes a property inalienable for an
indefinite period. Perpetuity may arise in two ways –I) by taking away from
transferee his power of alienation However, Section 10 of the TPA states that a
condition restricting trasferee’s power to transfer is void.; II) by creating future
remote interest (which has been prohibited under S.14 of the TP Act)
Principle Behind the rule – The basic principle upon which this rule is made is public
policy it enables free circulation of the property, to prevent the property from being
tied up forever; for the betterment in trade and commerce; betterment of the
property. Protecting the interest of owner of the property otherwise he will not be
able be able to dispose of the property even in case of emergency. In absence of this
rule against perpetuity, all the properties in the world would have been static and of
no use to the economy as a whole.
Conditions necessary for limited perpetuity-:

 There must be a transfer of property.

 The transfer should be to create an interest in favour of an unborn person.
 The vesting interest of the unborn must be preceded by life or limited interest
of living person i.e. prior interest holder.
 The unborn person must be in existence at the expiration of the interest of the
living persons.
If all the above ingredients are present then the vesting of the interest in favour of
the ultimate beneficiary may be postponed only up to the life or lives of living
persons plus the minority of the ultimate beneficiary but not beyond that. In case of
Saundara Rajan v. Natarajan, A.I.R 1925 P.C. 244, the Privy Council held that for
purposes of S.14 the normal period of minority would be 18 years. So, the vesting
can be postponed only up to the life of the prior interest holder and the minority i.e.
18 years of the ultimate beneficiary.
Exceptions to the rule against perpetuity-:
The provisions of Section 14 shall not apply in the following cases –

 Transfer for public benefit - Where property is transferred for the benefit of
the people in general, then it is not void under this rule. E.g. for the
advancement of knowledge, religion, health, commerce or anything beneficial
to mankind.
 Covenants of Redemption - This rule does not offend the covenants of
redemption such as in mortgage.
 Personal Agreements - Agreements that do not create any interest in the
property are not affected by this rule. This rule applies only to transfers where
there is a transfer of interest.
 Pre-emption - In this there is an option of purchasing a land and there’s no
question of any kind of interest in the property, so this rule does not apply.
 Perpetual Lease - It is not applicable to the contracts of perpetual renewal of
leases.
 Mortgages - because there is no creation of future interest.
DOCTRINE OF ELECTION (SECTION 35 TPA)
Election means the right of choosing between presumptive alternatives. The doctrine
of election is applicable to both movable and immovable properties. It states that,
when one professes to transfer the property over which he has no right, without
having informed the owner, he must approach the owner to seek its disposal. The
owner must decide whether or not to allow it. Henceforth, it can be inferred that he
has the right to exercise the doctrine of election to either confirm or dissent during a
transaction.
The doctrine of election is stated in Sec. 35 of the Transfer of Property Act alongside
Section 180 to 190 of the Indian Succession Act. It states that when a party transfers a
property over which he does not hold any right of transfer and entailed in that
transaction is the benefit conferred upon the original owner of the property, such
title-holder must elect his option to either validate such transfer of property or reject
it; upon rejection, the benefit shall be relinquished back to the transferor
Necessary ingredients for the doctrine of election

 The person transferring the property should not be the owner of the property.
 The person transferring must at the same time and in the same instrument,
grant benefits to the owner of the property.
 Both the transfer must be made in the same transaction i.e. transfer of the
property of the owner to the transferee and conferring the benefit on the
owner of the property. It is not applicable if it is made in two separate
instrument.
 It is required that the owner has a proprietary interest in the property.
  The owner is put to election who does not receive direct benefit under the
transaction, but gets some benefit under it indirectly.
 The question of election does not arise when the benefit is received by a
person in a different capacity.
According to section 35, the owner of the property within one year, after knowing
the expiration period does not make a decision they are deemed to have elected to
confirm the election if they don’t reply after the period is over.
Principle behind-A person utilizing the benefits of an instrument also has to carry
the burden attached to it. In other words, enshrined in legal maxim qui approbat
non reprobate i.e a man cannot approbate (approve) and reprobate (disapprove) at
the same time. In case the person upon whom a benefit is conferred rejects it, the
property which was attempted to be transferred to him will revert to the transferee
and it is the transferor who will compensate the disappointed transferee. If the
transferor dies, then the legal heirs of the transferor will compensate
the disappointed transferee out if the inherited assets.
The doctrine of election is universally applicable to all religious people.
He who accepts the benefits under a deed or a will or another instrument, must adopt the
whole contents of that instrument; conform to all its provision; and renounce all the rights
that are inconsistent with it.- Fredric William Maitland
Mode of election: the election can either be direct or indirect, in direct one just needs
to simply communicate about the elected choice. Whereas, in indirect election, the
acceptance of the benefit by the owner is subjected two conditions- He has the
knowledge of his responsibility to elect; there must be a proof of knowledge of
circumstances which would have influence the judgement of the men to elect.
TRUST
The word trust can be defined as any transfer of property by the owner to other for
the benefit of third party. It is a type of financial arrangement between the parties in
which the trustee holds the assets of the trustor for the benefit of the third party.
There are two types of trust in India- a) Public trust; b) Private trust. A trustee is a
person who is responsible for managing all the trust, the trustor is the person who
firstly creates an agreement and afterward grants the trustee to have control over the
assets and property, beneficiary is a person who receives the benefits of the
agreement of trust.
Valid Trust

