UNIT 1 Introduction to Property Law

 CONCEPT AND MEANING OF PROPERTY

Property is any physical or virtual entity that is owned by an individual or jointly by a

group of individuals. Here, the most important aspect of the concept of ownership and
property is the word ‘thing’, on which a person has control for use.
To consume, sell, rent, mortgage, transfer, and exchange his property. Property is any
tangible or intangible entity that is owned by a person or jointly by a group of people.
Depending on the nature of the property, an owner of the property has the right to
consume, sell, rent, mortgage, transfer, exchange, or destroy their property, and/or to
exclude others from doing these things.

 There are some Traditional principles related to property rights which include:

1. Control over the use of the property.

2. Right to take any benefit from the property.
3. Right to transfer or sell the property.
4. Right to exclude others from the property.

 KINDS OF PROPERTY

 MOVABLE PROPERTY

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 Movable Property — TPA doesn't define it, we determine whether it is immovable, and
if it is not then it is considered movable, the definitions in other Acts define it in a similar
way.
 Section 3(36) of General Clauses Act - property of every description, except immovable
property;
 Section 2(9) of the Registration Act - includes standing timber, growing crops and
grass, fruit upon and juice in trees, and property of every other description, except
immovable property;
 Section 22 of the Indian Penal Code also defines movable property to include corporeal
property of every description except land and things attached to the earth or permanently
fastened to anything that is attached to the earth.

CASE LAWS

 Shantabai v. State of Bombay (1958) Shantabai was granted the right to cut wood in
certain forests through an unregistered document.
 Fatimabibi v. Arrfana Begum (1980)
 Duncans Industries Ltd. v. State of U.P. (2000)

• Degree of Annexation— the embedded thing be removed without causing any harm to the
land, basically how easily it can be detached

• Object of Annexation — if an object is in long-term use, then immovable.

 IMMOVABLE PROPERTY

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 Definition of Immovable Property

Section 3 TPA- “immovable property” does not include standing timber, or grass.

Section 3(26) of the General Clauses Act shall include land, benefits to arise out of Iand,
and things attached to the earth or permanently fastened to anything attached to the earth

Section 2(6) of the Registration Act - includes, hereditary allowances, rights to ways, lights,
ferries, fisheries, or any other benefit to arise out of the land, things attached to the earth, or
permanent fastened to anything which is attached to the earth anything which is attached to
the earth but not standing timber growing crops nor grass

Section 3 TPA - "Attached to the earth" means—

a) Rooted in the earth, as in the case of trees and shrubs;

b) Imbedded in the earth, as in the case of walls or buildings; or

• Degree of Annexation — can the embedded thing be removed without causing any harm to
the land, basically, how easily it can be detached

• Object of Annexation — if the object is for long-term use, then immovable.

c) Attached to what is so imbedded for the permanent beneficial enjoyment of that to which
it is attached;

 TANGIBLE PROPERTY
Tangible property has a physical existence and can be touched. This type of property can
be moved from one place to another, without causing any damage. From this, we can say
that this property is movable in nature—examples: cars or other vehicles, books, timber,
electronic devices, furniture, etc.

 INTANGIBLE PROPERTY
Intangible property does not have any physical existence. These are properties with
current or potential value, but no intrinsic value of their own & cannot be touched or felt
but hold value. Examples include intellectual property like copyrights, patents or GI,
stock and bond certificates. Franchises, securities, software & many more.

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 OBJECTS OF TPA

(1) TO PROVIDE – Definite, Clear, Uniform law for the transfer of Immovable property
among living persons.
(2) IT COMPLETES THE CODE OF CONTRACT- as the Indian Contract Act does not
deal with immovable property.

 SCOPE OF TPA
1. Not an Exhaustive Law

2. Transfer Between Living Person Only, inter-vivos

3. Certain Transfers Are Excluded -------------------------(Section 57 and

Chapter IV exception)
Under the order of Courts and
According to the rules of transfer
in Muslim Law

4. Special Law Will Prevail Over TPA.

5. Limited Scope, not applicable to Punjab.

 WHAT MAY BE TRANSFERRED (Section 6)

These are the pointers when it cannot be transferred.

a. Spes successionis — Possibility property in future,

It includes:

 Chance of an estate coming to an heir in succession or

 Chance of obtaining any legacy on the death of a relative or
 Any other possibility of a similar nature.
 Illustration: - Imagine if your grandfather owns a big piece of land, and you think you
might inherit it one day. However, since he's still alive, that chance of inheriting it cannot
be sold or transferred to someone else because it's just a possibility, not a guaranteed
right.

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b. Right of re-entry: - for breach of a condition subsequent to any person other than the
owner of the property affected.

 Illustration: - Let's say you own a house, and there's a rule that if someone breaks certain
conditions, like not paying rent, you can take the house back. But you can't give that right
to take the house back to anyone else, only the owner can use it.

c. Easementary rights cannot be separated apart from the dominant heritage.

 Illustration: - If you have a right to use your neighbour’s land for a pathway, that right
can't be separated from your property. Suppose you decide to transfer the property to
someone, the right to use the pathway will transfer with the property.

d. Restricted Interest: - An interest in property restricted in its enjoyment to the owner

personally.

dd. Right to future maintenance: - Future Maintenance is for the personal benefit of the
person to whom it is granted, thus it cannot be transferred.

 Illustration: - If someone is supposed to provide you with money for your living
expenses in the future, like your parents, you can't sell that right to someone else. (Only
money that you will get in future, not past unpaid money)

e. Right to sue: -The right to sue for an indefinite sum of money cannot be transferred, if it is
the right to sue for a definite sum of money, then it is an actionable claim. An actionable
claim can be transferred.

 Illustration: - Let's say you're planning to sue someone for damages. You can't sell the
right to sue them to someone else because it's your personal legal action.

f. A public office and the salary of any public officer, whether before or after it has become
payable.

 Illustration: -If someone works for the government, their job and salary contract can't be
sold or transferred to another person.

g. Stipends/Pensions allowed to military, naval, air force and civil pensioners of the
Government and political pensions.

 Illustration: - Military, naval, air force and civil pension payments from the government
can't be given to someone else.

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h. Three Categories made

If it opposes the nature of the interest affected

If it is a transfer of unlawful object or consideration according to section 23 of ICA

If it is to a person legally disqualified to be a transferee. Example Prison inmates.

 Illustration: - No transfer can happen if it goes against the nature of what's being
transferred, like trying to sell someone a house without giving them access rights to the
house. Also, no transfers can be made for illegal reasons, like selling drugs, or to
someone who legally can't receive it, like selling alcohol to a minor.

i. Other Untransferable Interests: A tenant who has the untransferable right of occupancy
cant transfer this right, a Farmer who has agricultural land of which he has made a default
to pay revenue to the government can't transfer his interest in that land and lessee of an
estate under the management of a court of wards will not be allowed to transfer his right.
 Illustrations: - Suppose you're renting a house with a specific agreement that you can't
sublet it to someone else. Even if you want to transfer your rights as a tenant to another
person, you can't do it because your right to stay there is not transferable.
 Similarly, if you're farming land, and you owe money for taxes, you can't transfer your
farming rights to someone else.
 Lastly, if you're leasing an estate that's under the management of a Court of Wards (a
legal entity that manages property for minors or incapacitated individuals), you can't
transfer your lease to another person.

Conditions are of two types: -

1. Conditions Precedent: Put prior to the transfer and the actual transfer depends upon the
compliance of those conditions.
2. Conditions Subsequent: To be fulfilled after the transfer, these conditions affected the
rights of transferees after the transfer.

 PERSON COMPETENT TO TRANSFER (SECTION 7)

7. Persons competent to transfer. —Every person competent to contract and entitled to

transferable property, or authorised to dispose of transferable property not his own, is

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competent to transfer such property either wholly or in part and either absolutely or
conditionally, in the circumstances, to the extent and in the manner, allowed and prescribed
by any law for the time being in force.

Generally, this section says that-

To enable a person to transfer a property, he must satisfy the following conditions -

(1) He must be competent to contract, and

(2) He must have title to the property or be authorised to transfer if it is not his own.

The word "transfer" includes-

Sale, Mortgage, Lease, Gift and Exchange.

By Sec. 11 of the Contract Act, every person is competent to contract if he

fulfils these three conditions

(1) Age of Majority: The transferor must have attained the age of majority. Under Section 3
of the Indian Majority Act, of 1875, a person attains majority at the age of 18 and, if a
guardian is appointed under the Guardians and Wards Act, of 1890, he would attain majority
at the age of 21.

(2) Sound Mind: Under Section 12 of the Contract Act, a person is of sound mind for the
purpose of making a contract if he is capable of understanding it and forming a rational
judgment as to its effect upon his interests.

