UNIT - II
Mr. Rudragouda M H
Assistant Professor of Law
Ramaiah College of Law
DISCLAIMER
Dear Reader,
Slides have been used as an aid for teaching
the KSLU curriculum.
Kindly read the Bare Act, and prescribed
textbooks for property law as per the KSLU
Syllabus.
In case of any doubts regarding the concepts
clarify the same at
rudragoudamh@msrcl.org
TOPICS COVERED
01 02 03
Doctrine of
Election Apportionment Ostensible
Trasnfer
04 05 06
Defective Title Improvements Fraudulent
made by bonafide Transfer & Part
owner Perfomance
DOCTRINE OF ELECTION
• Election is an obligation to choose between two inconsistent alternative
rights if the grantor has a clear intention that the grantee should not enjoy
both.
• The foundation of the doctrine of election is that the person taking a
benefit under an instrument must also bear the burden.
• Where the Person professes to Transfer of property which he has no right
to transfer and as a part of the same transaction confers any benefit on the
owner of the property, the owner must elect either to confirm such
transfer or to dissent is granted and the benefit so relinquished as if it had
not been disposed of
ILLUSTRATION
The Farm of Sultanpur is the property of C and worth of Rs. 800. A by an
instrument of Gift professes to transfer it to B, giving by the same
instrument of Rs. 1000 to C. C elects to retain the farm. He forfeits the gift of
Rs. 1000.
In the same case, A dies before the election. His representatives must out of
the Rs. 1000 pay Rs 8,00 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.
ILLUSTRATION
A person taking no benefit directly under a transaction, but deriving a benefit
under it indirectly, need not elect
A person who in his own capacity takes a benefit under the transaction may
in another, dissent therefrom.
CASE LAW
Mst. Dhanpatti v. Devi Prasad and others, 1970 SCD 174
• The law pertaining to election is set out in section 35(1) of the
transfer of property, Act.
• A transfer of property by a person, who has no right to transfer
• As a part of the same transaction, he must confer benefit to the
owner
• Owner must elect either to confirm such transfer or to dissent
from it.
• The Instant case, the plaintiff did not base their claim either on
the ground of election or on estoppel.
ANALYSIS OF SECTION
• The transferor must profess to transfer a property which he has no right to
transfer. It is immaterial whether in doing so he knows or does not know it to be
his property.
• He must confer a benefit on the owner whose property he purports to transfer to
another person
• The two things the transfer and conferring the benefit form parts of the same
Transaction
• The benefit must be directly conferred upon the owner of the property
• The benefit must be conferred on him in the same capacity in which he is the
owner of property
APPORTIONMENT
• The Expression Apportionment means a division of common funds between
several claimants
• Apportionments are of two kinds: Apportionment by time, Apportionment by
estate
• In the absence of contract or local usage to the contrary, all rents, annuities,
pensions, dividends, and other periodical payments in nature of income shall,
upon the transfer of interest of the person entitled to receive such payments be
deemed as between the transferor and the transferee, to accrue due from day to
day and to be apportionable
SECTION 36
• The section clearly lays down that all periodical income shall be accrued and apportioned
on a day-to-day basis.
• This section is applicable to inter vivos transfers (transfer between living persons) and
does not apply to transfers by operation of law.
Illustration :
• Consider ‘A’ lets his property to ‘C’ for Rs.1000/- per month. ‘C’ pays the rent amount at
the end of each month. ‘A’ sold his property to ‘B’ on 15th January. On 31st January C
will pay Rs. 500/- to ‘A’ and Rs. 500/- to ‘B’.
• Such apportionment is only done in the absence of any contract to the contrary.
APPORTIONMENT BY ESTATE
Property is divided and held in several shares,
The benefit of any obligation relating to the property as a whole passes from one
to several owners of the property
Corresponding duty shall, in the absence of a contract, to the contrary amongst
the owners, be performed in favor of each of such owners in proportion to the
value of his share in the property, provided that the duty can be severed and that
the severance does not substantially increase the burden of the obligation
Illustration
Read the bare act
OSTENSIBLE OWNER
• Appears to be true but is not true
• An ostensible owner of a property is a person who’s the name appears on the records and
is in the possession of the property but he/she never intended to own the property.