 There must be a certainty of intention for which the trust is being created.
 There must be certainty regarding the subject matter of the trust.
 Object for which the trust is entrusted must be certain.
Section 7- provides that only that person is entitled to create a trust who is competent
to contract and who has the authority to transfer such property. In simpler terms-
first, the person must have the power or authority for that disposition of the
property and second, that the person must be competent to contract.
Purpose and objectives of a trust
A trust can be formed for carry many works, on of such important works is
succession. Trust acts as a vehicle for work related succession. It shall not include
any activity for the profit within meaning of Income Tax Act, 1961. The objects of it
listed as follows:
1. To encourage the human resource development, development of educational
institutions. Maintenance of learning centres for the transformation of
personality and other skills.
2. To manage administer any orphanage, nursing homes, old age homes,
hospital, or social status and other building and properties.
3. To provide medical facilities for deserving children in rural locality. To help
provide relief to poor.
4. To spread the messages of preserving and conserving the Indian culture and
to promote charitable values, literature, science and education.
5. To cooperate with the central and the state government and other authorities
in extending aid for education purpose.
6. To protest and fight against injustice and to aware people about social issues
so they can fight against evils.
7. To work for welfare of the neglected and marginalized section of society and
to provide facility for legal assistance to underprivileged sections for their
rights and justice.
SALE
Sale has been defined as the ‘transfer of ownership in exchange for a price paid, or
promised, or part-part and part-promised’. This implies that a transaction amounts
to a sale when one party transfers ownership to the other and the other paus some
amount or promises to pay some amount in return.
Essential of a valid sale (section 54)

 Parties must be competent to contract- The seller/transferor/vendor will be

competent to contract if he/she conforms to the following: Firstly, the buyer
must not be disqualified from purchasing a property under any Indian law.
Secondly, the buyer must be a natural or juristic person. The seller must have
the competency or legal right to sell the property, should have ownership,
must not be disqualified, must not be a minor or of unsound mind, seller
must be a natural or juristic person.
 Subject matter of sale must be an immovable property- the TPA, 1882 deals with
the sale of immovable property. Therefore, it is an essential ingredient, it
could be either tangible or intangible.
 Fixed consideration- money or price is an important element for the sale. It
includes any form of money, for e.g. currency notes, cheques, coins, etc.
 although not everything that has value constitute money, for example work
done on land, digging a well.
 Conveyance- the mode of transfer is confirmed in the follows ways: (I) delivery
of possession; or (II) registration of sale deed.
Difference b/w sale and mortgage

SALE EXCHANGE
Sale refers to the transfer of ownership It can be defined as the mutual transfer
in property in exchange for money. of ownership from one person to the
other. In simple terms, it is known as
‘barter’.
It is defined under section 54 It is defined under section 118
The transferor and transferee are Since the property of one is changed
commonly known as seller/vendor and with the property of another, they are
buyer/vendee respectively. both transferors and transferees at the
same time.
Sale is considered a valid sale when one There is no involvement of money
of parties pays or promises to pay some consideration in the transfer via
consideration. exchange.
Sale is affected via a sale deed The mode of transfer in case of
exchange is the same as that of sale
under section 54, therefore, it is effected
with a sale deed.

