Vepa Sarathi Textbook Chapter 1-6

Chapter 1
Immovable Property
IMMOVABLE PROPERTY
The first broad categorisation of property is into movables and immov
ables. There is no definition of movable property in the Transfer of
Property Act, 1882; however, the general understanding is that any object
or thing which is capable of being moved or displaced is movable prop
erty. Section 3(36), General Clauses Act, 1897 defines movable property
as property of every description except immovable property. The Indian
Registration Act, 1908 states that movable property is property of every
other description except immovable property, but includes standing tim
ber, growing crops and grass, fruit upon and juice in trees. The reason
for this is that the intention with which timber trees are planted and
crops and grasses sown is that they will someday be cut and turned into
movables. Therefore, though the trees and crops and grasses are rooted
in immovable property, they were always intended to be movables.
Similarly, fruit trees are planted with the intention that the fruit will be
picked and the juice harvested. It is important that fruit trees themselves
are not included in the definition of movable property but only the fruit
upon and the juice in such fruit trees. Another facet of movable property
is that it should be capable of being moved or displaced, but it is not
necessary that the movement or displacement should occur by human
intervention. For example, electricity is movable property. A current of
electricity is created when electrons move from one atom to another.
Electricity cannot be moved or touched like other objects. Humans can
not themselves move the electrons from one atom to another. However,
just because electricity cannot be moved or touched like other objects, it
will not be excluded from the category of movables.1
Since the Act deals primarily with transfer of immovable property
and since the definition of movable property relies so heavily on the
definition of immovable property, our first step is to find out what is
1. State of AP v NTPC Ltd, (2002) 5 SCC 203.
CASE PILOT
4 LAW OF TRANSFER OF PROPERTY [Chap. J
“immovable property” and that involves the primary question, namely*

what is “property”? Property is the total wealth of a person. It may con'
sist of land and buildings, a mortgage right which the person may have
over another’s land, the debts which may be owing to him from others,
any insurance money due to him, cheques received by him, etc. This
is so because, suppose A owns a plot of land. B may have a mortgage
over it and C may be the tenant in actual occupation and cultivating it-
Ordinarily, we speak of A as the owner, B as the mortgagee and C as the
lessee. But in fact B is the owner of his mortgage right which is therefore
his “property” and C is the owner of the leasehold right and the lease is
therefore his “property”.
This leads us to: What is immovable property? The implication of the
term “immovable” is that the property is permanent, fixed and cannot
be easily removed.2 It may also be permanently attached to other immov
able property and so becomes immovable property itself. The Act, in
Section 3, provides:
3. Interpretation clause.—In this Act, unless there is something repugnant in
the subject or context,—
“immovable property” does not include standing timber, growing crops or
grass;
The expression is not really defined in the Act. According to the General
Clauses Act, 1897, “immovable property” includes lands, benefits to
arise out of land, and things attached to the earth, or permanently fas
tened to anything attached to the earth. In Section 2.(6), Registration Act,
the expression includes land, buildings, hereditary allowances, rights to
ways, lights, ferries, fisheries or any other benefits to arise out of land
and things attached to the earth or permanently fastened to anything
which is attached to the earth, but not standing timber, growing crops or
grass. Section 2(7), Sale of Goods Act provides:
2. Definitions.—...
“goods” means every kind of movable property other than actionable claims
and money; and includes stock and shares, growing crops, grass and things
attached to or forming part of the land which are agreed to be severed before sale
or under the contract of sale.
This incidentally shows why transfer of “actionable claims” is included
in the Transfer of Property Act.
These definitions show that land, interests in land, things attached
to land (see, the definition of things “attached to the earth”) and things
permanently fastened to anything attached to land would be immova
ble property. The question that would arise is when is a thing said to
be “attached to earth” or “permanently fastened to anything attached
2. Shree Arcee Steel (?) Ltd v Bharat Overseas Bank Ltd, 2005 SCC OnLine Kar 187: AIR
2005 Kar 287.
S. 2] IMMOVABLE PROPERTY 5
to earth”, or, as it is sometimes put, when is a chattel deemed to have

become a “fixture”? The test is, has the chattel been fixed, however
slightly, to land, and where it has been affixed to anything attached to
land, has it been affixed for the permanent beneficial enjoyment of the
thing to which it is affixed.
A hot mix plant and crusher plant fixed in the soil to facilitate work
were not regarded as things attached to earth within the meaning of
the expression “immovable property” as defined in Section 3? [See
pp. 40-41]
In reading the definitions of immovable property contained in Transfer
of Property Act, 1882; in Section 3(26), General Clauses Act; and in
Section 2(6), Indian Registration Act, the immovable property can be
further categorised as under:
Immovable property
Land Benefits to arise Things attached
out of land to the earth
I
Things rooted Things embedded Things attached to
in the earth in the earth what is so embedded
I
(i) Degree of annexation (i) Permanent attachment
(ii) Object of annexation (ii) For beneficial enjoyment
Land constitutes every part of the earth not covered by water. It includes
every part of the surface and a column of space above and the ground
underneath the surface. This means that subsoil, mines and minerals
which are below the ground are also part of land and are therefore
immovable property. Land in this context also includes wells, tube wells,
ponds, tanks, rivers and streams, and canals. The question whether these
water bodies or waterways are naturally occurring or artificial is irrele
vant. The reason why these water bodies or waterways are also consid
ered land is probably because they are substantially shallow as compared
to oceans and seas, enough for humans to have access to the land below
these water bodies or waterways and therefore sufficiently shallow to be
known as land.
A benefit to arise out of land, or a “profit a prendre” (benefit from
use) is a right to use land in a manner which would derive profit or ben
efit for the person who is entitled to such use. The reason why this right
though intangible is an immovable property in and of itself is because it
3. Sangyong Engg & Construction Co Ltd v Yograj Infrastructure Ltd, AIR 2015 NOC 878
(Del).
6 LAW OF TRANSFER OF PROPERTY [Chap, 1
entitles the holder to step onto land and use it for his own benefit. It is 3
right which is inextricably linked to the land and is therefore immovable
property even by itself. A profit a prendre is an interest in land and is,
therefore, immovable property.
An example of interest in land being immovable property is provided
by Ananda Behera v State of Orissa4. In this case the petitioner had
CASE PILOT
licence from the proprietor of an estate for catching and appropriat
ing all the fish in a lake and they had paid the proprietor large sum of
money. The lake vested in the respondent-State under the Orissa Estates
Abolition Act. The State refused to recognise the licence and the peti
tioner claimed that the transactions were really sales of future goods as
fish was movable property, and hence, the Abolition Act was not appli
cable. It was held:
...as a profit a prendre is regarded as a benefit arising out of land it follows
that it is immovable property within the meaning of the Transfer of Property
Act. Now a ‘sale’ is defined as a transfer of ownership in exchange for a
price paid or promised. As a profit a prendre is immovable property and as
in this case it was purchased for a price that was paid it requires writing and
registration because of Section 54 of the Transfer of Property Act. If a profit
a prendre is regarded as tangible immovable property, then the ‘property*
in this case was over 100 in value. If it is intangible, then the registered
instrument would be necessary whatever the value. The ‘sales’ in this case
were oral: there was neither writing nor registration. That being the case, the
transactions passed no title or interest....
In Bihar Eastern Gangetic Fishermen Coop Society Ltd v Sipahi Singh5,
CASE PILOT the State Government ordered the settlement of the Jalkar should con
tinue with the first respondent for the years 1976-1977 and 1977-1978
but before the final orders were passed and the patta of settlement of the
Jalkar was issued, on the representations made by the appellant, the State
Government directed that the settlement of the Jalkar should be with the
society for the relevant years on certain conditions. The first respondent
thereupon filed a writ petition and the High Court allowed the writ peti
tion relying on the doctrine of promissory estoppel. Allowing the appeal
the Supreme Court held:
Besides, the right to catch and carry away the fish is a 'profit a prendre". If a
profit a prendre is a tangible immovable property, its sale has to be by means
of a registered instrument in case its value exceeds ^100. If it is intangible,
4. AIR 1956 SC 17: (1955) 1 SCR 919; Domingo Santana D'Souza v M.R. Wagle Trust,
1978 SCC OnLine GDD 11: AIR 1979 GDD 19; Haji Sukhan Beg v Board of Revenue,
l979 SCC OnLine All 901: AIR 1979 All 310; Controlling Revenue Authority v Anti
Biotic Project Virbhadra, 1979 SCC OnLine All 442: AIR 1979 All 355 (Drawing of water
is not benefit arising out” of land and hence, not immovable property); R. Saravanan v
Sri Vedaranyaswaraswami Devastanam, 1981 SCC OnLine Mad 54: AIR 1982 Mad 396.
5. (1977) 4 SCC 145; Bibi Sayeeda v State of Bihar, (1996) 9 SCC 516 (Right to hold a
bazaar).
the sale is required by Section 54 of the Transfer of Property Act, 1882, to

be effected by a registered instrument whatever its value. Therefore, in either
situation the grant of the profit a prendre has to be by means of a registered
instrument. Even if the settlement ofJalkar to the first respondent is regarded
as a lease and not as a grant, it would not make any difference because a
lease of fishery which is immovable property as defined in Section 2(6) of the
Registration Act, 1908, if it is for any term exceeding one year or reserves a
yearly rent, has also to be registered under Section i7(i)(d) of that Act and
Section 107, Transfer of Property Act. In the instant case, the transfer of the
profit a prendre in favour of the first respondent was admittedly for two years
reserving a yearly rent and was not evidenced by a registered instrument and,
therefore, he had no right, title or interest which could be enforced by him.6
Section 3, Transfer of Property Act, 1882 defines things being “attached
to the earth” as meaning one of the following three things either 1) rooted
to the earth, or 2) embedded in the earth, or 3) permanently attached to
what is embedded in the earth for the purpose of beneficial enjoyment of
that to which it is attached.
Trees and shrubs are rooted in the earth and therefore as a general
rule, trees and shrubs are immovable property. An exception as to stand
ing timber, crops and grasses is carved out from this category because
the intention with which they were sown was always to cut them down
for use as movables. Therefore, when land is transferred, standing trees
which are rooted in the earth on that land will also be transferred along
with the land as would anything else permanently attached to the land,
unless there is a clear express or implied intention to the contrary.7
Things that are embedded in the earth must be firmly fixed to the
earth in order to be considered immovable property. Though this is a
rather subjective concept, there is a two-fold test to consider whether an
object is sufficiently embedded in the earth to be considered immovable
property. First is the degree of annexation. The thing embedded must be
so deeply embedded in the earth that its removal would be likely to cause
damage to the earth or that it cannot be removed without great effort.
If this is so, the thing embedded may be called immovable property. The
second facet is the object of annexation or the reason why the thing was
embedded in the earth in the first place. There must be an intention that
the thing was embedded with the intention of being placed in the earth
permanently. A building is called immovable property because its foun
dation is firmly embedded in the earth and there is generally no intention
of uprooting a building in a short while after its construction. Therefore,
both tests of degree of annexation and object of annexation being ful
filled, we call a building immovable property because it is embedded in
the earth.
6. Ananda Behera v State of Orissa, AIR 1956 SC 17: (1955) 2 SCR 919.
7. Suresh Chand v Kundan, (2001) 10 SCC 221.
8 LAW OF TRANSFER OF PROPERTY [Chap, i
Things which are permanently attached to things which are embed

ded in the earth are also immovable property. The degree of attachment
must be so great that the thing which is attached must have no separate
existence or entity from the thing to which it is embedded. There is a
two-fold test to be observed when considering whether a thing attached
to a thing embedded in the earth is immovable property: i) it must be
permanently attached, and 2) it must be for the beneficial enjoyment
of the thing which is embedded. Both conditions must be fulfilled. An
electric fan or a light fitting cannot be said to be immovable property
because even though it may be fitted in a flat in a building for the benefi
cial enjoyment of the flat, it cannot be said to be a permanent fixture. It
is similarly important that the thing which is attached is for the beneficial
enjoyment of the thing which is embedded. It would not be sufficient if
the object was attached for its own use or protection unless its attach
ment is intrinsically connected with the beneficial enjoyment of the thing
which is embedded.
The following rights are recognised as immovable property:
i. right of way;
2. right of ferry;
3. right of fishery;
4. right to collect dues from fairs held on one’s land;
5. right to collect lac from trees;
6. right to collect rent from property;
7. a mortgagor’s right to redeem the mortgage;
8. Hindu widow’s life-interest in the income from the husband’s
immovable property; and
9. office of a hereditary priest of a temple.
The following are not immovable property:
1. a decree for the sale of immovable property on a mortgage;

2. a machinery which is not permanently attached to earth and so can
be shifted from place to place;
3. right of worship;
4. right to recover maintenance even though charged on immovable
property;
5. government promissory notes;
6. grass;
7- growing crops;
8. right of a purchaser to have lands registered in his name;
9. royalty; and
10. standing timber.
STANDING TIMBER
The scope of the expression “standing timber” and how it is different
from a tree is explained in Shantabai v State of Bombay8. In that case, the
petitioner’s husband, a zamindar, executed an unregistered document in CASE PILOT
favour of the petitioner giving her the right to enter upon certain areas
in the zamindari in order to cut and take out bamboos, fuel, wood and
teak. After the passing of the Madhya Pradesh Abolition of Proprietary
Rights Act, 1950, a question arose as to the exact nature of the peti
tioner’s right. It was held that the petitioner had no enforceable right
against the State. Mr Justice Bose in his judgment examined the scope of
Section 3(2.6), General Clauses Act under which “standing timber” is not
immovable property. The learned judge observed:
A tree will continue to draw sustenance from the soil so long as it continues
to stand and live.... Before a tree can be regarded as 'standing timber" it
must be in such a state that, if cut, it could be used as timber-, [that is, as
wood suitable for building houses, bridges, ships, etc., whether on the tree
or cut and seasoned;] and when in that state it must be cut reasonably early.
The Rule is probably grounded on generations of experience in forestry and
commerce and this part of the law may have grown out of that. It is easy to
see that the tree might otherwise deteriorate and that its continuance in a
forest after it has passed its prime might hamper the growth of younger wood
and spoil the forest and eventually the timber market.
Therefore, as regards things which are capable of being removed from
the land, the test for deciding whether they are to be regarded as movable
or immovable property would be: If there is an intention to sever them
from the immovable property, land or building, for the purpose of sell
ing them as separate items, then such separate items would be movable
property.
MORTGAGE AND EQUITY OF REDEMPTION

A debt secured by mortgage of immovable property, would itself be
immovable property and the corresponding equity of redemption in the
mortgagor, would also be immovable property. [See, S. 58 and notes
thereunder.]
IMPORTANCE OF IMMOVABLE PROPERTY

It is necessary to understand why a distinction is made between movable
and immovable property. The first category of objects which falls within
8. AIR 1958 SC 532; Joseph v Joseph, (Rubber trees not “standing timbers”) 1979 SCC
OnLine Ker 7: AIR 1979 Ker 219; Fatma Bibi v Irfana Begam, 1980 SCC OnLine All 309:
AIR 1980 All 394; State of H.P. v Motilal Partap Singh and Co, 1980 SCC OnLine HP
7: AIR 1981 HP 8; State of Orissa v Titaghur Paper Mills Co Ltd, 1985 Supp SCC 280
(Bamboos—immovable property).
10 LAW OF TRANSFER OF PROPERTY [Chap, i
the ambit of immovable property is land or earth. The other two cate
gories that are also called immovables are classified in this way because
they are inherently and intrinsically connected with land or earth.
The main reason why immovable property is treated differently from
movables is because it is a limited resource. It is not possible, unlike most
movables, to replicate land or create an additional land other than what
is already available. This rationale finds place also in the Specific Relief
Act, 1963 which deals inter alia with the performance of contracts. There
is a presumption that a contract for sale of immovable property must be
performed. On the other hand, there is a presumption against the perfor
mance of a contract for sale of movables. Consider this situation: A cot
ton merchant promises to sell 10 bales of cotton to a customer. Cotton is
freely available in the market. If for any reason the cotton merchant does
not supply the promised 10 bales of cotton to his customer, the customer
can purchase 10 bales of cotton from another vendor and claim the price
of cotton as his damages from the cotton merchant. However, this is
not possible in the case of sale of immovable property. It is not possible
for a person who has agreed to buy immovable property from a seller
to simply buy a replacement from another vendor. This is the reason
why a seller who has contracted to sell immovable property is required
to stand by his promise and perform the contract. It is for this reason
that immoveable property is treated as being on a different footing from
movable property.
There are also several formal requirements attached to the transfer
of immovable property, including the payment of stamp duty, the reg
istration of a written instrument, recording the transfer and the entry
of the details of the transferee in the record of rights in respect of land
which is maintained by every State Government in India. Registration
and entry in the record of rights are not requirements for transfer of
movable property. For example, it is not necessary to execute a written
document or register it every time a customer buys salt and sugar from
the local grocer. The reason why these are requirements for the transfer
of immovable property is because of the Eminent Domain Theory, which
states that all land within the territory of a State (nation) belongs to the
State and its citizens hold rights in that immovable property only at the
pleasure of the State. This means that the State can divest a citizen of his
right to immovable property whenever it chooses. This is also the theory
behind the acquisition of land by the State (in India, immovable property
can be acquired by the State for a public purpose). This is why, in theory,
property forming part of the territory of a State always belongs to that
State, and the State maintains a record of all transactions or transfers
which are taking place in respect of the immovable property.
In practice, however, the record of rights and the register main
tained for the purpose of registration of documents under the Indian
Registration Act, are maintained for the purpose of facilitating the col
lection of stamp duty and property taxes.
Another important reason for the recordal of rights in immovable
property and registration of documents transferring rights in immovable
property, is that it creates a public record which serves as notice to all
persons wanting to buy immovable property, of all persons who may
claim a right to the immovable property which is sought to be trans
ferred. This also assumes significance because immovable property is
a limited resource and no one can be permitted to transfer immovable
property in which a third party is claiming rights.
SCOPE OF THE ACT

The Act is not exhaustive. It does not apply to
i. transfers by operation of law,
2. transfers under orders of court,
3. testamentary transfers, and
4. some rules of transfer under Mohammedan Law. Notwithstanding
the reservation in clause (4), the Act is a territorial law or lex loci.
Since the Act of 1882 is not a complete Code, where the statutory law in
India is silent, an Indian court may look for guidance to principles of jus
tice, equity and good conscience which are nothing more than decisions
of English courts on the assumption that, that system is a repository of
all justice. Therefore, the English Law with respect to transfers becomes
important and the salient features of that system of law are given here in
order to enable the student to understand a decision of an English court.
HOW PROPERTY IS CLASSIFIED IN ENGLISH LAW

Indian law divides property into movables and immovables. But in
English Law the division is into realty and personalty. Realty was that
kind of property which could be recovered by a person who lost pos
session of it. The action was known as a real action. When lands were
regarded as superior to goods or chattels, a real action lay only with
respect to lands. In the case of goods, if a person lost possession, he could
not recover them in specie, but had only a right to recover damages. Such
an action was known as a personal action. Broadly therefore, immovable
property was realty and goods were personalty. But a leasehold interest
was known as chattel real. It was real because it was connected with land.
It was a chattel or personalty, because, a lessee originally (in English
Law), could not get back possession of the land when he lost possession
of it. He could only recover damages. We may, therefore, say that inter
ests in land known to the feudal system are realty property, and interests
outside that system, such as leases, [see, p. 13] were treated as personalty.
12 LAW OF TRANSFER OF PROPERTY [Chap. 1
In modern English Law, however, it is treated as real property. In fact

after the Real Property Amendment Act, 1925, even in England, the dis
tinction is only between movable and immovable property.
WHAT WERE THE BROAD FEATURES OF LAND LAW

BEFORE NORMAN CONQUEST
In England, in Anglo-Saxon times, absolute ownership in land, known
as allodial ownership was recognised, so that the holder could dispose it
of either by deed or will. But the will was in the nature of a post obit gift.
That is, it is a gift to take effect after death. It was not ambulatory, that
is mutable, nor was it revocable.
There were, however, certain limitations on this right of disposal, so
as to safeguard the interests of one’s heirs. Among the heirs, equal distri
bution was the rule, though primogeniture was not unknown.
WHAT WERE THE EFFECTS OF THE NORMAN CONQUEST

1. The idea of absolute ownership gave place to feudalism.
2. There was no freedom of alienation, but a process known as subin
feudation came into being.
3. The right of testamentary disposition was practically taken away.
WHAT IS FEUDALISM
Under the feudal doctrine, the king was paramount owner of land and
the subjects holding land were deemed to be his tenants. Thus, the king
alone was the owner. Others held only “estates”. The tenant who held
immediately from the king was known as tenant in capite or a chief ten
ant. The person in actual possession of the land was known as the tenant
in possession or terre tenant. If A was the chief tenant and if A granted
the land to B, and B to C and C to D and D was the tenant in posses
sion, B and C were known as mesne lords. A held the land from the king
by infeudation and the others by sub-infeudation. In the chain, D was
bound to render feudal services to C, C to B, B to A and A to the king.
In English Law the right devolved on the tenant from the superior
lord, whereas in India, the tenant was on the land and the grantees of
land were imposed on the tenants. The right of the grantee was merely
a right to collect and appropriate the rent payable by the tenant to the
grantor.
But, as the feudal chain lengthened out, A found it difficult to enforce
the services due to him and so, subinfeudation was abolished. This
was done in 1290, by a statute known as the Statute Quia Emptores.
Therefore, after 1290, a tenant could substitute another in his place, but
could not subinfeudate.
S.2] IMMOVABLE PROPERTY 13
In the case of wills, since there could be no “livery of seisin”, that is,
delivery of possession of real property in the case of a dead person, the
device of trust was adopted, by which, a person, before his death, con
veyed the property to a trusted friend who handed it over to the intended
person, after the death of the grantor. The Statute of Uses, 1535, put
an end to this device, but testamentary powers were recognised by the
Statute of Wills, 1540. There were certain reservations, namely, 1) lands
on military tenure could be disposed of only to the extent of two-thirds;
this became innocuous when the tenure itself was abolished in 1660 by
the Statute of Tenures; and 2) the will covered only the properties in
existence at the date of the will. This reservation was abolished by the
Wills Act of 1837.
WHAT WERE VARIOUS KINDS OF FEUDAL SERVICES

Land was held under free tenures or unfree tenures. Where a lord held
both types of tenures he was known as the lord of the manor. The manor
consists of 1) lands held by freehold tenants, 2) demesne lands cultivated
by copyhold tenants, and 3) the manor house. Broadly, the services were
divided into unfree and free. The unfree services were rendered by those
terre tenants known as villeins. The expression was derived from “villa”,
since the tenant lived chiefly in villages doing rustic work. Originally, the
inferiority attached to the tenant, but later, to the nature of services. If
they were precarious, servile and were capable of being exacted arbitrar
ily by the lord, they were considered unfree. But it was on his agricultural
services that the feudal lord relied for cultivation of land retained by him,
known as demesne land since there was no other class of hired labourers,
and this circumstance accounted for the lord’s arbitrary power and secu
rity of the tenant. He could not leave without his lord’s consent, which
when asked was granted by his court known as the manorial court. But
the tenant had to pay a fine on his surrender of the land to the lord and the
admittance of the next tenant. These amounts were entered in the court
roll which became conclusive evidence of the nature of the tenure and the
villein’s title to it. An intending purchaser could satisfy himself about the
title prior to surrender and admittance, but as actual inspection became
inconvenient, copies of court roll were given to him and that was how
he came to be known as copyholder. By the end of the 19th century the
tenure was enfranchised either voluntarily or under the Copyhold Act,
1894. By the Law of Property Act, 192.5, the copyhold tenure ceased to
exist, and today, all lands in England are held as freehold socage tenure
(See below). In the case of freehold tenure, originally, the services which
the tenant had to render were free, that is, they were honourable, certain
and could not be exacted arbitrarily by the lord.
WHAT WERE THE VARIOUS KINDS OF FREE OR

FREEHOLD TENURE
The main classes were: i) military tenure or tenure in chivalry or ten
ure per militianr, 2) lay or socage tenure; 3) tenure in free alms or
frankalmoign; 4) tenure in sergeantry; and 5) burgage tenure.
What were the incidents of the various kinds of tenure:
1. Military tenure.—The feudal services or incidents of this ten
ure were: (a) military service; (b) homage; (c) fealty; (d) relief; (e) aids;
(/) wardship; (g) marriage; (h) escheat; and (i) forfeiture. The military
service was always to the king whatever might be the rank of the tenant
in the feudal chain. Homage consisted in the tenant kneeling before the
lord, and fealty, in the tenant taking an oath of allegiance to the lord.
The right of the lord to recover a certain amount from the tenant’s heir,
when he was admitted to tenancy was known as relief. Aids or Auxilia
were payments which a tenant had to make (a) for ransoming the lord if
he was taken captive; (b) for knighting the lord’s eldest son; and (c) for
marrying the lord’s eldest daughter. Wardship was the lord’s right of
guardianship over the person and property of a minor tenant without
any liability to account. Marriage was the lord’s right to consent or not,
to the marriage of the son or daughter of his tenant. When a tenant died
without heirs and without having disposed of his property by will, the
property reverted to the lord by escheat. If a tenant was convicted of a
felony, the lord could forfeit the tenant’s property.
Gradually, homage, fealty, relief and aids had fallen into disuse.
Military service came to be commuted into a fixed money payment
known as scutage and gradually even that ceased to be recovered. The
tenure itself was abolished in 1660.
2. Socage tenure.—In this, instead of military service, the tenant had
to render agricultural service, which was commuted into the payment of
an annual amount, known as quit rent. The tenant was not subject to the
incidents of wardship and marriage though subject to the other incidents.
3. Frankalmoign.—This arose when lands were granted to churches
and monasteries for rendering spiritual service to the grantor. They are
rare in modern English Law.
4. Tenant in sergeantry.—This was of two kinds: (a) grand sergeanty
or magnum servitium and (b) petty sergeanty. The service was to the
king direct. In the former, it was honourable, as for example, carrying
the king’s banner. In the latter, the service rendered was small, as for
example, presenting the king once a year with a bow or a sword. In mod
ern law, the tenure exists in name only.
5. Burgage tenure.—This is a kind of socage tenure obtaining in
urban parts. One variety of it is known as Borough English in which
the property of the tenant went to his youngest son. Another variety
was gavelkind in which the property of a tenant devolved on all his male
issues. In modern law all these peculiar incidents have been completely
abolished.
By the end of middle ages, (c 500 AD to 1500 AD) practically all land
in England was in the occupation of tenants directly under the king.
With the abolition of knight service and conversion of the tenure into
socage tenure, the position in 192.5, — when the Law of Property Acts
were passed — was that all land was held in socage tenure and most of
it was held directly under the king. Thus, the person who is referred to
as an owner in English Law is really a feudal tenant derived from the
obsolete social organisation known as feudalism. The fee simple, which
corresponds to absolute ownership in India was the interest which the
feudal tenant held. Other types of freehold estates such as life estates and
entailed estates were usually the result of internal family arrangements.
The result in modern English Law, after the coming into force of the
Law of Property Act, 192.5, is that there is only one tenure, namely, the
socage tenure, which is lay and free. The incident of escheat had lost all
practical significance, because the tenants were freely using their testa
mentary powers which they gradually acquired. Forfeiture was abolished
in 1870 and the Law of Property Act, 192.5, abolished other manorial
incidents.
WHAT ARE “WORDS OF LIMITATION” AND

“WORDS OF PURCHASE”
The former is used in an instrument to define the nature and extent of the
interest transferred or devised.
The latter indicates the person or persons who are to take.
For example, property is transferred to “to A, his sons and grandsons
forever”. This would mean an absolute transfer in favour of A only, and
his sons and grandsons do not get any direct benefit, because, they are
treated as words of limitation.
This distinction is not important in Indian law, because, in Indian law,
it is the substance, the real intention of the transferor that matters and
not the form.
DIFFERENCE BETWEEN FREEHOLD AND LEASEHOLD

