 3.1 Kinds of Interest- Vested Interest and Contingent Interest (Sec.

19-21)

 3.2 Conditional Transfer (Sec. 25-29)

 3.3 Doctrine of Election (Sec. 35)

 3.4 Doctrine of Lis Pendense (Sec. 52)

 3.5 Doctrine of Part Performance (Sec. 53A)

 3.6 Transfer by Ostensible Owner and Fraudulent Transfers (Sec. 41 and 53)

3.1 Vested Interest and Contingent Interest (Sec. 19 to 21)

Concept of Vested Interest

 Section 19 of the Transfer of Property Act, 1882 states about Vested

Interest. It is an interest which is created in favour of a person where time is
not specified or a condition of the happening of a specified certain event.
The person having the vested interest does not get the possession of that
property but has the expectancy to receive it upon happening of a specified
certain event.

 For example, A promises to transfer his property to B on him attaining the

age of 22. B will have vested interest in A’s property till the time he does
not get the possession of it.

Important Aspects:-

 Interest should be vested: This is the basic meaning of the provision that
lays down that interest should be created in favour of a person where time is
not specified or a condition of the happening of a specified certain event. A
person should profess to transfer a particular property in order for this
interest to be created.

 Right to enjoy property is postponed: When interest is vested in a person,

he does not immediately get the possession of that property and hence
cannot enjoy that property.


Characteristics of Vested Interest

 1) Vested interest creates a present right that is in effect immediately,

although the enjoyment is postponed to the time prescribed in the transfer. It
does not entirely depend on the condition as the condition involves a certain
event.

 2) Death of transferee will not render the transfer invalid as the interest will
pass on to his legal heirs.

 3) Vested interest is a Transferable and heritable right.

Concept of Contingent Interest

 Section 21 of the Transfer of Property Act, 1882 states about Contingent

Interest. It is an interest which is created in favour of a person on a condition
of the happening of a specified uncertain event. The person having the
contingent interest does not get the possession of that property but has the
expectancy to receive it upon happening of that event but will not receive the
property if the event does not happen as the condition is not fulfilled.

 Contingent interest is entirely dependent on the condition imposed on the

transfer.

 For example, A agrees to transfer the property ‘X’ to B on the condition that
he shall secure 90 % in his exams. This condition is uncertain and the
happening of the event or not happening is in doubt and therefore B here
acquires a contingent interest in the property ‘X’. He shall get the property
only if he gets 90 % and when the condition is fulfilled.

Characteristics of Contingent Interest

 A) This interest is entirely dependent upon the condition. It only happens

when the condition is fulfilled.

 B) Death of the transferee before getting the possession of the property will
result in the failure of continent interest and the property will remain with
the transferor.
  C) Contingent interest is a Transferable right, but whether it is heritable or
not, it depends upon the nature of such any transfer and the condition.

3.2 Conditional Transfer

 Section 25 of the Transfer of Property Act, 1882 provides for Conditional

Transfer. It means that any transfer that happens on the fulfilment of a
condition that is imposed on the other party for the transfer of property.

For any kind of a conditional transfer to be valid, the condition that is

imposed should not be:

 Prohibited by law,

 Should not be an act that involves fraudulent acts,

 Should not be any act that is impossible,

 Should not be an act that is termed as violative of public policy,

 Should not be immoral

Condition Precedent

 It is given in Section 26 of the Transfer of Property Act, 1882. Any

condition that is required to be fulfilled before the transfer of any property is
called a condition precedent.

 This condition is not to be strictly followed and the transfer can take place
even when there has been substantial compliance of the condition. For
example, A is ready to transfer his property to B on the condition that he
needs to take the consent of X, Y and Z before marrying. Z dies and
afterward, B takes the consent of X and Y so the transfer can take place as
there has been substantial compliance.
Condition Subsequent

 It is given in Section 29 of the Transfer of Property Act, 1882. Any

condition that is required to be fulfilled after the transfer of any property is
called condition subsequent.

 This condition is to be strictly complied with and the transfer will happen
only after the completion of such condition.

 For example, A transfers any property ‘X’ to B on the condition that he has
to score above 75 percent in his university exams. If B fails to achieve 75
percent marks then the transfer will break down and the property will revert
back to A.

3.3 Doctrine of Election Sec. 35

Introduction to Doctrine of Election

 Election means choosing between two alternative rights.

 If two rights are provided to a person under any instrument in such a manner
that one right is more preferable than the other, he is bound to elect or
choose only one of them.

 Section 35 of the Transfer of Property Act, 1882 deals with Doctrine of

election.

