Doctrine of election: section 35 of transfer of property act

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 Doctrine of election: section 35 of transfer of property act

INDEX

Topic Page.no
1 BRIEF OVERVIEW 3

2 DOCTRINE OF ELECTION 6

3 EXCEPTIONS 9

4 UNDERSTANDING THE PRINCIPLE 10

5 OTHER IMPORTANT CONDITIONS 11

6 COMPENSATION 13

7 Case Law under section 35 14

8 CONCLUSION 16

BRIEF OVERVIEW

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 Doctrine of election: section 35 of transfer of property act

Its a famous proverb in English that one cannot eat the cake and have it too which relates to the
fact that if given a choice, an individual can either opt for the choice or relinquish it. However
both the options cannot be exercised at the same time. The same concept is more or else
ingrained in the Indian legal system in as much as the Transfer of Property Act incorporates the
Doctrine of Election which has been consistently apply to imply that benefit under one option
can alone be exercised by an individual.

In a recent decision [Mumbai International Airport Pvt. Ltd. v. Golden Chariot Airport] the
Supreme Court explained the meaning underlying the doctrine and its ambit as far as its
applicability under the Indian legal system was concerned. The Court explained the concept in
the following terms;

Now the question is whether the contesting respondent on a complete volte-face of its previous
stand can urge its case of irrevocable licence before the Estate Officer and now before this
Court? The answer has to be firmly in the negative. Is an action at law a game of chess? Can a
litigant change and choose its stand to suit its convenience and prolong a civil litigation on such
prevaricated pleas? The common law doctrine prohibiting approbation and reprobation is a facet
of the law of estoppel and well established in our jurisprudence also.

The doctrine of election was discussed by Lord Blackburn in the decision of the House of Lords
in Benjamin Scarf vs. Alfred George Jardine1, wherein the learned Lord formulated

“…a party in his own mind has thought that he would choose one of two remedies, even though
he has written it down on a memorandum or has indicated it in some other way, that alone will
not bind him; but so soon as he has not only determined to follow one of his remedies but has
communicated it to the other side in such a way as to lead the opposite party to believe that he
has made that choice, he has completed his election and can go no further; and whether he
intended it or not, if he has done an unequivocal act…the fact of his having done that
unequivocal act to the knowledge of the persons concerned is an election.”

In Tinkler vs. Hilder2, Parke, B., stated that where a party had received a benefit under an Order,
it could not claim that it was valid for one purpose and invalid for another. In Clough vs. London

1
[(1881-82) 7 Appeal Cases 345]
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 Doctrine of election: section 35 of transfer of property act

and North Western Rail Co.3 the Court referred to Comyn’s Digest, wherein it has been stated:-
“If a man once determines his election, it shall be determined forever.” In the said case, the
question was whether in a contract of fraud, whether the person on whom the fraud was practiced
had elected to avoid the contract or not. The Court held that as long as such party made no
election, it retained the right to determine it either way, subject to the fact that an innocent third
party must not have acquired an interest in the property while the former party is deliberating. If
a third party has acquired such an interest, the party who was deliberating will lose its right to
rescind the contract. Once such party makes its election, it is bound to its election forever.

In Harrison vs. Wells4, Salmon LJ, in the Court of Appeal, observed that the rule of estoppel was
founded on the well-known principle that one cannot approbate and reprobate. The doctrine was
further explained by Lord Justice Salmon by holding “it is founded also on this consideration,
that it would be unjust to allow the man who has taken full advantage of a lease to come forward
and seek to evade his obligations under the lease by denying that the purported landlord was the
landlord”. (See page 530)

In KokHoong vs. Leong Cheong Kweng Mines Ltd.5, the Privy Council held that “a litigant may
be shown to have acted positively in the face of the court, making an election and procuring from
it an order affecting others apart from himself, in such circumstances the court has no option but
to hold him to his conduct and refuse to start again on the basis that he has abandoned.”