The word “freehold” is different from “freehold tenure” which is also
known as “free tenure”. [See, p. 11] An estate is said to be “freehold”
when it is for a definite period but of uncertain duration; for example to
A for life. It is used in contrast to the phrase “estate for a term of years”
which is for a definite period of certain duration. The lessee was called
the termor. The leasehold tenure developed outside the feudal system. In
this tenure the freeholder alone had the seisin or ownership and the lessee
had possession or occupation. “Estate in fee” corresponds to absolute
ownership in India and “estate in tail” means to the descendants or heirs
of the body of grantee.
A conveyance was made in the following terms:
To the use of Edward Shelley for life, remainder to the use of X, Y and Z for
a term of 24 years, and remainder to the use of the ‘heirs male of the body’ of
Edward Shelley. (Where property is given to a person for life and thereafter
to another, it is said that the ‘remainder’ is given to the second person).
The last words in the transfer, namely, “remainder to the use of the ‘heirs
male of the body’ of Edward Shelley”, were held to be words of limita
tion of the estate taken by Shelley and did not operate to convey any
estate to the heirs. The rule laid down in the case was:
When an ancestor takes an estate of freehold, and in the same gift or convey
ance, an estate is limited by way of remainder, whether mediately or immedi
ately, to his heirs either in fee or in tail, the words ‘his heirs’ are to be taken
as tvords of limitation and not of purchase. The result was that Shelley took
a fee simple estate which he could alienate to defeat his heirs. If he alienated
the vendee would get the full estate after 24 years.
The rule set out above was an artificial rule known as the Rule in Shelley
case and was abolished by the Law of Property Act, 1925 [See, Preface to
the First Edition]. In the book entitled Pie Powder by A Circuit Tramp,
an amusing anecdote is related to this Rule. When an examinee was
asked “What was the Rule in Shelley case?', he was said to have replied:
“It is the same as in anybody else’s case, because, the law does not dis
criminate between persons.”
HOW ARE ESTATES CLASSIFIED

The word “estate” in Indian law means the total wealth or property of a
person whether movable or immovable. The term has also received a spe
cial meaning under local statutes such as the Madras Estates Land Act.
In English Law, it is used according to context in two different senses:
1) the sense in which it is used in Indian law, namely, the total wealth of
a person; and 2) the interest in land which a person holds. In the latter
sense, they are: 1) an estate in fee simple, 2) an estate in fee tail, 3) an
estate for life, and 4) an estate for a term of years.
1. An estate in fee simple corresponds to absolute ownership in India.
When a fee simple tenant dies his estate passes to his nearest heir or heirs.
2. An estate tail is created when on the grantee’s death the estate goes
only to his lineal descendants or heirs of the body. If there is a failure of
such heirs, it will revert to the grantor or to the grantor’s representatives.
It could also be special when it is restricted to a particular class (for
example, male) of lineal descendants. After the passing of the Law of

Property Act, 192.5, they are known as entailed interests. We have seen
that by c 1500 AD tenants holding directly from the king had become
practically full owners (holders of fee simple). Some of them wanted
to retain the property in their own family. So the estate tail came into
existence.
In India, in the case of Hindus, such an interest cannot be cre
ated because it is unknown to Hindu Law. The same rule applies to
Mohammedans also, except in relation to Wakfs, which could be in
favour of one’s descendants in perpetuity.
3. An estate for life or life estate, arises when an estate is granted for
the life of the grantee or of any other person or persons. For example,
an estate may be granted to A for his life, or it may be granted to A to
be enjoyed by him for the life of B. In the second case, it is known as an
estate per autre vie. Where an owner in fee simple wanted to lease out his
land, he originally created a life estate because a lease for a fixed term did
not protect the lessee originally in case he was dispossessed.
In Indian law, under the Hindu customary law, a widow’s estate
resembles a life estate and if she makes an unauthorised alienation, it
gives rise to an estate per autre vie, because, the alienee gets a title only
for the life of the widow. On her death, her husband’s heirs (known as
reversioners) could take the property from the alienee.
4. An estate for a term of years arose when property was transferred
for a term certain, as in the case of leasehold interests, that is, for a defi
nite period.
WORDS OF LIMITATION FOR CREATING

THE VARIOUS KINDS OF ESTATES
Fee simple. — Originally, an estate in fee simple could be created under

an instrument executed inter vivos, only by the use of the words “and his
heirs”. For example: to A and his heirs, and any other words were deemed
insufficient. This position continued till 1881 when the Conveyancing
and the Law of Property Act was passed providing that it would be suf
ficient to use the words “fee simple”, that is: To A in fee simple. By the
Law of Property Act, 1925, no words of limitation are necessary, so that,
a conveyance “to A” would pass to A the full fee simple or other whole
interest which the grantor was capable of conveying.
In the case of wills, originally, words like “forever”, “absolutely” or
“in perpetuity” were considered sufficient to create an estate in fee sim
ple in the grantee. The Wills Act of 1837 completely did away with the
necessity for any words of limitation.
In Indian law all that was required was that there should be words in
an instrument making the intention of the grantor or testator clear. [See,
18 LAW OF TRANSFER OF PROPERTY [Chap. 1]
S. 8, Transfer of Property Act, 1882; and S. 95, Indian Succession Act,

192.5.] The words in common use are “Putra Poutradi Krame”, “Param
pariyamai” and “Achandrarkam”
Estate tail.—The words of limitation were “heirs of his (or her) body”
and other words, however clear, were deemed insufficient. But the 1881
Act (of England) (supra) provided that the words “in tail” were sufficient.
Under the 1925 Act either the words “in tail”, or the “heirs of the body”
could be used.
In testamentary instruments any words would be sufficient if they
indicated an intention on the part of the testator to grant an estate in
tail. For example “to A and his issue”
In India, where such an estate could be created, both in testamentary
and non-testamentary instruments, any words which render the meaning
of the grantor clear, are sufficient.
Life estates.—Under the common law, words, which were ineffective
for creating an estate in fee simple or in tail, operated to create an estate
for life. In modern law, the expression used is “for life”; for example “to
A for life”.
EXERCISES
1. What is meant by immovable property? Explain with illustrations.
(PP- i-7)
Visit ebcexplorer.com to access cases

and statutes referred to in the book EBC
through EBC Explorer™ on SCC Online®; Explorer™
along with updates, articles, videos, blogs
and a host of different resources.
The following statute from this chapter is available

through EBC Explorer™:
• Registration Act, 1908 STATUTE PILOT
The following cases from this chapter are available

• Ananda Behera v State of Orissa, AIR 1956 SC 17:
(1955) 2 SCR 919
• Bihar Eastern Gangetic Fishermen Coop Society Ltd v Sipahi Singh,
(1977) 4 SCC 145
• Shantabai v State of Bombay, AIR 1958 SC 532
• State of AP v NTPC Ltd, (2002) 5 SCC 20
Chapter 2
What Property is Transferable?
SOME GENERAL RULES

The Transfer of Property Act deals with transfers inter vivos. Section 5
provides: STATUTE PILOT
5. “Transfer of Property” defined. — In the following sections “transfer of

property” means an act by which a living person conveys property, in present
or in future, to one or more other living persons, or to himself, and one or more
other living persons, and “to transfer property” is to perform such act.
In this section “living persons” includes a company or association or body
of individuals, whether incorporated or not, but nothing herein contained shall
affect any law for the time being in force relating to transfer of property to or by
companies, associations or bodies of individuals.
For the meaning of “transfer”, see Pandey Oraon v Ram Chander Sahu1.
The definition therefore shows that a valid transfer of property must CASE PILOT
have the following components:
1. That it must be an “act”. This requires conscious action on the part
of the owner of the property. A transfer by the operation of law will not
suffice. It is not concerned with transfers by judicial process like execu
tion sales. [See, S. z(d)]
2. That both the transferor and the transferee must be living. Since
the Act deals with transfers by a living person, that is, transfers inter
vivos, It also does not apply to wills, because, a will or testament oper
ates only after the death of the testator. A dedication of property to a
temple is not covered by the Act, because a temple or the deity is not a
living person. By Sections 13, 14 and 20, however, transfers in favour of
unborn persons are recognised, subject to certain restrictions.
3. That the transfer may take effect immediately that is “in present” or
may be deferred to a later date that is “in the future”.
1. 1992 Supp (2) SCC 77; Mohd Noor v Mohd Ibrahim, (1994) 5 SCC 562; Mahesh Chand
Sharma v Raj Kurnari Sharma, (1996) 8 SCC 128; Corpn of Calicut v K. Sreenivasan,
(2002) 5 SCC 361.
4. That for there to be a transfer there must be a conveyance, that is,

a creation of a right in favour of a person who has none by a person who
has a right in the immovable property. A relinquishment in favour of a
coparcener2, or a Hindu widow, having a limited interest in property,
surrendering it to the next reversioner in order to accelerate his succes
sion, are not transfers, because they are really extinction of rights in
property and not transfers of property.
A family arrangement or a bona fide settlement of a disputed claim is
also not a transfer of property, because it is a recognition of pre-exist
ing rights and does not convey any new or distinct title to the parties to
the settlement.3 For the same reason, a partition is also not a transfer.4
There is only a change in the mode of enjoyment, one co-owner getting
one or more specific items of property instead of exercising a right in
all the joint properties. A family settlement can go beyond members. It
can include persons outside the family who are not in the line of succes
sion.5 Signatures of the parties to the settlement should be fairly obtained
by giving them full knowledge of the nature of the transaction. There
should be no blank paper signatures.6
Once a partition has been effected, there is severance of jointness of
properties. The portions which came to the share of two brothers, they
exchanged their portions as between them. It was held that such mutual
transfer of separate properties, if more than ^100 in value, could be
made only by a registered agreement.7
The creating of an easement or a charge on property are also not
transfers.
The intention of the legislature under Section 13(8) (SARFAESI Act)
is that the sale of a secured asset is to be confirmed specifically by the
secured creditor and not by an authorised officer. So long as the sale is not
2. Hari Satya Banerjee v Mahadev Banerjee, 1982 SCC OnLine Cal 91: AIR 1983 Cal 76.
3. Kalyani v Narayanan, 1980 Supp SCC 298 (Case of Will); Sitshilabehn v Anandilal
Bapalal, 1982 SCC OnLine Guj 131: AIR 1983 Guj 126; A. Sreenivasa Pai v Saraswathi
Atnmal, (1985) 4 SCC 85; Mohd Shaffi v Tallai Ram, 1984 SCC OnLine P&H 508: ILR
(1985) iP&H 368: AIR 1985 P&H121.
4. Khusmanben Bankulal v Babubhai Rangildas, 1978 SCC OnLine Guj 41: AIR 1979
Guj 25; Sita Ram Prasad v Mahadeo Rai, 1980 SCC OnLine Pat 29: AIR 1980 Pat 254;
V.P.R. Prabhu v S.P.S. Prabhu, 1985 SCC OnLine Ker 41: AIR 1985 Ker 265; Sk Sattar
Sk Mohd Choudhari v Gundappa Amabadas Bukate, (1996) 6 SCC 373. Vikram Singh
v Ajit Inder Singh, 2014 SCC OnLine Del 847: AIR 2014 Del 173, a family settlement
does not require registration. Court fees has to be paid according to the share of the sep
arating party, not on valuation of the whole property. Ramdev Food Products (P) Ltd v
Aruindbhai Rambhai Patel, (2006) 8 SCC 726, memorandum of understanding to settle
family disputes, not transfer of property, no interference. Anup Kr Debbarma v Ahindra
Kr Debbarma, AIR 2009 NOC 588 (Gau), family settlement in the absence of any ambi
guity should always be encouraged and enforced.
5. Zaheda Begum v Lal Ahmed Khan, 2009 SCC OnLine AP 497: AIR 2010 AP 1.
6. Santra Deuiv Pardeep Kumar, AIR 2015 NOC 104 (P&H); Ganeshi v Ashok, (2011) 15
SCC 417, a family arrangement is not a transfer of property.
7. Balkrishna Bhagiuanji Lohi v Prakash Sheshrao Lohi, AIR 2015 NOC 89 (Bom).
S. 5] WHAT PROPERTY IS TRANSFERABLE? 21
confirmed by the secured creditor, the transfer of the secured asset does
not become effective. The borrower has the right to redeem the property
at any time before the date on which the property is transferred to the
auction purchaser by confirmation of the sale by the secured creditor.8
5. That there must be actual conveyance, that is to say, that there must
be the actual transfer of rights and not merely the promise to sell at a
later date. This is to be distinguished from an immediate transfer which
is to take effect in the future. A mere agreement to sell does not have the
effect of conveying. It does not operate as a transfer of property. Even
delivery of possession accompanied by a sale agreement does not effect
transfer of interest in property.9 A transfer can be effected by a registered
sale deed and not merely by an agreement to sell, general power of attor
ney or will.10
Division of partnership assets among partners of a firm is not a convey
ance because all of them are already owners of such assets. Registration
of such apportionment is not necessary.11 The execution of a deed jointly
by a husband and wife providing that on death of the last executant the
property would go to their children, did not amount to settlement. It is
only a will.12
Compromise. — Every compromise does not involve a transfer of
property. A dispute about a property may be settled by a compromise.
If the property already belongs to them, it is divided among them under
their settlement agreement. There would be no conveyance. A deed of
compromise in such a case is not a transfer.13
6. That a living person can even transfer property to himself. This
means that a person acting in one capacity may transfer property to him
self acting in another capacity. The words “which may include himself”
were added to Section 5 in the year 192.9 by amendment. Before the year
1929, a person could not transfer property to himself alone but to him
self only if there were other transferees alongside.
PROPERTY
The word “property” means the right and interest which a man has
in lands and chattels to the exclusion of others.14 Section 6, Transfer
8. India Finlease Securities Ltd v Indian Overseas Bank, 2.012. SCC OnLine AP 205: AIR
2013 AP 10.
9. Majidan v Ishaq, AIR 2008 NOC 1135 (Utt).
10. Suraj Lamp & Industries (P) Ltd (2) v State of Haryana, (2012) 1 SCC 656.
11. Balbir Singh v State of U.P., 2012 SCC OnLine AH 478: AIR 2012 All 113.
12. Narayani v Sreedharan, 2011 SCC OnLine Ker 4059: AIR 2012 Ker 72.
13. Khunni Lal v Gobind Krishna Narain, 1911 SCC OnLine PC 14: ILR (1911) 33 All 356;
Hanuman Sahu v Abbas Bani Bibi, 1929 SCC OnLine Oudh 160: AIR 1929 Oudh 193.
14. Joydeu Sen v State of W.B., AIR 2010 NOC 256 (Cal), a stamp vendor licence is not prop
erty. It cannot be inherited or transferred.
of Property Act says that property of any kind may be transferred.

Therefore, the term “property” must be read in its widest possible sense.
Any and all rights and legal interests which a person may possess, may be
called property. A transfer can be made of the object itself or any of the
subordinate rights associated with the object. Before the Law of Property
Act, 1925 was passed in England, the four kinds of estates described,
namely, 1) an estate in fee simple, 2) an estate tail, 3) a life estate and
4) an estate for a term of years, could be created at law. Equity recog
nised only trusts, and obligations in the nature of trust arising by reason
of fraud or mistakes where it was inequitable to allow a legal owner of
property to be its beneficial owner. After the Act was passed the only
estates which could be conveyed or created at law are: 1) an estate in fee
simple; and 2) an estate for a term of years. The reason for the change
was to simplify conveyancing, so that, a purchaser will get a clear title
to the property, the rule being that a purchaser of a legal estate will take
the property conveyed free from equitable claims in or over the property,
even though he had notice of them, unless they were registered. Under
the present law in England an estate tail and a life estate would be equi
table interests.
In India, there is no distinction between legal and equitable estates
and all estates, or interests, that is, every kind of property in land, could
be conveyed or created under the Transfer of Property Act. Therefore, an
absolute estate which corresponds to an estate in fee simple, an estate tail
wherever it could be created, a life estate and an estate for a term of years
could be conveyed or created; and if such right is infringed the court will
give relief.15
The words “in present or in future” refer to “conveys” and not “prop
erty”, and so the section could not be interpreted to authorise transfer of
“future” property. In fact, a person cannot transfer what is not in exist
ence. But if he agrees to transfer what is to come into existence in future,
that is, if there is a transfer of “future” property it is treated as a contract
to transfer such property. If the property does come into existence the
transferee can sue for specific performance of the contract, provided that
the “future” property is not of the kind whose transfer is prohibited by
Section 6. Under English Law, however, equity, treating as done what
ought to be done, fastens upon the property and the contract to transfer
becomes a completed transfer. Since a contract requires consideration, a
gift of future property is not an enforceable contract.
Before the words “or to himself” were introduced in the section, a
person could create a trust in his favour, that is, he could create a trust of
15. Shankar Yadav v State of Jharkhand, 2011 SCC OnLine Jhar 673: AIR 2012 Jhar 21,
once there was a registered sale deed in favour of the transferee which was executed by
the State, the Mines Commissioner had no power to pass any order as to ownership and
possession and lease of property in the mine by the transferee.
which he is the beneficiary. After the amendment a transfer can be made

by a person to himself as for instance by a person making a settlement
or trust in which he constitutes himself as a trusteed
Section 6 provides what kinds of property may be transferred and
what may not be transferred. It says:
6. What may be transferred. — Property of any kind16 17 may be transferred,
except as otherwise provided by this Act or by any other law for the time being
in force.
(a) The chance of an heir-apparent succeeding to an estate, the chance of a
relation obtaining a legacy on the death of a kinsman, or any other mere
possibility of a like nature, cannot be transferred.
(b) A mere right re-entry for breach of a condition subsequent cannot be
transferred to any one except the owner of the property affected thereby.
(c) An easement cannot be transferred apart from the dominant heritage.
(d) An interest in property restricted in its enjoyment to the owner personally
cannot be transferred by him.
(dd) A right to future maintenance, in whatsoever manner arising, secured or
determined, cannot be transferred.
(e) A mere right to sue cannot be transferred.
(f) A public officer cannot be transferred, nor can the salary of a public
officer, whether before or after it has become payable.
(g) Stipends allowed to military, naval, air-force and civil pensioners of the
Government and political pensions cannot be transferred.
(h) No transfer can be made (i) insofar as it is opposed to the nature of the
interest affected thereby, or (z) for an unlawful object or consideration
within the meaning of Section 23, Indian Contract Act, 1872, or (3) to a
person legally disqualified to be transferee.
(/) Nothing in this section shall be deemed to authorise a tenant having an
untransferable right of occupancy, the farmer of an estate in respect of
which default has been made in paying revenue, or the lessee of an estate
under the management of a Court of Wards, to assign his interest as such
tenant, farmer or lessee.
Under this section, the general rule is, every kind of property can be
transferred. There may be exemptions in the personal laws, or recog
nised by local customs.
The reasons for placing restrictions on transferability may be broadly
classified into three categories, viz- 1) public policy, 2) that the right is
personal to the one exercising it, and 3) that the right is intrinsically con
nected to a larger right or property which is not being transferred.
A public officer cannot be transferred, nor can the salary of a pub
lic officer, whether before or after it has become payable, and stipends
16. Suleman Isubji Dadabhai v Naranbhai Dahyabhai Patel, 1979 SCC OnLine Guj 43: AIR
1980 Guj 165.
17. Pannalal v Ramnarayan, 1970 SCC OnLine Raj 43: AIR 1971 Raj 294 (Case of sale
of benefit of reconveyance of property sold); V.B. Rangaraj v V.B. Gopalakrishnan,
(1992) 1 SCC 160; K. Balakrishnan v K. Kamalam, (2004) 1 SCC 581 (case of transfer of
Remainder).
allowed to military, naval, air force and civil pensioners of the govern
ment and political pensions cannot be transferred. This is because, for
example, pensions are granted to ensure the pensioners comfort; it is
a matter of public policy that pensions or stipends not be transferred
before they are paid out.
A restricted interest in property may be created for a particular person.
It is a personal right. For example, a life interest is created in a flat in
respect of a widow. She cannot transfer it in her lifetime since the right is
restricted to her personally.
There are also some rights which cannot be transferred without also
transferring the larger object to which they are attached. These restric
tions are on the transfer of the “mere” subordinate right without trans
ferring the dominant heritage or the larger interest. For example, a
mere right of re-entry for breach of a condition subsequent cannot be
transferred to anyone except the owner of the property affected thereby.
Which means that if ownership of the property in its entirety is trans
ferred, the right of re-entry will pass to the new owner along with the
property, but the “mere” right of re-entry cannot be transferred without
transferring ownership.
Chance of succession or of legacy.—The kinds of things mentioned
in clause (a) are known as spes successions. It means a mere chance of
succession or a bare or naked possibility. In English Law it, is different
from future interests such as contingent remainders and executory inter
ests, because there can be possibilities coupled with interest. [See, Ss. 21
and 28] Lord Bacon laid down the rule:
The law doth not allow of grants except there be a foundation of an inter
est in the grantor; for the law will not accept grants of titles or of things in
action which are imperfect interests, much less will it allow a man to grant or
encumber that which is no interest at all, but merely future.
But since Licet dispositio de interesse futuro sit inutilis tamen fieri potest
declaratio praecedens quae sortiatur effectum interveniente novo actu,
which means, that although the grant of a future interest is invalid, yet
a declaration precedent may be made which will take effect on the inter
vention of some new act, though a transfer of a spes successions will not
confer upon the transferee any interest in property, yet courts of equity,
in England, have construed the assignment of a spes, if for valuable con
sideration, as a contract for assignment when the spes itself matures into
a full right, because equity treats as done what ought to be done.
But the Indian law is different. In Indian law the transfer of an expec
tancy and an agreement to transfer it, are both void. Under Indian law,
an agreement to assign a spes is null and void. This is because the person
who is seeking to transfer the property has no present right in the prop
erty, he only has the chance that he may succeed to the property at some
time in the future. A person can only transfer what he owns. An heir
apparent has no right in the estate of his predecessor while his predeces
sor is alive. This is based on the maxim nemo est haeres viventis which
means that no one is an heir during his predecessor’s lifetime. Until the
heir actually succeeds to the estate of his predecessor, any transfer by
him is a mere possibility or is speculative and cannot be enforced as
being opposed to public policy.
The possibilities referred to in Section 6(a) are: i) the chance of an heir
apparent succeeding to an estate, z) the chance of a relation obtaining a
legacy on the death of a kinsman, and 3) any other mere possibility of a
like nature.
This was laid down in Annada Mohan Roy v Gour Mohan Mullick18.
In that case the appellant purchased from the respondents their rights CASE PILOT
expectant upon the termination of the surviving widow’s rights. Later,
there was a compromise between the widow and the respondents as a
result of which the respondents got certain properties. In a suit by the
appellant to recover the properties received by the respondents, it was
held, “The transfer was of a spes successions and since Section 6(a)y
Transfer of Property Act forbids such transfers of expectancies, the
transfer was void.”
In Karpagathachi v Nagarathinathachi 19, two co-widows divided
their husband’s properties into two shares and entered into separate pos CASE PILOT
session. Under the partition deed each widow gave up her life interest.
When one of the widows died, her daughter (respondent) took posses
sion of her mother’s share. The surviving widow filed a suit for posses
sion against the respondent for recovery of possession alleging that the
arrangement by which her right of survivorship was relinquished was
repugnant to Section 6(a)^ Transfer of Property Act. It was held:
The interest of each widow in the properties inherited by her was property,
and this property together with the incidental right of survivorship could be
lawfully transferred. Section 6(a) of the Transfer of Property Act prohib
its the transfer of the bare chance of the surviving widow taking the entire
estate as the next heir of her husband on the death of the co-widow, but it
does not prohibit the transfer by the widow of her present interest in the
properties inherited by her together with the incidental right of survivorship.
The principle of the decision is that each widow could transfer her right
of survivorship. Though the court held that such a transfer was possible,
it was finally held that, in fact, there was no evidence of such a transfer.20
18. 19x3 SCC OnLine PC 2.8: (19x2-23) 50 IA 239: ILR 50 Cal 929; Badri Nath v Punna,
(1979) 3 SCC 71 (Right of a Baridar of a deity to share in the offerings at a Hindu shrine
not a spes successionis)\ Epari Adinaryana Patra v Epari Raniahari Patra, 1980 SCC
OnLine Ori 60: AIR 1980 Ori 95.
19. AIR 1965 SC 1752: (1965) 3 SCR 335.
20. Chandy Varghese v K. Abdul Khader, (2003) n SCC 328.
In Amrit Narayan Singh v Gaya Singh21, the guardian of a minor

reversioner entered into a compromise with the female holder, by which
CASE PILOT
the properties were relinquished in favour of other relatives. In a suit
by the reversioner for possession of the properties after the death of the
female holder, it was held:
A Hindu reversioner has no right or interest in praesenti in the property
which the female owner holds for her life. Until it vests in him on her death,
should he survive her, he has nothing to assign or to relinquish or even to
transmit to his heirs. His right becomes concrete only on her demise; until
then it is mere spes successions.
This is not a case of extinction by surrender, because surrender can only
be in favour of the nearest reversioner.
The right of a priest to share in the offerings that may be made to
the deity is a mere possibility. It can, however, be argued that there are
bound to be some offerings, and so, the right can be transferred.
If B and C are the wife and daughter of A, and C releases her right of inher
itance in A’s property in favour of B for consideration, and thereafter A dies,
B cannot resist C’s claim to her share of the inheritance, because, it is a
transfer of a Spes.
This clause may be compared with Section 43. That section provides:
43. Transfer by unauthorized person who subsequently acquires interest in
property transferred.—Where a person fraudulently or erroneously represents
that he is authorised to transfer certain immovable property and professes to
transfer such property for consideration, such transfer shall, at the option of
the transferee, operate on any interest which the transferor may acquire in such
property at any time during which the contract of transfer subsists.
|l Nothing in this section shall impair the rights of transferees in good faith
for consideration without notice of the existence of the said option.
The illustration to the section is in the following terms:
A, a Hindu, who has separated from his father B, sells to C three fields. X,
Y and Z, representing that A is authorised to transfer the same. Of these fields
Z does not belong to A, it having been retained by B on the partition; but on
B’s dying A as heir obtains Z. C, not having rescinded the contract of sale, may
require A to deliver Z to him.
This section deals with what is known in English Law as the Doctrine of
feeding a grant by estoppel. It is also referred to as title feeding estoppel
or the forwarding of title by estoppel. In essence this doctrine means that
in the event that an heir apparent does make a transfer of his predeces
sor’s property [or other transfer barred by S. 6(a)], the transfer cannot
be acted upon. However, if he does in fact eventually obtain rights in the
property whether by succession or otherwise, he is obliged to make good
21. 1917 SCC OnLine PC 72: (1917-18) 45 IA 35.
J
on his promise. The transferor cannot now take the defence that at the
time the transaction was made it was barred by Section 6(a). He must
perform his part of the contract and transfer his rights in the immov
able property. Since the doctrine is based on estoppel the conditions of
Section 115, Evidence Act must be satisfied before the doctrine applies,
that is, the fraudulent or erroneous representation by the transferor must
have induced the transferee to enter into the contract, and the transferee
should not have known the defect in the transferor’s title. Since there can
not be an estoppel against statute, the doctrine cannot be invoked when
a statute specifically prohibits a transfer, as in the case of an alienation
of inalienable service inams. For example, under Section 6, Transfer of
Property Act, a spes successions is inalienable; so also are service inams.
In such cases, the acquisition later by the transferor of a transferable
interest in those properties will not attract the doctrine so as to confer a
title on the transferee. If, however, the transferee did not know the nature
of the property and bona fide believed the representation of the trans
feror that he had a right to transfer it, then the transferee can rely on the
doctrine. Therefore, if what is purported to be sold is admittedly a spes
then Section 6(a) would apply and the doctrine in this section cannot be
invoked by the transferee. But, if the transferor, though really entitled
only to a spes represents that he had a right to sell and the transferee
bona fide believes him, then the doctrine of this section is applicable.
In Jumma Masjid v Kodimaniandra Deviah22, two brothers were ==-
owners of a certain property, and on the death of one and his widow, his casepil
reversioners, representing that they had a present interest in the property^
sold it to the respondent. The widow of the other brother, later made a
gift of the property to the appellant. In a suit by the respondent for pos
session of the property, the appellant contended that the respondent’s
vendors had only a spes successions during the lifetime of the widow
who made the gift to the appellant and that, therefore, the transfer in
favour of the respondent was void. The widow, who made the gift in the
appellant’s favour being dead, it was held:
Considering the scope of the... [section] on its terms, it clearly applies when
ever a person transfers property to which he has no title on a representation
that he has a present and transferable interest therein, and acting on that
representation, the transferee takes a transfer for consideration. When these
conditions are satisfied, the section enacts that if the transferor subsequently
22. AIR 1962. SC 847: 1962 Supp (1) SCR 554; Jhulan Prasad v Rant Rai Prasad, 1978 SCC
OnLine Pat 59: AIR 1979 Pat 54; Anand Padhan v Dhttba Mohanty, 1978 SCC OnLine
Ori 104: AIR 1979 Ori 5; Bhagtvan Das v Chandra Kali, 1979 SCC OnLine All 909: AIR
1979 All 350 (Section applied to agreements to sell); Epari Adinaryana Patra v Epari
Rantahari Patra, 1980 SCC OnLine Ori 60: AIR 1980 Ori 95; Rant Pyare v Rant Narain,
(1985) 2 SCC 162; Brahntuart Sanathan Dharant Mahantandal v Prent Kuntar, (1985) 3
SCC 350; Rojasara Rantjibhai Dahyabhai v Jani Narottamdas Lallubhai, (1986) 3 SCC
300; Kartar Singh v Harbans Kaur, (1994) 4 SCC 730.
acquires the property, the transferee becomes entitled to it, if the transfer
has not meantime been thrown up or cancelled and is subsisting. There is
an exception in favour of transferees for consideration in good faith and
without notice of the rights under the prior transfer. But apart from that, the
section is absolute, and unqualified in its operation.... It makes no differ
ence in its application, whether the defect of title in the transferor arises by
reason of his having no interest whatsoever in the property, or of his inter
est therein being that of an expectant heir.... Section 6(a) and Section 43
relate to two different subjects, and there is no necessary conflict between
them; Section 6(a) deals with certain kinds of interests in property men
tioned therein, and prohibits a transfer simpliciter of those interests. Section
43 deals with representations as to title made by a transferor who had no title
at the time of transfer, and provides that the transfer shall fasten itself on the
title which the transferor subsequently acquires. Section 6(a) enacts a rule of
substantive law, while Section 43 enacts a rule of estoppel which is one of
evidence. The two provisions operate in different fields, and under different
conditions, and we see no ground for reading a conflict between them or for
cutting down the ambit of the one by reference to the other. In our opinion,
both of them can be given full effect on their own terms, in their respective
spheres. To hold that transfers by persons who have only a spes successions
at the date of transfer are not within the protection afforded by Section 43
would destroy its utility to a large extent....
The appellant also sought to rely on the decisions wherein it has been held
that a plea of estoppel could not be raised against a minor who had trans
ferred property on a representation that he was of age, and that Section 43
was inapplicable to such transfers, vide Sadiq AH Khan v Jai Kishori2\
Gadigeppa Bhimappa Meti v Balangauda Bhimangauda24, and Ajudhia
Prasad v Chandan Lal25. But the short answer to this contention is that
Section 43 deals with transfers which fail for want of title in the transferor
and not want of capacity in him at the time of transfer....
An item of property was transferred by a man to his wife in lieu of
maintenance. He subsequently sold the same property to another person
for a consideration. The wife filed a suit to challenge this transfer. She
died during pendency of the suit. The husband became the owner of the
property being the legal heir of his wife. The court held that Section 43
became applicable and therefore the transfer was not voidable under
Section 41. The man had become the legal owner of the property and not
just its ostensible owner.26
c=A Reference may, in this connection, be made to the following obser-
vations of the Judicial Committee in Mohd Syedol Ariffin v Yeoh Ooi
CASE PILOT
23. 1928 SCC OnLine PC 28: (1928) 28 LW 17.