Liabilities and rights of the seller and the buyer before completion of sale
Liabilities of a seller (Section 55(1)(a)-55(1)(g))
 Disclosure of material defects (Section 55(1)(a)): A seller is bound to disclose
any latent material defect in the property or his title in his knowledge.
 Production of title deeds for inspection (Section 55(1)(b)): A seller is bound
to produce all the title documents relating to the property at the request of the
buyer for his inspection.
 Answer relevant questions regarding his title or the property (Section 55(1)
(c)): The seller must answer every relevant question put to him by the buyer
relating to his title or the property. The answer must be to the best of his
information.
 Execute a proper conveyance of the property (Section 55(1)(d)): Conveyance
means an act of transferring a property. It can be done by signing or affixing a
thumb impression on the sale deed by the seller. A seller is bound to execute a
proper conveyance only on the payment of the consideration by the buyer.
 Take reasonable care of the property and title deed (Section 55(1)(e)): The
seller is bound to take care of the property and title deed till the delivery of
the property to the buyer.
  Pay all the charges (Section 55(1)(g)): A seller is bound to pay all the rent and
public charges of the property, with interest if any, due till the completion of
the sale.
Rights of a seller 55(4)
 Right to take rents and profits (Section 55(4)(a)): A seller is entitled to collect
rents and profits from the property until the ownership is transferred to the
buyer.
Liabilities of a buyer 55(a)-55(b)
 Disclosure of all the facts known to the buyer that materially increase the
value of the property (Section 55(5)(a)): The buyer is under obligation to
furnish to the seller any fact to which he has reason to believe is not known to
the seller relating to the increase in the property’s value. If he fails to do so, it
will be considered fraud, and the seller can avoid the sale if it is proven.
 Pay the price in accordance with the contract (Section 55(5)(b)): The buyer
must pay the purchase money at the time of completion of the sale to the
seller or any person as directed by the seller.
Right of a buyer
 Refund of money paid on proper denial to accept delivery (Section 55(6)
(b)): The buyer is entitled to receive the amount of any purchase money with
interest properly paid by him. The buyer is also entitled to get a refund of any
earnest money paid by him or the cost awarded to him in a suit to compel the
specific performance of a contract or to obtain a decree for its rescission.
Liabilities and rights of the seller and the buyer after completion of the sale
Liabilities of a seller
 To give possession (Section 55(1)(f)): The seller is bound to put the buyer or
person as directed by the buyer in possession of the property on being so
required.
 Implied liability (Section 55(2)) – The seller must undertake impliedly that he
holds the perfect title to the property and is transferring the same free from
any encumbrance.
 To deliver title deeds on receipt of price (Section 55(3)): The seller is bound
to hand over all the documents relating to the title of the property to the
buyer on payment of the whole of the purchase money.
Right of a seller
 Charges upon the property for the unpaid price (Section 55(4)(b)): Where the
ownership has been transferred to the buyer before payment of the whole
consideration amount, the seller becomes entitled to a charge upon the
 property with notice of non-payment. The charge will be for the amount of
the purchase money or the part remaining unpaid or for the interest on such
amount from the date of possession delivered.
Liabilities of a buyer
 To bear loss to the property (Section 55(5)(c)): After the completion of the
sale, the ownership is completely transferred to the buyer. From that date, if
any damage, destruction or decrease in value occurs in the property, the
buyer will be bound to bear such losses.
 To pay the outgoings. (Section 55(5)(d)): The buyer is liable to pay all the
public charges or rent accruing after the completion of the sale or as agreed by
the terms settled in the sale deed.
Rights of a buyer
 Benefit of the increment. (Section 55(6)(a)): Any benefit arising from
improvement or increase in value of the property or the rents and profits after
completion of the sale shall vest with the buyer.
GIFT
Section 122 of TPA defines gift as the transfer of an existing moveable or immovable
property. Such transfers must be made voluntarily and without consideration. The
transferor is known as the “donor” and the transferee is known as the “donee”. This
section defines gift as a gratuitous transfer of ownership in some property that is
already existing.
Essentials of a valid gift
1. Transfer of ownership: The transferor, i.e., the donor must divest himself of
absolute interest in the property and vest it in the transferee, i.e., the donee.
Transfer of absolute interests implies the transfer of all the rights and
liabilities in respect of the property. To be able to effect such a transfer, the