(3) Disqualified to Contract: A person who is disqualified from contracting by any law to
which he is subject is incapable of making a transfer also. Thus, if a person whose property is
under the management of a Court of Wards transfers such property, the transfer is void.

 Conditions which Restrain the Alienation (Section 10)

When a property is subjected to a limitation or condition which absolutely restrains the

transferee to part with or dispose of his interest, such conditions shall be void as per section
10. Restraint on the alienation is said to be absolute when it totally takes away the right of
disposal.

Exceptions:

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Transfer to a woman or for her benefit (Not Hindu/Muslim/Buddhist):
Property may be transferred to or for the benefit of a married woman with the condition of
restraint to alienation and that condition shall not be void.

 Illustration: -Suppose a father wants to gift a piece of land to his daughter upon her
marriage, but he's concerned that her husband might try to sell it. He can include a
condition that the daughter can't sell or mortgage the land during her marriage. This
condition would be valid because it's intended to protect the woman's interest in the
property.

Lease: Conditional transfer is valid in the case of the lease when the condition is for the
benefit of the lessor or for those who are claiming under him because a Lease is
fundamentally the transfer of just right of enjoyment and not the transfer of Ownership.

 Illustration: Let's say you lease a house from someone, and the lease agreement states
that you can't sublease the house to anyone else. This condition is valid because it
benefits the owner of the property (the lessor) by ensuring they know who is occupying
the property.

UNIT 2

TRANSFER FOR AN UNBORN CHILD (EXTRACT OF SECTION 13)

Essential Elements of Section 13

1. No Direct Transfer
2. Prior Interest ex-A person with a life interest
3. Absolute Interest (The entire property must be transferred to the unborn person)

 Section Breakdown
1. The interests of the unborn person must be preceded by a prior interest of
someone
Illustration: A, the original owner transfers a piece of land to B for their lifetime, and
after B's death, the land goes to C's unborn child.

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  A (Original Owner) ➔ B (Lifetime Interest) ➔ C's Unborn Child
2. The unborn person must be in existence when the prior interests come to an end.
Illustration: Continuing from the previous illustration, when B passes away, C's child must
already be born or in existence for the transfer to be valid. Otherwise, the property will revert
back to A.
 A ➔ B ➔ C's Born Child (Ends)
3. The interest created in favour of the unborn person must be the whole of the
interest remaining of the transferrer
Illustration: All the powers that had vested in A, shall be transferred to C’s unborn child,
any partial transfer of powers cannot be made.
 A ➔ B ➔ (Whole Interest) C's Unborn Child
So, altogether:
 A (Original Owner) ➔ B (Lifetime Interest) ➔ C's Unborn Child (Whole
Interest)
CASE LAW: Tagore v. Tagore (1872) - The Privy Council observed that a foetus/infant in a
womb is considered a person in existence for the purpose of making a gift to an unborn child.
(Continuing the previous illustration) This means if B dies and C’s child is in the foetus, the
transaction will succeed.

RULE AGAINST PERPETUITY

Section 14 ‘Rule against perpetuity’ limits the maximum time period beyond which property
cannot be transferred.
 Starting from the date that the transferor transfers the property + lifetime of the last
prior interest holder’s + gestation period(foetus) of the unborn beneficiary + 18 years,
(‘Age of majority of person).
This period is called the perpetuity period, and the vesting of the property in the transferee
cannot be postponed beyond this limit.

Illustration: - A, wants to transfer property to D’s Unborn child, and Makes both B and C
Life beneficiaries, this would be invalid as it contradicts the rule against perpetuity.

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 Exceptions to the rule of Perpetuity

 Transfer to charities or for public benefit- Section 18 of TPA, rules against

perpetuity won’t apply when the transfer is in favour of the public viz. advancement of
religion, knowledge, commerce, health, safety or any other object beneficial to
mankind.

VESTED AND CONTINGENT INTEREST

# VESTED INTEREST
Interest is created in favour of a person without specifying the time and term when it
is to take effect or on the happening of a certain event (which must happen).
1. Immediate effect: The interest is vested right after the transfer is initiated. Nothing
can stop the interest from vesting in the person in favour of whom the transfer is to be
made.
2. Time of vesting: The transferor can specify a particular time as to when the interest
will be vested in the person who will receive the property.
3. Death of the transferee: If the transferee dies before getting the property in his
possession, the interest vested in him will now vest in his legal heirs and they will get
the possession of that property once the condition is fulfilled.
Illustration:- A, the landowner, decides to transfer a piece of land to B. The transfer
deed simply states that B will inherit the property. As a result, B immediately acquires
a vested interest in the property upon the transfer.
Illustration:- A, the landowner, decides to transfer a piece of land to B. The transfer
deed states that B will get a certain amount of property after 5 years. As a result, B
will immediately acquire a vested interest, but just the transfer is postponed.
Illustration:- (Conditional limitation) A, the land owner, decides to Transfer a
piece of land to B but the transfer will stay at the transferred position only if B,
marries till the age of 35, suppose he doesn't the property will revert back to the
original Owner.
Point to notice- The transferee will still get the property even if the transferee dies,
after the death of the transferee the property will be bestowed to its heirs.
Case Law:- Lachman v. Baldeo, a person transferred a deed of gift in favour of another
person but directed him that he would not get possession of that property until the
transferor himself died. The transferee will have a vested interest even though his right
of enjoyment is postponed.

# CONTINGENT INTEREST

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Section 21: Contingent Interest
The interest created in favour of a person will take effect only on the happening of a specified
uncertain event (Which may or which may not happen)
Contingent Interest becomes Vested Interest on happening/not happening the uncertain
event. It is merely a Promise of interest on fulfilment of the condition.
Illustration:- Suppose John transfers his farm to his son David, but with the condition that
David will only get the farm if he graduates from college. Until David graduates, his interest
in the farm is uncertain or contingent upon his graduation.
Exception:- Enjoying the benefits arising out of the property.
Illustration: Let's say Mr. Johnson transfers a piece of land to Tim when he is 20 years old.
According to the exception, Tim's interest in the land is not contingent because Mr Johnson
also arranges for Tim to receive all the income generated by the land until he turns 25. This
means Tim gets to enjoy the benefits of the land even though he doesn't have full ownership
until he reaches 25.
Section 22. Transfer to members of a class who attain a particular age.
Illustration:- Mr. Smith transfers the beach house to his four grandchildren: Anna (22), Ben
(24), Carol (26), and Dave (23). According to this section, only Carol (26) will immediately
own her share of the property because she's the only one who meets the condition of being at
least 25 years old. Anna, Ben, and Dave will not have ownership until they turn 25.
Section 23. Transfer contingent on happening of specified uncertain event.-
1. Uncertain Event: The event that needs to happen for the transfer of property to take
effect is uncertain, meaning it may or may not occur.
2. No Mention of Time: If the transfer specifies an uncertain event but doesn't mention any
time frame for that event to occur, then certain conditions apply.
3. Failure of Transfer: The transfer fails if the uncertain event doesn't happen before, or at
the same time as, the intermediate or precedent interest ceases to exist. In simpler terms,
if the event doesn't happen before the conditions for the transfer are no longer valid, then
the transfer fails.
Illustration: If Tom gets married at any point in the future, he'll inherit the house according
to his parents. However, if Tom never gets married or if he gets married after the death of his
parents, the transfer of the house to him fails because the specified uncertain event (his
marriage) didn't happen before, or at the same time as, the intermediate or precedent interest
(the parents' ownership of the house) ceased to exist (due to their passing away).

