CS Executive

Economic, Business and Commercial Laws

Test Paper – 7
Transfer of Property Act, 1882
Time:- 1: Hr [25 Marks]
5 Questions All Compulsory [5 Marks Each]

Question - 1
A contract for the sale of land has been entered into between A and B. The transferee has
paid the price entering into possession and is willing to carry out his contractual
obligations. As registration has not been effected, A the transferor, seeks to evict B from
the land. Can he do so ? Explain.
Answer
No, B will not suffer simply because the formality of registration has not been through. The
legislature grants some relief to such a transferee under Section 53A of the Transfer of Property
Act, 1882, which embodies the doctrine of part-performance.
Followings are the essential conditions for the operation of the doctrine of part performance
according to Section 53A.
1. There must be a contract to transfer immoveable property.
2. It must be for consideration.
3. The contract should be in writing and signed by the transferor himself or on his behalf.
4. The terms necessary to constitute the transfer must be ascertainable with reasonable
certainty from the contract itself.
5. The transferee should have taken the possession of the property in part performance of the
contract. In case he is already in possession, he must have continued in possession in part
performance of the contract and must have done something in furtherance of the contract.
6. The transferee must have fulfilled or be ready to fulfill his part of the obligation under the
contract. If all the above mentioned conditions are satisfied, then the transferor and the
persons claiming under him are debarred form exercising any right in relation to the
property other than the rights expressly provided by the terms of the contract
notwithstanding the fact that the instrument of transfer has not been registered or complete
in the manner prescribed there for by the law for time being in force.

Question - 2
Sachin made an unconditional gift of property to Amit but continued in possession of
gifted property. Sachin revoked the gift deed transferred it to Naresh. Amit wants to
recover possession from Naresh. Discuss it in the light of provisions of Transfer of
Property Act, 1882 whether Naresh can withhold the gifted property?
Answer
According to Section 122 of the Transfer of Property Act, once a gift is accepted by the donee/his
legal representatives during life time of donor, the donor cannot revoke it.
One of the essential feature of gift is that it cannot be revoked at the will and pleasure of the
grantor. A gift which comes into existence on the fulfilment of a condition, that is to say, a gift
which is subject to a condition precedent is also valid. But in this case, as gift is unconditional,
therefore, after its acceptance, Sachin cannot revoke gift deed.

Applying section 41 of the Transfer of Property Act dealing with transfer by ostensible owner, in
present case, Sachin (donor) is not ostensible owner as he is not holding the property with the
consent of Amit (real owner). Therefore, Naresh (transferee), cannot, invoke the protection of
Section 41. Amit would succeed in the case and Naresh cannot withhold the gifted property.

1.1 EBCL – Test Paper – 7

Question - 3
A and B are litigating in a count of law over property X and during the pendency of the suit,
A transfers the property X to C. The suit ends in B’s favour. Decide, who shall be entitled
for property X under the provisions of the Transfer of Property Act, 1882 ?
Answer
Section 52 of the Transfer of Property Act, 1882 incorporates the doctrine of Lis pendens. It
states that during the pendency of a suit in a Court of Law, property which is subject to the suit or
litigation cannot be transferred. When it is said that the property cannot be transferred what is
meant in this context is that property may be transferred but this transfer is subject to the rights
that are created by a Court decree.
In the given case, A and B are litigating in a Court of law over property X and during the pendency
of the suit A transfers the property X to C. The suit ends in Bs favour. Here C who obtained the
property during the time of litigation cannot claim the property. He is bound by the decree of the
Court wherein B has been given the property.

Question - 4
Vested and contingent interest
Answer
The following are the principal points of distinction between a vested and a contingent interest:
1. When an interest is vested the transfer is complete. It creates an immediate proprietary
interest in the property though the enjoyment may be postponed to a future date. A
contingent interest on the other hand is dependent upon the fulfilment of some conditions
which may or may not happen. In other words, in case of vested interest, the owner's title is
already prefect; in case of a contingent interest, the title is as yet imperfect but may become
perfect on the fulfillment of a stipulated condition.
2. A vested interest takes effect from the date of transfer. A contingent interest in order to
become vested is conditioned by a contingency which may not occur.
3. A vested interest cannot be defeated by the death of the transferee before he obtains
possession. A contingent interest may fail in case of the death of transferee before the
fulfilment of condition.
4. Since vested interest is not circumscribed by any limitation which derogates from the
completeness of the grant, it logically follows that a vested interest is transferable as well as
heritable. If, therefore, a transferee of the vested interest dies before actual enjoyment, it will
devolve on his legal heirs. A contingent interest, on the other hand, cannot be inherited
though it may be transferred coupled with limitation regarding fulfilment of a condition.

Question - 5
Distinguish between English mortgage and Mortgage by conditional sale.
Answer
An English mortgage looks like a mortgage by conditional sale but there are obvious differences
between the two:
1. In English mortgage there is a personal liability undertaken by the mortgagor to pay the debt.
In a mortgage by conditional sale there is no personal covenant (agreement for payment of
the mortgage money and mortgagee has his remedyagainst the mortgaged property only);
2. In English mortgage the ownership in the mortgaged property is absolutely transferred to
the creditor (i.e. mortgagee) which however, may be divested onrepayment of the loan on the
fixed day.
In a mortgage by conditional sale, the mortgagee gets only a qualified ownership which may,
however, ripen into an absolute ownership in default of payment of the mortgage money.

1.2 EBCL – Test Paper – 7