donor must have the right to ownership of the said property. Nothing less
than ownership may be transferred by way of gift. However, like other
transfers, the gift may also be made subject to certain conditions.
2. Existing property: The property, which is the subject matter of the gift may be
of any kind, movable, immovable, tangible, or intangible, but it must be in
existence at the time of making a gift, and it must be transferable within the
meaning of Section 5 of the Transfer of Property Act. Gift of any kind of
future property is deemed void. And the gift of spes successionis (expectation
of succession) or mere chance of inheriting property or mere right to sue, is
also void.
3. Transfer without consideration: A gift must be gratuitous, i.e., the ownership in
the property must be transferred without any consideration. Even a negligible
property or a very small sum of money given by the transferee in
consideration for the transfer of a very big property would make the
 transaction either a sale or an exchange. Consideration, for the purpose of this
section, shall have the same meaning as given in Section 2(d) of the Indian
Contract Act. The consideration is pecuniary in nature, i.e., in monetary
terms. Mutual love and affection is not pecuniary consideration and thus,
property transferred in consideration of love and affection is a transfer
without consideration and hence a gift.
4. Voluntary transfer with free consent: The donor must make the gift voluntarily,
i.e., in the exercise of his own free will and his consent as is a free consent.
Free consent is when the donor has the complete freedom to make the gift
without any force, fraud coercion, and undue influence. Voluntary act on a
donor’s part also means that he/she has executed the gift deed in full
knowledge of the circumstances and nature of the transaction.
5. Acceptance of the gift: the donee must accept the gift, property cannot be given
to a person against his/her consent. The donee may refuse the gift as in cases
of non-beneficial property or onerous gift. Thus, acceptance of the gift is
necessary, such acceptance may either be implied or express. Implied
acceptance may be inferred from the conduct of the done and the surrounding
circumstance, if the donee takes possession of the property, there is
acceptance of the gift.
Suspension or Revocation of gifts
. This section lays down two modes of revocation of gifts.
 Revocation by mutual agreement: Section 126 of the act provides provisions
which must be followed in case of conditional gift. The donor may make a gift
subject to certain conditions of it being suspended or revoked. Where it has
been agreed that the gift shall be revoked upon happening of some event. The
condition must be expressly laid down, conditions must be a part of the same
transaction, condition must not depend solely on will of the donor, condition
must be valid as per law, must be mutually agreed.
 Revocation by the rescission of the contract: This contract may either be express or
implied. If the preceding contract is rescinded then there is no question of the
subsequent transfer to take place. Thus, under Section 126, a gift can be
revoked on any grounds on which its contract may be rescinded. For
example, Section 19 of the Indian Contract Act makes a contract voidable at
the option of the party whose consent has been obtained forcefully, by
coercion, undue influence, misrepresentation, or fraud. Thus, if a gift is not
made voluntarily, i.e., the consent of the donor is obtained by fraud,
misrepresentation, undue influence, or force, the gift may be rescinded by the
donor. The limitation for revoking a gift on the grounds of fraud,
misrepresentation, etc, is three years from the date on which such facts come
to the knowledge of the plaintiff (donor). The right to revoke the gift on the
abovementioned grounds is lost when the donor ratifies the gift either
expressly or by his conduct.
 DOCTRINE OF PART PERFORMANCE
The doctrine of part performance has been enshrined in the section 53A of TPA,
according to which a person contracts with another person to transfer immovable
property, the contract must be signed by the parties or someone in behalf of the
parties so that the transfer can be ascertained with reasonable certainty and when
the transferee has taken possession of the property as part performance or has done
some other activity as part performance of the contract and is willing to perform his
part of contract, the transferor cannot breach the contract, even when the transfer has
not been completed in the prescribed manner.
Ingredients of doctrine of part performance
1) The contract must be of immovable property i.e. it must be for consideration, in
writing, must have some conditions under the contract for a transfer of
immovable property, the agreement to sell must be registered, the terms of the
contract must be reasonable certain and not vague.
2) The person to whom it is transferred i.e. if the property is in custody or some part
of it already or if the property is in possession, the will occur, the act of taking
possession shall be taken.