24. 1931 SCC OnLine Bom 15: AIR 1931 Bom 561.
25. 1937 SCC OnLine All 80:1LR 1937 All 860.
26. Hardev Singh v Gunnail Singh, (2007) 2 SCC 404. The court cited N. Srinivasa Rao v
Special Court, (2006) 4 SCC 214, if a transfer is void because of a statutory restrictions,
S. 43 cannot be used to validate the transaction and thereby to nullify the statute.
Gark27, as to the value to be given to illustrations appended to a section,

in ascertaining its true scope:
It is the duty of a court of law to accept, if that can be done, the illustrations
given as being both of relevance and value in the construction of the text.
The illustrations should in no case be rejected because they do not square
with ideas possibly derived from another system of jurisprudence as to the
law with which the sections deal. And it would require a very special case
to warrant their rejection on the ground of their assumed repugnancy to
the sections themselves. It would be the very last resort of construction to
make any such assumption. The great usefulness of the illustrations which
are although not part of the sections, having been expressly furnished by the
legislature as helpful in the working and application of the statute, should not
be thus impaired....
Alamanayakunigari Nabi Sab v Murukuti Papiah28 arose out of a suit to
enforce a mortgage executed by the son over properties belonging to the CASE PILOT
father, while he was alive. The court observed:
The argument that Section 43 should not be so construed as to nullify
Section 6(a) of the Transfer of Property Act, by validating a transfer initially
void under Section 6(a), however neglects the distinction between purporting
to transfer ‘the chance of an heir-apparent’ and ‘erroneously representing
that he (the transferor) is authorised to transfer certain immovable property’.
It is the latter course that was followed in the present case. It was represented
to the transferee that the transferor was in praesenti entitled to and thus
authorised to transfer the property. On this reasoning, if a transfer is statedly
of an interest of the character mentioned in Section 6(a), it would be void,
whereas, if it purports to be of an interest in praesenti, it is within the protec
tion afforded by Section 43.29
In Official Assignee v Sampath Naidu30, the facts were that the trans
feror had executed two mortgages over properties in respect of which he CASE PILOT
had only spes successions. Then he succeeded to the properties and sold
them. On the question whether the mortgages were void as offending
Section 6(a), Transfer of Property Act, the court held that as the mort
gages, when executed, contravened Section 6(a), they could not become
valid under Section 43. Referring to the Alamanaya Kunigari Nabi Sab
case, the court observed that no distinction could be drawn between a
transfer of what is on the face of it spes successions, and what purports
to be an interest in praesenti and that if such a distinction were allowed,
27. 1916 SCC OnLine PC 52: (1915-16) 43 IA 256. Hameed v Janteela, 2009 SCC OnLine Ker
4690: AIR 2010 Ker 44, a sum of money was received by a legal heir apparent in lieu of
her share in the property of her father during his lifetime, she was estopped from claiming
her share in the property of her father on his dying intestate. Another similar decision is
Shehanitnal v Hassan Khani Rawther, (2011) 9 SCC 223, the heir apparent had received
an advantage in the property, he was not allowed any share in succession.
28. 1915 SCC OnLine Mad 274: AIR 1915 Mad 972.
29. Gulam Abbas v Haji Kayyum AH, (1973) 1 SCC 1.
30. 1933 SCC OnLine Mad 141: (1933) 38 LW 610.
the effect would be that by a clever description of the property dealt with
in a deed of transfer one would be allowed to conceal the real nature of
the transaction and evade a clear statutory prohibition.
This reasoning is open to the criticism that it ignores the principle
underlying Section 43. It is to be noted that when that decision was
given the relevant words of Section 43 were, “when a person erroneously
represents”, and now, as amended by Act 20 of 1929, they are, “where
a person fraudulently or erroneously represents”, and that emphasises
that for the purpose of the section it matters not whether the transferor
acted fraudulently or innocently in making the representation, and that
what is material is that he did make the representation and the transferee
has acted on it. When the transferee knew as a fact that the transferor
did not possess the title which he represents he has, then he cannot be
said to have acted on it when taking a transfer. Section 43 would then
have no application, and the transfer would fail under Section 6(a). But
where the transferee does act on the representation there is no reason
why he should not have the benefit of the equitable doctrine embodied in
Section 43, however fraudulent the act of the transferor might have been.
The court was further of opinion (in the Sampath Naidu case3'), that
in view of the decision of the Privy Council in Annada Mohan Roy v
Gotir Mohan Mullick31 32 and in Sri Jagannadha Raju v Sri Raju Prasad
Rao33, which was approved therein, the illustration must be rejected.
In the Sri Jagannadha Raju case, the question was whether a contract
entered into by certain presumptive reversioners to sell the estate which
was then held by a widow as heir could be specifically enforced, after
the succession had opened. It was held that as Section 6(a) forbade trans
fers of spes successions, contracts to make such transfers would be void
under Section 23, Contract Act and could not be enforced. This decision
was approved by the Privy Council in the Ananda Mohan Roy case.
These decisions have no bearing on the question now under consider
ation as to the right of a person who for consideration takes a transfer
of what is represented to be an interest in praesenti. The decision in the
Sampath Naidu case is erroneous.
The preponderance of judicial opinion is in favour of the view taken in
the Alamanaya Kunigari Nabi Sab case.... In our judgment the interpre
tation placed on Section 43 in those decisions is correct and the contrary
opinion is erroneous. We accordingly hold that when a person transfers
property representing that he has a present interest therein, whereas he has
in fact only a spes successions, the transferee is entitled to the benefit of
Section 43, if he has taken the transfer on the faith of that representation and
for consideration.
31. Official Assignee v Sampath Naidu, 1933 SCC OnLine Mad 141: (1933) 38 LW 610.
32. 1923 SCC OnLine PC 28: (1922-23) 50 IA 239.
33. 1915 SCC OnLine Mad 457: ILR (1916) 39 Mad 554.
The test really is, does the transferee know that he is buying only a spes
or did he believe the transferor’s representation. This rule applies only
when the formal requirements of the law for the transfer are satisfied. If
they are not, then can be no title by estoppel.
There is another rule which seems to have some resemblance to the
doctrine of feeding the estoppel.34 It is known as the rule in Holroyd
v Marshall35. It is based on the maxim that equity takes as done what CASE PILOT
ought to be done. Suppose a transfer is made of property not in exist
ence. But if it comes into existence in future then according to this rule
the contract to transfer becomes a complete transfer. But this rule has
no application in India, because a contract by itself does not create any
interest in the property.
Under this section the subsequent estate passes to the transferee with
out the transferor doing anything except deliver the property to the
transferee when he calls upon the transferor to do so. If, however, before
he calls upon the transferor to deliver, the latter transfers the property to
another for value and without notice of the first transfer, the first trans
feree’s right is defeated by the title of the subsequent transferee.
The section operates even where the subsequent acquisition is less than
what was transferred if the transferee is willing to exercise the option
in his favour and be satisfied. The rules of Muslim law and those under
Section 6(a) were considered in Shehammal v Hassan Khani Rawther36.
There was relinquishment and renunciation of the chance of succession to CASE PILOT
an estate by heirs apparent during the lifetime of the owner of the estate
i) by receiving a consideration for giving up their expectant future share
in the property, or 2) by entering into a family arrangement or settlement
to that effect. It was held that either of such course of conduct constituted
an exception to the provision which does not permit transfer of spes sue-
cessionis. The doctrine of estoppel would come into play when the inher
itance opens on death of the owner. The legal heirs would be estopped
from claiming their right of succession. For this purpose, it is necessary
that all the heirs apparent should enter into a family arrangement with
the owner of the estate relinquishing their future right of inheritance. It is
not sufficient that all the members have separately or individually entered
into such an arrangement with the owner of the estate.
If the legal right and the enjoyment of such right became vested in a
person at once, he was said to have an estate in praesenti. If the enjoy
ment was postponed to a future date, they were known as estates in
futuro or estates in future, the main categories of which are known in
English Law as Remainders, Reversions and Executory interests. Under
feudal law, a transfer or feoffment was a transfer of feudal possession
34. Bantvari Lal v Sitkhdarshan Dayal, (1973) 1 SCC 2944.

35. (1862) 10 HLC 191: 11 ER 999; Renn Devi v Mahendra Singh, (2003) 10 SCC 200.
36. (2011) 9 SCC 223.
and a present transfer, because of the services involved. A remainder was

possible because there was no gap in the rendering of feudal services.
VESTED AND CONTINGENT REMAINDERS, REVERSIONS

AND EXECUTORY INTERESTS
If A, the tenant in fee simple, grants his land to B for life, B becomes enti
tled to the seisin of the land for his life and on his death it would revert
to A. A’s interest was called a reversion and A has valuable interest in the
land even during the lifetime of B, an interest which he could dispose
of inter vivos or by will. Supposing A in the above example grants a life
estate to B and thereafter the fee simple, which would have reverted to
him to C. In such a case C’s estate is known as a remainder. Remainders
are either vested or contingent. In the example, C’s interest is vested in
him and would vest in possession when B’s life-estate is terminated. It is
for this reason, namely, that the interests are already vested, that rever
sions and vested remainders were not strictly classed as future estates,
but are classed as present estates. If the grant was in the form to A for
life with remainder to B in fee simple if he passes the LLB Examination,
B acquired no estate until the happening of the contingency, namely,
the passing of the LLB examination which might never happen. Such
a remainder is known as a contingent remainder which was a future
estate. Under the English common law before B passes the LLB exami
nation, he has nothing which he can transfer to anyone. After he passes,
6 has a right capable of transfer. Under the equitable rule laid down in
Holroyd v Marshall37 such an interest can be transferred, that is in equity
6 can transfer his right even before he passes the examination, provided
he passes before A dies. At common law B cannot alienate unless the
condition is fulfilled. But, in equity it is sufficient if the condition is ful
filled before A dies. The modern law is, contingent remainders are legally
transferable as they were in equity. In Indian law contingent remainders
are not transferable and their transfer is prohibited by Section 6.
SCOPE OF CLAUSE (B) IS AS FOLLOWS:

(MERE RIGHT OF RE-ENTRY)
Suppose, in a lease deed, there is a clause for re-entry by the lessor on
the breach of certain covenants by the lessee. [See, S. m(g)] The benefit
of the clause for re-entry alone cannot be transferred in favour of a third
party without transferring the property itself. But if property is given by
C to A and it is provided that if A marries 6, the property would revert to
C, C’s interest will accrue only when A marries B. But C can assign such
interest to anyone, because, C’s right is an interest accruing on the hap
pening of a condition subsequent and not a bare right of entry. Similarly,
37. (1862.) io HLC 191: n ER 999.
a reversion of the property following upon or based on a forfeiture could

be transferred. Suppose there is a lease of lands and that on default of
payment of rent the lessor has a right to forfeit the lease and re-enter. If
the lessor gives notice of forfeiture and then leases the land to another,
that other can sue for possession from the first lessee, because, “what
was transferred was not the right of re-entry by itself, but the reversion
based on the clause for forfeiture”.
Since the transfer of the reversion carries with it the right to enter
on forfeiture, a question arises as to whether the transfer should take
place before the forfeiture is incurred. It is submitted that a covenant
for re-entry can be taken advantage of by the transferee even though
he became entitled to the reversion after the condition of re-entry has
become enforceable, on the analogy of the law in England. [Seey S. 41(3),
Law of Property Act, 1925]
SCOPE OF CLAUSE (c) IS AS FOLLOWS: (EASEMENT)

An easement is a right which the owner or occupier of certain immovable
property (dominant heritage) possesses for the proper enjoyment of the
property, like a right of way over the adjoining property (servient herit
age). Since the right cannot subsist apart from the dominant heritage, the
right of easement alone cannot be transferred.
As regards clause (d), a Hindu widow’s right to residence and mainte
nance comes under this clause, because the right is personal to her and
she is entitled to it as the widow of a deceased member of the joint Hindu
family. Similarly, religious offices to which emoluments are attached are
personal, the offices having been given to them on grounds of personal
qualification. These offices though inalienable are often heritable.
In Rajah Vurmah v Ravi Vurmah39, the founders of a temple provided
that its trustees shall be the chiefs of four distinct families. The office
was hereditary and no question of personal fitness arose. On the question
whether the trustees could alienate the trust property, holding that the
office was inalienable, it was observed:
1. The general principle is that the trustees had no power under the
common law of India to transfer the office.
2. There could be a custom which prevails against the general law by
which such a transfer could be made.
3. The important principle to be observed by the courts is to con
sider the evidence of usage as to the particular temple or religious
institution.
4. If the custom set up was one to sanction not merely the transfer
of a trusteeship, but as in this case the sale of a trusteeship for the38
38. 1876 SCC OnLine PC 22: (1876-77) 4 IA 76.

pecuniary advantage of the trustee, that circumstance alone would

justify a decision that the custom was bad in law.
Again, personal inains, whose enjoyment is restricted to the grantee and
his family for doing some service, cannot be alienated outside the family.
The alienation is however not void but only gives the government a right
to determine the inam and enter upon the property.
The maintenance granted to a wife on divorce or the alimony ordered
to be paid to her on judicial separation are inalienable, both in Indian
and English laws. A right of preemption also comes under this clause.
This principle does not apply in the case of a decree obtained for evic
tion on the ground of the personal use of the landlord, because a decree
is property under the general law and can be transferred.39
CLAUSE (d): (RESTRICTED INTEREST)
Clause (d) deals with restricted interest. Where the interest in a property
is restricted in enjoyment to the owner only, it becomes non-transferable.
A lady inherited some property from her maternal father as owner. She
gifted this property to her minor child reserving possession and right of
enjoyment to herself. This was held to be a restricted interest. The child
was the absolute owner of the property. It was not restricted in its enjoy
ment to herself.40
SCOPE AND PURPOSE OF CLAUSE (dd) IS AS FOLLOWS:

(RIGHT TO FUTURE MAINTENANCE)
If a widow sues her husband’s coparceners for past and future mainte
nance, she may get either a simple money decree fixing the amount of
future maintenance or charging the family properties. Or, the widow
may enter into an agreement with her husband’s coparceners or rever
sioners, fixing the future maintenance. Under this clause, a right to
future maintenance in whatever manner arising cannot be transferred.
But a decree for past arrears does not come under the prohibition.
This clause was introduced by the Amending Act of 1929 and applies
to transfers effected after 1 April 1930, even though the right to main
tenance arose before that date. Under clause (d), a right to receive main
tenance was not transferable, but some courts held that if the amount
of maintenance was fixed by agreement or decree it could be assigned.
This clause was therefore introduced. Although an agreement or a decree
39. Ramgopal Shrikrishna Asawa v Satyanrayan Ramnivas Phatalia, 1976 SCC On Line Bom
12: AIR 1978 Bom 14.
40. K. Balakrishnan v K. Kamalam, (2004) 1 SCC 581; Siddaraju v Gangadhara, 2012 SCC
OnLine Kar 6168: AIR 2012 Kar 143, entire land transferred, a portion retained by the
settlor as his life interest, a limited estate. Transfer not lawful, possession, if given was
recoverable.
would make such right definite, it is nevertheless a right created for the
personal benefit of the qualified owner.
SCOPE OF CLAUSE (e): (RIGHT TO SUE)

As regards clause (e), suppose A and B enter into a contract for purchase
of goods by A from B. As long as the contract subsists A or B can assign
his interest to a third party C who can enforce the contract against the
other party B or A. The assignment to C is of an actionable claim and
hence, is valid. But if the contract is broken, say by B, A is only entitled
to damages and he has only a mere right to sue for the damages. Such a
right cannot be transferred. An advocate assigned his right to the peti
tioner to sue the defendant for damages for defamation. The court said
such right was not assignable. The pauper petition filed in this case was
not maintainable.41 But if a decree for damages has been passed, that
decree can be transferred as it is no longer a mere right to sue. A right
to recover mesne profits is a mere right to sue and is not transferable. It
would be otherwise if the property itself is sold together with mesne prof
its. The distinction between an actionable claim and a mere right to sue
is brought out in the decision of the Privy Council in Manmatha Nath
Mullick v Hedait Ali42. In that case, one Banerji mortgaged his properties
to the appellant and thereafter leased the properties to the respondent
who undertook to pay the government revenue, cesses, and other public
demands. Early in 192.4, the mortgagee, that is, the appellant, purchased
the properties in execution of a mortgage decree obtained by him. The
respondent, as lessee, continued to be in possession till September 192,4.
He defaulted in payment of the government revenue for 192.3 and 1924.
The appellant paid the amounts and sued the respondent for their recov
ery. The High Court granted a decree for the 1924 instalment, but with
respect to the 1923 instalment, it held that Banerji transferred to the
appellant only a mere right to sue for damages and hence, the appellant
was not entitled to recover it under Section 6(e), Transfer of Property Act.
It was held by the Judicial Committee:
What was assigned to the appellant was not a mere right to sue but a claim
for a definite sum of money which the lessee was bound by his contract
with Banerji to repay to him. This would be an actionable claim to which
Section 130 of the Act would apply. The failure of the lessee to fulfil this
obligation does not give rise to a claim of damages within the meaning of
the clause in the lease on which the High Court found, but to a claim for
reimbursement of the precise sum which the landlord had disbursed to meet
the obligation.
41. Sundar v Rantdass, 2012 SCC OnLine Mad 4473: AIR 2013 Mad 133.
42. 1931 SCC OnLine PC 81: (1931-32) 59 IA 41; Thennofriz Insulations (P) Ltd v Vijaya
Udyog, 1981 SCC OnLine Del 11: AIR 1981 Del 385; Aniirtham Kuduntbah v Samant
Kudumban, (1991) 3 SCC 20.
This is the general principle in the law of torts also. If a consignor recov
ers from the insurance company the value of goods delivered by him to
the railway and lost in transit, and thereafter transfers to the insurance
company the right to sue the railway for damages, the assignment is a
mere right to sue and so is invalid. But, if a co-sharer transfers his right
to sue for accounts and for recovery of the sum found due, it is not the
transfer of a mere right to sue, but to recover a liquidated sum, though it
is to be determined after taking accounts.
SCOPE OF CLAUSES (f), (g) AND PUBLIC OFFICE,

STIPENDS, PENSIONS, ETC.
The prohibition under clauses (f), (g) and (h) is based on public policy.
An office is granted to a person on grounds personal to the incumbent
and he alone should discharge the duties of the office. As regards the
salary, though part of it is attachable to discharge a decree against him,
the salary is not saleable, for once a public officer loses the remuneration
attached to his office, he will be under no inducement to perform his
duties and may be tempted to take bribes.
Sections n and 12, Indian Pensions Act, 1871, read with Section 6,
Transfer of Property Act prohibit the voluntary and involuntary aliena
tion of pensions. This is an example of clause (g). As regards clause (/;)
service inams fall under this category. The emoluments of the inams are
attached to the office and if the alienation is permitted, the inamdar
would be left with the burden of service without enjoying the revenue
which was provided to keep him in comfort to be able to perform the
services. Examples of Section 6(h) and (/) are res nullius, res communes
\ and res extra commercium.
(^£=7 In Dwarampudi Nagaratnamba v Kunuku Ramayya43, the karta of
case pilot a joint Hindu family transferred coparcenary property to the appellant
who was his concubine. The transfers were made in view of past illicit
cohabitation and though ostensibly sale deeds, were in reality gift deeds.
On the question whether the transfers were void under Section 6(h)y
Transfer of Property Act, it was held:
The transfers were without consideration and were by way of gifts. The gifts
were not hit by Section 6(h) of the Transfer of Property Act, by reason of the
fact that they were motivated by a desire to compensate the concubine for her
past services.
This is so because even if there was a contract to make a gift in considera
tion of the past cohabitation, the contract would not be hit by Section 23,
Contract Act.
43. AIR 1968 SC 253: (1968) I SCR 43.

The Supreme Court, however, held that since the properties gifted
were coparcenary property, the karta had no power to make such a gift.
An example of Section 6(Z?)(3) is found in Section 136 of this Act.
An unlawful maintenance of a suit in consideration of an agreement
to have a part of the thing in dispute is known as “champerty” and the
transfer in pursuance of the agreement would be a champertous transfer.
Such a transfer is invalid in English Law, but not in Indian law.
In Union of India v Iqbal Singh44, the respondent, a displaced person
from Pakistan, had a verified claim assessed over ^32 lakhs for compen CASE PILOT
sation under the Displaced Persons (Compensation and Rehabilitation)
Act, 1954. His uncle had also a verified claim assessed at about ^26
lakhs. The uncle executed a will under which he gave various legatees
including the respondent shares in the compensation which was due to
be paid to him. After his death, the authorities held that the respondent
would be a beneficiary under his uncle’s will to the extent of 19 per
cent of the amount due to be paid to the uncle. The Assistant Settlement
Commissioner, however, clubbed together the individual claim of the
respondent and his share as a legatee and then awarded the maximum
compensation of ^2 lakhs under the rules. The respondent’s case was
that he was entitled to ^2 lakhs on his claim and in addition his share
of 19 per cent also as a legatee under his uncle’s will. When the matter
reached the High Court, his claim was allowed. Dismissing the appeal to
it, the Supreme Court held:
The statutory rights of claimants to compensation, which crystallise on
assessment and verification of claims are separate rights to property of each
claimant covered by the wide definition of ‘property’ in Section 6, Transfer
of Property Act. They cannot evaporate or vanish suddenly with the death
of a claimant.
Property dedicated to God. — Property dedicated to God, being of reli
gious use only, is not transferable under Hindu law. The right to receive
offerings as a co-sharer is dependent upon the right of performance of
pooja. Such a right is not transferable. The sale deed was accordingly
held void. But the court said that even if the plaintiff got no right under
the sale deed, he was entitled to share offerings by inheritance.45
Statutory prohibitions.—A transfer of property can be prohibited
only under the provision of some law and not by a direction in judgment
made in a writ petition under Article 226 of the Constitution.46 A lease
44. (1976) 1 SCC 570; Sundariya Bai Choudbary v Union of India, 2008 SCC OnLine MP
108: AIR 2008 MP 227, a will can be executed only in respect of an estate, family pension
is not an estate, it could not be bequeathed by will. Other pensionary benefits, like PF,
gratuity, etc and retiral dues, extra remuneration are an estate of the deceased. It is capa
ble of being disposed of by bequest.
45. Dani Rant v Jamuna Das, AIR 2010 NOC 524 (All).
46. Kansing Kalnsing Thakore v Rabari Maganbhai Vashrantbhai, (2006) 12 SCC 360.
land was Bhumidhari with non-transferable rights. It was held that no

interest could be transferred in such land to another person. The land
would stand vacated and become vested in the state.47
WHO CAN TRANSFER

The next section, Section 7 deals with persons who can transfer.
7. Persons competent to transfer.—Every person competent to contract and
entitled to transferable property, or authorised to dispose of transferable prop
erty nor his own, is 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.
Trust.—When a person acquires an item of property with his money
but in the name of another person, he acquires beneficial interest in such
property. It has been held that such interest is indisputably capable of
being transferred. For such a purpose, the only legal requirement is the
essence of trust. The right of the beneficiary to transfer his interest being
absolute, the transferee derives rights, titles and interest in it.48
PERSON COMPETENT TO CONTRACT
In Mohori Bibee v Dharmodas Ghose49, it was held that a minor’s con-

case pilot tract *n In<^a *s v°id, that is5 a minor is not competent to contract, and
hence, a conveyance of land by a minor is not merely voidable, but void.
Where a minor, however, fraudulently represents himself to be a major
and induces an innocent third party to purchase property from him,
and later sues for its recovery on the ground that the sale was void, the
court will, on equitable principles, restore the property to him, only if he
returns the purchase money. The age of majority in English Law is 21,
while in Indian law it is 18, except when the minor is under the protec
tion of the Court of Wards or a guardian has been appointed under the
Guardian and Wards Act, 1890, in which case, the age of majority is 21.
Minority, however, is no disqualification for being a transferee in the
following cases:
1. a gift or device in favour of a minor, when it is not onerous;
2. a conveyance for consideration, where the consideration has pro
ceeded or proceeds from a third party and no obligation is imposed
on the minor; and
3. even if the consideration proceeded from the minor, if the trans
action was complete and there is no outstanding obligation to be
performed by the minor.
47. Ramkali v State of U.P., AIR 2009 NOC 190 (All).