Justice Ashutosh Mookerjee speaking for the Division Bench of Calcutta High Court in
DwijendraNarain Roy vs. Joges Chandra De,6, held that it is an elementary rule that a party
litigant cannot be permitted to assume inconsistent positions in Court, to play fast and loose, to
blow hot and cold, to approbate and reprobate to the detriment of his opponent. This wholesome
doctrine, the learned Judge held, applies not only to successive stages of the same suit, but also
to another suit than the one in which the position was taken up, provided the second suit grows
out of the judgment in the first.

2
(1849) 4 Exch 187
3
[(1861-73) All ER, Reprint, 646]
4
1966 (3) All ER 524
5
(1964 Appeal Cases 993)
6(AIR 1924 Cal 600)

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 Doctrine of election: section 35 of transfer of property act

It may be mentioned in this connection that all the proceedings pursued by the contesting
respondent in which it took the plea of irrevocable licence was virtually in clear contradiction of
its stand which it took before the Bombay High Court on 12.7.01 where it had given up the plea
of ‘irrevocable licence’. It is on this plea that its suit again became triable by the Bombay City
Civil Court and all subsequent proceedings pursued by the contesting respondent followed
thereafter.

The Court has also applied the doctrine of election in C. Beepathumma & Ors. vs. V.S.
Kadambolithaya & Ors.7, wherein the Court relied on Maitland as saying:

“That he who accepts a benefit under a deed or will or other instrument must adopt the whole
contents of that instrument, must conform to all its provisions and renounce all rights that are
inconsistent with it.” (Maitlands Lectures on Equity, Lecture 18).

The Court also took note of the principle stated in White & Tudor’s Leading Case in Equity
volume 18th edition at p.444 – wherein it is stated, “Election is the obligation imposed upon a
party by Courts of equity to choose between two inconsistent or alternative rights or claims in
cases where there is clear intention of the person from whom he derives one that he should not
enjoy both… That he who accepts a benefit under a deed or will must adopt the whole contents
of the instrument.”

In M/s New Bihar Biri Leaves Co. &Ors. vs. State of Bihar &Ors.8, the Court observed that it is
a fundamental principle of general application that if a person of his own accord, accepts a
contract on certain terms and works out the contract, he cannot be allowed to adhere to and abide
by some of the terms of the contract which proved advantageous to him and repudiate the other
terms of the same contract which might be disadvantageous to him. The maxim, qui approbat
non reprobat (one who approbates cannot reprobate), applies in our laws too.

DOCTRINE OF ELECTION

7
1964 (5) SCR 836
8
(1981) 1 SCC 537
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 Doctrine of election: section 35 of transfer of property act

The doctrine of election which is given in Section 35 of the Transfer of Property Act and also
Sections 180-190 of the Indian Succession Act. It goes on to discuss the exceptions to the
doctrine and also the modes of election.

INTRODUCTION

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 subject nevertheless :

 “Where the transfer has been through gratuitous means and the transferor has become
incapable of making a new transfer.
 In all cases where the transfer is for consideration”.9

An illustration to further explain :

A owns a property that is worth Rs 800. B professes to transfer the same to C through the
Rs1000 instrument to A. But the A, the owner opts/elects to retain his property and thus, forfeits
the gift of Rs 1000.10

"Election" means choosing of one right between two rights, when there is clear intention that
both the rights cannot be enjoyed but only one. Section 35 of the Transfer of the Property Act
defines the "Doctrine of Election". The "Doctrine of Election" is based on the rule in Cooper vs
Cooper.

If a person transfers some property which he has no right to transfer, and the same transaction
confers any benefit on the owner of the property, such owner must elect either to confirm such

9
Section 35, The Transfer of Property Act, 1882
10
G.C.V SubbaRao, Law of Transfer of Property (4th edn, Universal Law Publishing 2010).
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 Doctrine of election: section 35 of transfer of property act

transfer or reject it. If he rejects the transfer, he shall relinquish the benefit conferred upon him
and the property will revert back to himself or his representative as if it had not been disposed of.