3) The person to whom the property is transferred is willing to perform the contract
or part of it.
4) The person who is transferring the property or any person on behalf of him
cannot claim any right on the property on which the person to whom the
property is transferred is residing or has possession unless the rights were
explicitly mentioned in the terms of the contract.
This doctrine obliges both the transferor and transferee to carry out a transfer,
section 53A centres on maintaining the transferee’s right to maintain ownership of
the property and prohibits transferor from using a record that is not being
registered. It affects partial equality and partial incorporation in the Indian legal
framework. In the absence of registered agreement, it provides for the procedural
defense such that a person can retain ownership of his portion of deal. The primary
purpose of this section is to prohibit the parties claiming the title in violation of the
interests of the other contracting party.
Nathulal v. Phoolchand, wherein the court held that taking possession is not the
only method of part performance. As long as the transferee is already in possession
of the property, after the contract of transfer, he must perform some further action in
part performance of the contract.
Sardar Govindrao Mahadik v. Devi Sahai Govind, wherein it the court observed,
section 53A is based on equity. Therefore, a person claiming possession of land
under section 53A must conduct himself in an equitable and just manner.
RIGHTS AND LIABILITIES OF LESSOR AND LESSEE
Lease is transfer of right of enjoyment of immovable property which is made in
consideration of a price paid to the transferor by the transferee. The transferor is
called ‘lessor’ and the transferee is called ‘lessee’
Rights of Lessor
Section 108 does not provide for any specific right of the lessor. But since rights and
duties are correlative, the liabilities of lessee would identically mean rights of the
lessor.
Liabilities of Lessor
 Duty to disclose latent material defect: lessor must disclose material defect in
the property to the lessee. Defect is latent if it not apparently visible but the
lessor has the knowledge, such defects is material if it is not of substantial
nature.
 Duty to give possession: lease is transfer of the right to enjoy the immovable
property and without possession enjoyment of property is not possible.
Lessor is therefore, liable to deliver possession of property to the lessee.
 Covenant for quiet enjoyment: lease being transfer of right of enjoyment in
an immovable property, it is implied that lessor to ensure the lessee a peaceful
enjoyment of right, accordingly, the lessor is deemed to have contracted.
Quite enjoyment means no interference or objection in lessee’s possession of
immovable property during the period of lease.
Rights of Lessee
 Right to accretions: accretions are additions made to the property either by
human being or by operation of natural forces. If during the continuance of
lease some accretion has been made to the property, it is then presume to be
the part of property.
 Right to avoid lease on destruction of property: Where the property is
rendered permanently unfit for use due to fire, flood, violence, mob or other
uncontrollable reason, the lessee has the right to get the lease terminated
before the expiry of the term.
 Right to deduct cost of repairs: the lessor has no obligation to repair
property, however, under an express agreement, the lessor may take the
obligation of making repairs in the tenanted property.
 Right to deduct outgoings: it is the duty of lessor to pay outgoings, where a
lessor makes a payment of public charge in respect of the property, he has the
right to deduct the amount from the rents.
 Right to remove fixtures: after termination of lease the lessee has the right to
remove the fixtures made by him during the lease.
 Right to remove crops: after termination of lease, the lessee is entitled to
remove crops sown by him during the period of lease.
 Right to assign his interest: the lessee has the right to transfer his right of
enjoyment in the property, provided that there is no prohibition imposed.
Liabilities of Lessee
 Duty to disclose facts: just same as lessor, the lessee is bound by the duty to
disclose any fact known to him which increases the value of the property.
 Duty to pay rent: the lease is bound to pay the rent or premium as stipulated
in the lease deed.
 Duty to maintain property: the lease is bound to keep and maintain the
property in the same conditions in which it was given to him.
 Duty to give notice of encroachment: if the lessee comes to know that an
encroachment has been made on the property in his possession, it is duty to
inform the lessor to take proper actions.
 Duty to use property reasonably: the lessee has a duty to enjoy property as
an ordinary prudence would use such property.
 Duty not to erect permanent structure: the lessee cannot erect any permanent
structure on leased property, if so constructed without consent and not
removed by the end of lease period the structure shall belong to the lessor.