RULE OF ELECTION

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The term Election means "to choose".
Definition:
The rule of election deals with situations where a person (the transferor) tries to transfer
property that they don't own (belonging to another person, the owner) and simultaneously
provides a benefit to the owner. The owner must choose (elect) to either accept the benefit
and allow the transfer or reject the benefit and reclaim their property.
Key Points:
1. Unauthorized Transfer:
o The transferor makes a transfer of property (e.g., land, house, car) that belongs
to someone else without having the legal right to do so.
2. Benefit Conferred:
o To compensate for the unauthorized transfer, the transferor offers a benefit
(e.g., money, another piece of property, a valuable item) to the actual owner of
the property.
3. Election by the Owner:
o The owner of the property is then put in a position where they need to make a
choice:
 Confirm the Transfer: If the owner decides to accept the benefit, they
effectively confirm the transfer of their property to the third party. This
means the owner cannot later claim the transferred property.
OR
 Dissent from the Transfer: If the owner rejects the benefit, they do
not confirm the transfer, and they retain their right to the property. The
third party does not get to keep the property, and the owner can reclaim
it.
Illustrations:
1. Example 1: Unauthorized Transfer of Land
o Scenario: Alice (transferor) gives Bob a piece of land that actually belongs to
Charlie (owner).
o Benefit: Alice offers Charlie a valuable painting.
o Charlie's Election: Charlie can either:
 Accept the painting and let Bob keep the land, or
 Reject the painting and take back his land from Bob.
2. Example 2: Unauthorized Transfer of a Car

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 o Scenario: David (transferor) transfers Emily’s car to Frank without Emily’s
consent.
o Benefit: David gives Emily a gold necklace.
o Emily's Election: Emily can either:
 Accept the necklace and let Frank keep the car, or
 Reject the necklace and reclaim her car from Frank.
Legal Provisions:
 The concept of election is covered under Section 35 of the Transfer of Property Act,
of 1882.
 The section emphasizes that the owner must choose to either affirm or dissent from
the unauthorized transfer when a benefit is conferred as part of the transaction.
Important Considerations:
1. Timing of Election: The election must be made within a reasonable time after the
benefit is conferred.
2. Informed Decision: The owner must be fully informed about the unauthorized
transfer and the benefit offered to make an effective election.
3. Failure to Elect: If the owner does not make an election within a reasonable time, it
may be presumed that they have elected to confirm the transfer by accepting the
benefit.
Case Law
Valliammai V Nagappa (1967), the Supreme Court (SC) held that the question of election
arises only when the transferee takes the benefit directly under the transaction.

Apportionment
Definition: Apportionment refers to the division and distribution of income, benefits, or
obligations related to a property. The concept ensures that various parties receive their fair
share of income or benefits derived from the property, or equally bear any obligations related
to it.
Types of Apportionment:
1. Apportionment by Time (Section 36 of TPA)
2. Apportionment by Estate (Section 37 of TPA)
1. Apportionment by Time (Section 36):
Definition: Apportionment by time deals with the division of income or benefits accruing
over a period of time, ensuring that each party receives a proportionate share according to
their entitlement period.

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Key Points:
 Income such as rent, interest, or dividends that accrues over time is divided based on
the duration for which each party is entitled to it.
 Ensures fair distribution of income from a property when ownership or entitlement
changes over time.
Illustrations:
 Scenario: A property is rented out for $1,200 per. After 6th month of the year, the
property ownership transfers from Owner A to Owner B. Owner A is entitled to the
rent for the first 6 months ($600), and Owner B is entitled to the rent for the
remaining 6 months ($600).
 If a tenant pays $100 monthly rent and the property is sold on the 15th of a month, the
seller (previous owner) and buyer (new owner) will each receive rent proportional to
their ownership duration in that month.
2. Apportionment by Estate (Section 37):
Definition: Apportionment by estate deals with the division of income or obligations based
on the proportionate share of each party's ownership in the property.
Key Points:
 Applies when a property is owned by multiple parties, each having a specific share or
interest.
 Income or obligations (like repairs) are divided based on each party's share in the
property.
Illustration:
1. Scenario: A property generates $10,000 annually from rent. The property is owned by
three co-owners: A (50% share), B (30% share), and C (20% share).
Apportionment: The rental income is divided based on their ownership shares:
o A receives $5,000 (50% of $10,000), B receives $3,000 (30% of $10,000), C
receives $2,000 (20% of $10,000).
2. If a property incurs $1,000 in repair costs, the costs will be divided based on
ownership shares. For the same ownership shares (A: 50%, B: 30%, C: 20%), the
costs are:
A pays $500, B pays $300, C pays $200.
Important Considerations:
 Timing and Fairness: Apportionment ensures that the division of income or
obligations is fair and corresponds to the exact period of entitlement or proportionate
ownership.

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  Legal Provisions: Sections 36 and 37 of the Transfer of Property Act, of 1882,
govern the rules for apportionment, ensuring legal backing for fair division.

An Ostensible Owner

Definition:
An ostensible owner is a person who appears to be the owner of a property but does not have
actual ownership rights. This person has been given the authority by the real owner to deal
with the property as if they were the owner. The concept ensures protection for third parties
who act in good faith, relying on the ostensible owner's authority.

Key Points:
1. Appearance of Ownership:
o The ostensible owner looks like the true owner to third parties.
o The real owner has given the ostensible owner the authority to represent the
property.
2. Authority to Transfer:
o The ostensible owner has the legal power to transfer the property.
o This power is given by the real owner, either expressly or impliedly.
3. Good Faith and Consideration:
o The third party who transacts with the ostensible owner must act in good faith.
o The transaction must be for valuable consideration (i.e., something of value is
exchanged).
4. Protection of Third Parties:
o Third parties are protected under the law if they deal with the ostensible owner in
good faith and without knowledge of the real owner's rights.

Requirements:
1. Consent of Real Owner: The real owner must have given express or implied consent
to the ostensible owner to act as the owner of the property.
2. Good Faith of Transferee: The person receiving the property (transferee) must act in
good faith, believing that the ostensible owner has the right to transfer the property.
3. For Consideration: The transferee must provide valuable consideration for the
property.

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Illustration:
o Scenario: Alice owns a piece of land. Alice allows Bob to appear as the owner
of the land for business purposes.
o Third Party (Charlie): Charlie wants to buy the land.
2. Transaction:
o Appearance: Bob appears to be the owner of the land to Charlie.
o Authority: Alice has given Bob the authority to manage the land.
o Good Faith: Charlie, acting in good faith, believes Bob is the true owner and
pays Bob for the land.
3. Outcome:
o Protection: Charlie is protected under Section 41 because he acted in good faith
and provided valuable consideration.
o Valid Transfer: The transfer of land to Charlie is valid, even though Alice is the
real owner.

UNIT 3

 Doctrine of Lis-pendence
Lis pendens is a Latin word that means “pending litigation”.
lis pendens is enshrined under Section 52 TPA.
It is based on a legal maxim ut lite pendente nihil innovetur which means nothing new
should be introduced, during a pending litigation.
This doctrine states that no property may be transferred when a lawsuit relating to it is
pending.
Illustration: - Imagine two parties, A and B, are in a legal dispute over ownership of a piece
of land. A files a lawsuit against B, claiming that B unlawfully acquired the land. The court
begins proceedings to resolve the dispute. While the lawsuit is ongoing, B tries to sell the
land to a third party, C, without the court's permission. However, according to this section,
any transfer during the lawsuit stays on hold, unless authorized by the court.

Conditions for applicability

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 The suit should be pending in a competent court.
 The suit must be directly and specifically related to an Immovable property.
 The suit should not be Collusive/ Malafide
Exception: Transfer by order of Court.

# Transfers Pendente Lite are NOT Void. It works as a hold.

Requirement of Notice to transferee? — Bellamy v. Sabine (1857)- No, there is no
requirement for the notice to the third party if the transfer is done during an ongoing case,
transfer of property will go to hold anyway.

 FRAUDULENT TRANSFER (SECTION 53)

Section 25 (IPC) "Fraudulently” A person is said to do a thing fraudulently if he does that

thing with intent to defraud but not otherwise.

Good faith: A thing is deemed to be done in good faith where it is done honestly, whether
it is done negligently or not does not matter.
Indications of a fraudulent transfer:
• Debtor sold everything keeping nothing to himself.
• Consideration is not adequate while selling property to a third person.
• The transfer is made secretly.
• Debtor tries to transfer in a way that goes out of reach to the creditors.

Section 53 says that a transfer of immoveable property is fraudulent when

it is made:
1. With intent to defeat or delay the creditors of the transferor shall be voidable at the
option of those creditors.

Illustration: - Mr A owes money to several creditors but is unable to repay their debts. In an
attempt to avoid paying his creditors, Mr. A decides to transfer a valuable piece of land that
he owns to his friend, Mr. B, without receiving any payment in return.
After the transfer, Mr A's creditors discovered the transaction and realised that Mr A
fraudulently transferred the property to Mr B in order to avoid paying his debts. Under
Section 53(1) of the law, the transfer of the property made with the intent to defeat or delay
the creditors can be voided at the option of any creditor affected by the transfer.

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2. Without consideration with the intent to defraud a subsequent transferee shall be
voidable at the option of such transferee.

Illustration: -under Section 53(2), if Mr B, as a subsequent transferee, received the property

without paying any consideration and with the knowledge that the transfer was made to
defraud creditors, he can also choose to void the transfer.
In summary, Section 53 allows creditors or subsequent transferees affected by fraudulent
property transfers to take legal action to void such transfers and reclaim the property.

Where section 53 does not Apply.

 Transfer in good faith for consideration.
 Any law relating to insolvency for the time being enforced.

