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THE TRANSFER OF PROPERTY ACT, 1882

CHAPTER II1 TRANSFERS OF PROPERTY BY ACT OF PARTIES

Chapter II of the Transfer of Property Act, 1882 deals with transfers of property by act
of parties. This chapter has been divided into two parts:

Part-A—provides for rules regarding transfers of property in general, whether movable

or immovable.

Part-B—provides for rules regarding transfers of immovable property.

(A) TRANSFER OF PROPERTY, WHETHER MOVABLE OR IMMOVABLE

Part-A consists of definition of property what may be transferred, competency of

persons, operation of transfers, oral transfers, restrictions on transfers, vested interest,
contingent interest, conditional transfers, transfers for benefit of unborn persons and
elections, etc. All these provisions will be taken up under the following headings:—

I. General provisions

II. Restrictions

III. Transfer for the benefit of unborn person

IV. Transfer to a Class

V. Vested Interest

VI. Contingent Interest

VII. Conditional Transfer

VIII. Election

IX. Apportionment

VIII. ELECTION

[s 35] Election when necessary.—

Where a person professes to transfer property which he has no right to transfer, and as
part of the same transaction confers any benefit on the owner of the property, such
owner must elect either to confirm such transfer or to dissent from it; and in the latter
case he shall relinquish the benefit so conferred, and the benefit so relinquished shall
revert to the transferor or his representative as if it had not been disposed of subject
nevertheless,

where the transfer is gratuitous, and the transferor has, before the election, died or
otherwise become incapable of making a fresh transfer,

and in all cases where the transfer is for consideration,

to the charge of making good to the disappointed transferee the amount or value of the
property attempted to be transferred to him.

Illustrations
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The farm of Sultanpur is the property of C and worth Rs 800. A by an instrument of gift
professes to transfer it to B, giving by the same instrument Rs 1,000 to C. C elects to
retain the farm. He forfeits the gift of Rs 1,000.

In the same case, A dies before the election. His representative must out of the Rs
1,000 pay Rs 800 to B.

The rule in the first paragraph of this section applies whether the transferor does or
does not believe that which he professes to transfer to be his own.

A person taking no benefit directly under a transaction, but deriving a benefit under it
indirectly, need not elect.

A person who in his one capacity takes a benefit under the transaction may in another
dissent therefrom.

(1) Exception to the last preceding four rules.—Where a particular benefit is expressed
to be conferred on the owner of the property which the transferor professes to transfer,
and such benefit is expressed to be in lieu of that property, if such owner claims the
property, he must relinquish the particular benefit, but he is not bound to relinquish any
other benefit conferred upon him by the same transaction.

Acceptance of the benefit by the person on whom it is conferred constitutes an

election by him to confirm the transfer, if he is aware of his duty to elect and of those
circumstances which would influence the judgment of a reasonable man in making an
election, or if he waives enquiry into the circumstances.

Such knowledge or waiver shall, in the absence of evidence to the contrary, be

presumed, if the person on whom the benefit has been conferred has enjoyed it for two
years without doing any act to express dissent.

Such knowledge or waiver may be inferred from any act of his which renders it
impossible to place the persons interested in the property professed to be transferred
in the same condition as if such act had not been done.

Illustration

A transfers to B an estate to which C is entitled, and as part of the same transaction

gives C a coal-mine. C takes possession of the mine and exhausts it. He has thereby
confirmed the transfer of the estate to B.

If he does not within one year after the date of the transfer signify to the transferor or
his representatives his intention to confirm or to dissent from the transfer, the
transferor or his representative may, upon the expiration of that period, require him to
make his election; and, if he does not comply with such requisition within a reasonable
time after he has received it, he shall be deemed to have elected to confirm the
transfer.

In case of disability, the election shall be postponed until the disability ceases, or until
the election is made by some competent authority.