 Duty to restore possession: after expiry of the term of lease, the lessee must
transfer possession to the lessor.
MORTGAGE
Mortgage is French term which means ‘death contract’. The term death contract
means that the pledge (promise, bailment, and guarantee) ends only when the loan
is repaid, the obligation is fulfilled or when the borrower takes over and/or sells the
collateral. In case of Gopal v. Parostam, it was observed that mortgage as
understood in this country cannot be defined better than by the definition adopted
by the legislature in section 58 of TPA.
Section 58 (a) provides, a mortgage is transfer of interest in specific
immovable property for the purpose of securing the payment of money advanced or
to be advanced by way of loan, existing or future debt. The transferor is called a
‘mortgagor and the transferee is called ‘mortgagee; the principle money along with
interest are called the ‘mortgage money’ and the instrument by which the transfer is
effect is called ‘mortgage deed’.
Kinds of mortgage
 Simple mortgage (section 58 b): the mortgager does not deliver the
possession of the mortgaged property. He finds himself personally to pay the
mortgage money and agrees either expressly or impliedly, that in case of his
failure to repay, the mortgagee shall have the right to cause the mortgaged
property to be sold and apply the sale proceeds in payment of mortgage
money. The essential feature of the simple mortgage is that the mortgagee has
no power to sell the property without the intervention of the court.
 Mortgage by conditional sale (section 58 c): the mortgagor ostensibly sells
the mortgaged property on condition that on default of payment of the
mortgage-money on a certain date the sale shall become absolute, or on
condition that on such payment being made the sale shall become void, or on
 condition that on such payment being made the buyer shall transfer the
property to the seller, the transaction is called mortgage by conditional sale.
 Usufructuary mortgage (section 58 d): the mortgagor delivers possession of
the mortgaged property to the mortgagee, and authorises him to retain such
possession until payment of the mortgage-money, and to receive the rents
and profits accruing from the property in lieu of interest, or in payment of the
mortgage-money, or partly in lieu of interest and partly in payment of the
mortgage-money, the transaction is called an usufructuary mortgage.
 English mortgage (section 58 e): where the mortgagor binds himself to repay
the mortgage-money on a certain date, and transfers the mortgaged property
absolutely to the mortgagee, but subject to a proviso that he will re-transfer it
to the mortgagor upon payment of the mortgage-money as agreed, the
transaction is called an English mortgage.
 Mortgage by deposit of title deeds (Section 58 f): mortgage by deposit of title
deeds, also known as equitable mortgage is a type of mortgage where a
person who belong to the state of Madras, Bombay, Calcutta or any other
state as specified by the government, deposit the title of the immovable
property to the Mortagee as a security for the debt owned. It is a special type
of mortgage as the execution of the mortgage deed is not necessary and the
delivery of the title of the property is sufficient. However, the intention of
delivery of title as a security must be clear and certain.
 Anomalous mortgage (section 58 g): a mortgage which is not a simple
mortgage, a mortgage by conditional sale, a usufructuary mortgage, an
English mortgage or a mortgage by deposit of title-deeds within the meaning
of this section is called an anomalous mortgage.
Essentials of Mortgage of Property
1. Transfer of interest: in mortgage there must be transfer of interest in specific
immovable property for the repayment of debt. In a simple mortgage, what is
transferred is power of sale, in a usufructuary mortgage there is transfer of
right of possession and enjoyment of the usufruct, in a conditional mortgage and
English mortgage, there is a transfer of right of ownership subject to
mortgagor’s right to get his property back. When the parties agree to enter
into mortgage, the interest of the mortgagor in the property reduces to the
extent which has been passed on to the mortgagee. In any case whatever be
the form of mortgage, there is a transfer of some interest only.
2. Specific immovable property: In order to create a mortgage, there should be
an existence of specific immovable property. The word ‘specific’ shows that
the description should not only be free from ambiguity and uncertainty, but
also that it should be specific, as distinguished from general. And it should be
mentioned in the mortgage deed. The purpose to write about property
specifically, is to attach that property, in case, the mortgagor doesn’t repay.
3. Debt: the purpose of mortgage is that of securing the loan or the performance
of an obligation which give rise to pecuniary liability. It may be for the
 purpose of obtaining a loan, to secure the repayment of loan. There is thus a
debt and the relationship b/w the mortgagor and mortgagee is that of debtor
and creditor.
Difference Between Mortgage and Charge