Conditions for application of the Doctrine of Election :

The following are the essentials for the application of the Doctrine of Election:

1. The transferor should dispose of the property in which he has no right to transfer.

2. The transferor must confer a benefit to the real owner of the property.

3. Both the benefits conferred and the transfer made must be part of the same transaction or
document.

4. The owner is now given a choice of election either to accept the benefit and allow the transfer
or to reject both.

Eg:-

"A" transfer "B"'s property worth Rs.100 without his consent or knowledge to "C" and in the
same transaction, "A" gives Rs.1000 to "B".

The basic of this doctrine is that a person who gets the benefits must also bear the burden.
Generally, the benefit is greater in value than the burden. The benefit should be express and
particular. It must be in the same transaction. The silence of the transferee for two years shows
the acceptance of benefit and approval of the transfer of his property to a third person.

The transfer and benefit should be gratutious without money. If the transferor has died or has
become incapable of making a fresh transfer before such election, then the subsequent election
by owner of the property is void.The Doctrine of Election only applies when the two donations
are part of the same transaction.

Mode of Election :

Election must be divide into two :

1. Direct Election or

2. Indirect Election.

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 Doctrine of election: section 35 of transfer of property act

1. Direct Election :

There is no prescribed form. A letter, telegram, oral words of transferor or any other sign by the
person which conveys the intention of the transferor is enough.

2. Indirect Election :

There are three types of Indirect Election.

They are :-

1. Acceptance of benefit without knowledge of duty to elect

2. Enjoyment for two years and

3. Status quo cannot be restored.

1. Acceptance of benefit without knowledge of duty to elect :

If the donee accepts the benefit conferred upon him by the transfer, then such acceptance on his
part constitutes election by him. But the acceptance must be made with full knowledge of his
duty to elect and all matters about such benefits.

If the donee accepts the benefits without knowledge, then the representatives of the donee may
revoke the election. If the election is made under mistake of fact, it may be revoked by the
elector or his representatives. But if the donee willfully abstains from inquring into the
circumstances under which the benefit is conferred upon him and makes an election, such an
election is binding on him and his representatives.

2. Enjoyment for two years : [ Section 188(1) of the Indian Succession Act ]

If a person who has to elect knows that he is under a duty to elect, he must express his dissent, if
he retains the property for some time and not interested to elect in favour of the proposal. If he
keeps the property for two years, without expressing that he is not in favour of the election, then
it is presumed that the person so retaining the property is doing so with knowledge and
acceptance of the document.

3. Status quo cannot be restored :

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 Doctrine of election: section 35 of transfer of property act

In the case of property which is exhaustible by consumption or use, if he once starts consuming
the property, election in his favour is persumed. No period of consumption is necessary for this
presumption.

EXCEPTIONS

When the owner who is considering the election between retaining the property and accepting a
particular benefit, chooses the former, he is not bound to relinquish any extraneous benefit that
he gains through the transaction.11

The acceptance of the benefit by the original owner shall be deemed to be as election by him to
validate the transfer, if he is aware of his responsibilities and the circumstances that might
influence a prudent man into making an election. 12

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

If the original owner does not elect his option within a year of the transfer of property, the
transferor would require him to elect his choice. Even after the reasonable time, if he still does
not also still elect, the original owner shall be assumed to have elected the validation of the
property transfer as his choice.13

In context of a minor, the period of election shall be stalled till the individual attains majority
unless he is represented by a guardian14.

UNDERSTANDING THE PRINCIPLE

In simple words, a person utilizing the benefits of an instrument also has to carry the burden
attached. This doctrine is founded upon a model wherein a person persuades another to act in a

11
ibid
12
Ibid.
13
Salil Paul, Mulla the Transfer of Property Act ( 9thEdn. Butterworths 2005)
14
Ibid.
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 Doctrine of election: section 35 of transfer of property act

manner to his prejudice and derives any advantage from that, then he cannot turn around and
claim that he was not liable to perform his part as it was void.15 This doctrine is universal and is
applicable to Hindus, Muslims as well as Christians.