Comments

[s 35.1] Doctrine of Election (Section 35)

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"Election is the obligation imposed upon a party by courts of equity to choose between
two inconsistent or alternative rights or claims in case where there is clear
intention......... that he should not enjoy both. That he who accepts a benefit under a
deed or will must adopt the whole contents of the instrument.199"

Election means choosing between two alternative rights or inconsistent rights. If an

instrument confers two rights on a person in such a manner that one right is in lieu of
the other, that person can choose or elect only one of them. A person cannot take
under and against the same instrument.200

The doctrine of election is based on the principle of equity that one cannot take what is
beneficial to him and disapprove that which is against him under the same instrument.
One cannot approbate and reprobate at the same time. In simple words, where a
person takes some benefit under a deed or instrument, he must also bear its
burden.201 The doctrine of election may be summarized as below:—

He who accepts a benefit under a deed or will, must adopt the whole contents of the
instrument, conforming to all its provisions and renouncing every right inconsistent with it.

The rule given in section 35 can be analysed as follows:—

1. Where a person professes to transfer property which he has no right to transfer,

and

2. As a part of the same transaction confers any benefit on the owner of the
property,

3. Such owner must elect either to,—

(a) confirm such transfer, or

(b) to dissent from it

4. If he dissents from it, he shall relinquish the benefit so conferred,

5. The benefit so relinquished shall revert to the transferor or his representative as if

it has not been disposed of

[s 35.2] Transferor Professes to Transfer Property not his Own

The section begins with the statement that "where a person professes to transfer
property not his own". The word "professes" means purports, claims or acknowledges.
Such a person is not the owner of the property, therefore, he cannot transfer the
property but he can make arrangements for the transfer of the property which he does
not own. If the property is such that the transferor can transfer it, then it will pass to the
transferee without any election by the person who is given a benefit by the same
instrument. The necessary condition for the application of this doctrine is that there
should be a claim under the instrument and also a claim dehors the instrument.202

It is not necessary that the transferor should mention it that he is transferring the
property which is not his own. The knowledge of the fact that the transferor has no
authority to transfer the property is immaterial for the applicability of doctrine of
election. The second paragraph of the section says that the rule will apply whether the
transferor does or does not believe that which he professes to transfer to be his own. In
a case, A being entitled to one share of a house, transferred the entire house to B and
conferred a benefit on the owner of the other share of the house. It was held that the
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transferor intended to give the whole house, it is immaterial from what cause this
intention proceeded, whether he forgot or misunderstood his rights.203

[s 35.3] Benefit Conferred on Owner of Property

The transferor in the same transaction of transfer of property confers some benefit on
the owner of the property. The owner is given some benefit in compensation of his
ownership. The owner is one who is put to election. The occasion for election arises
only where a benefit is conferred directly on the owner of the property. Where benefit is
given indirectly, no duty to elect arises. For example, A professes to transfer the
property of B to C and gives Rs 10,000 to the wife of B. This is not the case of direct
benefit to B and thus, B has no duty to elect.

It is also necessary that the benefit and burden both must come from the same
transaction. If they come from independent sources, the transferee need not elect.
However, it is not necessary that both should be transferred from the same instrument
of transfer. They must be parts of the same transaction.

[s 35.4] Part of the Same Transaction

It is necessary for making the rule of election to operate that both the transfer and
benefit form part of the same transaction. Benefit must be given in lieu of transfer.
Benefit and transfer must be inseparable and interdependent. Where they are
independent of each other they will not be considered as parts of the same transaction.
An example may be taken of the early case of Muhammad Afzal v Gulam Kasim.204 In
this case, after the death of Nawab of Tank, the government while transferring
chiefship to Nawab's eldest son, transferred some cash allowance to the Nawab's
second son. The Nawab had already transferred in his life time villages to the second
son for his maintenance. It was held by the Privy Council that since these grants (cash
and villages) came to the second son from two different sources, they were not part of
the same transaction, and, therefore, the second son was not put to election.

[s 35.5] Owner of Property must Elect

The next requirement of his section is that the owner of the property must elect either
to confirm such transfer or to dissent from it. He may either accept the instrument with
all its contents or reject it altogether. Where he accepts the instrument he becomes
entitled to the benefit but he becomes bound to transfer the property. If he does not
accept the instrument, he retains the property and the benefit is not conferred on him.
The person electing must be the "owner" of the property. The word "owner" has been
used in a very wide sense in this section. It includes not only those who have vested
interest but also those who have contingent, reversionary and remote interest in the
property.