BASIS FOR
MORTGAGE CHARGE
COMPARISON

Meaning Mortgage implies the Charge refers to the security for

transfer of ownership securing the debt, by way of
interest in a particular pledge, hypothecation and
immovable asset. mortgage.

Creation Mortgage is the result of the Charge is created either by the

act of parties. operation of law or by the act of
the parties concerned.

Registration Must be registered under When the charge is a result of the

Transfer of Property Act, act of parties, registration is
1882. compulsory otherwise not.

Term Fixed Infinite

Personal Liability In general, mortgage carries No personal liability is created,

personal liability, except however, when it comes into
when excluded by an effect due to a contract, then
express contract. personal liability may be created.

Rights and liabilities of mortgagor and mortgagee

Rights of Mortgagor
1. Right to redemption (section 60): this right puts end to mortgage by
returning the property of mortgagor. The right to redeem further grants three
rights to the mortgagor: (I) right to end mortgage deal; (II)right to transfer
mortgaged property his name; (III) to take back possession of property in case
of delivery of possession.
2. Right to Accession (section 63): it means addition to property, according to it
mortgagor is entitled to such accession to his property which is in custody of
mortgagee.
3. Right to improvements (section 63A): if the mortgaged property has been
improved while it was in possession of mortgagee, then on redemption and in
the absence of any contract to the contrary mortgagor is entitled to such
improvement.
4. Right to renewed lease (section 64): if the mortgage property is a leasehold
property and during the duration of the mortgage the lease gets renewed
 then, on redemption the mortgagor is entitled to have the benefit of the new
lease.
5. Right to grant lease (section 65A): the mortgagor has the right to lease out the
mortgage property while he is in lawful possession of that property, subject to
conditions.
Duties of Mortgagor
1. Duty to avoid waste (section 66): the duty to not commit any act which leads
to the waste of property or any act which reduces the value of the mortgaged
property.
2. Duty to indemnify for defective titled: the mortgagor has to compensate the
mortgagee for a defective title in the mortgaged property.
3. Duty to compensate mortgagee: If the mortgaged property is in possession of
mortgagee who is paying all the taxes and other public charges, then it is the
duty of mortgagor to compensate mortgagee for incurring such expenses.
4. Duty to direct rent of a lease to mortgagee: where the mortgaged property is
leased by mortgagor then it is his duty to direct lessee to pay rent, etc to
mortgagee.
Rights of Mortgagee
1. Right to foreclosure (section 67): the mortgagee can obtain a decree from the
competent court that debars the right over the property, by such decree the
mortgagee can place a complete bar over the mortgagor’s right to redeem the
property.
2. Right to sue (section 68): the mortgagee has the right to sue for mortgage
money in case of default in payment, destruction of property, deprivation of
security, etc.
3. Right to sell (section 69): the Mortgagee or his representative is authorized to
sell the mortgaged property after the repayment becomes due, but this right is
limited.
4. Right to accession (section 70): the mortgagee in the absence of a contract
contrary, shall be entitled to such accession, if any.
5. Right to renewed lease (section 71): the mortgagee is entitle to take benefits
of the new lease as the property is still in possession and the mortgagor has
not redeemed it yet.
6. Right of mortgagee to spend money on mortgage-property (section 72): so as
to preserve it from destruction or for other reasons, he may add such
expenses to the principal money.
7. Right to proceeds of revenue sale or compensation on acquisition: the
mortgagee has the right to claim for the mortgage money, if the mortgagor
had failed to settle the payment backlogs to the mortgaged property.
Duties of Mortgagee
Section 76 provides following liabilities of mortgagee in possession:
  Duty to maintain the property.
 Duty to collect the profits associated with the property.
 Duty to pay government dues.
 Duty to take necessary measures to keep property undamaged.
 Duty to keep records of the revenues and expenditure.
 Duty to carry out urgent and necessary repairs of the property.
Once a mortgage always a mortgage
The maxim ‘once a mortgage, always a mortgage’ sets out a legal principle
applicable to all mortgage transactions. This maxim denotes that a mortgage cannot
be made irredeemable and any provision inserted to make it so irredeemable shall be
void to that extent and will operate bad in law. The mutual rights of mortgagor and
the mortgagee provide for a peculiar position of the parties to the transaction. The
Right to Redemption which is available to the mortgagor, provides a right to claim
back his property. The maxim states that the original nature of mortgage
transaction never changes. It continues to be a mortgage. Once a mortgage
transaction is created then it continues to be a mortgage transaction. The right of
redemption is available to him in future. His right of redemption is not defeated
for technical reasons. Hence it is regulated by the maxim ‘once a mortgage, always
a mortgage’. Thus, stating that the true nature of mortgage never changes.
A mortgage is always redeemable and a mortgagor’s right to redeem shall neither be
taken away nor be limited by any contract between the parties and it cannot by the
unilateral act of mortgagee be converted into a sale. For instance, if no period was
fixed for redemption of a usufructuary mortgage when it was created, mortgagee
would not become owner due to non-redemption and mortgagor’s suit for
redemption would be proper.
Any condition that penalise the mortgagor in the event of non-payment of loan
would be termed as a clog on his right of redemption and would be void. Such
condition can validly be ignored by the mortgagor and would not be enforced by
any court. And a condition that the property would be forfeited in the event of
default in payment of money is a penalty. If he is prevented from doing so or is
prevented from redeeming the mortgage, such prevention is bad in law. If he is so
prevented, the equity of redemption is affected by that, and has always been termed
as a clog. Such a clog is inequitable. Under Section-60 of the TP Act, it is provided
that, at any time after the principal money has become payable, the mortgagor has a
right to redeem. Example- A condition imposed in the mortgage deed that if the
mortgagor is not able to repay the loan by 10 years from the date of execution of the
mortgage deed, he would not be entitled to redeem the same and would have to sell
the land to the mortgagee, would be a clog on his right of redemption and hence
void.
EASEMENT
The concept of easement has been defined under Section 4 of The Indian Easements
Act, 1882. According to it, an easementary right is a right possessed by the owner or
occupier of the land on some other land, not his own, the purpose of which is to
provide the beneficial enjoyment of the land. This right is granted because without
the existence of this right an occupier or owner cannot fully enjoy his own property.
It includes the right to do or continue to do something or to prevent or to continue
to prevent something in respect of some other land, which is not his own, for the
enjoyment of his own land.
The word ‘land’ refers to everything permanently attached to the earth and the
words ‘beneficial enjoyment’ denotes convenience, advantage or any amenity or
any necessity. The owner or occupier referred to in the provision is known as
the Dominant Owner and the land for the benefit of which the easementary right
exists is called Dominant Heritage. Whereas the owner upon whose land the
liability is imposed is known as the Serviant Owner and the land on which such a
liability is imposed to do or prevent something, is known as the Servient Heritage.
E.g. right of way, right to discharge rainwater, right to sunlight, etc.
Essentials of Easement