• The real test is as to what is the source of the purchase money; the motive behind the
same is to give a benami color to the possession of the property and as to who is enjoying
the benefits of the property.
• Real owner do not only differentiates between the real owner and the apparent owner of
the property but also exclude the person who hold the possession of the property in a
fiduciary capacity like agents, guardians, etc
OSTENSIBLE OWNER
• Makes others believe that one individual has complete control over his property
including the power of alienation.
• Although such person is not authorized for such alienation of the property.
• the person alienates the property in the capacity of an ostensible owner.
• Such transfer is not a gift and is done for a value or consideration in exchange of the
property.
• The transferee acts in a total bona fide manner and takes reasonable care to ascertain
that the ostensible owner has the.
• capacity to transfer such property, i.e. the transferee is not aware of the
actual/constructive notice of the facts.
OSTENSIBLE OWNER
• the real owner of the property will be prevented by this section from question the validity of
such transfer on the ground of the capacity of the ostensible owner to transfer such property,
i.e. whether the ostensible owner was competent to transfer the property or not.
CASE LAW
NirasPurbe and Ors.vs. TetriPasin and Ors. (12.07.1915 - CALHC) :
MANU/WB/0091/1915
• The husband owned a land and mutated its revenue records in the name of his wife and then
when on a pilgrimage. While the husband was on a pilgrimage the wife sold the land to a third
person.
• The purchaser of the land made a due and bona fide investigation regarding the land and
capacity of the wife to sell the property and paid the consideration for the transfer. As the land
was subjected to mortgage, the purchaser also paid off the loan and redeemed the said
CASE LAW
The husband on his return was not able to claim the land back, as before
leaving for pilgrimage he made his wife the ostensible owner of the
property by his conduct.
REQUIREMENTS FOR TRANSFER OF
PROPERTY
• Consent of the real owner
• Implied consent
• Consent cannot include consent to deceive
• Reasonable care by the transferee
• Transfer not voidable
• Burden of Proof
CONSENT OF THE REAL OWNER
Chapalabala Dasi vs. Sarat Kumari Dasi and Ors. (04.12.1940 - CALHC):
MANU/WB/0213/1940
The consent of the real owner is the only thing that gives the ostensible owner the capacity
to transfer the property hence such consent should be free and valid consent. Because the
ostensible owner's possession is justified by the real owner's consent, and since that
consent is so important, the real owner of the property should therefore be capable of
giving consent for the transfer of the property and should have provided it voluntarily.
IMPLIED CONSENT
Mulchand Hazarimal and Ors.vs. HassomalBachomal and Ors. (12.01.1937 - SIND)
: MANU/SN/0003/1937
The consent of the real owner need not be express or written; Section 41 also includes
implied consent of the real owner. As aforesaid, the ostensible owner has to be in
possession of the property by the consent of the real owner and has to hold himself out as
the real owner of the property and allow others to deal with the property as his own
CONSENT CANNOT INCLUDE CONSENT
TO DECEIVE
Amrit Kaur v Recovery Officer : MANU/PH/4063/2012
The real owner of the property may be innocent and allows the world to think
that someone else is the owner of his property, but if the transferee has done a
proper enquiry and in a bona fide manner as mentioned in the section then the
interest of the transferee will be protected
REASONABLE CARE BY TRANSFEREE
To protect oneself from the charge of willful abstinence from reasonable inquiry
and simultaneously protecting from the imputation of a constructive notice the
transferee should show the initiation of such inquiry with the help of certain
evidences like description of sale certificate, or the possibility of other sharers
present in the case of a Joint Hindu Family.
BURDEN OF PROOF
Radheshyam Agarwalla v. Bahadur Singh and Ors. (31.08.1981 - CALHC) :
MANU/WB/0133/1982.
The transferee also have to prove that he has taken reasonable care and has purchased
the property as a bona fide purchaser as per section 41. But if the transferee reports
the existence of facts that are leading to a starting point of inquiry, which may further
lead to the discovery of truth, on further investigation then the burden of proof shifts
on ther person.
