1

SEMESTER III OF LLB (3 YEARS COURSE)

SUBJECT
TRANSFER OF PROPERTY ACT

DESCRIPTIVE QUESTION BANK

WITH ANSWERS
 2

Q No. Questions Page

No.
1 State the rights of an unpaid seller 3
2 Define constructive notice 3
3 What does “attested” mean 4
4 What is conditional transfer 5
5 Vested interest & Contingent interest 6
6 Doctrine of Election 6
7 Rule against Perpetuity 7
8 Lease & License 8
9 State properties which cannot be transferred 9
10 Define mortgage 10
11 What are the essential elements of a gift 10
12 What is Sale 11
13 What is “Actual Notice” 12
14 What is mean by “instrument” 12
15 What is ‘Exchange’ 12
16 Define “immovable property” 13
17 Who is competent to transfer 14
18 What do you mean by Ostensible Owner 14
19 Write a Short note on Lis Pendent 15
20 Write a Short note on Fraudulent Transfer 16
21 Write a Short note on Part Performance 17
22 State different types of mortgages. Explain any two 17
23 What is ‘Gift’ 19
24 What are the essentials of a Gift & how are gifts affected? 19
 3

Q1) State the rights of an unpaid seller?

A1) Rights (Remedies) of Unpaid Seller

a. The rights of unpaid seller against goods are as follows:-

1. Right of possession/ lien

2. Right of stoppage of goods in transit

3. Right of resale

b. The rights of unpaid seller against buyer are as follows:-

1.Suit for price

2.Suit for interest and special damages

3. Suit for interest and special

4.Suit for breach of contract

Q2) Define constructive notice?

A2) Notice, may be actual or constructive. If a person knows about a fact, he

has an actual notice. But, in certain circumstances law treats a man who
ought to have known a fact even though he did not in fact know it. This is
called constructive notice.

Constructive notice arises from an irrefutable presumption of notice. In law

such a presumption will arise when

(i) There is a willful absentation on the part of a person to make necessary

enquiries regarding the existence of certain facts, or

(ii) He showed gross negligence in the matter.

 4

The words “wilful absentation” suggest want of bona fide in respect of

particular transaction (Joshua v. Alliance Bank, 22 Cal. 185). Thus, a person
who refuses to receive a registered letter is, deemed to have constructive
notice of its contents.

In so far as gross negligence is concerned, it does not mean a mere

carelessness but means carelessness of such an aggravated nature as to
indicate mental indifference to obvious risks. For example, if A buys property
from B and does not care to ask whether any amount by way of municipal tax
is due on that property and if the municipal corporation asks him to pay the
arrears of tax, then B is responsible, and if he does not pay, then the arrears
of tax may be made a charge on the property.

Q3) What does “attested” mean?

A3) Attestation is an important formality in connection with the execution of

transfer. "Attest" means to testify a factor, to bear witness to a fact.
Attestation, in relation to a document, signifies the fact of authentication of
the signature of the executant of that document by the attestator by putting
down his own signature on the document in testimony of the fact of its
execution. All transfers do not require attestation. For example, a sale or a
lease does not require attestation. But a mortgage or a gift requires that a
mortgage deed or a gift deed must be attested by two or more witnesses.
Attestation is valid and complete when two witnesses sign the instrument.

According to the definition given in the Transfer of Property Act (Section 3),
the following essentials are required for a valid attestation:

(a) There must be at least two or more witnesses;

(b) Each witness must see (a) the executant’s sign or affix his mark to the
instrument, or (b) some other person signs the instrument in the presence
and by the direction of the executant, or (c) receive from the executant a
personal acknowledgement of his signature or mark or of the signature of
such other person; and
 5

(c) Each witness must sign the instrument, (i.e. document), in the presence of
the executant.

It is not necessary that both attesting witnesses should be present at the

same time. However, the attesting witness must have put his signature with
intention to attest. Thus, when a Register or an identifying witness puts his
signature on the document he cannot be regarded as an attesting witness
unless it is duly proved that he signed with the necessary intention to attest.

Q4) What is conditional transfer?

A4) When an interest is created on the transfer of property but is made to

depend on the fulfilment of a condition by the transferee, the transfer is
known as a conditional transfer. Such a transfer may be subject to a
condition precedent or a condition subsequent. If the interest is made to
accrue on the fulfilment of a condition, the condition is said to be condition
precedent. For instance, A agrees to sell his land to B if B marries C. This is a
condition precedent.