48. Canbank Financial Services Ltd v Custodian, (2004) 8 SCC 355.
49. 1903 SCC OnLine PC 4: (1902-03) 30 IA 114.
Where the conveyance is for consideration which has yet to proceed from
the minor or where there is an outstanding obligation to be performed
by the minor, the conveyance in favour of the minor transferee cannot
be upheld. For example, a lease in favour of a minor when rent has to be
paid in future. In the cases of a lease under Section 107, since a lease has
to be executed both by the lessor and the lessee, a minor can neither be
a lessor nor a lessee.
A person who is competent to transfer can do so either himself or
by constituting any other competent person his power of attorney. Such
person can do so only as long as the owner is alive. His power can also
be terminated at any time.50 A person cannot bestow upon his transferee
better title than he himself has. In order for a valid transfer to happen,
the transferor must either himself have good title or he must have been
given authority to transfer (whether by way of power of attorney or oth
erwise) by someone who has good right, title and interest in the property
being transferred.
LUNATICS
A transfer by a lunatic is wholly void. If the conveyance was made during
a lucid interval, it would be valid provided no committee or manager has
been appointed in respect of his property. The law is the same in England
and under the Mental Health Act, 1987.
Where a conveyance is made in favour of a lunatic the property will
vest in him, but it will be managed by a committee or receiver in England,
and by a manager in India.51
OTHER PERSONS WITH LIMITED

POWERS OF ALIENATION
The powers of statutory corporations, in India and in England, are those
authorised by the statute either expressly or by necessary implication.
Managers of joint Hindu families with respect to the family properties,52
trustees and managers of temples and heads of maths are other persons
coming under this class. Where an agreement for sale of an immovable
property was not joined by one of the co-sharers, the whole transfer was
held to be void including the share of the signing co-sharers.53
50. Suraj Lamp & Industries (P) Ltd (2) v State of Haryana, (2012) 1 SCC 656.
51. Tarakesiuar v Mahesh, AIR 1981 Pat 348.
52. Balai Chandra Mondal v Indurekha Debi, (1973) 1 SCC 284; Attaur Rahetnan Fateh
Mohmmad v Hari Peeraji Burud, AIR 2.008 NOC 1900 (Bom), a person not holding
transferable interest in property cannot transfer it. Such a transferor cannot enforce the
agreement executed by him against the transferee, M.P. Wakf Board v Subhan Shah,
(2006) 10 SCC 696; the expression “title to property” has a definite connotation, it is not
the same thing as user.
53. Vimaleshtvar Nagappa Shet v Noor Ahmed Shariff, {2011) 12 SCC 658.
PERSONS DISQUALIFIED FROM BEING TRANSFEREES

Aliens and corporations were at one time so disqualified in England. The
law there is now governed by the Naturalisation Act of 1870 and the
Mortmain and Charitable Uses Act, 1888. These principles were never
imported into India, but there is a class known as ascetics or sanyasis, who
have renounced the world and are deemed to be civilly dead, and hence,
they cannot be transferees of property. If the renunciation or retirement
from worldly life is only partial, he will not be so disqualified.54
THE EFFECTS OF TRANSFER [S. 8]

8. Operation of transfer.—Unless a different intention is expressed or nec
essarily implied, a transfer of property passes forthwith to the transferee all the
interest which rhe transferor is then capable of passing in the property and in the
legal incidents thereof.
Such incidents include, where the property is land, the easements annexed
thereto, the rents and profits thereof accruing after the transfer, and all things
attached to the earth;
and, where the property is machinery attached to the earth the movable parts
thereof;
and, where the property is a house, the easements annexed thereto, the rent
thereof accruing after the transfer, and the locks, keys, bars, doors, windows and
all other things provided for permanent use therewith;
and, where the property is a debt or other actionable claim, the securities
therefor (except where they are also for other debts or claims not transferred to
the transferee), but not arrears of interest accrued before the transfer;
and, where the property is money or other property yielding income, the inter
est or income thereof accruing after the transfer takes effect.
UNLESS A DIFFERENT INTENTION IS

NECESSARILY IMPLIED
When a transfer is made to a Hindu or Muslim, can their personal law
be necessarily implied into the document?
In Sahu Har Prasad v Fazal Ahmad55, a Sunni Mohammedan, gov
CASE PILOT erned by Hanafi law, executed a document purporting to be a sale of cer
tain properties in favour of his mother. Shortly, thereafter the transferor
died and in a litigation that ensued, the sale was held to be void. The
effect of the decision was that the mother took nothing by the sale deed.
The mother had, however, before the decision, executed a tuakfnama of
the properties transferred by the sale deed. Since the sale was void and
she became entitled to one-third of the properties under her personal law,
54. See, Mayne’s Hindu Law, Art. 561. See, S. 136.

55. 1933 SCC OnLine PC 5: (1932-33) 60 IA 116; Sk Noor v Sk G.S. Ibrahim, (2003) 7 SCC
321.
the question arose whether the ivakf attached to that one-third share. It
was held:
Their Lordships think it at least doubtful whether Section 8, Transfer of
Property Act has any application to the present case, but in any event, they
are of the opinion that in order to ascertain the intention of the lady in exe
cuting the wakfnama, the whole transaction must be looked at, and upon
this they think that her intention to settle only what she thought had been
entrusted to her by her son is clear. The sale and the execution of the wakf
nama must be regarded as integral parts of one transaction and the sale being
held to be void, the wakfnama falls with it.
In Ram Gopal v Nand Lal56, a Hindu died leaving two widows, a wid
owed daughter-in-law and a daughter’s son. The widows took their hus CASE PILOT
band’s property and after the death of one of them, the other surrendered
it to the daughter’s son who was the nearest reversioner. After his death,
the guardian of his minor son transferred to the widowed daughter-in-
law two items of property and she relinquished all her claims to her
father-in-law’s property. There was nothing in the transfer deed to indi
cate that the daughter-in-law was to enjoy the property only during her
lifetime. On the question whether, by implication, she took only a life
estate, it was held:
The general principle of law recognised and embodied in Section 8 of the
Transfer of Property Act is that unless it is shown that under Hindu law
a gift to a female means a limited gift or carries with it the restrictions or
disabilities similar to those that exist in a widow's estate, there is no justifi
cation for departing from the principle. There is certainly no such provision
in Hindu law and no text could be supplied in support of the same. The
position therefore is that: to convey an absolute estate to a Hindu female, no
express power of alienation need be given; it is enough if words are used of
such amplitude as would convey full rights of ownership.
Similarly, in Nathoo Lal v Durga Prasad5758
, a Hindu’s property after his
death was gifted to one of his daughters. On the donee’s death, the son CASE PILOT
of another daughter—the daughter being dead—claimed the property
on the ground that his aunt had only a limited estate in it. The Supreme
Court followed the Ram Gopal case53 and observed:
It is true that the principle that unless there are express terms in the deed
of gift to indicate that the donor who had absolute interest intended to
convey absolute ownership, a gift in favour of an heir who inherits only a
56. AIR 1951 SC 139.

57. AIR 1954 SC 355; Krishnabai v Dnyandeo Laxman Yeyale, 1980 SCC OnLine Bom 224:
AIR 1982 Bom 107; Nanak Chand v Chander Kishore, 1982 SCC OnLine Del 150: AIR
1982 Del 520 (Meaning of Malik Meri Matuka); Narain Prasad Singh v State, 1983 SCC
OnLine Pat 69: AIR 1983 Pat 244; Rantkali v Sumitra, AIR 1983 All 429; CIT v Bahadur
Singh, (1986) 4 SCC 512.
58. Ram Gopal v Nand Lal, AIR 1951 SC 139: 1950 SCR 766.
limited interest cannot be construed as conferring an absolute interest, was

once deduced from the Privy Council decision in Mohd Shumsool Hooda v
Sbetvukram59, wherein it was held that a bequest to a daughter-in-law passed
a limited estate.... This matter is now set at rest by Ram Gopal case (supra)
and according to the law as understood at present there is no presumption
one way or the other and there is no difference between the case of a male
and the case of a female, and the fact that the donee is a woman does not
make the gift any the less absolute when the words would be sufficient to
convey an absolute estate to a male.
A registered settlement deed was not allowed to be cancelled by the sett
lor all by himself. Such a unilateral deed of cancellation was not allowed
to be registered. All the parties to the settlement must join. The settlor
who is seeking cancellation has to proceed under Section 31, Specific
Relief Act, 1963 for an order of cancellation.60
ALL INTEREST OF TRANSFEROR

Where a vacant site was mortgaged by deposit of title deeds, and subse
quently, a cinema hall was built on it by the owner of the site, the cinema
hall is also comprised in the security.61
All things attached to the earth
This expression is defined in Section 3 as:
3. Interpretation clause. — “attached to the earth” means—
(a) rooted in the earth, as in the case of trees and shrubs;
(b) embedded in the earth, as in the case of walls or buildings; or
(c) attached to what is so embedded for the permanent beneficial enjoyment
of that to which it is attached.
In Indian law, a fixture can be removed before sale of the land to which it
was affixed. But under the English common law it could not be removed,
because quicquid plantatur solo, solo cedit, that is, whatever is affixed to
the soil belongs thereto. But the modern law62 in England is the same as
the Indian law as is shown by the statement of Baron Martin:
The old rule laid down in the old books is, that if the tenant or the occupier
of a house or land annex anything to the freehold, neither he nor his repre
sentatives can afterwards take it away, the maxim being Quicquid plantatur
solo, solo cedit. But as society progressed and tenants for lives or for terms
of years of houses, for the more convenient or luxurious occupation of them,
or for the purposes of trade, affixed valuable and expensive articles to the
freehold, the injustice of denying the tenant the right to remove them at his
59. 1874 SCC OnLine PC 17: (1874-75) 2 IA 7.

60. V. Ethiraj v 5. Sridevi, AIR 2014 Kar 58.
61. Boda Narayana Murthy v Valluri Venkata Suguna, 1977 SCC OnLine AP 270: AIR 1978
AP257.
62. Elliot v Bishop, (1854) 10 Ex 496: 156 ER 534.
pleasure, and deeming such thing practically forfeited to the owner of the fee
simple by the mere act of annexation became apparent to all; and there long
ago sprung up a right sanctioned and supported by the Court of Law and
Equity, in the temporary owner or occupier of real property or his represent
atives, to disannex and remove certain articles, though annexed by him to
the freehold, and these articles have been denominated fixtures.
In Narayan Das Khettry v Jatindra Nath Roy Chowdhury6364 , land upon
which a house was built was sold for arrears of revenue and from the CASE PILOT
purchaser government acquired it under the Land Acquisition Act, 1894.
On the question as to who was entitled to the compensation in respect of
the structures, the original owner or the purchaser in the revenue sale,
it was held:
It was conceded that the maxim, which is found in English Law, namely,
quicquid plantatur solo, solo cedit has at the most only a limited application
in India.
The case of Thakoor Chunder Poramanick v Ramdhone Bhicttacharjeee\
to which reference was made in the High Court’s judgment, differs materi
ally from the present case in its facts, and the decision itself is not applicable.
The following statement, however, is to be found in the judgment of the Full
Bench which was delivered in 1866:
We have not been able to find in the laws or customs of this country any
traces of the existence of an absolute rule of law that whatever if affixed
or built on the soil becomes a part of it, and is subjected to the same rights
of property as the soil itself.
Their Lordships, therefore, are of opinion that in construing the provisions
of the abovementioned Acts it is necessary to bear in mind the statement
made by Sir Barnes Peacock in the abovementioned case, which seems to
have been accepted for many years as a correct pronouncement....
Having special regard to the view held in India respecting the separation
of the ownership of buildings from the ownership of the land, and to the
recognition by the Courts in India that there is no rule of law that whatever
is affixed or built on the soil becomes a part of it, and is subjected to the
same rights of property as the soil itself, their Lordships are of opinion that
in order to make a house erected upon the land as well as the land itself, sub
ject to the Government power of sale for arrears of revenue, special words
indicating the intention of the Legislature to make the building subject to sale
would be necessary.
No such special words are to be found, and their Lordships are of opinion
that the conclusion at which the learned Judges of the High Court arrived,
namely, that ownership of the building did not pass to the plaintiff by reason
of the revenue sale, was correct.
63. 192.7 SCC OnLine PC 29: (1926-27) 54 IA 218; State Bank of Patiala v M.S. Chohan,
1981 SCC OnLine HP 13: AIR 1982 HP 27; Harihar Prasad v Jitendar, AIR 1982 Pat 165
(Land and House); Ideal Bank. Ltd v Official Liquidator, 1983 SCC OnLine Del 23: AIR
1983 Del 546.
64. (1866) 6 WR 228.
In the Poranianick case65 an alienee from a Hindu widow erected certain

buildings on the land. He was evicted by the reversioner because the wid
ow’s alienation was without necessity. The alienee, however, was allowed
to remove the building constructed by him and the observations of Sir
Barnes Peacock were, as seen above, approved by the Privy Council in
the Narayan Das case66.
The maxim cujus est solum ejus est usque ad coelum means, he who
possesses land possesses also that which is above it. Not only has land
thus an indefinite extent upwards, in law, it extends downwards also.
Therefore, the owner of the soil owns all that lies beneath its surface.
Although the presumption thus is that the owner of land has the right to
the mines and minerals underneath, it frequently happens that a person
being entitled to land and the mines beneath, grants away the land reserv
ing the right to mines. Therefore, whether subsoil rights go to the grantee
would depend upon the nature of the rights of the transferor in the land
transferred and the terms of the transfer.67
Some departure from this rule seems to be in evidence. In a case before
the Kerala High Court, the document which assigned immovable prop
erty did not mention the house built on it. It was held that the assignee
obtained title to the house also because things attached to the earth have
to go with it.68
For a chattel to become a fixture it must be attached to the immovable
property for its more beneficial enjoyment. Such a purpose is presumed
when the person attaching it is the owner; and no such inference is drawn
in the case of a tenant of the property.
Where machinery was installed, by the owner on a cement platform
and kept in position by being attached to pillars which were deeply fixed
in the ground, the machinery would be immovable property. But if a
pump was fixed to the land to be used only as a pump and not for the
more beneficial enjoyment of the land, it continues to be a chattel and
does not become a fixture.69
When a usufructuary mortgagee of land puts up a tent and installs cin
ema equipment therein, the inference would be that the cinema machin
ery is only a chattel and not a fixture, because the installation was not
made by the owner.
65. Ibid.
66. Narayan Das Khettry v Jatindra Nath Roy Chowdhury, 1927 SCC OnLine PC 29: (1926-
27) 54 IA 218.
67. See also, Ss. 55(2), (3), 65 and 108(c).
68. V.P. Fakrudheen Haji v SBI, 2008 SCC OnLine Ker 281: AIR 2009 Ker 78.
69. CCE v Solid and Correct Engg Works, (2010) 5 SCC 1222, the assessee assembled and
CASE PILOT
erected asphalt drum hot mixed plants at the site fixing them to the foundation perma
nently embedded in earth. The court said that such attachment did not qualify a plant to
be treated as immovable property. It had a separate existence devoid of the land. It could
not be regarded as something for permanent beneficial enjoyment of the land.
Section 8 is only a recognition by the legislature of the rule that acces

sory follows the principal.
DEBTS AND SECURITIES

In Jugalkishore Saraf v Raw Cotton Co Ltd70, two partners carrying
on business as pucca adatias filed a suit against the appellant for recov CASE PILOT
ery of money, and, while the suit was pending transferred the debt to
the respondents. The respondents, however, did not take any steps to
get themselves substituted as plaintiffs and therefore, the decree was
passed in the name of the original plaintiffs. On the question whether
the respondent could apply for execution of the decree as a transferee,
under the Transfer of Property Act, it was held:
The transfer of the debt passed all the interest which the transferors were
then capable of passing in the debt and in the legal incidents thereof. There
was then no decree in existence and, therefore, the transferors could not then
pass any interest in the non-existing decree. Therefore, Section 8 ...does not
assist the respondent.... Section 8 of the Transfer of Property Act does not
operate to pass any future property, for that section passes all interest which
the transferor can then i.e. at the date of transfer, pass.
Since the words used are “debt or other actionable claim” the question
whether a debt secured by mortgage of immovable property could be
transferred without registering the instrument of transfer arises. It is no
doubt not an actionable claim, but since under Section 8 the securities
are also transferred, that is the immovable property is transferred, such
a transfer of the debt without registration does not seem to be possible.
But there could be a transfer of the debt apart from the security. Thus,
in Imperial Bank of India v Bengal National Bank71, the respondent
bank had borrowed large sums from the appellant bank and executed CASE PILOT
debentures creating a floating charge on the whole undertaking, prop
erties, assets and interest present and future as security for the loans.
The debentures were not registered under the Registration Act. The
respondent bank in the ordinary course of its business lent money to
customers on overdraft account on the security of title deeds deposited
by the customers in respect of such loans. A petition for winding up was
filed against the respondent bank and liquidators were appointed. In the
debenture holders’ action commenced by the appellant, the liquidators
contended that the consequence of non-registration of the debentures
under Sections 17 and 49 was that they could not be received in evidence
with the result that not only was the appellant bank deprived of all rights
70. AIR 1955 SC 376: (1955) 1 SCR 1369.

71. 1931 SCC OnLine PC 56: (1930-31) 58 IA 323; H. Anraj v Govt ofT.N., (1986) 1 SCC
414.
to the property comprised in the title deeds, but also of any rights over
the sums so secured. It was held:
There appears to be no difficulty in a transfer of a debt without the security:
the original debtor can always redeem: the relations between him and his
original creditor are not altered: indeed, in the present case it would appear
that the appellant-bank can only enforce the debt in the name of the respond
ent-bank which, no doubt, the latter bank must permit.
The important point to be noted about this case is that there are two
debts involved: i) by the respondent bank to the appellant bank, and
) by the customer of the respondent bank to the respondent bank and
2.
for securing which he deposited his title deeds. As regards the first debt,
the appellant bank could always sue the respondent bank for it. If the
appellant bank, however, wanted to proceed to enforce the second debt
which was transferred to the appellant bank, then and then only should
the procedure indicated in the decision be followed.
PROPERTY LET OUT ON LEASE
The relationship of landlord and tenant (with the new landlord) comes
into existence on transfer of the leased property. It is not necessary that
the lessee should make an attornment of that fact. Termination of the
lease by the lessor on the ground of arrears of rent was held to be valid.72
TAXES, EXCISE, ETC.

A sale deed stipulated that liabilities arising out of land, building and
machinery were to be borne by the purchaser. The court said excise duty
was not a liability arising out of land, building or machinery. It was
payable on manufacture of excisable material. The stipulation in the sale
deed did not cover excise duty. The purchaser was not liable for excise
duties of the seller.73
ACTIONABLE CLAIM
This is defined in Section 3:
“actionable claim” means a claim to any debt, other than a debt secured
by mortgage of immovable property or by hypothecation or pledge of movable
property, or to any beneficial interest in movable property not in the possession,
either actual or constructive, of the claimant, which the civil courts recognise as
affording grounds for relief, whether such debt or beneficial interest be existent,
accruing, conditional or contingent:
72. Gyanendra Kumar v Dinesh Kumar, AIR 2008 NOC 1416 (Utr).
73. Rana Grinders Ltd v Union of India, AIR 2013 SC 3422.
An actionable claim may be existent in praesenti, accruing, conditional

or contingent.74
This expression may be contrasted with the expression used in English
Law, namely, a chose in action. In Colonial Bank v Whinney75, it was
observed: CASE PILOT
It is difficult to find out the exact meaning of the expression ‘chose in

action’.... It is impossible to look into the authorities upon this subject with
out seeing, that the meaning attributed to the expression has been expanded
from time to time.
Originally, the expression meant a present right to take proceedings for
the recovery of a debt in a court of law. Since debt was considered as
a purely personal obligation, an assignment of a debt was regarded as
a mere assignment of a right to sue and was regarded as incapable of
assignment. Later, the common law recognised the right of one inter
ested in the property to sue in the name of the creditor. Courts of equity,
however, recognised the title of an assignee of a debt. This distinction
between the transfer of a chose in action and the transfer of a right to
sue for the same has ceased to exist since the passing of the Judicature
Act of 1873. Therefore, an absolute assignment by writing, under the
hand of the assignor of any debt, or other legal chose in action of which
express notice in writing has been given to the debtor or other person
from whom the assignor would have been entitled to receive or claim
such debt or chose in action shall be deemed in law to pass and transfer
the legal right to such debt or chose in action. The term now includes
all debts and all claims for damages for breach of contract or torts con
nected with such breaches. The expression thus is much wider than the
phrase “actionable claim” as defined in the Act.
The word “debt” in the definition indicates that the claim is for a defi
nite sum of money which is due.
The following have been held to be actionable claims:
1. benefit of an executory contract for the purchase of goods; the right
to claim the benefit of a contract not coupled with any liability;76
2.. claim for a definite sum of money, which a lessee is bound to pay
under the contract with the lessor;
3. claim for arrears of rent;77
4. claim for future rent;
5. decree that may be passed in a suit for a definite sum of money,
already filed, because it is a claim to a debt;
74. Sunrise Associates v Govt (NCT of Delhi), (2.006) 5 SCC 603.

75. (1885) 30 Ch D 2.61.
77. Ibid, it includes insurance claims, partnership claims, right to sue for the benefit of a
contract not coupled with any liability, arrears of rent, etc.
6. life policies;
7. right to receive money from a licensee for a licence given to him to
remove bark from the tree of the licensor;
8. right to recover arrears of annuity;
9. share in dissolved partnership;
10. usufructuary mortgagor’s liability to pay to the mortgagee the bal
ance remaining; and
11. right to a credit in a provident fund account.78
The following are not actionable claims, though they would be choses in
action in English Law:
1. a claim to mesne profits;
2. a copyright, because it is capable of possession;
3. a decree already passed, because it is no longer a debt;
4. right of a person to recover damages by way of interest for the
breach of contract; and
5. right to recover profits from a co-sharer.
Section 9 provides:
9. Oral transfer.—A transfer of property may be made without writing in
every case in which a writing is not expressly required by law.79
Before the passing of the Transfer of Property Act, no writing at all was
necessary for a conveyance. But under the Act, writing is necessary in the
case of following transfers:
1. Sale of immovable property of the value of ^100 or more—
Section 54.
2. Sale of a reversion or other intangible thing—Section 54.
3. Simple mortgage irrespective of the amount secured — Section 59.
4. All other mortgages for 100 or more—Section 59.
5. Leases of immovable property from year to year or for a term
exceeding one year or where yearly rent is reserved — Section 107
[see also, the proviso to the section and S. 117].
6. Exchange (same rules as for sale)—Section 118.
7. Gift of immovable property—Section 123.
8. Transfer of an actionable claim—Section 130.
9. Notice of transfer of actionable claim—Section 131.
Therefore, the following transfers can be effected by a parol contract:
1. Sale or exchange of immovable property of value less than 100.
2. A mortgage by deposit of title deeds.

79. Vali Pattabhirama Rao v Sri Ramanuja Ginning and Rice Factory (P) Ltd, 1983 SCC
OnLine AP 207: AIR 1984 AP 176; Kale v Director of Consolidation, (1976) 3 SCC 119;
Tek Bahadur Bhujil v Debi Singh Bhujil, AIR 1966 SC 292.
3. Mortgages, other than a simple mortgage when the principal

amount secured is less than ^100.
4. Leases other than those mentioned in item (5) above.
Further, a transfer could be made to the deity by an oral gift, because
the deity is not a living person and the transfer is not in favour of a living
person. [See, S. 5].
EXERCISES
1. What is meant by transfer of property? (pp. 17-19)
2. Can a person transfer property to himself? (pp. 19-21)
3. Is the Act exhaustive of all kinds of transfer? (p. 21)
4. What is meant by actionable claim? (pp. 44-46)
5. Does Indian law distinguish between legal and equitable estates?
(p. 20)
6. What are the exceptions to the rule that all kinds of property can
be transferred? (p. 21)
7. A leases his land to B on condition that in case B sub-lets, he would
re-enter. A transfers his right of re-entry to C. Is this transfer valid?
(PP- 3o-3i)
8. A pujari of a temple transfers his turn to worship and his right to
receive the offerings. Is the transfer valid? (p. 35)
9. The decree-holder of a decree for pre-emption transfers it to
another. Is the transfer valid? (pp. 33-34)
10. A Hindu widow transfers her right to maintenance. Is the transfer
valid? (pp. 32-33)
11. Is a transfer of the right to sue for defamation valid? (p. 33)
12. What is meant by “Feeding the grant by estoppel”? (pp. 24-25)

and statutes referred to in the book
through EBC Explorer™ on SCC Online*;
The following statute from this chapter is available

• Transfer of Property Act, 1882 STATUTE PILOT
50 LAW OF TRANSFER OF PROPERTY
(contd.)
The following cases from this chapter are available (—"V*

• Alamanayakunigari Nabi Sab v Murukuti Papiah, 1915 CASE PILOT
SCC OnLine Mad 274

• Amrit Narayan Singh v Gaya Singh, 1917 SCC OnLine PC 72
• Annada Mohan Roy v Gotir Mohan Mullick, 1923 SCC OnLine
PC 28
• Colonial Bank v Whinney, (1885) 30 Ch D 261
• Dwarampndi Nagaratnamba v Kunuku Ramayya, AIR 1968 SC 253
• Holroyd v Marshall, (1862) 10 HLC 191: 11 ER 999
• Imperial Bank of India v Bengal National Bank, 1931 SCC OnLine
PC 56
• Jugalkishore Sarafv Raw Cotton Co Ltd, AIR 1955 SC 376
• Jumma Masjid v Kodimaniandra Deviah, AIR 1962 SC 847
• Karpagathachi v Nagarathinathachi, AIR 1965 SC 1752
• Mohd Syedol Ariffin v Yeoh Ooi Gark, 1916 SCC OnLine PC 52
• Mohori Bibee v Dharmodas Ghose, 1903 SCC OnLine PC 4
• Narayan Das Khettry v Jatindra Nath Roy Chowdhury, 1927 SCC
OnLine PC 29
• Nathoo Lal v Durga Prasad, AIR 1954 SC 355
• Official Assignee v Sampath Naidu, 1933 SCC OnLine Mad 141
• Pandey Oraon v Ram Chander Sahu, 1992 Supp (2) SCC 77
• Ram Gopal v Nand Lal, AIR 1951 SC 139
• Sahu Har Prasad v Fazal Ahmad, 1933 SCC OnLine PC 5
• Shehammal v Hassan Khani Rawther, (2011) 9 SCC 223
• Union of India v Iqbal Singh, (1976) 1 SCC 570
• V.P. Fakrudheen Haji v SBI, 2008 SCC OnLine Ker 281
Chapter 3
General Rules Regarding

Transfer of Property
RESTRAINTS ON ALIENATION
Sections io to 18 contain the first set of rules that have to be observed
while alienating property. Since it is a principle of economics that wealth
should be in free circulation to get the greatest benefit from it, these sec
tions provide that ordinarily there should be no restraints on alienation.
Where “wealth accumulates men decay”. The policy of law is that there
ought to be freedom to alienate property to permit it to circulate in soci
ety. The principle is alienatio rei praefertur juri accrescendi or the law
prefers alienation to accumulation.
Section io provides:
10. Condition restraining alienation. — Where property is transferred subject
to a condition or limitation absolutely restraining the transferee or any person
claiming under him from parting with or disposing of his interest in the prop
erty, the condition or limitation is void except in the case of a lease where the
condition is for the benefit of the lessor or those claiming under him: Provided
that property may be transferred to or for the benefit of a woman (not being a
Hindu, Muhammadan or Buddhist), so that she shall not have power during her
marriage to transfer or charge the same or her beneficial interest therein.
ABSOLUTE RESTRAINT
The rule in all systems of jurisprudence is alienatio rei praefertur juri
accrescendi, that is, alienation is favoured by the law rather than accu
mulation. It was this attitude that made sub-infeudation make place for
substitution.
The section is based on the principle that the power of alienation is
one of the most important incidents of property.1 If total restraints were
1. CZT v Abmedabad Rana Caste Assn, (1982) 2 SCC 542.