• The property held by a Karta or any member of an HUF and such property is held for
the benefit or gain of the other members of such HUF and the same is purchased by a
known source of the HUF will not amount to a Benami transaction under the Act.
• A person who purchases property in the name of his spouse or any child is not subject to
the benami transaction restriction. However, the individual's known ancestors must pay
the consideration
• The property that is held by a person in the capacity of a trustee for the benefit of
another person will not amount to a benami transaction/property.
• When the property of a person is jointly held by the brother, sister, lineal descendent or
antecedent and the consideration for the same is paid by a person who is a known
individual to the owner
DEFECTIVE TITLE
• No person shall be chargeable with any rents or profits of any immovable property,
which he has good faith paid or delivered to any person of whom he is in good faith paid
or delivered to any person of whom he is in good faith held such property
• Nothwithstanding anything The person to whom such payment or delivery was made
had no right to receive such rents or profits
DEFECTIVE TITLE
A lets a field to B at a Rent of Rs. 50 and then transfers the field
to C. B, having no notice of the transfer, pay the rent to A in
good faith. B is not chargeable with the rent so paid
IMPROVEMENTS MADE BY BONA FIDE HOLDER
UNDER DEFECTIVE TITLE
• Transferee of immovable property makes any improvement on the property
believing in good faith that he is absolutely owner
• Evicted by a person having the better title
• The transferee has the right to require the person causing eviction to have the value
of improvement estimated and paid to sell his interest in the property to the
transferee.
SCOPE
• Doesn’t apply to transfer made by operation of law, applies to inter vivos
• Karnataka Scheduled Castes and Scheduled Tribes (Prohibition of Transfer of
certain Lands) Act, 1978.
• Section 51 of the Transfer of Property act would not apply
DOCTRINE OF LIS PENDENS
• Pendente lite nihil innovator (Pending Litigation no new thing to be introduced)
• Pendency of litigation from the date of filing of the case and till the case is
disposed
• Doctrine is based on the expediency
• Case shall be in a court having the jurisdiction
CASE LAW
Parveen Kumar v. Baljinder Kaur, AIR 2010 P & H 40
• Originally land was recorded in the name of petitioners husband and after his death his
brother G knowing it well that his brother’s wife was alive and being the sole legal heir.
• Khatedari rights and thereafter she has been litigating being sole legal heir of the recorded
khatedar.
• Despite the pendency the brother in law opted for alienation of the property.
• Board of Revenue was not accommodative to transfer such property
FRADULENT TRANSFER
• Transfer of the immovable property made with the intent to defeat or delay the
creditors of the transferor shall be voidable at the option of any creditor so defeated
• Transfer made without the consideration with an intent to defraud a subsequent
transferee shall be voidable at the option of such transferee
• Transfer the immovable property, intent of defeat , the suit to be brought by entire
body of creditors.
CASE LAW
Dr. Vimla v. Delhi Administration, 1963 Supp. (1) CR 585
The Supreme Court observed in this decision that the term "fraud" has two elements:
deceit and injury to the defrauded person. The harm does not just result in economic
loss. It also involves the deprivation of property or money, as well as harm to a
person's body, mind, and reputation.
CASE LAW
Mushar Sahu v. Lala Hakim Lal,(1951) 43 Cal. 521
• It will not be fraud if the debtor chooses to pay one creditor and leave
others unpaid provided that he must not retain any benefit
PART PERFORMANCE
• The Act imposes the statutory bar on the transferor to seek possession of the immovable
property from the transferee.
• Disentitles the transferor from seeking possession from the proposed transferee in
possession.
• Transferor takes the possession forcefully, the proposed transferee in possession would
be entitled to suit to enforce the bar of section 53-A of the act against the transferor.
REQUIREMENTS
• Contract to Transfer the property
• It must have been Partly Performed
• Transferee Should have performed or be willing to perform
his part of contract
CASE LAW
M Mariappa v. A K Sathyanarayawla Setty, AIR 1984 Karnataka 50
• The Property must be owned by plaintiff
• Agreement to sell the property by plaintiff to defendant
• Infurtherance the defendant should have been in possession of the
property
• The right conferred is to protect the position and that it does not
create any title on the defendant