The condition precedent will be allowed to operate only if it is not hit by the
provisions of Section 25 of the Act. Section 25 in the first place, says that, the
condition must not be impossible to fulfil. Secondly, the condition must not
be forbidden by law. Thirdly, it should not be of such a nature that if
permitted it would defeat the provisions of any law. Fourthly, it should not
be fraudulent. Fifthly, the condition should not be such as to cause injury to
the person or property of another. And lastly the condition should not be
immoral or opposed to public policy.

A transfer may also be made subject to a contingency which may or may not
occur. Thus, an interest may be created with the condition superadded that it
shall cease to exist in case a specified uncertain event shall happen, or in case
a specified uncertain event shall not happen. This is known as condition
subsequent. Condition subsequent is one which destroys or divests the rights
upon the happening or non-happening of an event. For example, A transfers
a farm to B for his life with a proviso that in case B cuts down a certain wood,
 6

the transfer shall cease to have any effect. B cuts down the wood. He loses
his life interest in the farm.

Q5) Write Short notes on Vested interest & contingent interest

A5) The word "vested" is used in two different senses. It may mean "vested
in possession" or "vested in interest". A right is said to be "vested in
possession" when it is a right to present possession of property and it is said
to be "vested in interest" when it is not a right to present possession but a
present right to future possession.

For instance, if a land is given to A for life with a remainder to B, A’s right is
vested in possession, B’s right is vested in interest. In the above example, the
interest of B is not subject to any uncertain condition. It will come into his
possession after A’s life comes to an end. Therefore, an interest is said to be
vested when it is not subject to any condition, precedent, i.e., when it is to
take effect on the happening of an event which is certain.

An estate is contingent when the right to enjoyment depends upon the

happening of an event which may or may not happen. In short, contingent
interest is an interest which takes effect after the condition is satisfied. It is
subject to a condition precedent. E.g., A gift to A on the marriage of B creates
a contingent interest, for B may never marry at all but that contingent
interest becomes vested if and when B marries.

Q6) Write Short notes on Doctrine of Election

A6) Section 35 of the Transfer of Property Act deals with doctrine of election.
Suppose, a property is given to you and in the same deed of gift you are
asked to transfer something belonging to you to another person. If you want
to take the property you should transfer your property to someone else,
 7

otherwise you cannot take the property which is transferred to you by

someone.

Election may be defined as “the choosing between two rights where there is
a clear intention that both were not intended to be enjoyed”.

The foundation of doctrine of election is that a person taking the benefit of

an instrument must also bear the burden, and he must not take under and
against the same instrument. It is, therefore, a branch of a general rule that
no one may approbate and reprobate (Copper v. Copper (1874) H.L. 53).

However, doctrine of election could not be applied to deprive a person of his

statutory right to appear invoking extraordinary jurisdiction of the Supreme
Court under Article 136, (PR Deshpande v. MB Haribatti (1995 (2) Scale 804
SC).

Q7) Write Short notes on Rule against Perpetuity

A7) Section 14 of the Act provides that no transfer of property can operate to
create an interest which is to take effect after the life time of one or more
persons living at the date of such transfer, and the minority of some person
who shall be in existence at the expiration for that period, and to whom, if he
attains full age, the interest created is to belong.

The rule against perpetuity is based on the general principle that the liberty
of alienation shall not be exercised to its own destruction and that all
contrivances shall be void which tend to create a perpetuity or place
property forever out of the reach of the exercise of the power of alienation.

Perpetuity has been described as “exemptions from intermission or ceasing”.

A perpetuity in the primary sense of the word, “is a disposition which makes
property inalienable for an indefinite period” (Jarman on Wills, 8th ed., vol.
1, P. 284). The rule against perpetuities applies to both moveable and
immoveable property.
 8

The rule against perpetuity contains two propositions, i.e.:

(1) No transfer is valid after the life-time of one or more persons living at the
date of such transfer. Transfer can remain in effect only during the life time
of an existing person.

(2) Transfer can be extended to a person who is not in existence but if he is in

existence at the time of termination of the period of last transfer. The
moment the person is born he shall have contingent interest and after
minority i.e. after the age of 18 years, he shall have vested interest. Barring
these two conditions, a restriction on alienation of a property is void. The
rule against perpetuities is also called the rule against remoteness because it
is directed against limitations which are too remote and are expressed to
take effect beyond the maximum period permitted by law.

Q8) Write Short notes on Lease & License

A8) Lease:- According to Section 105, a "lease" of immoveable property is a

transfer of a right to enjoy property. Since it is a transfer to enjoy and use the
property, possession is always given to the transferee. The lease of
immoveable property must be made for a certain period.