 PART PERFORMANCE (Section 53A)

The doctrine simply means that when two people enter into an agreement and one of the
parties creates contracts, presuming that the other party will also perform its obligations. So,
if the other party later denies or acts fraudulently by refusing to fulfil his duties as mentioned
in the agreement, the doctrine of part performance is applied to safeguard the interest of the
party who performed acts in furtherance of the agreement.
Illustration: -Suppose Mr. A agrees to sell his house to Mr. B for a certain amount of money.
They sign a written contract outlining the terms of the sale, including the price, the property
details, and the date of transfer.
After signing the contract, Mr. B pays a portion of the agreed-upon price to Mr. A as a token
of his commitment to the deal. In part performance of the contract, Mr. B also moves into the
house and starts making improvements to it, as agreed upon in the contract. (possession)
However, before the transfer can be completed, Mr A changes his mind and decides not to
sell the house to Mr B.(ownership)
Here the right of possession of B will be secured by section 53A part performance

# Essentials for the Application of Doctrine of Part Performance

• There must be a written contract for the transfer of an immovable property signed by the
transferor or by someone authorized to sign on his behalf. The contract should give out the
terms of the transfer with reasonable certainty.
• There must be consideration.
• The transferee must have done some act in furtherance of the contract.
• The transferee must have possession as a result of this contract.
• The transferee should have performed his part of the deal or is willing to perform it.

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# The transferor will still be the real owner until and unless the ownership is transferred
through a REGISTERED DEED.
Proviso: nothing in this section shall affect the rights of a transferee for consideration who
has no notice of the contract or of the part performance?
Protection under this doctrine can only be used as a shield against the transferor for
protecting your possession and not against 3rd parties who don’t know the contract.
CASE LAW: Prabodh Kumar Das v. Dantmara Tea Co. Ltd. (1940)

UNIT 4

SALE- MEANING
Section 54: Sale Defined
Sale is the transfer of ownership in exchange for
• Price paid or
• Promised or
• Partly paid and partly promised.

Essentials of Sale
a. Transfer of Ownership (Conveyance).
b. Seller should be the owner of immovable property.
c. Parties should be competent at the date of sale (Major + Sound mind).
d. Subject Matter — The Property must be in existence at the time of sale.
e. Price — Money Consideration should be there, adequacy is irrelevant. (They can buy/sell it
at any price)

Sale how made: Sale can be made only by a registered instrument for the
following.
• Tangible immovable property of the value of 100 Rs. and upwards,
• Other intangible immovable property Ex, rights to do fishing in a pond.
• Reversion- The "right to reversion" refers to a property owner's entitlement to regain
possession of their property after a specific event or period of time has occurred.

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Illustration: - Mr. Smith owns a piece of land and decides to lease it to Mr. Johnson for a
term of 10 years. According to the lease agreement, Mr. Johnson can use the land for
agricultural purposes during this period, but he must return the land to Mr. Smith at the end
of the lease term.
In this scenario, Mr Smith retains the right to reversion, meaning that once the lease term of
10 years expires, the land automatically reverts back to him.

 LIABILITIES AND RIGHTS OF THE SELLER AND THE BUYER

BEFORE COMPLETION OF SALE
Liabilities of a seller
 Disclosure of material defects (Section 55(1)(a))
Illustration: - Mr. Smith is selling his house to Ms. Jones. He knows that there is a
hidden structural issue with the foundation that could significantly affect the value of the
property. However, Mr Smith fails to disclose this defect to Ms Jones before the sale.
After purchasing the house, Ms. Jones discovered the structural problem, which was not
apparent during her initial inspection. In this case, Mr. Smith is liable for not disclosing
the material defect, as required by Section
 Production of title deeds for inspection (Section 55(1)(b))
Illustration: -Ms. Jones, the buyer, requests Mr. Smith, the seller, to provide all the title
documents related to the property for her inspection before completing the sale. However,
Mr. Smith refuses to produce these documents, causing suspicion about the property's
legal status. As per Section 55(1)(b), Mr. Smith is obligated to produce the title deeds for
inspection upon the buyer's request. Therefore, his refusal to do so constitutes a breach of
his liability as a seller.
 Answer relevant questions regarding his title or the property (Section 55(1)(c))
Illustration: -During the negotiation process, Ms. Jones asks Mr. Smith several questions
regarding the property's legal title and any encumbrances it may have. However, Mr.
Smith provides vague or evasive answers, failing to disclose important information about
the property's history. This behaviour violates Mr Smith's obligation under Section 55(1)
(c) to answer relevant questions truthfully and to the best of his knowledge.
 Execute a proper conveyance of the property (Section 55(1)(d))
Illustration: -After receiving the full payment from Ms. Jones, Mr. Smith refuses to
execute a proper conveyance of the property by signing the necessary sale deed. Despite
repeated requests from Ms. Jones, Mr. Smith delays or avoids completing this essential
step in the sale process. By failing to execute the conveyance as required by Section 55(1)
(d), Mr. Smith breaches his liability as a seller under the Transfer of Property Act.
 Take reasonable care of the property and title deed (Section 55(1)(e))
Illustration: -Before the completion of the sale, Mr. Smith neglects to maintain the
property adequately, leading to damage and deterioration of its condition. Additionally,
he fails to store the title deeds securely, resulting in their loss or damage. As per Section

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 55(1)(e), Mr. Smith is obligated to take reasonable care of the property and title deeds
until the delivery to the buyer, but his negligence in this regard constitutes a breach of his
liability as a seller.
 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 except
if the buyer purchased the property with all the encumbrances.

Rights of a Seller
 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
 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 confide 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. If there are any encumbrances existing on the
property at the time of sale, the buyer is free to deduce such amount from the
consideration he has to pay. It is in correspondence with the duty of the seller to
execute a proper conveyance.

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 to the seller in anticipation of delivery. 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. This
clause uses the words- “…such possession of the property as its nature admits.” It
refers to the nature of possession. For instance, in the case of tangible immovable
property, physical control is to be given over property. In the case of intangible
immovable property, the possession is symbolic.
 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. The rights or interest created by the sale shall vest with the transferee

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 and may be enforced by every person in whom that right or interest is for the whole or
any part thereof from time to time is vested.
 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. Proviso (a) to Section 55(3) states that
if a seller retains any part of the property comprised in the documents, he is entitled to
keep the documents as well. Proviso (b) also imposes the same duty on the buyer of
the greatest value when the property is sold to different buyers. However, in both
cases, such a person must furnish such documents and their true copies to other
buyers at their request. They are also under an obligation to keep the documents safe
unless prevented from doing so by fire or other inevitable accidents.

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 which
is in the hands of the buyer or any transferee without consideration or any transferee
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 or part from the date
on which possession has been 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.
Parceling by subsequent purchaser

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MORTGAGE
Definition:- A mortgage is the transfer of an interest in specific movable property for the
purpose of securing payment for money advanced or to be advanced by way of loan and
existing or future debt or performance of an engagement which gives rise to a liability.
A mortgage is when you give someone an interest in a piece of property (like a house or land)
to make sure you pay back the money you borrowed, owe, or will owe in the future. It's like a
guarantee for a loan or debt.
Illustration:- Buying a House with a Loan: Imagine you want to buy a house, but you don't
have all the money upfront. So, you take a loan from the bank. The bank then puts a
mortgage on the house. This means if you don't pay back the loan, the bank can take the
house to get its money back.

ELEMENTS
a) There must be a transfer of an interest.
b) The transfer of interest must be in specific immovable property.
c) The transfer must be made to secure money, Debt or Performance of an engagement
which may give rise to liability.

MORTGAGOR
The person Who transfers the interest in the property in a Mortgage is known as a Mortgagor.

MORTGAGEE
A mortgagee is a person in whose favour the mortgage is created.

MORTGAGE MONEY
The principal money and interest of which payment is secured for the time being are called
mortgage money.

MORTGAGE DEED
The instrument by which transfer is affected in a mortgage is known as a mortgage deed.

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ACCESSION TO MORTGAGED PROPERTY (SECTION 70)
When you mortgage a property to someone (the mortgagee), any additions or improvements
made to that property afterwards become part of the mortgage. This means the mortgagee has
a right to these additions or improvements for the security of the loan unless there's a
different agreement.
Illustration:- If someone mortgages a piece of land for building to another person, and later
builds a house on that land, the mortgagee also has a right to the house in addition to the land
as part of the security for the loan.

 THERE ARE 6 TYPES OF MORTGAGES

1) SIMPLE MORTGAGE. The mortgagor binds himself 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 sold by the order of the court.