So, this doctrine contains the principle that the exercise of a choice by a person left to himself of
his own free will to do one thing or another binds him to the choice which he has voluntarily
made, and is founded on the equitable doctrine that he who accepts benefit under an instrument
or transaction of his choice must adopt the whole of it or renounce everything inconsistent with
it.16 Thus, it is a general rule that a person cannot approbate and reprobate17. Also, the election is
confined to the case of a gift or Will18 and does not apply in case of a legal remedy19.

Conditions precedent for equity of election20:

 A transfer of property by a person who has no right to transfer;

 As a part of the same transaction, he must confer some benefit on the owner of the
property and
 Such owner must elect either to confirm such transfer or to dissent from it.

OTHER IMPORTANT CONDITIONS

Proprietary Interest

Election over a property is not asked to made by a person unless he holds a proprietary interest
which are disposed off in derogation of the person’s rights.21

15
Darashaw J. Vakil, The Transfer of Property Act ( 2ndEdn. Wadhwa Nagpur 2004) 334.
16
Ibid.
17
Beepathuma( C ) v. VS Kadambolithiya [1964] 5SCR 836,850, AIR 1965 SC 241; Codrington v. Codrington
(1857) 7 HL 854, 861.
18
Nihar v. AnathNath, AIR 1956 Pat 223 (226) (DB) : 1956 BLJR 177.
19
Ibid
20
Dhanpatti v. Devi Prasad 1970 (3) SCC 776 (778)
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 Doctrine of election: section 35 of transfer of property act

So, election cannot take place if the property that is decided by the transferor to be disposed does
not happen to be owned by any individual to whom an interest is being provided through the
transfer. Also, it cannot take place if the transferor does not provide any benefit on the individual
who is the original owner of the property. 22

“As part of the same transaction”23

One cardinal condition for the doctrine of election to be executed is that the benefit conferred
upon the original owner should be as part of the same contract by which he transfers the property
over which he holds no right to transfer.

In the landmark case of Ramayyar v. Mahalaxmi24, a widow had given a gift in excess of her
powers and had then provided a will which stated that “ excluding the properties which I have
already given away, I will make the following dispositions”. The Court ordered that the plaintiff
under the will was not excluded from the election doctrine from contesting the previous gift
which wasn’t the issue of the will at all.

It is to be noted that different nature of two properties is not a bar to election by the owner like in
the case of Ammalu v. Ponnammal25 where a person who was managing the properties of the
daughter of his deceased brother, died leaving a will bequeathing a portion of it to B. It was held
that the doctrine of election did apply for the niece.

Donor’s Intention

In order to create a situation of election, it is important that the intention of the testator should be
clear with regard to disposing of the property which he does not own. 26 Parol evidence is not
acceptable and thus the intention must be prima facie clear. 27 28

21
MstDhanpatti v. Devi Prasad (1970) 3 SCC 779; Mohomed Ali v Nissar Ali (1927) 109 IC 835, AIR 1928 Oudh
67, 82
22
Salil Paul, Mulla the Transfer of Property Act ( 9thEdn. Butterworths 2005) 249.
23
B.B Mitra, Transfer of Property Act (18th edn, Kamal Law House 2007) 204
24
AIR 1922 Mad 357 (358) : 64 IC 481
25
36 MLJ 507; 49 IC 527
26
Rancliffe v. Parkins 6 Dow 179
27
Stratton v Best 1 Ves 185
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 Doctrine of election: section 35 of transfer of property act

Indirect Benefit

The benefit that the original owner is conferred with has to be direct in nature and if indirect, he
does not need to elect.29 This principle is explained in Section 184 of Indian Succession Act,
1925 and states that “when the devisee who claims derivatively through another does not take
under the deed, and is not bound by the equity attaching thereto.”30

Difference in Capacity

An individual can in one capacity utilize a benefit while can dissent or reject that benefit in
another capacity31. It means to explain that it is possible to facilitate two roles of an individual
wherein he can for example, accept legacy for an estate while in his personal competence, he
could retain the property.32