• The Doctrine of election is an exeception to the general rule, “Namo dat

quod non habet” which means “no one can convey a better title than, what
he himself has.”

 Election is an obligation to choose between two alternative rights. The very

foundation of this doctrine is that the person taking a benefit under an
instrument must also bear the burden.

Understanding the Doctrine of Election

 This doctrine consists of the principle of a person exercising a choice out of

his own free will to do one thing and is founded on the equitable doctrine
 that he who accepts the benefit under an instrument or transaction of its
choice must adopt the whole of it or renounce everything.

Essential Conditions for application of the Doctrine of Election

 1. A person having no right to transfer, transferring property

 2. He must transfer some benefit on the owner of the property, as part of the
same transaction

 3. The owner must elect either to confirm the transfer or to dissent from it

3.4 Doctrine of Lis Pendens (Sec. 52)

 The doctrine of lis pendens is incorporated in the Transfer of Property Act,

1882, under Section 52.

 ‘Lis’ means litigation and ‘pendens’ means pending, literally signifying

pending litigation.

 Any action or proceeding which is pending in any court of law is said to be

lis pendens.

 The maxim representing this doctrine means that ‘during the pendency of
litigation, nothing new should be introduced and to maintain the status quo,
to abstain from doing anything which may affect any party to the litigation.

 The doctrine of Lis Pendens is based on a principle that during the pendency
of suit, the subject matter of it (i.e. the property in the suit) should not be
transferred to a third party. The crux is that when litigation is pending in
respect of any property, none of the two parties shall be permitted to transfer
the same expect with the permission of the court.

Object behind Doctrine of Lis Pendense

 Avoid endless litigation.

 To protect one of the parties to the litigation against the act of the order.

 To avoid abuse of legal process.

  The purpose of the doctrine is to protect either party to the suit against the
act of another, to avoid misuse of legal process and to restrict endless
litigation.

Essentials of Doctrine of Lis Pendens

 The basis of the doctrine is necessity, so it is immaterial as to whether the

transferee had any notice of suit pending in the court or not.

 The transferee is bound by the order of the court even if he had no actual or
constructive notice of the pending suit

 The pendency of the suit starts from the date on which the plaint is filed in
the court and ends on the date on which the final decree is passed by the
court, as mentioned in the explanation to section 52.

Some Example (Illustration)

 A rented his property to B so there is a pending suit between a landlord (A)

and a tenant (B) regarding payment of rent, then A transfers his property
during that time to another person C, the transfer shall not be affected in any
manner by the doctrine of Lis Pendens because the suit was not regarding
the title or interest of an immovable property, it was regarding the payment
of rents.

Conclusion

 The main principle underlying Section 52 of the act is to maintain and

preserve the status quo in a pending case and prevent any alteration that can
be brought to the case by the involved parties. The principle specially
mentions cases where an immovable property is directly or indirectly
involved.

 It prevents a party to a suit from being deprived of its right regarding a

certain property.

3.5 Doctrine of Part- Performance Sec. 53A

Introduction
  Under the Doctrine of Part Performance, if a person has taken possession of
a property and has performed acts in furtherance of a contract for the transfer
of that property, they may be protected and allowed to enforce their rights to
the property. This is applicable even if the contract is not in compliance with
the formal requirements of the law.

 This doctrine serves as an exception to the general rule that contracts for the
transfer of the immovable property must be in writing and registered.

 Illustration:

 Consider a scenario where A enters into a contract with B to sell

his immovable property and allows B to take possession of the property even
before the formal sale deed is executed. This contract is considered partially
performed.

 However, if A later refuses to fulfil his obligation of executing the proper

sale document and instead files a lawsuit against B, treating B as a trespasser
and seeking eviction, B can oppose A’s claim. B can argue that the contract
of transfer in his favour has already been partially performed and A should
not be allowed to backtrack on his own agreement.

Ingredients of Section 53-A for Doctrine of Part Performance

Contract for Transfer of Immovable Property

The first condition for the application of the Doctrine of Part Performance is the
existence of a contract for the transfer of immovable property in exchange for
value.

Written Contract

The contract must be in writing. If the contract for transfer is oral, Section 53-A
does not apply. In the case of V.R. Sudhakara Rao v. T.V. Kameswari, it was
ruled that the benefits of Section 53-A cannot be claimed by a person who
possesses property based on an oral agreement of sale. It is not sufficient for the
contract to be in writing; it must also be duly executed, meaning it should be
signed by the transferor or someone on their behalf.
 Valid Contract

Section 53-A only applies to contracts that are valid in all respects. The
agreement must be enforceable by law under the Indian Contract Act, 1872.