A simple mortgage happens when you borrow money using your property as security, but
you don't give up possession of the property. Instead, you promise to pay back the money
personally
Illustration:- Imagine you own a small apartment building. You need money for a personal
project, so you decide to get a loan using the building as collateral. However, you don't move
out of the building or give it to the lender. Instead, you promise to pay back the loan. But if
you fail to pay, the lender has the right to sell the building to recover the money.

2) MORTGAGE BY CONDITIONAL SALE. The property is mortgaged with a condition

that in the event of a failure by the debtor to repay the debt at the stipulated time, the
transaction should be regarded as a sale. And in case the loan is repaid at the stipulated
time, the sale shall be invalid.

Illustration:- Let's say you own a piece of land and need money. You agree to sell the land
to a friend but with a condition. If you can't pay back the money you borrowed by a specific
date, your friend gets to keep the land permanently. However, if you do pay back the money
on time, the sale agreement becomes void, and you keep the land. Or, if you pay back the
money, your friend has to transfer the land back to you. This arrangement is called a
mortgage by conditional sale.
3) USUFRUCTUARY MORTGAGE. An usufructuary mortgage happens when the owner
of a property gives possession of it to the lender. The lender can then keep possession
until the loan is paid off. During this time, the lender can collect rent or profits from the
property, either as interest on the loan or as partial payment of the loan.

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Illustration:- Imagine you own a farm but need money. You give possession of the farm to
the lender. The lender can now live on or rent out the farm and collect the profits. They can
use this money as payment towards the loan you borrowed. Once you pay off the loan, you
regain full control of the farm.
4) ENGLISH MORTGAGE. An English mortgage occurs when the borrower agrees to
repay the loan by a certain date. They then transfer ownership of the property to the
lender. However, there's a condition that the lender will transfer the property back to the
borrower once the loan is fully repaid.
Illustration:- Imagine you want to borrow money to start a business. You agree to an English
mortgage with a lender. You transfer ownership of your house to the lender as security for the
loan. You promise to repay the loan by a specific date. Once you pay off the loan, the lender
agrees to transfer the ownership of the house back to you. So, it's like temporarily giving up
ownership of your house to secure a loan

5) MORTGAGE BY DEPOSIT OF TITLE DEEDS. A mortgage by deposit of title deeds

happens when a borrower in specific towns, like Calcutta, Madras, and Bombay, or in any
other town specified by the government, gives their property documents to a lender as
security for a loan.
Illustration:- Imagine you live in Calcutta and need a loan. You go to a lender you give the
lender the documents that prove you own your property. By giving these documents to the
lender, you're using them as security for the loan. If you can't repay the loan, the lender can
use these documents to claim ownership of your property.
6) ANOMALOUS MORTGAGE. An anomalous mortgage is basically any type of
mortgage that doesn't fit into the categories of simple mortgage, mortgage by conditional
sale, usufructuary mortgage, English mortgage, or mortgage by deposit of title-deeds.
Illustration:- Imagine you want to borrow money to renovate your family home. However,
you come up with a unique agreement with the lender. Instead of following one of the typical
mortgage types, you agree on a special arrangement. For example, you might agree to repay
the loan in instalments based on a percentage of your future earnings from a business you're
starting. Since this agreement doesn't fit into any of the standard mortgage types, it's
considered an anomalous mortgage.

Rights and Duties of Mortgage

Rights of Mortgage
Right of Redemption
According to section 60 of TPA 1882, it is the important right of the mortgagor is the right to
redeem the mortgage.
1. Once the mortgage period gets over, then it is the right of mortgagor to get the property
back after paying the money to the mortgagee.

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2. Redemption is a legal right and it cannot be destroyed by any agreement.
3. The mortgagee has to give all the documents related to the mortgage transaction to the
mortgagor such as the mortgage deed, and property papers.
4. The mortgagee has to give possession of the property to the mortgagor.

Right to transfer to a third party

1. According to section 60A of TPA, a mortgagor can authorise a mortgagee to transfer the property
to a third person.

2. And because of this, the mortgagor can pay the debt to the mortgagee by taking a loan from that
third person.

Right to inspection and production of documents

1. According to section 60B of TPA, a mortgagor can inspect all the documents relating to the
mortgage and also he can inspect the property mortgaged.

2. And all the costs and expenses incurred during the inspection can be paid by the mortgagee.

Right to accession
1. According to section 63 of TPA, a mortgagor has the right to take in accession after the
redemption of the mortgage.

Right to improvement
1. According to section 63A of TPA, if any improvement is made to the property where the property
is in possession of the property, then the mortgagor has the right to take that improvement with that
property.

2. But if the improvement is made to the property to save it from destruction, then in such case the
mortgagor has to give the cost of that improvement.

Right to a renewed lease

1. According to section 64 of TPA, the property is given in a mortgage and if the mortgagor renews
the lease then at the time of redemption, the mortgagor will get all the benefits arising out of that
lease.

Right to grant a lease

According to section 65A of TPA, a mortgagor has the right to gant a lease of which is lawfully in
possession with the mortgagee & such lease will be binding on the mortgagee too
There are many conditions on which such a lease can be granted.
1. That lease should be according to the laws.
2. No rent or premium shall be paid in advance.
3. The lease shall not contain a covenant for renewal.
4, The lease shall come into effect within months from the date on which it was made.

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5. In the case of the lease of buildings, the duration of the (ease shall not exceed three years)

Duties/Liabilities of Mortgagor
Transfer of Property Act has also conferred some duties on the mortgagor. The following are the
duties of a mortgagor:
1. Duty to avoid waste, section 66 of TPA
2. Duty to indemnify for defective title
3. Duty to compensate mortgagee
4. Duty to direct rent of a lease to a mortgagee

Duty to avoid waste (section-66)

Generally, it is the duty of the mortgagor not to do any act which reduces the value of the mortgaged
property. Further, the waste is divided into two parts.
Active waste: In Active waste, a mortgagor is not liable for minor waste.
Permissive waste: If the mortgagor does any act which leads to a reduction of the value of the
property, then the mortgagor will be held liable.

Duty to indemnify for defective title

A defective title is a title when a third party starts claiming or interfering with the mortgaged property.
Then is a liability for the mortgagor to compensate for the expenses incurred by the mortgagee for
protecting the title of that property.

Duty to compensate mortgagee

If the property is in possession of the mortgagee and he is paying all the taxes and other public charge,
then in such case, it is the duty of the mortgagor to pay all the expenses to the mortgagee.

Duty to direct rent of a lease to mortgagee

If a property which is mortgaged is given on lease, then it is the duty of the mortgagor to direct the
lessee to pay the rent to the mortgagee.

Lease
Definition of Lease
Lease Section 105: A lease is a legal agreement where one person (the landlord) allows
another person (the tenant) to use a property, such as a house, apartment, or land, for a
specific period of time in exchange for regular payments (rent). The tenant has the right to
use the property, but the landlord still owns it.

Essentials of a lease

27
 o Parties must be competent: The parties in a lease agreement should be competent to
enter into a contract. Lesser should be entitled to a property and have absolute rights
over that property.
o Right of possession: Ownership rights are not transferred in a lease, only the
possession of the property is transferred.
o Rent: Consideration for a lease can be taken in the form of a rent or premium.
o Acceptance: Lessee, who is to get the interest in the property after lease, has to accept
the lease agreement along with the time period and terms & conditions imposed on the
transfer.
o Time Period: A lease always takes place for a particular time period which is to be
specified in the lease agreement. It can be relaxed at the option of the lessor.
What happens when the lease agreement does not prescribe the time period of the lease?
Section 106 provides for the duration of the lease in the absence of the lease agreement. It
lays down that in the absence of a contract, the lease can be ended by both parties to the lease
by issuing a notice to quit. The prescribed time period always commences from the date of
receiving the notice to quit. The following are the circumstances:

Rights and liabilities of Lessor and lessee

The rights of the lessor
1. A lessor has a right to recover the rent from the lease which was mentioned in the
lease agreement.
2. The lessor has a right to take back the possession of his property from the lessee if the
lessee commits any breach of condition.
3. The lessor has a right to recover the amount of damages from the lessee if there is any
damage done to the property.
4. The lessor has a right to take back the possession of his property from the lessee on
the termination of the lease term prescribed in the agreement.

Liabilities of the lessor

1. The lessor has to disclose any material defect relating to the property which the lessee
does not know and cannot with ordinary supervision find out.
2. The lessor is bound by the request of the lessee to give him the right of
possession over his property.
3. The lessor can enter into a contract with the lessee if he agrees to abide by all terms
and conditions prescribed in the agreement, he can enjoy the property for the rest of
the time period without any interference with an obligation to pay the rent later on.