Modes of Election

The election by the owner can either be direct or indirect. In direct election, it is simply through
communication about the elected choice or option. Though, in case of an indirect election, “the
acceptance of the benefit by the original owner is subject to two conditions:

1. He has to be aware of his duty to elect, and

2. There must be proof of knowledge of circumstances which would influence the judgment
of a reasonable man in making an election : 33

Enjoyment for two years of the benefit by the person on whom it is conferred with any
dissent.34”

The election shall be presumed when the donee acts in such a manner with the property gifted to
him that it becomes impossible to return it to the original owner in its original state.35

28
B.B Mitra, Transfer of Property Act (18th edn, Kamal Law House 2007) 205.
29
G.C.V SubbaRao, Law of Transfer of Property (4th edn, Universal Law Publishing 2010) 744.
30
ibid
31
Grissel v. Swinoe (1869) 7 Eq. 291 = 17 W.R. 438
32
G.C.V SubbaRao, Law of Transfer of Property (4th edn, Universal Law Publishing 2010) 744.
33
B.B Mitra, Transfer of Property Act (18th edn, Kamal Law House 2007) 206.
34
Spread v. Webster, (1974) 2 Ves. 367 ; 30 ER 676
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 Doctrine of election: section 35 of transfer of property act

Difference between English Law and the Indian Law Perspective

The English law depends upon the principle of compensation which means that if the original
owner does not choose to validate the transfer, he can keep the property and also the benefit
accrued, subject to compensation provided to the donee, to the extent of the property he had
suffered a loss for.

But in the Indian law context, this doctrine is influenced by the principle of forfeiture which
states that if the original owner does not choose to validate the transfer, the donee incurs a
forfeiture of the conferred benefit which goes back to the transferor.36

English Law:-
In this respect the English Law is different because there the donee electing against the
instrument does not incur a forfeiture of the benefit conferred on him by it, but in merely bound
to make compensation out of it to the person disappointed by his election.

COMPENSATION

Estimated cost of the property which is attempted to be transferred towards the transferee is the
approximation of the compensation that he shall receive. However, in context of immovable
properties, there arises the issue of changing value of the property according to the lapse of time.
Thus, this valuation is to take place at the date of the instrument becoming operational rather
than at the time of election37.

Case Law under section 35

Section 35:Doctrine of Election: – Explained. The foundation of the doctrine of election is that
person taking the benefit of an instrument must also bear the burden, imposed thereby and that
he cannot take under against the same instrument. It is a breach to the general rule that no one
may approbate or reprobate. The doctrine is based on intended intention to this extent that the

35
B Mitra, Transfer of Property Act (18th edn, Kamal Law House 2007) 207
36
G.C.V SubbaRao, Law of Transfer of Property (4th edn, Universal Law Publishing 2010) 740
37
Re Hancock. Hancock v. Pawson (1905) 1 Ch. 16
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 Doctrine of election: section 35 of transfer of property act

law presumes that the author of an instrument intended to give effect to every part of it. There is
an obligation on him who takes a benefit under a will or other instrument intended to give full
effect to that instrument under which it was beyond the power of the donor or settler to dispose
on him who takes the benefit, the obligation of carrying the instrument into full and complete
force and effect. Of an instrument is in valid in part, what remains is sufficient to put a person to
his election if he claims a benefit under it. Muhammad Kader Ali Fokir vs. Fakir Lakman
Hakim.[3]

Doctrine of election:- the beneficiary must give effect to the instrument as a whole.
The foundation of the doctrine of election is that a person taking the benefit under an instrument
must also bear the burden imposed by it and that he cannot take under against the same
instrument. It is, therefore, a breach of the general rule that no one may approbate or reprobate.
The doctrine is based on intention to this extent that the law presumes that the author of an
instrument intended to give effect to every part of it.