The essentials of a lease are:

(1) It is a transfer of a right to enjoy immoveable property;

(2) Such transfer is for a certain time or perpetuity;

(3) It is made for consideration which is either premium or rent or both;

(4) The transfer must be accepted by the transferee.

The transferor is called the lessor, the transferee is called the lessee, the
price is called premium and the money, share, service or any other thing of
value to be so rendered is called the rent.
 9

License- A licence is a right to do or continue to do in or upon the

immoveable property of the grantor, something which would, in the absence
of such a right, be unlawful. A licence does not transfer any interest in the
property and the licence has no right to possession. A licence can be revoked
by the grantor at any time, whereas a lease cannot be revoked.

Illustration: If, A sell the fruits of his garden to B, B is given permission or

licence to enter A garden and take away the fruits.

Q9) State properties which cannot be transferred?

Ans. Section 6 of this Act contains some exceptions to the general rule that
property of any kind may be transferred. Consequently, the following
properties cannot be transferred, namely:

(a) the chance of an heir apparent succeeding to an estate, the chance of a

relation obtaining a legacy on the death of a kinsman or any other mere
possibility of a like nature cannot be transferred.

(b) A mere right of re-entry for breach of a condition subsequent cannot be

transferred to any one except the owner of the property affected thereby.

(c) An easement cannot be transferred apart from the dominant heritage.

(d) An interest is property restricted in its enjoyment to the owner personally

cannot be transferred by him.

(e) A right to future maintenance in whatsoever manner arising, secured or

determined, cannot be transferred.

(f) A mere right to sue cannot be transferred.

(g) A public office cannot be transferred nor can the salary of a public officer,
whether before or after it has become payable.
 10

(h) Stipends allowed to military, naval, air force and civil pensioners of the
Government and political pensions cannot be transferred.

Q10) Define mortgage

A10) According to Section 58 of the Transfer of Property Act, a "mortgage" is

the transfer of an interest in specific immoveable property for the purpose of
securing the payment of money advanced or to be advanced by way of loan,
an existing or future debt or the performance of an engagement which may
give rise to pecuniary liability.

The transferor is called a mortgagor, the transferee a mortgagee. The

principal money and interest the payment of which is secured for the time
being are called the mortgage money and the instrument by which the
transfer is effected is called a mortgage deed.

Characteristics of a mortgage:

(a) the mortgagee’s interest in the property mortgaged terminates upon the
performance of the obligation secured by the Mortgage.

(b) the mortgagor has a right of foreclosure upon the mortgagor’s failure to
perform.

(c) the mortgagor has a right to redeem or regain the property on repayment
of the debt or performance of the obligation.

Q11) What are the essential elements of a gift?

Ans. “Gift" is the transfer of certain existing moveable or immoveable

property made voluntarily and without consideration by one person called
the donor, to another called the donee and accepted by or on behalf of the
donee. Such acceptance must be made during the life time of the donor and
 11

while he is still capable of giving. If the donee dies before acceptance, the gift
is void.

The essentials elements of a gift are as follows:-

1. There must be a transfer of ownership.

2. The subject matter of gift must be a certain existing moveable or

immoveable property.

3. The transfer must be made voluntarily.

4. It must be done without consideration.

5. There must be acceptance by or on behalf of the donee, and such

acceptance must be made during the lifetime of the donor and while he is
capable of giving.

Q12) What is Sale?

Ans. Section 54 of the Transfer of property Act defines "sale” as a transfer of

ownership in exchange for a price paid or promised or part paid and part-
promised.

Essentials:

(a) The seller must be a person competent to transfer. The buyer must be any
person who is not disqualified to be the transferee under Section 6(h)(3).

(b) The subject matter is transferable property.

(c) There is a transfer of ownership. This feature distinguishes a sale from

mortgage, lease etc., where there is no such transfer of ownership.

(d) It must be an exchange for a price paid or promised or part paid and part
promised.
 12

(e) There must be present a money consideration. If the consideration is not

money but some other valuable consideration it may be an exchange or
barter but not a sale.

Q13) What is “Actual Notice”?

Ans. Actual notice means when a person actually knows about the existence
of a fact. The fact must be definite information given in the course of
negotiations by a person interested in the property. The information of fact
should not be a rumour or hearsay and thus is not bound by such
information.

Q14) What is mean by “instrument”?