Immovable Property

This section applies solely to the transfer of immovable property. It does not
extend to agreements for the transfer of movable property, even if supported by
consideration. The defence of Part Performance is not available in relation to the
possession of movable property (Hameed v. Jayabharat Credit & Investment
Co. Ltd and Ors.).

Transfer for Consideration

The requirement for the application of Section 53-A is a written contract that
involves the transfer of immovable property in exchange for consideration. The
written contract, which serves as the basis for the possession of the property, must
clearly indicate the intention to transfer the property. If the document is vague or
unclear, Section 53-A cannot be applied. It is crucial that the terms of the written
contract can be determined with reasonable certainty (Hamida v. Humer and
Ors.).

The Willingness of Transferee to Perform their Part of the Contract

Section 53-A is rooted in the principle of equity, which states that one who seeks
equity must do equity. Therefore, for a person to claim the protection of their
possession under Section 53-A, their own conduct must be fair and just. It is an
essential requirement for the applicability of this section that the transferee
demonstrates a willingness to fulfil their obligations under the contract (Sardar
Govindrao Mahadik and Anr. vs. Devi Sahai and Ors Govind).

The Exception to Doctrine of Part Performance

 The proviso to Section 53-A of Transfer of Property Act includes an

exception in favour of a transferee for consideration who has no knowledge
of the contract or its part performance. This implies that a transferee who
 acquires the property for consideration without any knowledge of the
contract or its execution is not affected by this rule.

 Any rights the transferee may have against the transferor under this section
would not be enforceable against a bona fide transferee for value who has no
knowledge of the previous transaction.

3.6 Transfer by Ostensible Owner Sec. 41

Introduction

Section 41 of the Transfer of Property Act, 1882 deals with the transfer of
property to someone who appears to be the owner. It states that when a person acts
with the permission, whether expressed or implied, of someone who appears to be
the owner of a particular immovable property, that person is considered the
‘ostensible owner’ of that property.

An ostensible owner refers to a person who appears to have ownership of a

property, but in reality, may not be the true owner. This concept arises when
someone has been given or appears to have the authority to deal with the property
as an owner, even though the real ownership might lie with another party.

For example, in property law, an ostensible owner may hold and manage a
property in a way that makes it seem as though they own it, even if the title or legal
ownership actually belongs to someone else. The law might protect third parties
who, in good faith, deal with the ostensible owner, assuming they are the real
owner.

Essentials of Section 41

 To apply Section 41, certain conditions must be met. Here are the necessary
prerequisites:

 The person transferring the property must be the ostensible owner.

 The actual owner’s consent, either expressed or implied, is required.

  The ostensible owner must receive some form of compensation in exchange
for the property.

 The transferee must exercise reasonable caution regarding the transferor’s

authority over the property and act in good faith.

 It’s important to note that this section applies only to the transfer of
immovable property and not movable property.

Benami Transactions

 The Benami Transaction (Prohibition) Act of 1988 addresses situations

where property is transferred in someone else’s name, known as a benami
transaction. According to this Act, the person holding the property becomes
the real owner, while the benamidar (the person in whose name the property
is held) acts as a representative or trustee for the real owner.

 If a property is acquired through a benami transaction and the indicia of

ownership are entrusted to the benamidar, the real owner can only challenge
the transfer by proving that it was done without their consent and that the
buyer was aware of this fact.

Requirements of Transfer by An Ostensible Owner under Section 41

To ensure a lawful transfer by an ostensible owner under Section 41, the following
requirements must be met:

 The individual must be the ostensible owner of the property.

 The ostensible owner must hold the property with the express or implied
consent of the real owner.

 The transferee must acquire the property from the ostensible owner in
exchange for consideration.

 The transferee should exercise reasonable caution to ensure that the

transferor has the authority to make the transfer, acting in good faith.

Fraudulent Transfer Sec. 53

Introduction
 Section 53 of the Transfer of the Property Act, 1882 deals with the requirement
of the fraudulent transfer of the Property. A transfer is a fraudulent transfer of
Property if it is made to defeat or delay the creditors of the transferor or without
consideration with intent to defraud a subsequent transferee.

Section 53 of the Transfer of the Property Act and Fraudulent Transfer of

Property

 1. Object- The primary object of sub-section (1) of Section 53 of the Act is

to make assets of the Transferor available to the general body of the
creditors.

 2. Requirement-The requirement of the section is to avoid the possibility of

the retention of all the benefits by the debtor.