not prohibited, this important principle would be abrogated by private

agreement. Remember that the right to transfer property is one of the
four rights of ownership in the property. It is against the policy of law to
transfer property to another (transferee) but preventing him (the trans
feree) from exercising one of the basic rights of an owner of property. At
the same time the transferor, who is at the time of the transfer the owner,
must also be permitted to exercise his right to transfer freely and in a
manner in which he sees fit, there ought to be no restrain on this right
either. Therefore, a balance is struck between allowing the transferor to
transfer property in any way he sees fit including with the conditions and
limitations he sees fit and there being no absolute restraint on the trans
feree from exercising in the future his right to alienate or transfer the
property. This balance is struck by permitting the transferor to impose
partial restraints or limitations on the transfer of property as long as
they are not absolute restraints. On the same principle, a provision in an
agreement among the members of a joint Hindu family that they would
only enjoy the income of the joint family properties and that they would
not claim partition, would be void, though partition is not alienation.
This section has to be read with Section 12 as they both deal with
restraints on powers of alienation. While a total restraint on the power
of alienation is void, partial restraints23may be good/permissible. The
restraint may be absolute as to point of time or as to a particular person
or of any other form. The question whether the restraint in question is
absolute or partial is to be gathered from the contents of the deed. The
words of the clause have to be so interpreted as to harmonise all the pro
visions of the deed? For example, a condition that the transferee shall
not transfer his interest for a period of three years, or a condition that the
transferee shall not transfer the property to any member of a particular
person’s family. But, the determination whether a condition amounts to
a total or partial restraint depends upon the substance and not the form.
For example, an agreement preventing the transferee from transferring
his property to anyone except to the transferor or his heirs, and that
too if they are willing to buy it and for a fixed price, is in substance an
absolute restraint.
If A, B and C effect a partition of their joint property and agree among
themselves that if any one of them should have no issue, he should not sell
his share, but leave it to the other two, it would be an absolute restraint.
If A sells property to B and 6 executes an independent separate agree
ment that if he wanted to sell the property he would only sell it to A, such
2. Mohd Raza v Abbas Bandi Bibi, 1932. SCC OnLine PC 23: (1931-32) 59 IA 236; Saraju
Bala Debi v Jyotirmoyee Debi, 1931 SCC OnLine PC 38: (1930-31) 58 IA 270; V.
Pechimuthu v Gowrammal, (2001) 7 SCC 617; Raghuram Rao v Eric P. Mathias, (2002)
2 SCC 624.
3. Thomas v A.A. Henry, AIR 2008 N0C 1414 (Ker).
S. 10] GENERAL RULES REGARDING TRANSFER OF PROPERTY 53
an agreement would be valid, because A, while transferring the property,

did not impose any condition against alienation.
The section makes two exceptions: one in favour of lessors and the
other in case of married women.
In the case of lessors, the condition will be good only “if it is for the
benefit of the lessors”, as for example a specific statement in the con
veyance that the lessor may re-enter. The effect of contravening a mere
condition against assignment in a lease will not make an assignment in
contravention of such a condition automatically void. Without an express
provision for re-entry, the lessor will only be entitled to damages for
breach of covenant.
A valid condition against alienation of the leasehold interest can be
imposed both in respect of voluntary and involuntary alienations, such
as, a sale in execution. But in the case of voluntary alienations, there
should also be a condition for re-entry to make the condition against
alienation valid.
Restraints on the power of alienation in dispositions in favour of mar
ried women, who are not Hindu, Mohammedans or Buddhists, will be
valid. Under English Law as once administered, a husband and wife were
regarded as one legal entity, so that on marriage all the property of a
woman became the property of her husband, and she could not dispose
of her property, except with her husband’s consent and could not, even
with such consent, devise the property by will. That was why Sir A.P.
Herbert in one of his Misleading Cases makes the humorous remark that
you can never find a reasonable woman, because textbooks on English
Law in dealing with a married woman’s right to deal with property, class
her with infants, lunatics and idiots. John Galsworthy refers to those days
as “the golden age for husbands before the Married Women’s Property
Acts”. Gradually, equity and legislature interfered in her favour, and by
the Married Women’s Property Act of 1882, an English married woman
was at liberty to acquire, hold and dispose of property as if she were a
feme sole, that is, unmarried woman. But though the power was given
to the married woman to deal with her property, it was not an unmixed
blessing, because her husband still wielded a lot of influence over her,
and he could either kiss her or kick her out of the property. Therefore, in
settling or conveying property in favour of a married woman, the English
courts recognised the rule that it was open to the settlor or transferor to
insert a clause in the deed of settlement or transfer, by way of a restraint
on anticipation, that is, to restrain her, during coverture (that is, while
under a husband’s protection and shelter) from anticipating the future
income of the property and from encumbering it or alienating it. The
proviso in the section is introduced to serve a similar purpose in India.
It must be clearly understood that what the section enacts is, that,
whatever interest—full or partial—is transferred, the transferor shall
not impose an absolute restraint on the power to alienate that interest or

right which was transferred to the transferee. Therefore, a limited inter
est in property can be created in favour of a transferee, but a restraint
on the power to alienate that limited interest—except in the cases men
tioned in the section—will be invalid.
Section 12 provides:
12. Condition making interest determinable on insolvency or attempted
alienation.—Where property is transferred subject to a condition or limitation
making any interest therein, reserved or given to or for the benefit of any person,
to cease on his becoming insolvent or endeavouring to transfer or dispose of the
same, such condition or limitation is void.
Nothing in this section applies to a condition in a lease for the benefit of the
lessor or those claiming under him.
In Dugdale, re4, it was observed:
The liability of the estate to be attached by creditors on a bankruptcy or
judgment is an incident of the estate, and no attempt to deprive it of that inci
dent by direct prohibition would be valid.... An incident of the estate given,
which cannot be directly taken away or prevented by the donor, cannot be
taken away indirectly by a condition which would cause the estate to revert
to the donor, or by a conditional limitation or executory device which would
cause it to shift to another person.
These observations show that creditors may have made advances on the
strength of property the transferee has. They should not be deprived of
their security, namely, the property against which they could have pro
ceeded in the event of non-payment, because of a clause in the transfer
of which they know nothing. Hence, this rule has been enacted as an
exception to the general rule embodied in Sections 31 and 32., that an
interest may be created with the condition superadded that the interest
shall cease on the happening of an uncertain event.
CONDITIONAL LIMITATION AND CONDITION:

DISTINCTION
The observations quoted use the words “conditional limitation” whereas
Sections 10 and 12, Transfer of Property Act use the word “condition”.
In English Law there is a difference between the two expressions, though
the distinction is not material under the Indian statute. I have already
explained that an estate in fee simple is one of the two kinds of legal
estates which could be created in England under the Law of Property
Act, 192,5. But to be a legal estate, the fee simple must be absolute and
in possession. Suppose a grant is made to A in fee simple as long as he
is unmarried, but on A’s marriage, it will be granted to B in fee simple.
4. (1888) LR 38 Ch D 176,182.
It is not a legal estate, because, though in possession, it is not absolute

being subject to a defeasance clause in favour of B. Again, if an estate
in fee simple, which is absolute, is to commence on a future date, it is
also an equitable estate, because, though absolute, it is not in possession.
The former kind of equitable estates, that is estates in fee simple, which
are not absolute are known as conditional or modified fees. They can
be either an estate in fee simple on condition or an estate in fee simple
by way of conditional limitation or determinable limitation. Since lim
itation, as applied to estates, marks the period which puts an end to an
estate, a conditional limitation arises when the condition forms part of
the limitation by putting a limit on the duration of the estate. For exam
ple, to X in fee simple until he marries. Here, the condition “until he
marries” forms part of the original words of limitation “in fee simple”.
But, if a grant is made to X in fee simple; but if he marries Y, on such
marriage to Z in fee simple; here the condition of marriage of X to Y does
not form part of the original words of limitation “in fee simple”. Since
the condition which determines the estate is collateral to the original
limitation, that is, a collateral event it is said to be an estate in fee simple
on condition.
Now, the practical difference between the two is shown by the follow
ing illustration, which is peculiar to life-estates in English Law. Suppose,
a grant for life provides that the interest shall be forfeited if the grantee
becomes bankrupt. The condition is obviously void under the Dugdale
case5. But suppose, it is a conditional limitation of the form to A for life
until he commits an act of bankruptcy. This is permissible, because it is
not a conditional limitation which shifts the estate to another person, but
creates an estate which ceases to exist on the bankruptcy.
Second paragraph
Though this paragraph provides that nothing contained in Section iz
shall apply to a condition in a lease for the benefit of the lessor and those
claiming under him, the legislature by way of abundant caution intro
duced a provision in Section in, under which, a lease is determined
when the lessee is adjudicated an insolvent and the lessor gets a right of
re-entry.
31. Condition that transfer shall cease to have effect in case specified uncer
tain event happens or does not happen.—Subject to the provisions of Section
12, on a transfer of property and interest therein may be created with the condi
tion superadded that it shall cease to exist in case a specified uncertain event shall
happen, or in case a specified uncertain event shall not happen.
5. 39 Ch 176, 182.
Illustrations
(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down
a certain wood, the transfer shall cease to have any effect. B cuts down the wood.
He loses his life-interest in the farm.
(b) A transfers a farm to B, provided that, if B shall not go to England within
three years after the date of transfer, his interest in the farm shall cease. B does
not go to England within the term prescribed. His interest in the farm ceases.
Suppose, property is transferred to A absolutely but with the condition
that it would revert to the transferor if it is attached in execution of a
decree against A, by a creditor. Such a condition subsequent would be
invalid under Section 12.
Suppose, A who is under a sentence of imprisonment for life, trans
fers his property to B, with the condition that when he is released, B’s
interests will cease and the property would revert to A. Such a condition
subsequent would be valid.
A corporation allotted a plot subject to the condition that the trans
feree was to have no right to transfer the land and the building standing
on it by way of sale, lease, mortgage, gift or any other way without spe
cific approval of the transferor. The transferee had also to complete the
construction and project within specified time. The condition so imposed
was held to be proper to save the corporation’s interest.6
The corresponding section, Section 134, Succession Act may also be
noted.
The condition referred to must be a valid condition. The difference
between Section 28 and Section 31 is that in the former the condition
subsequent not merely divests the interest but vests it in another, whereas,
under Section 31 the interest is divested and revested in the grantor. [See
also, S. 12]
And Section 32 provides:
32. Such condition must not be invalid.—In order that a condition that an
interest shall cease to exist may be valid, it is necessary, that the event to which
it relates be one which could legally constitute the condition of the creation of
an interest.
That is, the condition should not be invalid under Section 25, which is
discussed later.
Right of repurchase.—The sale stipulated that the seller would take
back the property within 10 years. He subsequently transferred this right
to another person. He was allowed by the court to enforce the agreement
of reconveyance. There was not any restriction upon the right of such
transfer. The court said that the agreement of repurchase could not be
regarded as personal.7
6. Omniplast (P) Ltd v HSIIDC Ltd, AIR 2.015 NOC 805 (P&H).
7. Raghunath Bali v Pandit Sriniwas, 2012 SCC OnLine Utt 598: AIR 2012 Utt 100.
RESTRAINT ON ENJOYMENT [S. 11]

11. Restriction repugnant to interest created. — Where, on a transfer of prop
erty, an interest therein is created absolutely in favour of any person, but the
terms of the transfer direct that such interest shall be applied or enjoyed by him
in a particular manner, he shall be entitled to receive and dispose of such interest
as if there were no such direction.
Where any such direction has been made in respect of one piece of immovable
property for the purpose of securing the beneficial enjoyment of another piece of
such property, nothing in this section shall be deemed to affect any right which
the transferor may have to enforce such direction or any remedy which he may
have in respect of a breach thereof.
The difference between Section io and Section n is that the former deals
with a case of an absolute prohibition against alienation of an interest
created by a transfer and the latter deals with the absolute transfer of an
interest followed by a restriction on its free enjoyment. That is, under
Section io, whatever interest was conveyed, large or small, limited or
unlimited, such interest cannot be made absolutely inalienable by the
transferee. Under Section n, when once an interest has been created
absolutely in favour of a person, no fetters can be imposed on its full
and free enjoyment. Where, however, the interest created is itself lim
ited, its enjoyment must also be limited; for example, when a widow’s
interest under customary Hindu Law is granted to a woman, a direction
that she should enjoy only the usufruct without either encumbering the
corpus or committing acts of waste would be valid. But a condition in
a deed depriving a co-owner of his or her claim to partition in respect
of the common property would be bad, because the right to partition is
an essential ingredient of co-ownership.8 The principle is that a condi
tion will be void, if it detracts from the completeness of the very interest
created; it will be good if it is consistent with such interest. Thus, where
an absolute estate is granted, but a condition is imposed on the grantee
requiring him to reside in a particular place, the condition is not valid
and cannot be enforced.9
Where an absolute interest is created in favour of a person, no further
restriction can be imposed regarding the manner of user or enjoyment
of the property. In this case the donor gave interest in the entire build
ing in favour of her daughter and thereafter to her sons. The right of
8. Jafri Begam v Syed AH Raza, 1901 SCC OnLine PC 5: (1900-01) 28 IA in.

9. Lilaivati v Firm Ram Dhari Suraj Bhan, 1969 SCC OnLine P&H 229: AIR 1971 P&H
87 (case of sale with a stipulation for payment of part of profits); Indu Kakkar v Haryana
State Industrial Development Corpn Ltd, (1999) 2 SCC 37 (Resumption of allotment).
Snbal Chandra Maity v Usha Banerjee, 2009 SCC OnLine Cal 1503: AIR 2009 Cal 210,
gift to daughter for life, thereafter to her sons absolutely, the lady donor’s own son was
also allowed to enjoy a portion of the building. The grant in favour of the donor’s son was
considered to be not an encroachment on the absolute right of daughter’s sons. Prency v
Jose, AIR 2010 Ker 1, restriction that nothing should be built on the identified part of the
land under transfer, was held binding upon the subsequent transferee.
enjoyment of a portion of the building, namely, all garages, was in favour

of the donor’s son and his heirs on specified conditions. The court said
that all such persons were beneficiaries under the deed. The creation of
an interest in a portion of the building in favour of her son on a speci
fied condition could not be regarded as an encroachment on the absolute
right of the daughter’s sons. The right about garages was to apply only
if the donee (son) accepted the specified conditions. Section u was not
violated.10
Where a condition was included in the sale deed that the property
would not be sold outside the family of the sellers, the transferee sold it
to the first cousin of the transferor, the Bombay High Court held that
the condition was a partial restraint and, therefore, valid. The court was
of the view that the first cousin belonged very much to the transferor’s
family.11
A piece of land was purchased for the purposes of a university. This
was not in the category of an acquisition. Subsequently, the land was
transferred to Development Authority for housing purposes. The sale
deed contained no restriction as to use. The university had no objection.
It was held that the erstwhile land owners who had a decade ago sold
their land for full value could not question use of the land.12
Suppose, A transfers property to his daughter B with the condition
that she shall not enjoy the property till her marriage. Such a condition
will be void, because delivery of possession and enjoyment can be post
poned only i) if the property is given to someone else and thereafter to
the transferee, or 2) if the transferee is a minor.
See also^ illustration (a) to Section 31. The condition is valid because
what was transferred was only a life interest and the condition is not
repugnant to the interest created.
The second paragraph relates to the rights of a transferor as against the
transferee 1) to enforce the performance of a positive covenant, and 2) to
restrain the breach of a negative covenant. After the 1929 Amendment,
although affirmative and negative covenants are valid as between a trans
feror and a transferee, only negative covenants can be enforced against
a transferee from the first transferee by reason of Section 40. That is, if
A is the owner of two properties X and Y and if A transfers X to B and
some covenants were entered into between A and B as to the use of X
in order to enable A to have the beneficial enjoyment of Y, then A can
enforce them whether they are affirmative or negative covenants. But if
10. Siibal Chandra Maityv Usha Banerjee, 2009 SCC OnLine Cal 1503: AIR 2.009 Cal 210.
11. Manohar Shiuram Swami v Mahadeo Guruling Swami, 1987 SCC OnLine Bom 327: AIR
1988 Bom 116; Dinesh Chhapolia v State of Orissa, AIR 2008 NOC 844 (Ori), a lease
of hand was heritable and transferable, a restriction that it could be transferred only with
the permission of the Collector, was held to be void.
12. Jagtar Singh v State of Punjab, 2012 SCC OnLine P&H 2861: AIR 2012 P&H 145.
B transfers X to C, then A can only enforce the negative covenants as

against C because of Section 40.
The Crown had the power in British India to limit the descent of lands
granted by it in any way it pleased.
Section 40, to which reference is made, provides:
40. Burden of obligation imposing restriction on use of land, or of obligation
annexed to ownership but not amounting to interest or easement.—Where, for
the more beneficial enjoyment of his own immovable property, a third person
has, independently of any interest in the immovable property, of another or of
any easement thereon, a right to restrain the enjoyment in a particular manner
of the latter property, or
where a third person is entitled to the benefit of an obligation arising out of
contract and annexed to the ownership of immovable property, but not amount
ing to an interest therein or easement thereon, such right or obligation may be
enforced against a transferee with notice thereof or a gratuitous transferee of
the property affected thereby, but not against a transferee for consideration and
without notice of the right or obligation, nor against such property in his hands.
Illustration
A contracts to sell Sultanpur to B. While the contract is still in force he sells
Sultanpur to C, who has notice of the contract. B may enforce the contract
against C to the same extent as against A.
Section 40 deals with restrictive covenants, that is a situation where
immovable property is transferred subject to the conditions which limit
the use and enjoyment of property by the owner of that property because
of rights created in favour of a third party in that property. A covenant is
in essence an agreement to do or refrain from doing something in respect
of that property. Covenants can be 1) express or implied, or 2) affirma
tive (positive) or restrictive (negative), or 3) personal or may “run with
the land”.
Express covenants may be spelled out in a deed or document. Implied
covenants can be read in by the law. For example, there is an implied cov
enant under Section 65, Transfer of Property Act, 1882, that a transferor
has good title in the case of sale of immovable property. There are other
implied conditions found in Section 65 in respect of mortgages and in
Section 108(c) in respect of leases.
Affirmative or positive covenants require the covenantor to do certain
acts, whereas a restrictive or negative covenant requires the covenantor
to refrain from doing certain acts or things. A covenant whereby the
owner of property may be required to build and maintain a well on his
property is a positive covenant. A covenant whereby a covenantor agrees
never to block a pathway that runs through his property is a negative
covenant.
As a general rule covenants are personal in nature, that is, the cove
nants are restricted to the parties to the agreement. Personal covenants
are not capable of being assigned, transferred or inherited. The exception

to this rule is covenants that run with the land. These type of cove
nants are attached to rights in property and are automatically transferred
along with the transfer of property, unless there is an express or implied
intention to the contrary.
First and third paragraphs

These paragraphs of Section 40 may be compared with the second para
graph of Section 11. While that deals with the transferor’s rights against
the transferee, this section deals with the right against the transferee
from the first transferee. The first paragraph was amended in 1929, and
before amendment, it recognised the right to compel the performance
of an affirmative covenant as well as restrain the breach of a negative
covenant. The effect of the amendment is to confine the section to nega
tive or restrictive covenants. A covenant is an agreement in writing. The
position therefore is that positive covenants may be enforced between the
original parties and are not ordinarily binding on subsequent transferees,
whereas negative covenants are binding even on subsequent assignees of
the covenantor’s interest if they have notice of such covenants.
Under the English common law, originally, the benefit of a covenant
ran with the land of the covenantee, but its burden did not run with the
land of the covenantor. For example, suppose A sells land to B and there
is a covenant between them that B would keep in good repair a road
leading to another piece of land of A. If A sells his other land to C and
B sells the land purchased from A to D, according to the above rule, C
as the purchaser of the land of the covenantee, that is A, could enforce
it against 6; but he could not enforce it against D, because D is the pur-
t—\ chaser of land of the covenantor and the burden did not run with it. This
rule was altered in Tulk v Moxhay13. In that case, Tulk was the owner
case pilot °f a vacant land and the purchaser of the land covenanted, for himself,
his heirs and assigns, to keep and maintain the said piece of ground in
its then form and in sufficient and proper repair as a garden uncovered
by any buildings. The land ultimately passed into the hands of Moxhay,
who, though he had notice of the covenant, announced an intention to
build on the ground. In an action for injunction by Tulk, it was held:
That this Court has jurisdiction to enforce a contract between the owner of
land and his neighbour purchasing part of it, that the latter shall either use
or abstain from using the land purchased in a particular way, is what I never
knew disputed.... It is said, that the covenant being one which does not
13. (1848) 2 Ph 774: 41 ER 1143; Bai Dosabai v Mathurdas Gouinddas, (1980) 3 SCC 545;
Hukmi Chand v Jaipur Ice and Oil Mills Co, 1980 SCC OnLine Raj 58: AIR 1980 Raj
155; Raj Narain v Addl District Judge, 1979 SCC OnLine All 539: AIR 1980 All 78 (cov
enant binding on a court-auction purchaser).
run with the land, the court cannot enforce it; but whether a party shall be
permitted to use the land in a manner inconsistent with the contract entered
into by its vendor and with notice of which he purchased..., for if an equity
is attached to the property by the owner, no one purchasing with notice of
that equity can stand in a different situation from the party from whom he
purchased.
In this case the covenant though apparently positive is really negative,
and though the court was dealing with a negative covenant, used lan
guage applicable to a positive covenant also. It was on that basis that the
rule in Tulk v Moxhay applies to both positive and negative covenants,
that the Indian Section 40 was originally enacted. But in later cases, in
England Tulk v Moxhay was confined to negative covenants. For exam
ple, in Haywood v Brunswick Permanent Benefit Building Society'4, the
covenant was to erect and keep in good repair and rebuild messuages
on the land; and it was held that since it was a positive covenant it was
not enforceable. Similarly, in Austerberry v Corpn of Oldham'5, a piece
of land was conveyed and it was bounded on both sides by the land of
the vendor. The covenant was to make a road and keep it in repair at all
times and to allow it to be used by the public subject to tolls. The vendee
made, according to the covenant, the road giving access to the vendor’s
land. The vendor later sold his lands to the plaintiff and the vendee sold
his land to the defendants. When the plaintiff sought to enforce the cove
nant, it was held that it could not be enforced because 1) it was a positive
covenant, and 2) it did not run with the covenantor’s land. To summarise,
the law in England was that in the case of a covenant between the vendor
and the vendee of a land, its benefit ran with the land of the covenantee
but its burden did not run with the land of covenantor; but, if the cove
nant was negative or restrictive on the user of the land by the covenantor,
it will be enforced against the covenantor’s transferee if he had notice of
the covenant or the transfer was gratuitous. And in determining whether
a covenant was positive or negative it is the substance of the covenant
and not its form that matters. This is the law in India also now after the
1929 Amendment. The reason for the rule is this: If a person sells land
with a covenant he would not get full value. Why should a purchaser
from him be then allowed to ignore the covenant and sell it free of the
covenant and get better value? Incidentally, a purchaser with notice from
a transferee without notice is not bound by the covenant.
These restrictive covenants apply in the case of a building scheme.
In such a scheme, there is a common vendor, who is the owner of a
large area, which he sells as plots for buildings. He imposes a number
of restrictions which are for the benefit of all the owners of the plots.14 15
14. (1881) LR 8 QBD 403 (CA).

15. (1885) LR 2.9 Ch D 750.
Therefore, any purchaser from the common vendor can enforce the cove
nants against purchasers of other plots and against their purchasers also,
who are deemed to have notice of the scheme.
COVENANTS RUNNING WITH THE LAND

Covenants running with the land, under the second paragraph must have
the following characteristics: i) they must be made with a covenantee
who has an interest in the land to which they refer; and 2) they must
concern or touch the land, that is, they must affect the nature, quality or
value of the land. For example, the covenants to pay rent and the right to
have quiet enjoyment in the case of leases. [See, Ss. 108 and 109] Suppose
again that A, the owner of land, grants sub-soil rights to a coal-mining
company and the company agrees to pay damages if the surface land
caves in or subsides. This is a covenant running with the surface land. If
the covenants do not touch the land, then they will be merely, personal
covenants.
Suppose A sells a vacant site to B with the condition that B should not
build on his portion in such a way as to obstruct A’s enjoyment of his
house. This is a negative covenant and can be enforced not only against
B but also against a transferee from B, if such transferee had notice of the
covenant, even if the transfer was for consideration.
Suppose A conveys an absolute interest in land to B and B covenants
not to cut any trees on the land. This covenant is certainly enforceable
against B. It would be enforceable even against a transferee from B for
consideration, if such transferee had notice of the covenant. In these two
illustrations, it is assumed that the covenant is for the more beneficial
enjoyment of the transferor’s property. But suppose, the transferee agrees
not to build a hotel on the land transferred to him, he will certainly be
bound by the covenant but his transferee, even if he had noticed, will not
be bound, because it may not be for the more beneficial enjoyment of the
transferor’s land.16
Suppose A is the owner of two buildings X and Y, contiguous to one
another; and A sells X to B who covenants to pull down a room on a
passage between X and Y whenever A requires B to do so. This is a posi
tive or affirmative covenant. A can certainly enforce it against B, but if B
transfers X for consideration to C, who has notice of the covenant, A can
enforce the covenant against C only if it is annexed to the ownership of
Y, i.e. if it touches or concerns the nature, quality or value of Y.
16. Roshan Lal v Manoj Kumar, 2015 SCC OnLine Raj 3475: AIR 2015 Raj 71, condition
stipulated in the sale deed of the previous owner that the common chowk between the res
idential houses of the parties is not to be used for private purpose, could not be enforced
against the subsequent owner when no such condition was mentioned in the sale deed of
the subsequent owner.
A positive covenant may run with the land and can be enforced against
a transferee with notice of the covenant, or against a gratuitous transferee
i. if it is an obligation arising out of a contract, and
z. if it is annexed to the ownership of the immovable property, that
is, if the owner, who is seeking its enforcement, may specifically
enforce it, because it is beneficial to him.17
SUBSTANCE AND NOT FORM

The owner of a plot permitted another to enjoy it and build on it. The
licensee covenanted that if he should sell any building erected by him
on the land, he would pay 14 of the sale price to the owner. The licensee
sold a house which he built on the land and the transferee had notice of
the covenant. It was held that the covenant was negative and restrictive
it being in substance a restriction on the licensee selling any building.
Therefore, the covenant to pay 14 of the sale price would be enforceable
against the transferee also, if the covenant was proved to be for the bene
ficial enjoyment of the property of the original owner. For the application
of the section the condition of beneficial enjoyment must also be satisfied.
Summarising the effect of Sections n and 40, the law in India may be
stated in the form of propositions as follows:
1. If A has only one piece of land and he sells it to B. A positive or
a negative covenant relating to the use of that land would not be
binding on B.
z. If A has two lands and he sells one land to B with a covenant for
the benefit of the other land. The covenant binds B irrespective of
whether the covenant is positive or negative.
3. Suppose in the above illustrations, B sells the land purchased by
him to C. C would be bound by the covenant with A, if the cove
nant is negative and if he had notice of the covenant.
4. If in the same illustration the covenant is positive C would not be
bound, unless it is annexed to the ownership of the other land.
5. If in the same illustrations A sells the land retained by him to D, D
will have all the rights of A and can enforce the negative covenant
against B.
6. If the transferees are transferees who have not paid any valuable
consideration the question of notice does not arise.
These rules may be contrasted with rules obtaining between a landlord
and tenant:
1. Under Section 11, a covenant between vendor and purchaser,
whether positive or negative, will be binding if it is for the benefit
17. Kanhaiya Lal v Babu Ram, (1999) 8 SCC 529.
of another piece of land which the vendor has. But, between a land
lord and tenant, if a lessor has only one piece of land and he leases
it out, the covenant entered into by the lessee would be binding on
the lessee.
z. Positive covenants between vendor and purchaser never pass, that
is, even though they are binding on the original purchaser they
would not bind a purchaser from the purchaser even with notice of
the covenant, unless the covenant is annexed to the ownership of
the other land. But as between a lessor and a lessee, even positive
covenants bind a transferee from the lessee.
3. A negative covenant between a vendor and his purchaser, is bind
ing on subsequent purchasers except when they are transferees
for valuable consideration without notice of the covenant. But as
between a lessor and a lessee, negative covenants and positive cov
enants which concern the land would be binding on the subsequent
transferees from the lessee whether or not they had notice.
Therefore, the passing ofcovenants along with the land may be summa
rised as under:
Covenant
Personal covenants Covenants that run with the land
(Do not automatically pass)
Affirmative covenants Negative covenants
(Do not pass except in the case of a lease)
With notice Without notice
(Will pass with the (Will not pass with the

transfer of the land) transfer of the land)
MEMBERSHIP OF COOPERATIVE SOCIETY OR

OF COMPANY
A person may acquire ownership of a house or flat by becoming mem
ber of a cooperative society or of a company. The terms and conditions
of membership of the society or articles of the company may impose
restrictions on the member’s right to deal with his property. In a case of
this kind where in spite of such restrictions the member had borrowed
money from a bank to pay the price by mortgaging his interest in the
property. He could not pay back the money and therefore the bank got
his house seized by approaching the Debt Recovery Tribunal. The com
pany contended that such seizure was not proper because it was against
the articles of the company. The court held that ownership rights can be
taken away only by a statutory provision. The articles of a company do

not have the effect of a statute.18
TRANSFERS IN FAVOUR OF UNBORN PERSONS [SS. 13-16]