A14) Instrument is defined in Transfer of property Act as a non-testamentary

document. A testamentary document is a will, so the definition of instrument
suggests that any document which is not the same as the nature of will is
called an instrument. The instrument is not proof of any transaction but
instead is one transaction.

Q15) What is ‘Exchange’?

A15) Sections 118 to 121 of the Transfer of Property Act, 1882 deal with
"Exchanges". When two persons mutually transfer the ownership of one
thing for the ownership of another, neither thing or both things being money
only, the transaction is called an "exchange".

The essential of an exchange are:-

(i) The person making the exchange must be competent to contract.

 13

(ii) There must be mutual consent.

(iii) There is a mutual transfer of ownership though things and interests may
not be identical.

(iv) Neither party must have paid money only.

This Section applies to both moveable and immoveable property.

Q16) Define “immovable property”?

A16) The term “immoveable property” is also not defined under Transfer of
property Act, 1882. However, it is defined in the negative sense as “the
immoveable property does not include standing timber, growing crops, or
grass”.

The General Clauses Act defines the term "immoveable property" as

“Immoveable 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” [Section 3(25)].

The Indian Registration Act expressly includes under to immoveable property

the benefits to arise out of land, hereditary allowances, rights of way, lights,
ferries and fisheries.

If the definitions of "immoveable property" as given in the Transfer of

Property Act, the General Clauses Act and the Registration Act are viewed
together, it is evident that they do not say what immoveable property is.
They only say what is either included or excluded therein.

Still, reading the definition in the Act with one in the General Clauses Act,
immoveable property will be found to include land, benefit to arise out of
land such as rent, and things attached to the earth like trees and buildings
but not standing timber, growing crops and grass. The last three things are
 14

regarded as severable from the land on which they stand and, therefore, they
are not included in the term "immoveable property".

Q17) Who is competent to transfer?

A17) According to Section 7 of the Transfer of Property Act, every person

who is competent to contract and entitled to transferable property, or
authorised to dispose of property is competent to transfer such property.

According to Indian Contract Act, a person is competent to contract when he

is a major and of sound mind and is not disqualified from contracting by any
law to which he is subject. But a minor can be a transferee as there is nothing
in the Transfer of Property Act to disqualify a person, who is a minor to be a
transferee. Thus, a mortgage can be validly executed in favour of a minor
who has paid the consideration (Hari Mohan v. Mohini, 22 C.W.C. 130,
Raghava v. Srinivasa, (1917) 60 Mad. 308). Although a minor is not
competent to be a transferor, yet a transfer to a minor is valid.

Q18) What do you mean by Ostensible Owner?

A18) An ostensible owner is a person who appears to be the owner of

immovable property even though he is not the real owner of the property.
The provisions regarding transfer by ostensible owner are governed by
section 41 of the Transfer of Property Act, 1882.

Section 41- Where, with the consent, express or implied, of the persons
interested in immoveable property, a person is the ostensible owner of such
property and transfers the same for consideration, the transfer shall not be
voidable on the ground that the transferor was not authorised to make it,
provided that the transferee, after taking reasonable care to ascertain that
the transferor had power to make the transfer, has acted in good faith.
(Section 41)
 15

The following conditions are necessary for the application of Section 41:

(i) the transferor is the ostensible owner;

(ii) he is so by the consent, express or implied, of the real owner;

(iii) the transfer is for consideration, and

(iv) the transferee has acted in good faith taking reasonable care to ascertain
that the transferor had power to transfer.

If any one of these elements is absent, the transferee is not entitled to the
protection of this section.

Q19) Write Short notes on Lis Pendent

A19) Lis means dispute, Lis pendens means a pending suit, action, petition or
the like.

Section 52 of the Transfer of property Act 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 a litigation cannot be transferred. The property
may be transferred but this transfer is subject to the rights that are created
by a Court’s decree. The doctrine of lis pendens does not apply to moveables.

For example, 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 B’s 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.

Section 52 lays down the Indian rule of Lis pendens being the legislative
expression of the Maxim- “ut lite pendente nihil innovetur” ‘During litigation
nothing new should be introduced’.
 16

In order to constitute a Lis pendens, the following elements must be present:

1. There must be a suit or proceeding in a Court of competent jurisdiction.

2. The suit or proceeding must not be collusive.

3. The litigation must be one in which right to immoveable property is

directly and specifically in question.

4. There must be transfer of or otherwise dealing with the property in

dispute by any party to the litigation.

5. Such transfer must effect the rights of the other party that may ultimately
accrue under the terms of the decree or order.