Rights of the lessee

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 1. During the period the lease is in effect if any alteration is made (alluvion for the time
being in force) then that alteration will come under that same lease.
2. If a significant part of the property that has been leased is destroyed wholly or partly
by fire, by flood, by war, by the violent acts of the mob or by any other means
resulting in its inefficiency of being a benefit for the lessee. If this happens, the lease
is voidable at his option.
There is a proviso to this section that states if the damage is done due to any act of the lessee
himself, this remedy will not be available for him.
1. Lessee has the right to deduct any expenses he has made for repairs in the property
from the rent if the lessor has failed to in reasonable time.
2. Lessee has a right to recover any such payment which a lessor is bound to make by
can deducting it from the interest of the rent or directly from the lessor. He has this
right when the lessor has neglected to make that required payment.
3. Lessee has a right to detach all things that he may have attached in the property or
earth. His only obligation is that he has to leave the property in the same condition as
he received it.
4. When a lease is of unspecified duration in the lease agreement, the lessee or his legal
representative has a right to collect all the profits or benefits from the crops which
were sown by the lessee at that property. They also have a right of free ingress and
egress from such property even if the lease ends.
5. Lessee has a right to transfer absolutely the property or any part of his interest in that
property by sub-leasing or through mortgaging. Lessee is not independent of the terms
and conditions mentioned in the lease agreement.

Liabilities of the lessee

1. Lessee is under an obligation to disclose all related material facts which are likely to
increase the value of the property for which the lessee has an interest in and the lessor
is not aware of.
2. Lessee is under an obligation to pay the rent or premium which is settled upon in the
agreement to the lessor or his agent within the prescribed time.
3. Lessee is under an obligation to maintain the property in the condition that he initially
got the property on commencement of the lease and he has to return it in the same
condition.
4. If lessee gets to know about any proceedings relating to the property or any
encroachment or any interference, then lessee is under an obligation to give notice to
the lessor.
5. Lessee has a right to use all the assets and goods which are on the property as an
owner would use which is preserving it to the best of its nature. He is although under
obligation to prevent any other person from using that asset or good for any other
purpose from what was prescribed in the lease agreement.

29
 6. The lessee cannot attach any permanent structure without the consent of the lessor
except for the purpose of agriculture.
7. Lessee is under an obligation to give the possession of the property back to the lessor
after the expiry of the prescribed term of the lease.

How does a Lease end?

Determination of lease
Section 111 states the determination of the lease, which lays down the ways in which the
lease is terminated:
1. Lapse of time – When the prescribed time of the lease expires, the lease is terminated.
2. Specified event – When there is a condition on time of lease depending upon the
happening of an event.
3. Interest – Lessor’s interest to lease the property may cease, hence resulting in the
termination of the lease.
4. Same owner – When the interest of both lessor and lessee are transferred or vested in
the same person.
5. Express Surrender – This happens when the lessee ceases to have an interest in the
property and comes into a mutual agreement with the lessor.
6. Implied Surrender – When the lessee enters into a contract with another for the lease
of property, this is an implied surrender of the existing lease.
7. Forfeiture – There are three ways by which a lease can be terminated:
 When there is a breach of an express condition by the lessee. The lessor may get the
possession of the property back.
 When the lessee renounces his character or gives the title of the property to a third
person.
 When the lessee is termed as insolvent by the banks, and if the conditions provide for
it, the lease will stand terminated.
8. Expiry of Notice to Quit – When the notice to quit by the lessor to the lessee expires, the
lease will also expire.

EXCHANGE

Sections 118 to 121 of the Transfer of Property Act, 1882 (TPA) deals with the concept of
Exchange. It is the same as sale but differs in consideration. Here the consideration is another
thing, not money.

Exchange

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  Section 118 of TPA defines Exchange.
 This Section states that 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.
 A transfer of property in completion of an exchange can be made only in the manner
provided for the transfer of such property by sale.
 The definition does not exclude the payment of money altogether. If one of the two
properties which are to be exchanged exceeds the other in value, the transfer would
nonetheless be an exchange, even if some money is paid by the owner of the property
in addition in order to equalize the value of both properties.
 Illustrations:
o Exchange of X’s pen for Y’s book.
o A’s house worth Rs. 2000 is to be exchanged for B’s field worth Rs. 1200 and
in pursuance of this bargain, B agrees to pay A Rs. 800 in case. Such a
transaction is an exchange.
Essentials of Exchange
 There must be a minimum of two parties and two properties, one of each belonging
to each one of them.
 No other form of consideration should be involved besides the properties.
 There must be a transfer of a thing for another thing and both or either of these things
may be movable or immovable.
 The object of exchange must not be unlawful.
Right of Party Deprived of Thing Received in Exchange
 Section 119 of TPA deals with the right of a party deprived of a thing received in
exchange.
 It states that if any party to an exchange or any person claiming through or under such
party is by reason of any defect in the title of the other party deprived of the thing
or any part of the thing received by him in exchange, then, unless a contrary intention
appears from the terms of the exchange, such other party is liable to him or any
person claiming through or under him for loss caused thereby, or at the option of the
person so deprived, for the return of the thing transferred, if still in the possession of
such other party or his legal representative or a transferee from him without
consideration.
Rights and Liabilities of Parties
 Section 120 of TPA deals with the rights and liabilities of parties.

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  It states that save as otherwise provided in this Chapter, each party has the rights and
is subject to the liabilities of a seller as to that which he gives, and the rights and is
subject to the liabilities of a buyer as to that which he takes.
In exchange, each party is subject to the rights of the buyer and seller in relation to the
property that he receives and gives respectively.

Gift

Section 122 of the Transfer of Property Act defines a 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 called the donee.
The gift must be accepted by the donee.

Parties to a gift transfer

Donor
The donor must be a competent person, i.e., he must have the capacity as well as the right to
make the gift. This implies that at the time of making a gift, the donor must be of the age of
majority and must have a sound mind. Registered societies, firms, and institutions are
referred to as juristic persons, and they are also competent to make gifts. A gift by a minor or
insane person is void.

Donee
Donee does not need to be competent to contract. He may be any person in existence at the
date of making the gift. A gift made to an insane person, a minor, or even to a child existing
in the mother’s womb is valid subject to its lawful acceptance by a competent person on
his/her behalf. Juristic persons such as firms, institutions, or companies are deemed as
competent donee and the gift made to them is valid.

Essential elements
There are the following five essentials of a valid gift:

1. Transfer of ownership

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 2. Existing property
3. Transfer without consideration
4. Voluntary transfer with free consent
5. Acceptance of the gift
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.

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.

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
considerations and thus, property transferred in consideration of love and affection is a
transfer without consideration and hence a gift. A transfer of property made in consideration
for the ‘services’ rendered by the donee is a gift. But, a property transferred in consideration
of donee undertaking the liability of the donor is not gratuitous, therefore, it is not a gift
because liabilities evolve pecuniary obligations.

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 free consent. Free consent is when the donor has the complete freedom to make
the gift without any force, fraud coercion, and undue influence. The donor’s will in executing
the deed of the gift must be free and independent. A voluntary act on a donor’s part also
means that he/she has executed the gift deed in full knowledge of the circumstances and

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nature of the transaction. The burden of proving that the gift was made voluntarily with the
free consent of the donor lies on the donee.

Acceptance of gift
The donee must accept the gift. Property cannot be given to a person, even in gift, against
his/her consent. The donee may refuse the gift as in cases of non-beneficial property or
onerous gift.
Section 122 provides that the acceptance must be made during the lifetime of the donor and
while he is still capable of giving. The acceptance that comes after the death or incompetence
of the donor is no acceptance. If the gift is accepted during the life of the donor but the donor
dies before the registration and other formalities, the gift is deemed to have been accepted
and the gift is valid.