The next four sections, namely, Sections 13 to 16, and Section 20 deal
with rules which have to be observed when creating future interests.
13. Transfer for benefit of unborn person.—Where, on a transfer of property,
an interest therein is created for the benefit of a person not in existence at the date
of the transfer subject to a prior interest created by the same transfer, the interest
created for the benefit of such person shall not take effect unless it extends to the
whole of the remaining interest of the transferor in the property.
Illustration
A transfers property of which he is the owner to 6 in trust for A and his
intended wife successively for their lives, and after the death of the survivor for
the eldest son of the intended marriage for life, and after his death for A’s second
son. The interest so created for the benefit of the eldest son does not take effect,
because it does not extend to the whole of A’s remaining interest in the property.
The rules governing the transfer of property to an unborn person are as
under:
1. There can be no direct transfer to an unborn person. There must
be a transfer to a prior interest who will hold the rights in the prop
erty sought to be transferred for the unborn person until it is born
or comes into existence. This is because of the rule that property
cannot be held in abeyance. At all times there must be someone in
existence who holds the rights of a particular property. If a transfer
occurs to a person who is not in existence on a particular day, then
on that day the transferor is divested of the rights in that property
but there is no one in existence in whom the rights will now vest.
The property is said to be in abeyance which is not permissible in
law. It is for this reason that a prior interest is created in favour of
some person who will hold that property for the unborn person.
2. There must be a prior interest created who will hold that property
in trust for the unborn person. Necessarily, a restricted interest is
created in favour of the prior interest who cannot deal with the
property in anyway except transferring it to the unborn person
when he comes into existence.
3. An absolute interest must be given to the unborn person. No restric
tions can be placed on the ultimate transfer to the unborn person.
18. Hill Properties Ltd v Union Bank of India, (2014) 1 SCC 635.
4. The maximum period for which the vesting of the property can
be postposed is upto the date of maturity of the ultimate benefi
ciary (the unborn person) for whom the property was eventually
intended.
CHILD NOT IN EXISTENCE

A child en ventre de sa mere, that is, a child in the mother’s womb is
deemed to be in existence, as also a child adopted by the mother after
her husband’s death. A transfer cannot be made directly in favour of an
unborn person. It must be preceded by a prior interest in favour of a
living person.
SCOPE OF THE SECTION AND THE RULE

AGAINST DOUBLE POSSIBILITY
In English Law when a tenant was in possession of land, that is, when
the tenant had seisin of the freehold, he was naturally anxious to keep
it in the family. In order to effectuate this family prudence, which was
calculated to preserve the family estate, the owner (tenant in fee simple)
would grant it to, say his son A and the heirs of his body. But courts
interpreted such an estate, before 1285, as an estate in fee simple condi
tional that is, an estate which became an estate in fee simple with respect
to the grantee, on the happening of the condition, namely, the grantee
begetting an issue or issues. Since the grantor lost his reversion and the
grantee’s descendants did not get any rights, the rich and influential hold
ers of land got passed the statute known as De Donis Conditionalibus in
1285. It declared that the grantor’s intention must be respected, so that in
grants similar to those considered above, A got only a life estate and the
remainder went to his descendants. On failure of such descendants the
estate reverted to the grantor or his representatives. But the lawyers and
judges discovered two methods by which the tenant in possession either
suffered a recovery or levied a fine the effect of which was to bar the
entail and the tenant in possession enlarged his estate to a fee simple. To
get over this, the grantors thought of what are known as future estates,
that is, a series of life interests one following another. Where the owner
in fee simple granted an estate to A for life, he carved out a particular
estate in favour of A and on its termination it reverted to the grantor or
his heirs and is known as a reversion. Where the grant was in the form to
A for life and the remainder to B in fee simple, it was a case of a remain
der. A series of such remainders could be created as to A for life, to B for
life, to C for life and to D in fee simple. If a grant was in the form to A
for life, remainder to B for life, remainder to C for life and remainder to
D in tail, the owner has a reversion expectant upon the particular estate
in favour of A, B, C and D failing, because if D has no issue the estate

reverts to the grantor. One such series of future interests was created in
favour of a person, who was a bachelor for his life, remainder to his eld
est son for life, and the remainder to the eldest son of such eldest son in
fee simple. The last limitation was held to be void in Whitby v Mitchell19
on the ground that there was a double possibility: i) the bachelor beget CASE PILOT
ting a son, and z) such son begetting a son in his turn. The court there
fore again foiled the attempt of the owner in fee simple creating a series
of future interests. As explained under Section io, the courts foiled all
such attempts because the law favours the free circulation of property.
As Lord Mansfield put it:
At last the people having groaned for two hundred years under the incon
veniences of so much property being unalienable, and the great men, to raise
the pride of their families, and (in those turbulent times) to preserve their
estates from forfeitures, preventing any alteration by the Legislature, the
judges and lawyers adopted various modes of evading the statute De Donis.
This rule against double possibility is enacted in this section in a more
stringent form. Thus, if a grant is in the form to A for life, to 6, an
unborn person, for life and then to C, whereas under English Law, by
virtue of the rule in Whitby v Mitchell2021 , the last limitation in favour of
C would be void, under this section, even the grant in favour of B would
be void. For a grant to an unborn person, to be valid, must exhaust the
whole of the grantor’s remaining interest, that is, it should be of the form
to A for life and to B (an unborn person) absolutely.
Under the rule in the Tagore case2', under the Hindu Law, before 1916,
bequest or a transfer in favour of an unborn son was deemed to be void
on the principle that a person not in existence at the material date was
incapable of taking. In that year, the Hindu Disposition of Property Act
(15 of 1916) was enacted, as a result of which it is possible for a Hindu
to transfer or bequeath property in favour of unborn persons, but such
dispositions are subject to Sections 13 and 14, Transfer of Property Act
which deal with limitations in favour of unborn persons and the rule
against perpetuity.
Suppose a person A settles property on himself for life and then on
his son and then on his son’s son, etc in succession for their respective
lives, and, if the line of his lineal descendants becomes extinct, for feed
ing of the poor in his town. The succession of life estates in favour of
A’s descendants is invalid under the Tagore case because it is an estate
unknown to Hindu Law. If the son of A was unborn even the first settle
ment is invalid because of the Tagore case. After the 1916 Act mentioned
19. (1890) LR 44 Ch D 85.

20. Ibid.
21. Tagore v Tagore, 1871 SCC OnLine PC 36: (1872-73) Supp IA 47.
above, this part of the decision in the Tagore case is altered, but even
so, the settlement in favour of A’s unborn son would be invalid because,
even under that Act, the transfer in favour of an unborn son is subject
to Sections 13 and 14, Transfer of Property Act; and under Section 13,
the transfer must extend to the whole of the remaining interest of the
transferor, whereas, in the instant case it is only a life interest that is
transferred to him.
The conditions to be complied with under this section are, 1) the inter
est of the unborn person must be preceded by a prior interest; 2) the
unborn person must be in existence when the prior interest comes to an
end; and 3) the interest created in favour of the unborn person must be
the whole of the remaining interest of the transferor, that is, a life interest
cannot be created in favour of the unborn person.
For example, if property is given subject to the condition that there
should not be any change in faith, it would be a case of giving less than
the whole of the interest of the transferor.
A gift to a person not in existence is void under Mohammedan Law
and therefore Section 13 does not apply to Mohammedans.22
In the illustration discussed above, if A is a Muslim the wakf in favour
of the poor would also have been invalid before of the passing of the
Mussalman Wakf Validating Act, 1913. But under this Act, so long as
the ultimate wakf is valid, it does not matter if it is postponed till after
the extinction of all the lineal descendants of the transferor. Therefore,
under Muslim Law as it now stands, the transfer would be valid.
These rules continue in Indian law, though the original rule against
double possibility enunciated in Whitby v Mitchell23 has been abolished
in England by the Law of Property Act, 192.5, so that, under the present
English Law, any number of life estates could be created in succession as
a series of remainders in favour of persons either born or unborn, subject
only to the rule against perpetuity.
The rule in Section 13, Transfer of Property Act is similar to the rule
in Section 113, Indian Succession Act, 1925.
Sopher v Administrator General of Bengal24 arose under Section 113,
CASE PILOT Succession Act. The facts were that the testator directed his trustees
to divide his property into shares equal to number of his children and
grandchildren and to pay the income of those properties to his sons for
life and then to his grandchildren who survive their respective fathers, till
22. See, S. 2, Trustees of Sahebzadi Oalia Kulsuni Trust v CED, (1998) 6 SCC 267; F.M.
Devaru Ganapathi Bhat v Prabhakar Ganapathi Bhat, (2004) 2 SCC 504. A child born
CASE PILOT
subsequently was also allowed under the deed to share the benefit equally, the court
allowed it. The court said that in the interpretation of deeds and documents, intention of
the executor of the document should be discovered by reading the document as a whole
and considering all the words in their ordinary and natural sense.
23. (1890) LR 44 Ch D 85.
24. 1944 SCC OnLine PC 3: (1943-44) 71 IA 93.
they attained the age of 18. The grandchildren were then entitled to the
property absolutely. The Judicial Committee of the Privy Council held
that the unborn grandsons had to survive a double contingency, namely,
they must reach 18 years and also survive their respective fathers, and
that therefore the bequest was void. The Privy Council observed that
the exception in Section 120, Succession Act (corresponding to S. 21,
Transfer of Property Act) does not apply because that exception does
not refer to the contingency of the grandson surviving his father. The
Privy Council also observed that if a bequest is capable of being defeated
either by a contingency or by a clause of defeasance, the bequest does
not comprise the whole of the remaining interest of the transferor. But
the Bombay High Court in Framroze Dadabhoy Madon v Tehmina25
held that the Sopher case cannot apply to transfers inter vivos^ because
Section 13 only provides that “unless it extends to the whole of the
remaining interest of the transferor”, and not to the certainty of its vest
ing in the transferee. Perhaps this decision may require reconsideration in
view of illustration (b) to Section 114, Indian Succession Act.
RULE AGAINST PERPETUITIES

Section 14 deals with what is known as the rule against perpetuity. It
provides:
14. Ride against perpetuity.—No transfer of property can operate to create
an interest which is to take effect after the lifetime of one or more persons living
at the date of such transfer, and the minority of some person who shall be in
existence at the expiration of that period, and to whom, if he attains full age, the
interest created is to belong.
The rule against perpetuity is founded on the principle that an owner of

property cannot utilise his right or liberty to transfer property in such a
manner as would defeat the right in the hands of his successors in inter
est. For example, an owner of property may want to ensure that for all
generations to come, a particular property remains in the hands of his
family members and does not transfer to any third party. This cannot be
done. It is possible for an owner of property to create a life interest in the
property in favour of as many living persons as he chooses. He may even
transfer the property to one unborn person. However, the last transfer
to the unborn person will have to be done absolutely and without any
restrictions. The owner of property cannot impose a restriction on the
transfer of property for generations to come. Such a transfer would be
void as being against the rule against perpetuities.
According to Blackstone, by perpetuities, estates are made incapable
of answering those ends of social commerce and providing for the sudden
25. 1947 SCC OnLine Bom 54: AIR 1948 Bom 188; Javuadi Venkata Satyanarayana v
Pyboyina Manikyan, 1982 SCC OnLine AP 216: AIR 1983 AP 139.
contingencies of private life for which property was at first established.

Perpetuity or creation of remote interests in future is the result of the
desire of many men of property to rule beyond their lifetime from their
graves by regulating the succession to their property. The rule against
perpetuity, or as it is also known, the rule against remoteness, prohibits
the non-vesting of interests beyond a certain period which is not unrea
sonable. It prescribes the maximum period within which a future interest
must vest, and if the vesting is postponed beyond such maximum period
the limitation would be void for remoteness. Such maximum period is
called the perpetuity period. In Cadell v Palmer26, the rule in its modern
form in English Law is stated as follows:
Where the vesting of any interest in property, whether legal or equitable, is
postponed for a period exceeding a life or lives in being at the date of the
instrument creating it, or where the disposition is a will, at the death of the
testator, and twenty-one years after the expiration of such life or lives such
interest is void.
This is to say, you can prevent alienation only for one generation, because
all the lives in being must die within the period of one generation, since
they are all in Lord Nottingham’s apt phrase, “Candles which are all
lighted together and must expire”.27
A child en ventre de sa mere is considered for this rule, to be in exist
ence. In such a case the period of gestation is added, that is, the perpetu
ity period is 21 years plus the period of gestation.
The “life or lives in being” are human lives, but they need not be of
persons taking under the limitation. The vesting can be postponed for
the life or lives of persons who are strangers to the transaction, but they
must be ascertained and in existence on the date of the conveyance or
when the will may take effect.
Difference between Indian and English Laws
The period of 21 years specified as an absolute period, that is, it is to be

taken in gross and no question of the minority of the donee arises. Under
Section 14, Transfer of Property Act, only the period of minority is to
be counted. Further, under the Indian rule, the interest is to vest in the
beneficiary on his attaining majority and he should be in existence on the
expiry of the life or lives in being. The age of majority in India is 18, but
if a guardian is appointed by court, the age is 21. The difference between
the English and Indian rule is exemplified by the following illustration:
Suppose a grant is made to A for life in a deed, and the remainder is
given to A’s eldest son 3 years after the death of A. Suppose further that
on the date of A’s death his eldest son had become a major. In this case
26. 10 Bing 141: 131 ER 859.
27. Howard v Duke of Norfolk, 2 Freeman 74: 22 ER 1066.
the vesting is postponed for 3 years in gross. Such a limitation would be

valid in English law, because, an absolute period of 21 years is allowed
after the life or lives in being. But the limitation would be void under the
Indian rule since the beneficiary was not a minor on the expiry of the life
or lives in being.
Another difference between the two systems of law is that the period
of gestation may be added to the perpetuity period both at its beginning
and its end, in English Law; while under Indian law it can be added only
at the beginning of the perpetuity period. This can happen only in testa
mentary dispositions and not under this Act. An example will make clear
the exact nature of the difference between the two systems.
Suppose a testator A bequeaths his property to his child en ventre de
sa mere for life and 21 years thereafter to the child of B. If B’s child was
en ventre de sa mere at the expiry of the 21 years, there is a valid bequest
in English Law, and the period after which the property vests in B’s child
would be the following periods as they occur one after the other, added
together: The period of gestation of A’s child, life of that child, 21 years,
and the period of gestation of B’s child. In Indian law, the limitation to
be valid would read, to A’s child, en ventre de sa mere for life and to B’s
child at 18. Even if B’s child was only en ventre de sa mere at the end of
the life of A’s child, the period after which the property vests in B’s child
would be the following periods as they occur one after the other added
together:
The period of gestation of A’s child, the life of that child, the period of gesta
tion of B’s child and 18 years. There is no period of gestation as the last item
as in the case of the limitation under English Law.
In considering whether the limitation is valid or offends the rule against
perpetuity, the question is whether there is a possibility of the interest not
vesting within the period of perpetuity. If such a possibility exists, the
limitation is void irrespective of the actual course of events. This is some
times expressed by saying, you cannot wait and see whether the vesting
in fact would be within or outside the perpetuity period:
1. Suppose, a grant is made to A for life in a deed and the remainder is
granted to that son of B who first attains the age of 18. It is possible
that when A dies, a son may not have been born to 6 and is born
only subsequently. Since, under the Indian rule the minor must be
in existence on the expiry of the life or lives in being, the limitation
in favour of B’s son will be void.
2. Suppose, a grant is made to A for life and the remainder is granted
to the unborn eldest son of A when he attains the age of 25. The
limitation is void under Indian law because the vesting is postponed
beyond the minority of the son. It would also be void under the
English Law. Because, it is possible that when A dies, he has a son
72 LAW OF TRANSFER OF PROPERTY [Chap, 3
aged 24, and so he is capable of taking the interest within one year
that is, less than 21 years of /Vs—a life in being—death, it might
be argued that in English Law the limitation is valid. But, equally
it is possible that A might die immediately or very soon after the
deed was executed, leaving a son en ventre de sa mere or an infant
of one or two years. In that contingency, the vesting is postponed
beyond a life in being and 21 years, and hence, since, the possibility
is there, rhe limitation would be void.
3. Suppose, rhe grant is to A and the remainder is to /Vs son on attain
ing 25. The limitation would be void, because of the possibility that
the vesting in A’s son may be more than 21 years after the death
of a life in being, namely, of A, if A dies leaving a son, one or two
years in age.
In rhe case of illustration (3), Section 163, English Law of Property Act,
1925, provides that the limitation in such cases should be read as if the
age specified is 21.
DOCTRINE OF CY PRES
The above is an instance of the doctrine of cy pres according to which if a
limitation or direction as such could not be given effect to it may be given
effect to in a manner as near to (cy pres) to the direction as possible. For
example, if under a will, property is given to an unborn son for life and
the remainder to the children of the unborn son in tail, the last limitation
was void according to the rule of double possibility. (Incidentally, this
rule is also referred to as the old rule of perpetuity). But according to
the doctrine of cy pres, the limitation was interpreted as an estate tail in
favour of the unborn son who was given a life estate. But the court will
not, under the guise of applying this doctrine, construe a will so as to
include as an object of the testator’s bounty a person whom the testator
wanted to exclude, or as to exclude a person whom the testator wanted
to include.
Note that if A transfers property to B during the lives of X, Y and Z
the transfer is valid even if the limitation stops here, because the property
would revert to A from B after the death of X, Y and Z. If, however, A
wants to transfer the property to C, who was not in existence at the date
of transfer, then, the section requires that C must be in existence when
the last of X, Y or Z dies and the deed must provide that C takes the full
estate on his attaining majority.
EXCEPTIONS TO RULE AGAINST PERPETUITIES

The rule against perpetuity recognises certain exceptions both in English
and Indian laws. They are:
i. In favour of charities. In English Law though a gift over from one

charity to another will be valid even if it is based on a remote pos
sibility, the gift in favour of the first charity must vest within the
perpetuity period. Under Indian law, the rule against perpetuities
does not apply to property transferred for the benefit of charities.
[See, S. 18]
z. In favour of estate tail, only in English Law, because of recogni
tion of the power to bar the entail and convert the estate into a fee
simple.
3. In favour of clauses of re-entry or for renewal in leases in both sys
tems of law.
4. In favour of provisions for the discharge of the debts of the grantor,
under English Law.
5. In favour of agreements to convey or re-convey property. With
respect to the last, seey Section 40 below.
ORIGIN OF THE RULE IN ENGLISH LAW

Under the English Law, originally, the rule against perpetuity applied
only to equitable contingent remainders and executory interests. The fol
lowing explains the scope of this rule.
I have already explained under Section 13 what are remainders. They
are divided into two classes, vested and contingent. Suppose a grant is
made to A for life and the remainder to B in fee simple. Then B’s interest
is a vested remainder, because it is capable of taking effect immediately
on the determination of the particular estate in favour of A, and it is not
subject to any condition precedent. But suppose the grant is to A for life
and the remainder to B in fee simple, if C returns from the US. In such a
case, B’s interest is a contingent remainder, because it is made to depend
not on the determination of the particular estate but upon the condition
of C returning from the US. Here, there is a possibility that C may not
return at all from the US, or he may return sometime after the determi
nation of the life estate in favour of A. There were important rules in
relation to creation of such future interests in law. They are:
1. An interest in freehold could not be limited by deed so as to spring
up at sometime in the future without any prior freehold estate, as,
for example, a grant to A in fee simple on his attaining the age of
21, without being preceded by any estate. It is known as a spring
ing interest and could not be created at common law by a deed.
2. An interest in freehold could not be limited by deed so as to take
effect in defeasance of a particular estate, as, for example, a grant
to A in fee simple as long as he is unmarried, and to B in fee simple
if he marries. This is known as a shifting interest and could not be
created at common law by deed.
3. Every contingent remainder of a freehold estate must have a par

ticular estate to support it. For example, a grant to A for 15 years,
and remainder to B in fee simple if he settles down in London.
The remainder in favour of B cannot take effect at common law,
because the grant for a term of years certain in favour of A is not a
freehold.
4. The condition on which the remainder is made to depend must be
fulfilled before or at the latest eo instanti with the determination of
the particular estate.
These rules were evolved because one of the most important rules of the
English common law is that seisin must never be in abeyance. Under the
Fourth Rule relating to legal contingent remainders set out above, if the
remainder is to vest at all the condition must be fulfilled at or before
the expiration of the particular estate, which was in favour of a living
person. There was thus no possibility of the limitation of an interest
being too remote, and that was why the rule against perpetuity was not
applicable to legal contingent remainders.
Since, in the cases of uses (settlements in the nature of trust) and
trusts, the legal estate always vests in the trustee, there is no gap in the
seisin, and therefore, the above rules are not applicable when limitations
were made by means of uses and trusts. Such remainders created by uses
and trusts are referred to as equitable remainders and such equitable
remainders, when contingent, were subject to the rule against perpetuity.
Under the modern English Law, all future estates, except reversionary
leases, are treated as equitable interests, and are governed by the rule
against perpetuity.
ORIGIN OF EXECUTORY TRUSTS IN ENGLISH LAW

By the end of the 14th century the capacity to dispose of goods and chat
tels was well-recognised and equally, the restriction on such a power to
dispose of land became well-established, because, in the latter case, the
king and the great lords were anxious to retain the feudal incidents of
tenure which would arise on the death of a feudal tenant. For example,
if the right to devise by will is recognised in the case of land, it would
rarely escheat to the feudal lord. To get over this disability the tenant
would convey the land to one or more feoffees to uses (the modern name
is trustees) inter vivos with a direction that the feoffee should convey the
land to the cestui que use (the modern name is beneficiary). In this device
to get over the want of a testamentary power, there was the danger that a
dishonest feoffee might have kept the land himself and refused to convey
it to the intended beneficiary. The Court of Chancery intervened in such
a case and on the application of the beneficiary the Chancellor would
issue a decree directing the trustee (feoffee) to transfer the land to the
beneficiary. Thus arose in English Law the distinction between legal and
equitable rights. The feoffee or trustee had the legal right to land, but the
cestui que use or beneficiary had the equitable right which was recog
nised by the Chancellor. In course of time, the equitable rights became
enforceable against the whole world except a purchaser of the legal estate
for value and without notice of the equitable right involved.
The equitable estate quickly developed and conveyances like the fol
lowing were quite common. To A in fee simple, to the use of B for life,
with remainder to the use of C in fee simple. A the feoffee got the legal
estate, B got an equitable estate for life and C got an equitable vested
remainder.
Again a conveyance such as “to A from ist of March next” would be
void at common law, because at common law, the only way of creating a
future interest was by way of a remainder in possession on the termina
tion of a prior freehold interest, for example, to A for life, with remainder
to B in fee simple. But if the conveyance was worded “to A in fee simple
to the use of B in fee simple from first March next”, A would get the legal
fee simple. He would hold it, at the direction of the Chancellor, to the
use of the grantor giving rise to a resulting use in favour of the grantor,
and on ist of March a use would spring up in favour of B, a springing
use. Similarly, if the grant was “to A in fee simple, but if he marries a
foreign national to B in fee simple” it would vest, at common law, the
legal fee simple in A and the gift over to B would be void, because the
future interest was not created as a remainder after the termination of a
freehold. But if the grant was worded “to A in fee simple to the use of B
in fee simple, but if he marries a foreign national then to the use of C in
fee simple”, it would have vested the legal fee simple in A and, in equity,
he would be compelled to carry out the uses expressed, with the result
that if B married a foreign national the equitable interest would shift to
C giving rise to a shifting use.
In 1535 the Statute of Uses was passed and its effect was to execute the
use, that is, if a conveyance is “to A in fee simple to the use of B in fee
simple”, it was deemed to be a conveyance direct to B in fee simple and A
dropped out of the picture. Thus, the trick by which land was disposed
of after the death of the feudal tenant came to an end. But lawyers and
judges were equal to the king (Henry VIII) and his Parliament. They
restricted the applicability of the statute in such a way that 1) it operated
only when one person was seized of land to the use of another; 2) it does
not apply when the trustee had some active duty to perform; and 3) it
became ineffective when there was a use upon use.
Suppose a grant was “A to the use of B to the use of C”. The effect of
the statute was to execute the first use, that is B got the legal estate, but
he held in trust for C. Thus, the trust reappeared.
The statute had the effect of turning springing and shifting uses into
legal interest. Thus, in the grant “to A in fee simple to the use of B in
fee simple from ist of March next”, the legal fee simple remained in the
grantor and on the given date the legal fee simple sprang up and vested
in B as a springing use. Similarly, in the grant “to A in fee simple to the
use of B in fee simple, but if he marries a foreign national then to the use
of C in fee simple” would vest the legal fee simple in B, but would shift
to C as a legal fee simple if B marries a foreign national, giving rise to a
shifting use.
In 1540, the Statute of Wills was passed permitting a tenant in fee sim
ple to devise lands by will which right became a completed right giving
full freedom of testamentary disposition when Knight service was turned
into Socage by the Statute of Tenures in 1660. The result was that legal
interests corresponding to springing and shifting uses could be also cre
ated by will. These springing and shifting devices were called executory
devices. All these types of legal interests—springing and shifting uses,
and executory devices are classed as executory interests.
Under modern English Law, that is after the Law of Property Act, 1925,
all future interests, except a right of re-entry in the case of leases, are
treated as equitable interests.
CORRESPONDING INDIAN LAW

Section 14 may be compared with the corresponding Section 114, Indian
Succession Act.
In this connection, we may study the scope of the second paragraph of
Section 40. [See, p. 57]
The illustration shows the scope of the paragraph. Under the Indian
Trust Act, it is an obligation in the nature of trust and the subsequent
transferee was bound by the obligation as a constructive trustee.
In London and South Western Railway Co v Gomm28, a railway
CASE PILOT company conveyed land and the transferee covenanted for himself, his
heirs and assigns, to reconvey the land to the Railway Company at any
future time, receiving back the money paid by him. It was held that the
covenant created an equitable contingent interest but that the limitation
was void as contravening the rule against perpetuity. That is, because in
English Law such an agreement to convey immovable property creates,
by itself, an interest in such property. In Indian law, however, such agree
ments do not create any interest in property and they will be perfectly
valid. Such covenants for pre-emption being valid are enforceable under
the second paragraph of the section. Thus, a contract in Indian law does
not create any interest, legal or equitable, but only creates obligations of
fiduciary character which could be enforced. Further, they are not hit
28. (1882) LR 20 Ch D 562 (CA).
by the rule against perpetuity, which may operate in some cases under
the English Law, because under that system such covenants may create
equitable interests in property. These distinctions are brought out in the
following two cases:
In Ram Baran Prasad v Ram Mohit Hazra2930 , two brothers partitioned
their properties reserving a right of pre-emption enforceable against even CASE PILOT
assignees. On the question whether the covenant for pre-emption offends
the rule against perpetuities, it was held:
‘A perpetuity’, as defined by Lewis in his well-known book, on Perpetuities...,
is a ‘future limitation, whether executory or by way of remainder, and of
either real or personal property which is not to vest until after the expiration
of, or will not necessarily vest within, the period fixed and prescribed by law
for the creation of future estates and interests’. The rule as formulated falls
within the branch of the law of property and its true object is to restrain the
creation of future conditional interest in property. The rule against perpetu
ities is not concerned with contracts as such or with contractual rights and
obligations as such. Thus a contract to pay money to a person, his heirs or
legal representatives upon a future contingency, which may happen beyond
the period prescribed would be perfectly valid (Walsh v Secy of State for
India™). It is therefore well-established that the rule of perpetuity concerns
rights of property only and does not affect the making of contracts which do
not create rights of property.
The rule does not therefore apply to personal contracts which do not cre
ate interests in property. (See the decision of the Court of Appeal in South
Eastern Railway Co v Associated Portland Cement Manufacturers (1900)
Ltd31), even though the contract may have reference to land....
In English law a contract for purchase of real property is regarded as cre
ating an equitable interest, and if, in the absence of a time-limit, it is possible
that the option of repurchase might be exercised beyond the prescribed period
fixed by the perpetuity rule, the covenant is regarded as altogether void. It
has therefore been held that a covenant for pre-emption unlimited in point of
time is bad as being obnoxious to the rule against perpetuities. The point was
settled by the Court of Appeal in London and South Western Railway Co v
Comm32, which is the leading English authority on the point....
In the case of an agreement for sale entered into prior to the passing of
the Transfer of Property Act, it was the accepted doctrine in India that the
agreement created an interest in the land itself in favour of the purchaser....
But there has been a change in the legal position in India since the passing
of the Transfer of Property Act. Section 54 of the Act states that a contract
for sale of immovable property ‘does not, of itself, create any interest in or
charge on such property’. Section 40 of the Act is also important....
The second paragraph...taken with the illustration establishes two prop
ositions: (1) that a contract for sale does not create any interest in the land,
29. AIR 1967 SC 744; Veerattalingam v Rarnesh, (1991) 1 SCC 489.