Q20) Write Short notes on Fraudulent Transfer

A20) Where a person transfers his property so that his creditors shall not
have anything out of the property, the transfer is called a fraudulent transfer.
A debtor in order to defeat or delay the rights of a creditor, may transfer his
property to some person, who may be his relative or a friend. The law does
not allow this.

Section 53 embodies the principle. It states: “Every transfer of immoveable

property made with intent to defeat or delay the creditors of the transferor
shall be voidable at the option of any creditor so defeated or delayed.”

Thus, where an owner of the property contracts a debt and then transfers his
property to someone so that the creditor cannot proceed against the
property to realise his debt, such a transfer is voidable at the option of the
creditor. The transfer is valid so long as the creditor does not challenge it in a
Court of law and gets a declaration that the transfer is invalid.
 17

Q21) Write Short notes on Part Performance

A21) Doctrine of part-performance is embodied in Section 53A of the

Transfer of Property Act.

Section 53A, was inserted by an amendment to the Act in 1929. An equitable

doctrine which allows a person who has partly performed an oral contract to
have it specifically performed or to sue for damages even though legislation
would usually render the contract unenforceable unless evidenced by
writing.

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 ready to fulfil his part of the
obligation under the contract.

Q22) State different types of mortgages. Explain any two in detail.

A22) There are in all six kinds of mortgages in immoveable property, namely

(a) Simple mortgage.

(b) Mortgage by conditional sale.

 18

(c) Usufructuary mortgage.

(d) English mortgage.

(e) Mortgage by deposit of title-deeds or equitable mortgage.

(f) Anomalous mortgage.

(a) Simple mortgage

In a simple mortgage, the mortgagor binds himself personally to pay the debt
and agrees in the event of his failure to pay the mortgage money, the
mortgagee shall have the right to cause the property to be applied so far as
may be necessary by means of a decree for the sale of property. If the
mortgaged property is not sufficient to discharge the debt, the mortgagee
can bring a personal action against the mortgagor and obtain a decree which,
like any other money decree, can be executed against other properties of the
mortgagor. In simple mortgage, no right of possession or foreclosure is
available to the mortgagee.

(b) Mortgage by conditional sale

In this type of mortgage, the property is mortgaged with a condition super

added that in the event of a failure by the debtor to repay the debt at the
stipulated time, the transaction should be regarded a sale, and in case the
loan is repaid at the stipulated time, the sale shall be invalid, or on condition
that on such payment being made the buyer shall transfer the property to
the seller.
 19

Q23) What is ‘Gift’?

A23) The provisions relating to "Gifts" have been stipulated under Sections
122 to 128 of the Act.

As per Section 122 of the Transfer of Property Act, “Gift" is the transfer of
certain existing moveable or immoveable property made voluntarily and
without consideration by one person called the donor, to another called the
donee and accepted by or on behalf of the donee. Such acceptance must be
made during the life time of the donor and while he is still capable of giving.
If the donee dies before acceptance, the gift is void.

Q24) What are the essentials of a Gift & how are gifts affected?

Ans. The essentials of a gift are as follows:-

1. There must be a transfer of ownership.

2. The subject matter of gift must be a certain existing moveable or

immoveable property.

3. The transfer must be made voluntarily.

4. It must be done without consideration.

5. There must be acceptance by or on behalf of the donee, and such

acceptance must be made during the lifetime of the donor and while he is
capable of giving.

There are two parties to the gift: donor and donee. The donor must be a
person competent to transfer; whereas the donee may be any person. The
gift can be made to any one, to an incompetent person or even to a juridical
person. The essence of a gift is that it is a gratuitous transfer.

According to Section 123, a gift of immoveable property must be made by a

registered instrument signed by or on behalf of the donor and attested by at
least two witnesses. A gift of moveable property may be made by a
registered instrument or by delivery of property. Where the donee is already
 20

in possession of the moveable property, as no future delivery is possible, the

donor may make a declaration of the gift in his favour. The declaration must
be clear and the donee must accept the gift.

A gift of immoveable property, as said above, must be affected by

registration. Where a gift in favour of someone is registered but it is not
accepted by the donee, the gift is incomplete.

If the deed of gift is executed but never communicated to the intended

donee and remains in the possession of the donor undelivered, it cannot be
compulsory registered at the instance of the donee. The reason is that the
donee did not accept the gift, the donor can at any time before such
acceptance revoke the gift. But once a gift is accepted by the donee, the
donor cannot revoke it. A gift may, however, be revoked if it is brought about
by a fraud or misrepresentation or undue influence.