 Dominant and servient heritage: for the enjoyment of right of easement,

necessary existence of two properties i.e. dominant and servient heritage is a
must.
 Separate owners: For exercising the right of easements, owners of the two
properties shall be different and not a single person.
 Beneficial Enjoyment: The object of easements is that the dominant owner
enjoys it in a way which includes express and implied benefits.
 Positive or Negative: Easements can be positive or negative. Former refers to
a right through which the dominant owner does some act to exercise the right
over the land of the servient owner. Whereas, the latter denotes an act of
prevention. In a negative easement the dominant owner prevents or restricts
the servient owner from doing certain act or acts.
Extinction of Easements

 Dissolution of servient owner’s right: In the situation where the grantor

ceases to have any right in the servient tenement because of some reason, then
the right of easements ceases to exist as well.
 Expiry of time or happening of an event: When an easement is acquired on
certain conditions or for certain purpose or for certain period of time. On the
fulfilment of such condition or purpose or expiry of the time, the right of
easement extinguishes as well as in accordance with Section 6 of the Act
 Extinction by release: Where in a situation the owner of the dominant
heritage releases the right of easement to the servient owner, the right ceases
to exist. Such a release can be both expressly or impliedly made.
  Termination of necessity: when necessity terminates, the easement of
necessity terminates as well.
 Useless easement: when easement is of such a nature that is not useful or
becomes incapable of being beneficial at any time or under any circumstances,
then the right of easement ends.
 Permanent change in the dominant heritage: When the nature of the
dominant heritage changes permanently with increase in burden on
tenement, then the right of easement ceases to exist as the purpose of it was
the beneficial enjoyment of the dominant heritage.
 Extinction by destruction of either heritages: When either of heritages gets
destroyed, the easement ends as it is essential for two properties to exist for
exercising the right.
 Unity by ownership: when one person becomes the owner of both the
dominant and servient heritage then the right of easement terminates.
Importance of easement

 Give people other than the property owner the right to benefit from a certain
section of the property.
 Allow individual to access other properties or a resource, for example to fish
in a private owned pond or to have access to a public breach.
 Help keep the peace between the neighbours and communities.
 Give a person, company or government the right to use someone else’s real
estate for a specific purpose.
 Provide one person with the right to use another person’s property for a
specific purpose or use and does not confer any right of possession.