30. (1863) 10 HLC 367: 11 ER 1068.
31. (1910) 1 Ch 12 (CA).
32. (1882) LR 20 Ch D 562 (CA).
but is annexed to the ownership of the land, and (2.) that the obligation can
be enforced against a subsequent gratuitous transferee from the vendor or a
transferee for value but with notice....
Reading Section 14 along with Section 54 of the Transfer of Property Act
it is manifest that a mere contract for sale of immovable property does not
create any interest in the immovable property and it therefore follows that
the rule of perpetuity cannot be applied to a covenant of pre-emption even
though there is no time-limit within which the option has to be exercised.
It is true that the second [part] of Section 40 of the Transfer of Property
Act makes a substantial departure from the English law, for an obligation
under a contract which creates no interest in land but which concerns land is
made enforceable against an assignee of the land who takes from the prom
isor either gratuitously or takes for value but with notice. A contract of this
nature does not stand on the same footing as a mere personal contract, for it
can be enforced against an assignee with notice. There is a superficial kind of
resemblance between the personal obligation created by the contract of sale
described under Section 40 of the Act which arises out of the contract, and
annexed to the ownership of immovable property, but not amounting to an
interest therein or easement thereon and the equitable interest of the person
purchasing under the English law, in that both these rights are liable to be
defeated by a purchaser for value without notice. But the analogy cannot
be carried further and the rule against perpetuity which applies to equita
ble estates in English law cannot be applied to a covenant of pre-emption
because Section 40 of the statute does not make the covenant enforceable
against the assignee on the footing that it creates an interest on the land.
We are accordingly of opinion that the covenant for pre-emption in this
case does not offend the rule against perpetuities and cannot be considered
to be void in law.
In R. Kempraj v Barton Son & Co33, the respondent entered into a lease
CASE PILOT with the appellant of certain premises. The lease was for 10 years with
an option in the lessee to renew it as long as he desired. The lessee, even
before the expiry of 10 years, informed the lessor of its intention to exer
cise the option. As the lessor did not comply with the notice the lessee
filed a suit for the specific performance of the covenant in the lease for
renewal. The lessor contended that the option relating to renewal was hit
by the rule against perpetuity. It was held:
Section 14 is applicable only where there is transfer of property. Even if cre
ation of a leasehold interest is a transfer of a right in property and would fall
within the expression ‘transfer of property’ the transfer was for a period of
ten years only. The stipulation relating to renewal could not be regarded as
transferring property or any rights therein.
In Ganesh Sonar v Purnendu Narayan Singha34, in the case of lease of
CASE PILOT land an option had been given to the lessor to determine the lease and
33. (1969) 2 SCC 594.

34. 1961 SCC OnLine Pat 67: AIR 1962 Pat 201.
take possession of the leasehold land under specified conditions. The

question was whether such a covenant would fall within the rule laid
down in the English case Woodall v Clifton35, in which it was held that a
proviso in a lease giving an option to the lessor to purchase the fee simple
of the land at a certain rate was invalid as infringing the rule against per
petuity. The Patna High Court distinguished the English decision quite
rightly on the ground that after the coming into force of the Transfer of
Property Act, a contract for the sale of immovable property did not itself
create an interest in such property as was the case under the English Law.
According to the Patna decision the option given by the lessee to the les
sor to resume the leasehold land was merely a personal covenant and was
not a covenant which created an interest in land and so the rule against
perpetuity contained in Section 14 of the Act was not applicable. The
same principle would govern the present case. The clauses containing the
option to get the lease renewed on the expiry of each term of 10 years can
by no means be regarded as creating an interest in property of the nature
that would fall within the ambit of Section 14.
In Muller v Trafford3637 , Farwell J observed that a covenant to renew
39
38
had been held for at least two centuries to be a covenant running with case pilot
the land. If so, then no question of perpetuity would arise. It appears
that in England whatever might have been the reason, the objection of
perpetuity had never been taken to cases of covenants for renewal. The
following observations of Farwell J, which were quoted with approval
by Lord Evershed, M.R. in Weg Motors Ltd v Hales57, are noteworthy:
‘But now I will assume that this is a covenant for renewal running with the
land: it is then in my opinion free from any taint of perpetuity, because it is
annexed to the land. See Rogers v Hosegood'33
Even on the footing that the clauses relating to renewal in the lease, in the
present case, contain covenants running with the land the rule against
perpetuity contained in Section 14 of the Act would not be applicable as
no interest in property has been created of the nature contemplated by
that provision.
Maharaj Bahadur Singh v Balchand59 is not contrary to the rule. In
that case, a Maharajah agreed to give a Society of Jesus a building site
for a temple whenever they should require it. He granted, later, a lease
of a hill to the respondent. The Society sued the lessee for possession on
the basis of the agreement. The suit was dismissed on the assumption
that the agreement created a right, but, since it could possibly take effect
35. (1905) 2 Ch 257 (CA).

36. (1901) 1 Ch 54.
37. 1962 Ch 49: (1961) 3 WLR 558.
38. (1900) 2 Ch 388.
39. 1920 SCC OnLine PC 83: {1920-21) 48 IA 376.
at a remote date, the grant was against the rule of perpetuities. But this
decision was before the Act when English Law was held applicable to
transfers in India.
Suppose, A agrees for himself and his heirs, executors and assigns, to
transfer to B or his heirs and executors, a piece of land whenever B or his
heirs or executors require him to do so. This is purely a personal contract
and no question of the rule of perpetuity arises. If A transfers the land
to a third party C, B can enforce the contract against A and C under
Section 40. The rule of perpetuity does not apply to covenants running
with the land.
Suppose, a person A transfers property to B for life and the remainder
to B’s unborn son on his attaining 25 years. The transfer in favour of the
unborn son would be void, because, in India, the maximum perpetuity
period is the period of gestation (which cannot exceed nine months) and
18 or 21 years (the age of majority). But, the vesting in the present case
is at 25 and one cannot wait and see if the property vests within the per
petuity period.
Suppose, property is transferred to A for life and thereafter absolutely
to those children of A, who are alive three years after A’s death. The
transfer to the children who are aged 16 and above at A’s death would
be void, because they will take the property at an age beyond 18. Such a
transfer, however, will be valid in English Law, where the postponement
can be upto 21 years.
Illustration (1) to Section 114, Succession Act, is as follows:
(/) A fund is bequeathed to A for his life and after his death to B for his life;
and after B’s death to such of the sons of B as shall first attain the age of 25. A
and B survive the testator. Here the son of B who shall first attain the age of 25
may be a son born after the death of the testator; such son may not attain 25 until
more than 18 years have elapsed from the death of the longer liver of A and B;
and the vesting of the fund may thus be delayed beyond the lifetime of A and B
and the minority of the sons of B. The bequest after B’s death is void.
It is submitted that the reasoning is fallacious. The bequest after B’s death
is void because the vesting is postponed beyond the minority period and
has nothing to do with the longer lives of A or B.
TRANSFERS TO A CLASS OF PERSONS [S. 15]

15. Transfer to a class some of whom come under Sections 13 and 14.—If,
on a transfer of property, an interest therein is created for the benefit of a class
of persons with regard to some of whom such interest fails by reason of any of
the rules contained in Sections 13 and 14, such interest fails in regard to those
persons only and not in regard to rhe whole class.
English Law
The corresponding rule in English Law is found enunciated in Leake v
Robinson40. Under that rule the whole limitation fails and no member CASE PILOT
of the class could take any interest. The reason was, the bequest or gift
being in favour of a class, it could not be split up, because, to split it up
and confer on each individual person a separate share as and when he
satisfies the condition would be making a new will or deed. This rule was
embodied in Section 15, Transfer of Property Act as it originally stood.
The amendment
In Bhagabati Barmanya v Kali Charan Singh41, it was pointed out by
the Judicial Committee that this artificial rule was mistakenly intro CASE PILOT
duced into the Indian statute and that it was, in any event, inapplicable
to Hindus. In that case, there was a bequest in a will to the wife and
mother of the testator for their lives, remainder on their death, to his sis
ter’s sons, those then in existence and those that may be born thereafter.
The testator died on the very day on which he executed the will. It was
held that there was a valid bequest to such of them as were capable of
taking on the date of the testator’s death, even though others of the class
were incapacitated on account of the rule in the Tagore case41, because
they were then unborn.
But, in Soundara Rajan v Natarajan43, an estate was given to the testa
tor’s daughters for their lives with remainder to the children on attaining CASE PILOT
the age of 21 years. Since some of the immovable properties dealt with
by the will were situated in the city of Madras, the will was governed
by the Hindu Wills Act, 1870. The consequence was that Sections 101
and 102, Indian Succession Act, 1865, corresponding to Sections 114
and 115, Indian Succession Act, 1925, became applicable to the will.
Under Section 101 which dealt with the rule against perpetuity, since the
bequest could be, possibly, delayed beyond the lifetime of the daughters
and the minority (18 years) of some of the children, the bequest in favour
of such children was void and under Section 102, which incorporated
the rule in Leake v Robinson44 regarding bequests in favour of a class,
the entire bequest in favour of all the children became void. These two
cases brought about an anomaly that in the case of Hindus dealing with
property outside the Presidency Towns, the rule in Leake v Robinson did
not apply, while in the case of Hindus dealing with property within the
Presidency Towns, the rule applied. The Amending Act 20 of 1929 has
done away with the rule in all cases and enacted the present section.
40. (1817) 2 Mer 363: 35 ER 979.
41. (1910-11) 38 IA 54: ILR 38 Cal 468.
42. Tagore v Tagore, 1872 SCC OnLine PC 36: (187Z-73) Supp IA 47.
43. 1925 SCC OnLine PC 49: (1924-Z5) 52 IA 310.
44. (1817) 2 Mer 363: 35 ER 979.
A gift is said to be to a class of persons when it is to all those who shall

come within a certain category or description defined by a general or
collective formula, and who, if they take at all, are to take one divisible
subject in certain definite proportionate shares.45
Indian Succession Act, 1925, Section 115

The corresponding section, Section 115, Succession Act, 1925, was simi
larly amended at the same time.
The first illustration to the above section provides:
A fund is bequeathed to A for life, and after his death to all his children who
shall attain the age of 25. A survives the testator, and has some children living
at the testator’s death. Each child of A’s living at the testator’s death must attain
the age of 25 (if at all) within the limits allowed for a bequest. But A may have
children after the testator’s decease, some of whom may not attain the age of 25
until more than 18 years have elapsed after the decease of A. [The bequest to A’s
children, therefore, is inoperative as to any child born after the testator’s death;
and in regard to those who do not attain the age of 25 within 18 years after A’s
death, but is operative in regard to the other children of A].
This illustration was considered by the Privy Council in Aniruddha Mitra
case pilot v Administrator General of Bengal46. In this case the testator, after mak
ing a bequest in favour of his son A directed by his will that the residue
was to be made over to the son or sons of A, natural or adopted, but only
on completion of 21 years and if there were more than one son of A on
the youngest completing 21 years. A had no son when the testator died
but thereafter adopted a son. The Privy Council held that the adopted
son could take the residue, because
1. an adopted son is deemed to be in existence at the time of the death
of his adoptive father;
2. though the adopted son was not in existence at the date of testator’s
death, the bequest in favour of unborn children is valid under the
Hindu Disposition of Property Act, 1916;
3. the gift is in favour of a class and is valid under Section 15;
4. the perpetuity rule would not apply because the property had
vested in the adopted son immediately after adoption, since the
words “made over to” show that it was only possession that was
postponed.
Dealing with the illustration to Section 115, Succession Act, the Privy
Council observed:
‘the last sentence in the illustration means that the bequest is inoperative in
regard to the children of A, born after the testator’s death who do not attain
45. Pearks v Moseley, (1880) LR 5 AC 714.

46. 1949 SCC OnLine PC 21: (1948-49) 76 IA 104.
the age of 2.5 within 18 years after A’s death, but it is operative in regard to
such children who do attain the age of 2.5 within 18 years, though born after
the testator’s death’.
It is respectfully submitted that this interpretation of the illustration
by the Judicial Committee requires reconsideration. Under Indian law,
the illustration may not be right because the bequest is inoperative with
respect to all the children whether they attain 25 years within or beyond
18 years of A’s death. The bequest can only be operative if they take their
shares when they attain 18. \
In Bajrang Bahadur v Bakhtraj Kuer47, by a will of 1929, property was z
bequeathed to A for life, then to A’s heirs successively for life, and finally case pilot
upon the extinction of A’s line upon B and his heirs. The testator died in
1930 and thereafter A died. A’s widow claimed a life estate. The Supreme
Court held that she was entitled to a life estate, because though some of
the heirs of A may be unborn and a life estate in their favour would be
invalid under Section 13, the widow was in existence and was entitled
to take under Section 15. The Supreme Court observed, “It is quite true
that no interest could be created in favour of an unborn person (Tagore v
Tagore) but when the gift is made to a class or series of persons some of
whom are in existence and some are not, it does not fail in its entirety.”
Since the will was of 1929 after the Hindu Disposition of Property Act,
1916, was passed, the testator can confer an interest on the unborn heirs
of A. The reason why the bequest in favour of such unborn heirs of A
failed in this case is not because they were unborn but because they only
got a life estate instead of the whole interest of the testator as required
by Section 13.
Suppose, property is given to A, a bachelor, for life and thereafter to
all his children, when the last child attains majority. The transfer is void
with respect to all those children who had attained majority but had to
wait till the last child attained majority. But under this section, the last
child can take his or her share.
AMENDMENT NOT RETROSPECTIVE

The amendment to the section was not retrospective. [See, discussion on
S. 63 of Act 20 of 192.9].
16. Transfer to take effect on failure of prior interest.—Where by reason of
any of the rules contained in Sections 13 and 14, an interest created for the bene
fit of a person or of a class of persons fails in regard to such person or the whole
of such class, any interest created in the same transaction and intended to take
effect after or upon failure of such prior interest also fails.
47. AIR 1956 SC 593.

Principle
The effect of the invalidity of a condition on a transfer depends upon
whether the condition is precedent or subsequent. In the case of an inva
lid subsequent condition it is ignored and has no effect on the interest
already vested. If it is a precedent then it will affect the transfer and the
transferee will take nothing. This is the rule in English Law as laid down
in Monypenny v Dering48. The reason why the ulterior disposition fails
to take effect is that it forms part of a scheme to prevent alienation.
Scope
Suppose, a transfer is made to A for life, remainder to his unborn eldest
son and the remainder to B in fee simple. Under Section 13, the first lim
itation is void, and therefore the ulterior disposition in favour of B which
depends upon the prior limitation is void.
Where a testator bequeathed to his great grandsons in tail male not in
existence at his death and on the failure of such tail male to the daugh
ter’s sons, the latter bequest was dependent on the gift to the great grand
sons and is therefore void.
Property was given to a woman for life, then to her male descendants,
but if she should have no sons, to her daughters without power of aliena
tion. In the absence of any issue the property was to go to her father. The
woman had no children at the time of the gift. The gift in favour of the
unborn daughters was void under Section 13, and hence the final disposi
tion in favour of the father, who claimed the estate on his daughter dying
without issue, was held to be invalid.
Where however the limitations which are to succeed are not dependent
upon or are not intended to take effect in the wake of the prior limitation
but are independent of such prior limitation or alternative to it, then the
limitations over will take effect if they are otherwise valid. The position
4 r—A is the same if the prior interest is not invalid but fails subsequently. In
\cz^/ such a case the subsequent interest is accelerated. In Ajudhia Buksh v
case pilot Rukmin Kuar49, an Oudh Taluqdar made a bequest to his wife for life
and the remainder to his younger son by her. The devise in favour of the
wife failed for want of registration. Since the intention of the testator
was to give his estate to his younger son, it was held that the remainder
in his favour was accelerated. In this case the prior disposition did not
fail because of Sections 13 and 14, but for want of registration. The case
is governed by the rule contained in Section 27 of the Act which lays
down the principle known as the Doctrine of Acceleration. In one case,
48. zDeGM & G 145: 41 ER 826, 841.

49. 1883 SCC OnLine PC 16: (1883-84) 11 IA 1; Bhuth Nath Mondal v Kalipada Mondal,
1982 SCC OnLine Cal 139: AIR 1982 Cal 534.
a man bequeathed his property to his wife and his brother for their lives,
after them to the male issue of the brother, and in default of any such
male issue to the person whom the brother appointed under a power
of appointment. The brother had no male issue and he appointed his
daughter. The gift to the daughter was held to be valid because it was an
independent and alternative gift by the testator. (When a person takes
property under a power of appointment it is taken not from the grantee
of the power but from the donor of the power). The test is, are there two
separate gifts dependent on distinct events, or is it a case of one gift falling
within Sections 13 or 14 and another just taking effect thereafter. In the
former case the second gift would take effect, but not in the latter case.
The section provides that the ulterior disposition would fail only if the
prior disposition in favour of the whole class intended failed because of
Sections 13 and 14. Therefore, if the prior disposition fails only in regard
to some of the members of the class, the ulterior disposition will not fail
but will take effect.

The section in the Succession Act, 1925, corresponding to this section in
the Transfer of Property Act, is Section 116. [See also, S. 20 below.]
ACCUMULATIONS [S. 17]

17. Direction for accumulation. — (1) Where the terms of a transfer of prop
erty direct that the income arising from the property shall be accumulated either
wholly or in part during a period longer than —
(a) the life of the transferor, or
(b) a period of eighteen years from the date of the transfer,
such direction shall, save as hereinafter provided, be void to the extent to which
the period during which the accumulation is directed exceeds the longer of the
aforesaid periods, and at the end of such last-mentioned period the property and
the income thereof shall be disposed of as if the period during which the accumu
lation has been directed to be made had elapsed.
(2.) This section shall not affect any directions for accumulation for the pur
pose of—
(z) the payment of the debts of the transferor or any other person taking any
interest under the transfer, or
(n) the provision of portions for children or remoter issue of the transferor or
of any other person taking any interest under the transfer, or
(Hi) the preservation or maintenance of the property transferred;
and such direction may be made accordingly.
Principle
A direction regarding income from property to keep it separate or to
postpone its enjoyment is a direction for accumulation. The object of
the rule against perpetuity is to circumscribe the period during which

property might be tied up. The object of this section is to restrict the
period for the accumulation of income in order to prevent hardship that
may be caused to heirs by postponing their enjoyment of the property
unreasonably and also to prevent the locking up of property and hamper
the economy of the country.
Originally, there could have been a direction for accumulation in English
Law for the full period of perpetuity. But in Thelluson v Woodford5^ the
testator directed the accumulation for nine lives in succession and the
direction was held to be good. The Accumulation Act, 1800, 39 and 40
Geo 3 c 98 was passed fixing the maximum period for accumulation.
That Act was repealed by the Law of Property Act, 192.5, which however
re-enacted the provisions.
The rule was originally enacted in a simple form in India as Section 18,
Transfer of Property Act. It fixed the maximum period for accumulation
as one year from the date of transfer where 1) the property was immov
able; or 2) the accumulation was directed to be made from the date of
transfer. The period was found to be too short and the position of the
rule was logically felt to be after Section 16. Therefore, the present rule
regarding accumulation was enacted as Section 17.
No specific rule can be laid down as regards the capacity of a Hindu to
direct accumulation. But the rule laid down in the section is not contrary
to Hindu Law.
Scope
A direction for accumulation for a period in excess of the period per
mitted by the perpetuity rule will be void also under the perpetuity rule.
Such a direction will also be void on the ground of repugnancy under
Section 11 where there is a transfer of an absolute interest.
A direction for accumulation for payment of debts for whatever period
would not go against the rule against perpetuities, because the property
is not tied up absolutely, since a creditor may at any time demand pay
ment. There must be existing debts and the accumulation must be for the
payment of such debts.

The corresponding section in that Act is Section 117.
18. Transfer in perpetuity for benefit of public.—The restrictions in
Sections 14, 16 and 17 shall not apply in the case of a transfer of property for
50. (1805) 11 Ves in.

the benefit of the public in the advancement of religion, knowledge, commerce,

health, safety, or any other object beneficial to mankind.
Principle
Where property is given for a purpose beneficial to the public it is neces
sary that it should not be frittered away, but on the contrary should be
kept intact so that its income could be utilised for the beneficial purpose.
That being so there could be fetters on the transfers of such property.
Under Hindu Law gifts for religious or charitable purposes were always
regarded as valid and the rule against perpetuity does not affect them.
The section is thus rightly made applicable to Hindus. Though it does not
apply to Muslims, Mohammedan law permits endowments in perpetuity
for religious or charitable purposes.
Scope
The illustration to Section 118, Succession Act, 1925, sets out what are
religious or charitable uses: 1) the relief of poor people; 2) maintenance
of sick soldiers; 3) the erection or maintenance of a hospital; 4) educa
tion of orphans; 5) support of scholars; 6) erection and maintenance of
a school; 7) building and maintenance of bridge; 8) making of roads;
9) erection and maintenance of a church; and 10) formation and mainte
nance of a public garden.
The following are charitable or religious gifts:
1. gifts of property to temple, idol or for the support of priests;
2. gift of sadavart, that is, feeding;
3. gift of property to a dharamshala where travellers are fed;
4. gift for building wells; and
5. gifts for maintaining schools and universities.
The following are not charitable or religious gifts:
1. trust for individual benefit;
2. gift for the performance of ceremonies for the spiritual benefit of
the donor or members of his family; and
3. gift for repairing a private tomb.
Under this section a gift over from one charity to another is valid as in
English Law. But unlike English Law a gift to a charity even upon the
happening of a distant event would be valid under this section.51
51. Sitesh Kishore Pandey v Rantesh Kishore Pandey, 1980 SCC OnLine Pat 118: AIR 1981
Pat 339.
EXERCISES
i. Can a transfer of property impose a condition on the transferee or
on persons claiming under him that they should not part with their
interest in the property? (pp. 49-52)
2. A transfers property to B with the condition that B shall not sell it
without A’s consent. Is the transfer valid? (The transfer is valid, but
not the condition)
3. In what cases are conditions restraining a transferee of property
from enjoying it in any manner he likes, valid and in what cases are
they invalid? (pp. 67-71)
4. A transfers property to B on condition that if B becomes insolvent,
the property reverts to A. Is this transfer valid? (p. 52)
5. A gifts a house to B with the condition that B shall not make any
alternations in it. Is the condition valid? (pp. 55-57, it is a condition
subsequent and void)
6. A transfers his land to B with the condition that if B joins the
Army, the land will revert to A. Is the condition valid? (pp. 52-53)
7. Explain the rule against perpetuity, (pp. 67-70)
8. The shebaits of a temple agree to appoint the members of the fam
ily of A, from generation to generation to perform temple services
and to provide for the expenses and remuneration of the person
then holding office. Is such an agreement valid? (pp. 74-78)
9. Can there be transfers to unborn persons and if so when?
(pp. 63-67)
10. What are the exceptions to the rule against perpetuity? (pp. 70-71)
11. How far is the rule in Leake v Robinson, (1817) 2 Mer 363: 35 ER
979 applicable in India? (p. 79)
12. A gifts her property to B her niece for life and then to B’s male
descendants, if any, absolutely, but if there are no male descendants
to B’s unborn daughter for life, and that if there is no issue of B at
all to A’s nephew C. If B dies without issue, can C take the prop
erty? (pp. 81-83)
13. Even if the ulterior disposition is not valid the prior disposition is
not affected. Is this right? (pp. 82-83)
14. How long can the income of transferred property be directed to be
accumulated without being enjoyed by the transferee? (pp. 83-85)
15. What is a covenant and what are covenants annexed to land?
(pp. 58-61)
16. Distinguish in law and equity, the nature of covenants running
with land. (pp. 60-61)
17. Distinguish between restrictive and positive covenants, (pp. 61-62)
GENERAL RULES REGARDING TRANSFER OF PROPERTY 89

and statutes referred to in the book ll ?---- ]EBC

through EBC Explorer™: U~~z/
• Ajudhia Buksh v Rukmin Knar, 1883 SCC OnLine PC 16 case pilot
• Aniruddha Mitra v Administrator General of Bengal,
1949 SCC OnLine PC 21
• Bajrang Bahadur v Bakhtraj Kuer, AIR 1956 SC 593
• Bhagabati Barmanya v Kali Charan Singh, (1910-11) 38 IA 54:
ILR 38 Cal 468
• F.M. Devaru Ganapathi Bhat v Prabhakar Ganapathi Bhat, (2004) 2
SCC 504
• Ganesh Sonar v Purnendu Narayan Singha, (1969) 2 SCC 594
• Leake v Robinson, (1817) 2 Mer 363: 35 ER 979
• London and South Western Railway Co v Gomm, (1882) 20 Ch D
562 (CA)
• Muller v Trafford, (1901) 1 Ch 54
• R. Kempraj v Barton Son & Co, (1969) 2 SCC 594.
• Ram Baran Prasad v Ram Mohit Hazra, AIR 1967 SC 744
• Sopher v Administrator General of Bengal, 1944 SCC OnLine PC 3
• Soundara Rajan v Natarajan, 1915 SCC OnLine PC 49
• Tulk v Moxhay, (1848) 2 Ph 774: 41 ER 1143
• Whitby v Mitchell, (1890) LR 44 Ch D 85
Chapter 4
Vested and Contingent Interest