Modes of making a gift

Section 123 of the Transfer of Property Act deals with the formalities necessary for the
completion of a gift. The gift is enforceable by law only when these formalities are observed.
This Section lays down two modes for effecting a gift depending upon the nature of the
property. For the gift of immovable property, registration is necessary. In case the property is
movable, it may be transferred by the delivery of possession. The mode of transfer of various
types of properties is discussed below:

Immovable properties
In the case of immovable property, registration of the transfer is necessary irrespective of the
value of the property. Registration of a document including a gift deed implies that the
transaction is in writing, signed by the executant (donor), attested by two competent persons
and duly stamped before the registration formalities are officially completed. In the case
of Gomtibai v. Mattulal, it was held by the Supreme Court that in the absence of a written
instrument executed by the donor, attestation by two witnesses, registration of the instrument
and acceptance thereof by the donee, the gift of immovable property is incomplete.
The doctrine of part performance is not applicable to gifts, therefore all the conditions must
be complied with. A donee who takes possession of the land under an unregistered gift deed
cannot defend his possession on being evicted. The following must be kept in mind regarding
the requirement of registration:
 Registration of the gift of immovable property is a must, however, the gift is not
suspended till registration. A gift may be registered and made enforceable by law
even after the death of the donor, provided that the essential elements of the gift are
all present.
 In case the essential elements of a valid gift are not present, the registration shall not
validate the gift.
It has been observed by the courts that under the provisions of the Transfer of Property Act,
Section 123, there is no requirement for delivery of possession in case of an immovable gift.
The same has been held in the case of Renikuntla Rajamma v. K. Sarwanamma that the mere
fact that the donor retained the right to use the property during her lifetime did not affect the

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transfer of ownership of the property from herself to the donee as the gift was registered and
accepted by the donee.
Movable properties
In the case of movable properties, it may be completed by the delivery of possession.
Registration in such cases is optional. The gift of a movable property effected by delivery of
possession is valid, irrespective of the valuation of the property. The mode of delivering the
property depends upon the nature of the property. The only things necessary are the transfer
of the title and possession in favour of the donee. Anything which the parties agree to
consider as delivery may be done to deliver the goods or which has the effect of putting the
property in the possession of the transferee may be considered as a delivery.

Actionable claims
Actionable claims are defined under Section 3 of the Transfer of Property Act. It may be
unsecured money debts or right to claim movables not in possession of the claimant.
Actionable claims are beneficial interests in movable. They are thus intangible movable
properties. Transfer of actionable claims comes under the purview of Section 130 of the Act.
Actionable claims may be transferred as gift by an instrument in writing signed by the
transferor or his duly authorised agent. Registration and delivery of possession are not
necessary.

A gift of future property

Gift of future property is merely a promise which is unenforceable by law. Thus, Section
124 of the Transfer of Property Act renders the gift of future property void. If a gift is made
which consists of both present as well as future property, i.e., one of the properties is in
existence at the time of making the gift and the other is not, the whole gift is not considered
void. Only the part relating to the future property is considered void. Gift of future income of
a property before it had accrued would also be void under Section 124.

A gift made to more than one donee

Section 125 of the Act says that in case a property is gifted to more than one donee, one of
whom does not accept it, the gift, to the extent of the interest which he would have taken
becomes void. Such interest reverts to the transferor and does not go to the other donee.
A gift made to two donees jointly with the right of survivorship is valid, and upon the death
of one, the surviving donee takes the whole.

Provisions relating to onerous gifts

Onerous gifts refer to the gifts which are a liability rather than an asset. The word ‘onerous’
means burdened. Thus, where the liabilities on a property exceed the benefits of such
property it is known as an onerous property. When the gift of such a property is made it is
known as an onerous gift, i.e., a non-beneficial gift. The donee has the right to reject such
gifts.
In case the onerous gift is made to a minor and such donee accepts the gift, he retains the
right to repudiate the gift on attaining the age of majority. He may accept or reject the gift on

35
attaining majority and the donor cannot reclaim the gift unless the donee rejects it on
becoming a major.

Universal donee
The concept of universal donee is not recognised under English law, although universal
succession, according to English law is possible in the event of the death or bankruptcy of a
person. Hindu law recognises this concept in the form of ‘sanyasi’, a way of life where
people renounce all their worldly possessions and take up spiritual life. A universal donee is a
person who gets all the properties of the donor under a gift. Such properties include movables
as well as immovables. Section 128 lays down in this regard that the donee is liable for all the
debts and liabilities of the donor due at the time of the gift. This section incorporates an
equitable principle that one who gets certain benefits under a transaction must also bear the
burden therein. However, the donee’s liabilities are limited to the extent of the property
received by him as a gift. If the liabilities and debts exceed the market value of the whole
property, the universal donee is not liable for the excess part of it. This provision protects the
interests of the creditor and makes sure that they are able to chase the property of the donor if
he owes them.

Suspension or revocation of gifts

Section 126 of the Act provides the legal provisions which must be followed in case of a
conditional gift. The donor may make a gift subject to certain conditions of it being
suspended or revoked and these conditions must adhere to the provisions of Section 126. This
Section lays down two modes of revocation of gifts and a gift may only be revoked on these
grounds.

Revocation by mutual agreement

Where the donor and the donee mutually agree that the gift shall be suspended or revoked
upon the happening of an event not dependent on the will of the donor, it is called a gift
subject to a condition laid down by mutual agreement. It must consist of the following
essentials:
 The condition must be expressly laid down
 The condition must be a part of the same transaction, it may be laid down either in the
gift deed itself or in a separate document being a part of the same transaction.
 The condition upon which a gift is to be revoked must not depend solely on the will of
the donor.
 Such conditions must be valid under the provisions of law given for conditional
transfers. For eg. a condition totally prohibiting the alienation of a property is void
under Section 10 of the Transfer of Property Act.
 The condition must be mutually agreed upon by the donor and the donee.
 Gift revocable at the will of the donor is void even if such condition is mutually
agreed upon.

Revocation by the rescission of the contract

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Gift is a transfer, it is thus preceded by a contract for such transfer. 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 option of such revocation lies with the donor and cannot be transferred, but the legal
heirs of the donor may sue for revocation of such contract after the death of 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.

Bonafide purchaser
The last paragraph of Section 126 of the Act protects the right of a bona fide purchaser. A
bona fide purchaser is a person who has purchased the gifted property in good faith and with
consideration. When such a purchaser is unfamiliar with the condition attached to the
property which was a subject of a conditional gift then no provision of revocation or
suspension of such gift shall apply.

Actionable Claim
Actionable Claim: An actionable claim is a right to receive money or benefits from
someone, which isn't backed by any physical property (like a house or a car). If the person
owing the money or benefits doesn't fulfil their promise, you can take legal action to get what
you're owed.
Section 3 defines the term actionable claim. It provides that an actionable claim means a
claim to unsecured debt (bina girvi rakhe loan) or to any beneficial interest in movable
property not in the possession of the claimant, which the courts recognise as affording
grounds for relief, whether such debt or beneficial interest existing, accruing conditional or

Key Characteristics:
1. Debt or Beneficial Interest (promise): It involves a claim to a debt or a beneficial
interest.
2. Unsecured: The claim is not secured by immovable property or specific movable
property.
Illustrations
1. Debt Not Secured by Property

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Example:
 Scenario: Alice lent Bob $1,000, and Bob agreed to pay it back in 6 months.
 Actionable Claim: Alice has an actionable claim against Bob for the $1,000 debt
because it is not secured by any property. If Bob doesn't repay, Alice can take legal
action to recover the debt.

2. Beneficial Interest in a Contract

Example:
 Scenario: Charlie has a contract with a company that promises to pay him $500 every
month for consulting services.
 Actionable Claim: Charlie's right to receive the monthly payments is an actionable
claim because it is a beneficial interest arising from the contract and is not secured by
any property.

3. Not an Actionable Claim: Secured Debt

Example:
 Scenario: Dana took a loan of $5,000 from a bank and secured it with her car.
 Not an Actionable Claim: This is not an actionable claim because the debt is secured
by movable property (the car).

Instances of Actionable Claims

Some examples of actionable claims are:
1. Claim for arrears of rent.
2. Claim for money due under the insurance policy.
3. Claim for return of earnest money.
4. Right to get back the purchase money when the sale is set aside.
5. Right of a partner to sue for an account of the dissolved partnership firm.
6. Right to claim benefit under a contract for the purchase of goods
7. Right to get the proceeds of a business.

Actionable claims are essentially unsecured debts or beneficial interests. They give the holder
the right to take legal action to recover the money or enforce the interest. If the claim is
secured by any property, it does not fall under actionable claims.

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By keeping these illustrations in mind, you can better understand what constitutes an
actionable claim under the Transfer of Property Act.

UNIT 5: Easement

Easement
Nature of Easement:
Definition: An easement is a right that one person has over the land of another for a specific
purpose. It allows the holder of the easement (the dominant owner) to use the land of another
(the servient owner) in a particular manner, without possessing it.
Key Points:
 Limited Use: Easements grant specific rights, such as the right of way, right to light,
or right to drainage, rather than full ownership or possession of the land.
 Permanent: Easements are generally enduring and can pass on to future owners of
the dominant and servient properties.
 Legal Right: Easements are recognized and enforced by law, typically under statutes
like the Indian Easements Act, of 1882.

Essentials of Easements
1.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. This is because as per the definition, it is the right exercised
by the owner or occupier of one land for enjoying the benefit of his/her land, over the land of
some other person. Dominant and servient heritage cannot be one. Thus, the existence of two
properties that are separate from each other is essential.