The third paragraph of the section says that a person taking no benefit directly under a
transaction, but deriving a benefit under it indirectly, need not elect. This means that the
benefit must be given directly to the owner in lieu of transfer of his property. For
example, if the lands of Sultanpur are settled upon C for life and after his death upon D,
his only child. A bequeaths the land of Sultanpur to B and 1000 rupees to C. C dies
intestate after the testator without making any election. D takes out administration to C
and as administrator elects on behalf C's estate to take under the Will. In that capacity
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he retains the legacy of Rs 1,000 and accounts to B for the rents of land of Sultanpur
which accrued after the death of the testator and before the death of C.

The fourth paragraph of the section says that a person who in his own capacity takes a
benefit under the transaction may in another capacity dissent therefrom. For example,
if the estate of Sultanpur is settled upon A for life and after his death upon B. A leaves
the estate to D and Rs 2,000 to B and Rs 1,000 to C, who is B's only child. B dies in
testate without making any election shortly after the testator. C takes out
administration to the estate B and as an administrator elects to keep the estate in
opposition of the will and the relinquish the legacy of Rs 2,000. C may do this and yet
claim under the will his legacy of Rs 1000.

Where the right of election was not offered to the plaintiff transferor in the sale deed, it
was held that in the absence of the right of election, the transferor could not claim that
he had elected for the alternative land in lieu of the disputed land.205

[s 35.6] Where Person Elects to Dissent

Where the owner elects to dissent from the transfer, he shall relinquish the benefit so
transferred to him and such benefit shall revert back to the transferor or his
representative as if it had not been disposed of. When property so reverts back and

(i) the transfer is gratuitous and the transferor has before election died or otherwise
became incapable of making a fresh transfer, and

(ii) in all cases where the transfer is for consideration,

it shall be the duty of the transferor or his representatives to compensate the

disappointed transferee. The amount of compensation shall be the amount or value of
the property which was going to be transferred to him, if the option has been exercised
in favour of the transaction.

Illustration

The farm of Sultanpur is the property of C and worth Rs 800. A by an instrument of gift
professes to transfer it to B, giving by the same instrument Rs 1000 to C. C elects to
retain the farm. He forfeits the gift of Rs 1000.

[s 35.7] Exception

The section also contains an exception to the last preceding four rules. Where a
particular benefit is expressed to be conferred on the owner of the property which the
transferor professes to transfer and such benefit is expressed to be in lieu of that
property, if such owner claims the property, he must relinquish the particular benefit.
However, he is not bound to relinquish any other benefit conferred upon him by the
same transaction.

[s 35.8] Mode of Election

The section also deals with the mode of election. The owner has to choose one out of
the two inconsistent rights. This choice may be express or implied from conduct.
Where the election is made by the owner in express words, it is an express election
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which is final and conclusive. But where the owner simply accepts the benefit without
expressing anything in words, it is presumed that he has elected in favour of
transaction provided—

(i) he is aware of his duty to elect, and

(ii) of those circumstances which would influence the judgment of a reasonable

man in making an election, or

(iii) if he waves inquiry under the circumstances.

Where the owner of the property having full knowledge of the circumstances and being
aware of his duty to elect accepts the benefit, it means that he has chosen in favour of
the transaction. In two circumstances, there is presumption that he has knowingly
accepted the benefit:—

(1) Two years enjoyment:—Where the owner has enjoyed the benefit for two years
without doing any act to express dissent.

(2) Impossibility:—Where the owner of the property has done some act which
renders it impossible to place the parties (persons interested in the property) in
the same condition in which they would have been as if such act had not been
done. For example, A transfers to B an estate to which C is entitled, and as part
of the same transaction gives C a coal mine. C takes possession of the mine
and exhausts it. He has thereby confirmed the transfer of the estate to B.

[s 35.9] Time Limit for Election

Time limit for the election has been prescribed by the ninth paragraph of the section.
The owner of the property has to signify his confirmation or dissent from the transfer
within one year after the date of transfer. This section says that if the owner of the
property does not, within one year after the date of transfer, signify to the transferor or
his representatives his intention to confirm or to dissent from the transfer, the
transferor or his representatives may require him to make his election after the
expiration of that period. But if he does not comply with such requisition within a
reasonable time after he has received it, he shall be deemed to have elected to confirm
the transfer.