The same principle is stated in White and Tudor’s Leading case in Equity,[4] as follows:-

Election is the obligation imposed upon a party by court of Equity to choose between two
inconsistent or alternative rights of climes in case where there is clear intention of the person
from who derives one that the he should not enjoy both. That he who accepts a benefit under a
deed or will must adopt the whole contents of the instrument.”
The India courts have applied this doctrine in several cases. In Ramakottaya v.
viraghavayya,[5] it was observed that a person cannot approbate and reprobate the same
transaction the supreme court has also considered the doctrine in Bhau Ram v. BaijNath
Singh[6] and Beepathuma v. VelasariShankaranarayanaKadamguliaya.[7]

Analysis of the section: - (1) the transferor must profess to transfer a property which he has no
right to transfer. It is immaterial whether in doing so he knows or does not know it to be lost his
property;

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 Doctrine of election: section 35 of transfer of property act

(2) He must confer a benefit on the owner whose property he purports to transfer to another
person;
(3) The two things (viz, the transfer and conferring of the benefit) must form parts of the some
transaction.
(4) The benefit must be directly conferred upon the owner of the property. For instance suppose
A by a deed makes a gift of B property to C and gives Rs. 10,000 to B son B, will not be put to
election for nothing is being given to B which may be supposed to be in compensation for his
loss.
(5) The benefit must be conferred on his in the same capacity in which he is the woner of the
property. For example, in the above illustration, suppose B is the guardian of his son, B may
keep his won property, and also take as his guardian, Rs. 1,000.

CONCLUSION

According to section 35 of the transfer of property Act 1882 provide that, Where a person
professes to transfer property which he has no right to transfer, and as part of the same
transaction confers any benefit on the owner of the property, such owner must elect either to
confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so
conferred, and the benefit so relinquished shall revert to the transferor or his representative as if
it had not been disposed of, subject nevertheless. Where the transfer is gratuitous, and the
transferor has, before the election, died or otherwise become incapable of making a fresh transfer
and in all cases where the transfer is for consideration, to the charge of making good to the
disappointed transferee the amount or value of the property attempted to be transferred to
him. Election is an obligation to choose between two inconsistent or alternative rights in a case
where there is a clear intention of the grantor that the grantee should nit enjoy both. The
foundation of the doctrine of election is that the person taking a benefit under an instrument must
also bear the burden. In other words, a person can not take under and against one and the same
instrument. The fifth paragraph provides an exception to the general rule that if a person elects
against the instrument, he will forfeit the whole o the benefit received under it. The paragraph
which follow provide for the mode of election. According to the term of these paragraphs,
election may be expressed or implied by conduct. Where, the election is made in express words,

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 Doctrine of election: section 35 of transfer of property act

it is final and conclusive. Where, however, it is not so made, but the transferee, being aware of
his duty to elect, and having a full knowledge of such matters as the value of properties, accepts
the benefit given to him by the transaction, such action on his part constitutes an election in favor
of the transaction. The question as to whether the benefit was accepted with the knowledge of the
circumstances would be a question of fact subject to the following rules, If the benefit has been
enjoyed for two years without doing any act to express dissent, it shall be presumed that he had
the knowledge or he waived enquiry. If he has done any act which renders it impossible to place
the person interested in the property professed to be transferred in the same condition as if such
act had not been done. The ninth and the last paragraph lays down that where the done suffers
from some disability by reason of infancy, lunacy and so forth, the election shall be postponed
until the disability ceases or until the election is made by the some competent authority, e.g., a
guardian of minor. The section is one of the group of section which deal with the rights of
mortgagees inter se. marshalling means to arrange. Under this section, the subsequent mortgagee
has been given the right to regulate or marshal the order in which the debt is to be realized by
prior mortgagees. It is late down that if the owner of two or more of the properties mortgages
them to one person and then mortgages one or more of the properties to another person, the
subsequent mortgagee is entitled to have the prior mortgage debt satisfied out of the property not
mortgaged to him. The claim to marshal must not be allowed to prejudice the rights of the first
mortgagee or of others two have acquired an interest for consideration.

15