2. Separate owners
For exercising the right of easements, owners of the two properties shall be different and not
a single person.

3. Beneficial Enjoyment
The object of easements is that the dominant owner enjoys it in a way which includes express
and implied benefits.

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4. Positive or Negative
Easements can be both positive and 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.
In a right of easement an owner of dominant heritage can do an act or prevent the servient
owner from doing something but he cannot bind the servient owner to do something for him.
The elementary right exists only when two heritages are adjacent to each other. It is a right in
rem, which means a right available against the whole world. Easement as a right is always
annexed to the dominant tenement. It is a right of re-aliena which means a right over a
servient tenement and not on one’s own land.

Kinds of Easements
Public Easement
A public easement grants a certain defined area of land for public use. An example
would be the granting of public access of a portion of the landowner’s property for a park or
tour.

Private Easement
Private easements occur when a property owner sells an easement to an individual. This
maybe for a number of reasons, including giving a neighbor driveway access, or sharing
a sewer line or well with a neighbour.

Continuous Easements:
o Definition: Continuous easements are those that are used or enjoyed without
interruption, such as a right of way or a right to light.
o Examples: A pathway that is used regularly by the dominant owner to access their
property, or windows that have continuously provided light for a certain period.

Discontinuous Easements:
o Definition: Discontinuous easements are those that are used intermittently, such as
the right to draw water from a well on another's land or the right to hold a fair on a
specific date each year.
o Examples: Seasonal rights to use a road for agricultural purposes or occasional rights
to fish in a pond on another's property.

Apparent Easement:

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An apparent easement is one which is shown by some permanent sign which, upon
careful inspection by a competent person, would be visible to him.
Illustration: For example- There is a drain from A’s land to B’s land and from there it
led to an open yard. This can be visible through a clear inspection and is an apparent
easement careful inspection by a person familiar with such matters. These are apparent
easements.

Non-apparent Easement:
A non-apparent easement is one that has no such sign.
Illustration: A right annexed to A's house to prevent B from building on his own land.
This is a non-apparent easement. Another example to explain non-apparent easement is
that the right to stop construction over a certain height.

Easement Rights
An easement holder is entitled to do whatever is reasonably necessary to fully utilize
the property for the purpose for which the easement was created. The property owner
may also use the land as long as such use does not interfere with the purpose of the
easement.
The following rights are recognized as easements, even if there are no official
documents or agreements:

1. Aviation Easement:
The right to use the airspace over a property, flying above a certain altitude, where
needed for spraying of property or other agricultural purposes.

2. Storm Drain Easement:

The right to install storm drains to carry rainwater to a river, wetland, or other body
of water.

3. Sidewalk Easement:
The right of the public to use sidewalks in front of a public area.

4. Beach Access Easement:

The right for neighbouring residents to access a public beach, even if the access

41
crosses private property.

5. Dead End Easement:

The requirement for a landowner to grant the public access to the next public way,
even if such access crosses on his property.

6. Conservation Easement:
The right of a land trust to limit development is usually done for the purpose of
protecting the environment.

Modes of Acquisition of Easements:

1. Grant
2. Customary Easement
3. Easement by Necessity
4. Prescriptive Easement
5. Easement by Prior Use

Grant
It may be granted or reserved in a deed or other legal instruments by the owner. The
grant may be, express or implied from the circumstances and conduct of the parties to
the easement.

Customary Easement
According to Section 18 of the Act, an easement may be acquired by virtue of a local
custom. Such easements are called customary easements. A valid customary easement
must possess the same characteristics as a valid custom.

Easement by Necessity
According to Section 13 of this Act, situations often arise when one property owner
must cross another’s land for a crucial purpose, such as accessing their land and home.
A landowner cannot be denied access to his home or property, and this is generally
taken into account in the deeds when the land is originally divided.

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Prescriptive Easement
According to Section 15 of this Act, a prescriptive easement occurs when someone
acquires easement over another’s land for a specific purpose. This differs from
easement by necessity as the person acquiring the easement only uses the property for
a set amount of time.

A landowner may simply grant permission for the other individual to use the property
on a limited basis, but if access is denied, the individual must file a claim of easement
by prescription, allowing the court to make a ruling.

Easement by Prior Use

An easement by prior use is based on the notion that, on occasion, landowners intend to
form an easement, but forget to include it within the deed. In this case, five elements
are needed to establish an easement by prior use:
 Common ownership of both properties at any one time
 A severance of the properties
 Use of easement before and after the severance
 Notice of the easement
The easement is for necessary and beneficial use
For example, Bob owns two separate lots, one of which provides access to a public
street, the other sits behind it. Bob’s driveway starts on the second lot and runs
through the first lot to the public street. He sells the street-adjacent lot and forgets
to specify the driveway area as an easement in the deed. Most likely, the court will
determine Bob is entitled to an easement by prior use, as it is necessary for him to
access his property from the street.

Disturbance of Easements
Disturbance of easements refers to actions or interference by the servient owner (the owner
of the land burdened by the easement) that hinder or obstruct the enjoyment of easement
rights by the dominant owner (the owner benefiting from the easement). Disturbance can
occur in various forms, such as physical obstruction, interference with access, or actions that
prevent the exercise of the easement. The law provides remedies for the dominant owner to

43
address and rectify such disturbances, ensuring their right to use and enjoy the easement as
originally intended.

Examples of Disturbance:
 Physical Obstruction: The servient owner erects a fence or builds a structure that
blocks the right of way easement, preventing the dominant owner from accessing their
property.
 Interference: The servient owner parks vehicles in a manner that obstructs the
pathway easement, making it difficult for the dominant owner to pass through.
 Prevention of Use: The servient owner installs barriers or locks gates, denying the
dominant owner access to a water source or other easement rights.

Legal Remedies for Disturbance:

 Injunction: The dominant owner can seek a court injunction to stop the servient
owner from continuing the disturbance.
 Damages: Compensation may be claimed for any losses or inconvenience caused by
the disturbance.
 Specific Performance: In cases where monetary compensation is inadequate, the
court may order the servient owner to remove the obstruction or cease interfering with
the easement.

Extinction of Easements
Extinction of easements refers to the termination or ending of easement rights permanently
or temporarily. Easements can be extinguished through various legal means, as outlined in
the Indian Easements Act, of 1882, such as by release, prescription, merger of properties, or
destruction of the dominant or servient heritage. The extinction of easements removes the
rights of the dominant owner to use the servient land in the prescribed manner, either by
mutual agreement, legal requirement, or changes in circumstances that make the easement
impractical or unnecessary.

Examples of Extinction:
 Release: The dominant owner voluntarily relinquishes their easement rights through a
written agreement with the servient owner.
 Merger: The same person acquires ownership of both the dominant and servient
properties, eliminating the need for the easement.
 Destruction: The servient land is destroyed to such an extent that it can no longer
support the easement, leading to its automatic extinction.
 Non-Use: The easement falls into disuse for a statutory period, and the servient owner
obstructs its exercise, resulting in its extinguishment by prescription.

Legal Consequences of Extinction:

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  Once an easement is extinguished, the rights and obligations associated with it cease
to exist.
 The dominant owner loses the right to use the easement, and the servient owner is
relieved of any burden associated with accommodating the easement.

Suspension of Easements
Section 49 of the Act provides that easement can be suspended under the following
circumstances-
1. An easement is or can be suspended when the dominant owner becomes entitled to the
possession of servient heritage for a limited interest. An example which can be stated
here to explain the concept is that A has a right of easement over B’s land. In the
future A takes B’s land on rent, here A becomes the occupier of B’s land. Thus, the
easement is suspended.
2. When the servient owner becomes entitled to the possession of dominant heritage for
a limited interest, the easement is suspended.
Thus, where both the dominant and servient owner becomes one, easement is suspended.

Revival of Easements
Section 51 of the Act provides for the situations wherein easement suspended or
extinguished can be revived, which are as follows-
1. When an easement is extinguished by the destruction of either of the heritages then it
can be revived-
 If the heritage is restored in 20 years.
 If the heritage is rebuilt in 20 years
2. In the case of unity of ownership, if the unity breaks due to some reason, then elementary
right can be revived and also through an order of a competent court.

Difference between Licenses and Easements

License Easements

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 1. License is a form of personal right attached 1. Right of easement is a right appurtenant to
to an immovable property. immovable property.

2. It is a right in personam. 2. It is a right in rem.

3. It is a right which can be annexed to the

3. This right cannot be attached.
property to which it is attached.

4. License is revocable. 4. Easements are not revocable at all.

5. It is permission given by the licensor i.e. the

5. It is acquired as a right.
grantor.

Difference Between Lease and License

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