[s 35.10] Election by the person under disability

Where the person making election suffers from some disability, the tenth paragraph of
the section provides that in such a case, the election shall be postponed until the
disability ceases or until the election is made by some competent authority on his
behalf.

[s 35.10.1] Hindu Law.—

The principle underlying this section has always been applied to Hindus. In the case of
Rungamma v Atchamma,206 the Privy Council referred to the rule that a party shall not
at the same time affirm and disaffirm the same transaction—affirm it as far as it is for
his benefit and disaffirm it as far as it is to his prejudice.
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This doctrine was applied directly in the case of Mangal Das v Runchhoddas.207 In this
case, a Hindu widow bequeathed immovable property of her husband to K and gave the
plaintiff, who was a reversionary heir, a legacy of Rs 2000. The plaintiff claimed the
legacy under the will and immovable property as heir. The court held that doctrine of
election will be applicable here and he will have to elect one or the other.

[s 35.10.2] Muslim Law.—

In the case of Sadik Hussain v Hashim Ali,208 the Privy Council applied this doctrine to
Mohammedans also.

[s 35.10.3] English Law.—

Under English Law, a transferee by electing against the transfer does not lose his
benefit but he becomes bound to make compensation out of it to the disappointed
person. Therefore, in English Law, doctrine of compensation applies in comparison to
the Indian doctrine of forfeiture. Under English Law, the person electing against the
transfer gets what remains after compensating the transferee disappointed. Secondly,
no time is fixed by English law for making an election, except when the time is limited
by the instrument itself. In Indian law, a period of one year is given for making an
election.

[s 35.11] Indian Succession Act

Sections 180 to 190 of the Indian Succession Act, 1925 contain the rule of election as
applied to Wills. Section 182 contains certain illustrations which are important from the
point of view of the rule election.

They are given below:—

(i) The farm of Sultanpur was the property of C. A bequeathed it to B, giving a

legacy of 1,000 rupees to C. C has elected to retain his farm of Sultanpur, which
is worth 800 rupees. C forfeits his legacy of 1,000 rupees, of which 800 rupees
goes to B, and the remaining 200 rupees falls into the residuary bequest, or
devolves according to the rules of intestate succession, as the case may be.

(ii) A bequeaths an estate to B in case B's elder brother (who is married and has
children) shall leave no issue living at his death. A also bequeaths to C a jewel,
which belongs to B. B must elect to give up the jewel or to lose the estate.

(iii) A bequeaths to B 1,000 rupees, and to C an estate which will, under a

settlement, belong to B if his elder brother (who is married and has children)
shall leave no issue living at his death. B must elect to give up the estate or to
lose the legacy.

(iv) A, a person of the age of 18, domiciled in India but owning real property in
England, to which C is heir at law, bequeaths a legacy to C and, subject thereto,
devises and bequeaths to B "all my property whatsoever and wheresoever", and
dies under 21. The real property in England does not pass by the Will. C may
claim his legacy without giving up the real property in England.
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1 Nothing in Chapter II is to be deemed to affect any rule of Muhammadan Law, see section 2,
Act 20 of 1929.
199 Leading Cases in Equity, White & Tudor, Vol I, Edn VIII.
200 C Beepathuma v Velasari Shankararnarayana Kadambolithaya, AIR 1965 SC 241 : (1964) 5
SCR 836 .
201 Codrington v Lindsay, (1873) 8 Ch 578 : (1873) 42 LJ Ch 526 .
202 Wollaston v King, 38 LJ Ch 398.
203 Padbury v Clarke, (1859) 42 ER 115 (117).
204 (1903) 30 Cal 843 : 30 IA 190.
205 Piara Singh v Charan Singh, AIR 2009 (NOC) 3020 (P&H).
206 (1858) 4 Moo Ind App 1 : 7 Suth WR 57.
207 (1890) 14 Bom 438.
208 (1916) 38 All 627 : 43 IA 212 : 36 IC 104.