[Ss. 19 to 24]
VESTED AND CONTINGENT INTERESTS

Section 19 defines “vested interest”.
19. Vested interest.—Where, on a transfer of property, an interest therein is
created in favour of a person without specifying the time when it is to take effect,
or in terms specifying that it is to take effect forthwith or on the happening of
an event which must happen, such interest is vested, unless a contrary intention
appears from the terms of the transfer.
A vested interest is not defeated by the death of the transferee before he
obtains possession.
Explanation.—An intention that an interest shall not be vested is not to be
inferred merely from a provision whereby the enjoyment thereof is postponed, or
whereby a prior interest in the same property is given or reserved to some other
person, or whereby income arising from the property is directed to be accumu
lated until the time of enjoyment arrives, or from a provision that if a particular
event shall happen the interest shall pass to another person.
When a transfer of property is complete the interest in a property vests

in favour of the transferee. If the completion of a transfer is pending
the performance of some condition precedent, it is known as a contin
gent transfer. Upon the performance of the condition, the transaction get
completed and the interest in favour of the transferee becomes a vested
interest. A vested interest gives the transferee an immediate right as
opposed to a contingent right which may come into being on the possible
happening of some future event. A right may vest in a transferee imme
diately and yet the enjoyment of the right in the hands of the transferee
may be postponed to some future time.
If an interest is limited to take effect on the fulfilment of a condition,
the condition is known as a condition precedent. If the condition refers
to an event which is certain to occur, the interest is a vested interest.
[See, introduction and notes under Ss. 13 and 14]. That is why, a vested
remainder is sometimes described as not being subject to a condition
[S. 19] VESTED AND CONTINGENT INTEREST 91
precedent. If it is an uncertain event it is contingent. Contingent interests

are dealt with under Section 21.
A vested interest with the right of future enjoyment is different from a
contingent interest. This is because the future enjoyment is not an uncer
tain event. It is only a question of “when” the right which is already
vested will be enjoyed as opposed to a question of “whether” the right
will pass to the transferee on the happening of some future uncertain
event. If the question is whether or if the interest will pass in the event of
the happening of some future uncertain event, the interest is a contingent
interest. A vested interest is created immediately and enjoyment can be
postposed to the happening of some future certain event. For example,
X transfers property to Y to be used by Y on his 25th birthday. The
event of Y achieving the age of 25 is a certainty in the natural course
of things. Thus, Y obtains a vested interest in the property immediately
and will enjoy the property upon turning 25 years of age. On the other
hand, L promises to transfer property to M upon M getting married to
N. Until such time as M actually marries N, the interest in favour of M is
a contingent interest because the transfer of property is dependant on the
happening of a future uncertain event. Once M marries N, M will then
have a vested interest in the property because the condition is fulfilled
and the transfer is completed.
Similarly, the creation of a prior interest in property will not postpone
the vesting of the property in the ultimate beneficiary. For example, X
transfers property to Y for use by Y for his lifetime and then to Z abso
lutely. If all three persons are living on the date of the transfer, a vested
interest is created in Z immediately. The enjoyment of the property in the
hands of Z is postponed for the lifetime of Y, but the interest in the prop
erty will nonetheless vest in Z on the date of the transfer itself. Therefore,
the creation of a prior interest in property will not postpone the vesting
of the property in favour of the ultimate beneficiary, but will only post
pone the enjoyment in the hands of the ultimate beneficiary during the
period of the existence of the prior interest.
Section 119, Succession Act, 192.5, contains illustrations exemplifying
the scope of the section.
The differences between a vested and contingent interest are as follows:
1. A vested interest is independent of any condition and takes effect
from the date of the transfer of interest, whereas a contingent inter
est depends entirely upon the fulfilment of the condition imposed.
2. In a vested interest there is a present interest, though its enjoyment
is postponed, but in a contingent interest the interest would vest
only on the fulfilment of the condition.
3. A vested interest is transferable and heritable, but a contingent
interest is neither alienable nor transmissible.
In Rajes Kama Roy v Shanti Debi1, the terms of a trust deed showed
that the settlor attached great importance to the discharge of the debts
becoming an accomplished fact before his two sons took the benefit by
way of devolution of his property. The widow of a predeceased son had
obtained a decree against the two sons for payment to her of a monthly
allowance. Her application for execution of the decree was opposed by
the two sons on the ground, inter alia, that under the terms of the trust
deed they had no attachable interest in the properties sought to be pro
ceeded against. It was held:
The learned Judges of the High Court relied on illustration (v) to Section 119
of the Indian Succession Act and the decision in Ranganatha Mudaliar v
Mohan Krishna Mudaliar2, [and granted execution]. The learned Solicitor-
General appearing for the appellant before us has urged that there is no such
inflexible rule of law as is assumed by the High Court, namely, that, ‘in spite
of a clause requiring payment of debts before the property reaches the hands
of the donee, the gift is a vested one’. He drew our attention to the fact that
both Section 19 of the Transfer of Property Act and Section 119 of the Indian
Succession Act clearly indicate that if ‘a contrary intention appears’ from the
document that will prevail.... It is to be noticed that at p. 1373 in Jarman
On Wills (8th Edn.) Vol II, it is stated as follows:
‘It was at one period doubted whether a devise to a person after pay
ment of debts was not contingent until the debts were paid; but it is now
well established that such a devise confers an immediately vested interest,
the words of apparent postponement being considered only as creating a
charge’.
Apart from any seemingly technical rules which may be gathered from
English decisions and text-books on this subject, there can be no doubt that
the question is really one of intention to be gathered from a comprehensive
view of all the terms of a document.... These arrangements taken together
clearly indicate that what is postponed is not the very vesting of the property
in the lots themselves but that the enjoyment of the income thereof is bur
dened with certain monthly payments and with the obligation to discharge
debts therefrom notionally pro rata, all of which taken together constitute
application of the income for his benefit.
A fund is bequeathed to A, B and C in equal shares to be paid to them
on their attaining the age of 18, respectively, with a proviso that, if all
of them died under the age of 18, the legacy shall devolve upon D. On
the death of the testator, the shares vested in interest in A, B and C, sub
ject to be divested in case A, B and C shall die under 18, and, upon the
death of any of them, (except the last survivor) under the age of 18, his
vested interest passes, so subject, to his representatives. The interest is
already vested but liable to be divested on the happening of a condition
1. AIR 1957 SC 255; Chikkaraj v K.N. Viswanathan, w SCC OnLine Mad 164: AIR
1979 Mad 103; Rukhamanbai v Sivrani, (1981) 4 SCC 262.
2. AIR 1926 Mad 645.
S. 19] VESTED AND CONTINGENT INTEREST 93
subsequent. For such conditional limitations see, notes under Sections 12,
28 and 31.
The words “To be paid” or “Payable at a certain age” only post
pone the enjoyment of a vested interest. They do not make the interest
contingent.
Suppose a property is given to A until B attains the age of 18 and
then to B. Apparently, the interest given to B is a contingent interest,
contingent on his attaining 18. But similar devise of real property was
construed in an English case as creating a vested interest and the same
rule applies in India both with respect to movable as well as immovable
property. The reason for such a construction is that the law favours vest
ing of property.
In a case before the Supreme Court, in a deed of family settlement
the settlor created a limited interest which was in the shape of the right
to receive rental income. The property of the settlor was to vest in the
brother settlee only after settlor’s death. It was held that the settlement
did not create a vested interest in favour of the settlee. The latter could
not be absolute owner during lifetime of settlor. He could not succeed to
the property on the settlor’s death.3
A document has to be construed as a whole and its substance has to
be examined to know whether it is a settlement or a will. Its form and
nomenclature is not conclusive. These words of the Supreme Court occur
in a case in which a document created unequivocal right in favour of
16 persons presently. The beneficiaries were to enjoy the property along
with the settlor during his lifetime. They were to get specified shares
after his death. There was no right with the settlor to cancel the deed
or alter its terms. The document provided for temple honours in favour
of two beneficiaries and their heirs. The respective shares were to be
divided after disposal of the property. These two conditions were not
taken to mean that the document was a will. It was in fact a settlement.4
Under the Mussalman Wakf Validity Act, 1913, life estates with vested
remainders are recognised in relation to wakfs.
Sale of inchoate contingent interest prior to vesting. — A father and
son transferred certain property purporting to be owners. In fact the
father had only life interest in the property and son’s interest was in
the nature of an inchoate contingent interest which had not yet become
vested. It was an undivided share in the family property which was to
vest on father’s death. The sale was held to be of no effect till the prop
erty was partitioned.5
3. Kokilambal v N. Raman, (2005) 11 SCC 234.

4. P.K. Mohan Rant v B.N. Ananthachary, (2010) 4 SCC 161.
5. Bay Berry Apartments (P) Ltd v Shobha, (2006) 13 SCC 737.
CONTINGENT INTERESTS [S. 21]

21. Contingent interest.—Where, on a transfer of property, an interest therein
is created in favour of a person to take effect only on the happening of a specified
uncertain event, or if a specified uncertain event shall not happen, such person
thereby acquires a contingent interest in the property. Such interest becomes a
vested interest in the former case, on the happening of the event, in the latter,
when the happening of the event becomes impossible.
Exception: Where, under a transfer of property, a person becomes entitled to
an interest therein upon attaining a particular age, and the transferor also gives
to him absolutely the income to arise from such interest before he reaches that
age, or directs the income or so much thereof as may be necessary to be applied
for his benefit, such interest is not contingent.
Suppose property is given to A until B attains the age of 18 and then to

B. A's interest is vested and B’s interest is contingent. Suppose property
is given to A but if he marries, to B, A’s interest is vested and B’s con
tingent. But if 6 dies and then A marries, A’s interest continues to be
vested and B’s interest (contingent) ceases with his death. Suppose again,
property is given to A, but if he dies without any issue, to B, A’s interest is
vested and B’s is contingent. Therefore, if B dies before A, B’s contingent
interest ceases with his death, and the subsequent death of A without any
issue will not have any effect.
Suppose a property is gifted to A for life and thereafter to B, if B
returns from the UK. No time is mentioned for the happening of the con
tingency. Therefore, the contingency must happen before A dies, because
otherwise the ownership of the property will remain in suspense. But, if
a time is fixed for B’s return, say, io years, then, even if A dies before
B’s return, B will take the property whenever he returns before io years.
During the interval between A’s death and B’s return, the property will
be held in trust, and if there is no one, by the official trustee.
Like the Explanation to Section 19, the exception to this section is a
rule of construction. The corresponding section in the Indian Succession
4 1— \ Act is Section 120.
\S~5/ Ma Yait v Official Assignee6, the result of a disposition was to cre-
case pilot ate> first °f a vested interest in all the children in the income of the
property; secondly, it created a contingent interest in all the children in
the corpus in respect of all the property until, at any rate, the youngest
child reached the age of 20. When the youngest child reached the age of
20, the children who were alive obtained a vested interest and a right to
have the proceeds distributed. The eldest son transferred his rights under
the settlement deed and the assignee sued for a declaration of the inter
est to the assignor. On the question whether the assignment was hit by
Section 6(a), Transfer of Property Act, it was held:
6. 1929 SCC OnLine PC 80: (1929-30) 57 IA 10.

The contingent interest which the children took was something quite dif
ferent from a mere possibility of a like chance of a relation obtaining a legacy,
and also something quite different from a mere right to sue. It is well-ascer
tained form of property—it certainly has been transferred, in this country
for generations—in respect of which it is quite possible to raise money and
to dispose of it in any way that the beneficiary chooses.
In this case it is not just a contingent interest (see page 88-89, where it is
stated that a contingent interest cannot be transferred). The contingent inter
est in the present case is a right in the corpus with an additional vested right
in the income. This disposition is clearly covered by the exception.
In English Law, while in the case of an individual, a direction for the
application of the income for the benefit of the donee gives him a vested
right, in the case of a grant to a class, no vested right is conferred until
all the members of the class attain the age. It is assumed that there is such
an exception in Indian law also, because of Section 22. It is respectfully
submitted that such an assumption is not justified, because 1) Section 22
does not refer to the application of the income; and 2) the Ma Yait case
(on p. 92) shows that the members of the class have a vested interest.
Below are given a few simple examples of vested and contingent
interests:
If A gives property to B for life and then to C but that C should not
enjoy the income till he is 18, C gets a vested interest. [See, S. 17] But if
A gives property to B for life and then to C when he reaches a particular
age, C only gets a contingent interest. Again, if A gives property to B
for life and then to his unborn son, the latter gets a vested interest the
moment he is born. If however, the grant is to B for life and then to his
unborn son on attaining 18, it is contingent. But note that if the grant
is to B for life and then to his unborn son but that the latter should not
enjoy the income till he is 18, it is a vested interest; similarly if the income
is given but the vesting of the corpus postponed, even then it is vested
under the exception to Section 21. If, however, property is given to B for
life and on his death to his son on attaining 18, the son gets a contingent
interest till he is 18, and thereafter a vested interest.7
Where, under a gift deed the donee is to take possession of the prop
erty gifted only after the death of the donor and his wife, the donee takes
a vested interest.
If A transfers property to B in trust for C with direction that B should
give possession to C when C attains the age of 25; C gets a vested interest
and is entitled to possession when he attains 18.
The test is: An interest is vested if it vests in the transferee immedi
ately or on the happening of an event which is bound to happen. Such
an estate does not cease to be a vested interest, merely because 1) the
7. Usha Sitbbarao v B.N. Vishveswaraiah, (1996) 5 SCC 201.

enjoyment is postponed; or z) a prior interest is given to another; or

3) the income accruing from it is directed to the accumulated until the
time of enjoyment arrives; or 4) where the interest would pass to another
on the happening of an event.
ACQUISITION OF VESTED INTEREST BY

UNBORN PERSON [S. 20]
Section 20 deals with the case of the creation of an interest for the benefit
of an unborn person. It provides:
20. When unborn person acquires vested interest on transfer for his ben
efit.—Where, on a transfer of property, an interest therein is created for the
benefit of a person not then living, he acquires upon his birth, unless a contrary
intention appears from the terms of the transfer, a vested interest, although he
may not be entitled to the enjoyment thereof immediately on his birth.
Section 23 provides for a transfer contingent on the happening of speci

fied uncertain events. It reads:
23. Transfer contingent on happening of specified uncertain event.—
Where, on a transfer of property, an interest therein is to accrue to a specified
person if a specified uncertain event shall happen, and no time is mentioned for
the occurrence of that event, the interest fails unless such event happens before,
or at the same time, as the intermediate or precedent interest ceases to exist.
If the Rules (1) and (4) in the notes under Section 14 are examined, one
may be tempted to conclude that the rule in this section is the same as
Rules (1) and (4) in English Law, but there are two important differences.
They are: 1) a limitation such as to A for life, remainder five years after
A’s death to B in fee simple, is not permissible in English Law, because
the contingent interest must vest at the latest eo instanti the determina
tion of the particular estate; but would be permissible under Indian law,
because time is mentioned for the occurrence of the event, and the con
ditions of the section are not applicable; and 2) under the English Law a
contingent gift must be supported by a prior estate but that artificial rule
is not imported into Indian law under this section.
Section 21 deals with two kinds of contingent interests: those that
take effect on the happening of a specified uncertain event and those that
take effect when a specified uncertain event does not happen. In the case
of the former kind, there are two possibilities: 1) a time is specified for
the happening of the event, or 2) no time is specified. If time is specified,
that situation will be covered by Section 21. But, if no time is specified,
that situation is covered by Section 23.
Illustrations to the section can be gathered from those under
Section 124, Succession Act, which is the corresponding section under
that Act.
The case of a transfer to members of a class who attain a particular

age is provided for in Section 22. It reads:
22. Transfer to members of a class who attain a particular age. — Where, on
a transfer of property an interest therein is created in favour of such members
only of a class as shall attain a particular age, such interest does not vest in any
member of the class who has not attained that age.
If, however, the intention is clear that the property is to be divided among
all the members of the class when they attain 18, Section 22 does not
apply because that is postponing only the division or enjoyment of the
property and hence, the gift is not contingent.
Section 24 provides for the case of a transfer to such of certain persons
as survive at some period not specified. It reads:
24. Transfer to such of certain persons as survive at some period not speci
fied.— Where, on a transfer of property, an interest therein is to accrue to such
of certain persons as shall be surviving at some period but the exact period is not
specified, the interest shall go to such of them as shall be alive when the inter
mediate or precedent interest ceases to exist, unless a contrary intention appears
from the terms of the transfer.
Illustration
A transfers property to B for life and after his life to C and D, to be divided
equally between them, or to the survivor of them. C dies during the life of B. D
survives B. At B’s death the property passes to D.
In the illustration if both C and D survive B and thereafter C dies, C’s

legal representatives and D share the property equally. If both C and D
predecease B, the property will be shared equally by the representatives
of C and those of D. This is due to a peculiar rule stated by Lord Lindley
in Penny v Commr of Railway* to the effect that the survivorship clause
is in the nature of a divesting clause and if none of the donees survive, the
clause will be inoperative so that the donees are deemed to have vested
interests.
Further illustrations are found under Section 125, Indian Succession
Act.
Document, whether settlement or will

The court has to examine the nature of the document as a whole and
also to find out its substance. The form or nomenclature given by the
parties to the instrument cannot by itself be a conclusive fact. The docu
ment created in praesenti unequivocal right in favour of 16 persons. The
beneficiaries were to enjoy the property along with the settlor during his
lifetime. They were required to create specified respective shares after
his death. The settlor reserved no right for himself to cancel the deed or
8. 1900 AC 62.8, 634.

alter its terms. The document was held to be settlement and not a will.
The fact that two of the beneficiaries and after them their legal heirs were
to receive temple honours or that after disposal of the property, the sale
proceeds were to be divided among the beneficiaries could not make the
document to be a will.9
EXERCISES
i. What are “vested” and “contingent” interests? (pp. 88-94)
2. What is a contingent remainder and when should it vest to be valid?
(p. 92)
3. What is the nature of the interest in the following case:
A gifts his property to B for his life on condition that after B’s
death it devolves on C, but if C dies before B then it devolves on
D. What are the interests of C and D during B’s lifetime? (C’s
interest is vested, whereas D’s is contingent)
9. P.K. Mohan Ram v B.N. Ananthachary, (2010) 4 SCC 161.

through EBC Explorer™ on SCC Online*;
along with updates, articles, videos,
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blogs and a host of different resources.

• Ma Yait v Official Assignee, 1929 SCC OnLine PC 80
• Rajes Kanta Roy v Shanti Debi, AIR 1957 SC 255
Chapter 5
Transfers with Conditions

[Ss. 25 to 30, 33 and 34]
CONDITIONAL TRANSFER
A condition is a provision or a stipulation which is attached to a transfer
of rights in property, which is required to be fulfilled for the transfer to
be completed. The condition may be one which is required to be per
formed either before or after the vesting of the property in favour of
the transferee. A condition which is required to be performed before a
property can vest is called a condition precedent. This type of condition
must be strictly complied with and if it is not, the property will not vest
with the transferee. For example, E promises to transfer a particular
land to G if G digs a well on that land. G must first dig the well before
the property can vest with him. A condition subsequent is one which
is to be performed after the property is vested with the transferee. For
example, F agrees to transfer his land to H if H will promise to pay all
future medical bills of F’s elderly aunt. H agrees to this condition and
the property gets vested in H immediately. H is then required to pay all
the medicals bills of F’s aunt in fulfilment of the conditions subsequent.
If H does not do so, the penalty is that he will then be divested of his
rights in the property and the property will revert back to F or F’s heirs.
However, a condition subsequent must only be substantially complied
with. Therefore, if H pays for “most” of the medical bills of F’s aunt or
pays only for doctors and hospital visits and doesn’t pay for visits to the
dentist, H’s obligations under the condition subsequent is substantially
complied with and he will not be divested of the property. A condition
subsequent only needs “substantial compliance” to be fulfilled. This is
because the effect of non-compliance with a condition subsequent is that
the transferee gets divested of the property transferred, whereas it is the
general policy of property law that the law favours the early vesting of
property and disfavours the divestation of property.
A conditional transfer is defined in Section 25. It provides:

25. Conditional transfer.—An interest created on a transfer of property and
dependent upon a condition fails if the fulfilment of the condition is impossible,
or is forbidden by law, or is of such a nature that, if permitted, it would defeat
the provisions of any law, or is fraudulent, or involves or implies injury to the
person or property of another, or the Court regards it as immoral or opposed to
public policy.
Illustrations
(a) A lets a farm to B on condition that he shall walk a hundred miles in an
hour. The lease is void.
(b) A gives Rs 500 to B on condition that he shall marry A’s daughter C. At the
date of transfer C was dead. The transfer is void.
(c) A transfers Rs 500 to B on condition that he shall murder C. The transfer
is void.
(d) A transfers Rs 500 to his niece C if she will desert her husband. The trans
fer is void.
Where a transferor makes the existence of a right dependent on the

happening or non-happening of an event, it is a conditional transfer.
Conditions maybe 1) precedent, 2) subsequent or 3) conditional limita
tion. The last has been discussed on pages 52 and 53.
Under Section 19, we have already seen what is a condition precedent.
A condition subsequent is one on the happening of which an interest
once vested, is either determined or shifted from the grantee to another
person [see, S. 28]. For example, a grant to A in fee simple. If he married
B’s daughter, then to C in fee simple. Similarly, a grant to A for life but if
he marries a second wife, the life estate shall be determined. The differ
ences between the two kinds of conditions are as follows:
1. A condition precedent precedes the vesting, but a condition subse
quent succeeds the vesting.
2. The fulfilment of a condition precedent has the effect of vesting
an estate not already vested, whereas, the fulfilment of a condition
subsequent divests an estate already vested.
3. A condition precedent to be effective need not be strictly fulfilled.
It is sufficient if it is substantially fulfilled. A condition subsequent,
however, must be strictly fulfilled.
4. When a condition precedent is void, the grant will be void, whereas,
if a condition subsequent is void, the condition is ignored. This fol
lows from Section 32.
Sometimes a condition precedent is construed as a condition subsequent.
Suppose a grant is made to A when he attains 21, but if he dies before
attaining that age, then to B. The condition of A’s death before 21, could
be treated as a condition precedent for the vesting of the estate in B. But
S. 26] TRANSFERS WITH CONDITIONS 101
in Edwards v Hammond1, it was treated as a condition subsequent, that

is, the estate had vested in A and was divested by the fulfilment of the
condition subsequent, namely, A’s death before attaining 21. The reason CASE PILOT
for such a construction was that the law favours vesting, in this case in A.
The rule against perpetuity and the rule of the double possibility,
already discussed, under Sections 13 and 14 come under the head “for
bidden by law”.
In Ghumna v Ram Chandra Rao2, the donor made a gift of his prop
erty to a person and his wife, on condition that the donor should phys CASE PILOT
ically enjoy the wife. The condition being immoral, the gift was held to
be void.
The difference between a transfer being void and a condition being
void may be examined at this stage. Transfers in favour of unborn per
sons but without giving them the whole estate [S. 13], transfers violating
the rule against perpetuity [S. 14], and conditional transfers when the
condition is illegal, immoral or impossible [S. 25] are cases where the
transfers are void. But in the case of a transfer with a total restraint on
alienation [S. 10], a transfer subject to a restriction repugnant to the
interest created [S. 11], a transfer subject to a condition making interest
determinable on insolvency or attempted alienation [S. 12], a transfer
subject to a condition directing accumulation beyond the period men
tioned in Section 17 are cases where the transfer is valid but the condi
tion is void, that is, the condition is ignored and transfer is deemed to be
unconditional.
What is considered as fulfilment of a condition precedent is provided
for in Section 26, as follows:
26. Fulfilment of condition precedent.—Where the terms of a transfer of
property impose a condition to be fulfilled before a person can take an interest
in property, the condition shall be deemed to have been fulfilled if it has been
substantially complied with.
Illustrations
(a) A transfers Rs 5000 to B on condition that he shall marry with the consent
of C, D and E. E dies. B marries with the consent of C and D. B is deemed to
have fulfilled the condition.
(b) A transfers Rs 5000 to B on condition that he shall marry with the consent
of C, D and E. B marries with the consent of C, D and E, but obtains their con
sent after the marriage. B has not fulfilled the condition. (It is a case of approval
and not consent). The approval was subsequent and not prior to the marriage.
In Veerabhadra Raju Bahadur Garu v Chiranjivi Raju Garu3, the appel

lant’s father made a bequest to his brother, the respondent, who had CASE PILOT
no legal claim to maintenance. After reciting that the legal pretensions
1. (1683) 1 B & PNR 324m
2. 1925 SCC OnLine All 48: ILR (1925) 47 All 619.
3. 1905 SCC OnLine PC 5: (1904-05) 32 IA 105: ILR (1905) 28 Mad 173.
of his brother and nephew were unjust, the testator purported to make
a bequest contingent on two events: i) the court’s decision in the then
pending litigation being in his favour; and 2) the defeated litigants hum
bly applying for subsistence. The respondent and the nephew sent peti
tions to the Collector complaining about non-payment of maintenance
and filed a suit. It was held:
The condition regarding humble application was a condition precedent....
But what humility there is, therefore, is primarily addressed to the Collector,
and not to the offended brother, who was now dead. But when the substance
of the document is examined, it is seen there is no renunciation, but, on
the contrary, a reassertion of the appellant’s father’s duty to maintain the
applicant; and the abstention from further appealing in the (earlier) litigation
is frankly ascribed to prudential reasons. Finally, the application is not for
what was given in the will, but for twelve times as much. Their Lordships are
entirely unable to find in this document either the language of humility, or
what is more important, the substance of the humble request for subsistence.
[The condition precedent not having been complied with, it was held that the
suit should be dismissed.]
This section is also an instance of the doctrine of cy pres.

The case of a condition subsequent is illustrated by the following:
under Section 31 the interest is divested and revested in the grantor. See
also, Section 12.
Suppose a grant is made to A in fee simple, but if he refuses to marry
a girl chosen by B, C and D, then to E in fee simple. Suppose B dies and
A refuses to marry a girl chosen by C and D. A will not be divested,
because the condition is a condition subsequent requiring strict fulfil
ment. As already explained the policy of law is to encourage vesting and
discourage divesting.
Other illustrations can be culled from the Succession Act, the corre
sponding section in which is Section 128.
Sections 28 and 29 deal with conditions subsequent.
28. Ulterior transfer conditional on happening or not happening of specified
event. — On a transfer of property an interest therein may be created to accrue to
any person with the condition superadded that in case a specified uncertain event
shall happen such interest shall pass to another person, or that in case a specified
uncertain event shall not happen such interest shall pass to another person. In
each case the dispositions are subject to the rules contained in Sections 10, 12,
21, 22, 23, 24, 25 and 27.
“Condition superadded” means a condition subsequent. This section

deals with defeasance on the fulfilment of a condition subsequent.
Defeasance is different from repugnancy.
It is a maxim of the feudal system that Cujus est dare ejus est dispo-
nere, which means the bestower of a gift has a right to regulate its dis
posal; but at the present day, as Lord St. Leonards remarked in Egerton
v Earl Brownlow\ “No man can attach any condition to his property
which is against public good, nor can he alter the usual line of descent by
a creation of his own.” Therefore, if after conferring an absolute estate
on the donee, the donor gives a further interest after the termination of
the donee’s estate (and not in defeasance of it) such further interest will
be void on the ground of repugnancy. [See also, Ss. io, n and 12.]. The
scope of this section is that conditions of defeasance can be imposed, but
they should not violate the rules in the various sections referred to in the
section. (—A
In Saraju Bala Debi v Jyotirmoyee Debi4 5, a Hindu granted properties
to his daughter subject to three conditions: 1) the properties were not to case pilot
pass to the grantee’s daughters; 2) they were not to be transferred by gift
except to a limited extent for religious purposes; and 3) the transferor
and his heirs should have a right of pre-emption on the happening of
specified events. There was a defeasance clause on the failure of desig
nated heirs, namely, the sons of the transferee (daughter) and their sons
successively. The transferee died without issue, but left a will leaving the
properties to the respondent. The appellant, claiming to be the nearest
reversioner of the last male holder (transferor), filed the suit against the
respondent. It was held:
The first condition is that the properties should not in any case pass to the
daughters and their heirs.... It is an attempt to alter the legal course of suc
cession to an absolute estate and is therefore void.6
The next condition is that neither the grantee nor her heirs should transfer
by way of gift except a gift for religious purpose. This again is more consist
ent with an attempt to restrict the powers of an absolute owner than an inten
tion to enlarge the power of a life tenant. As such a restriction is repugnant
to the absolute estate it is void on that ground.7
The last condition gives a right of pre-emption.... This condition implies
a power of sale rather than negating it, and is inconsistent with the notion of
an estate for life.
The conditions referred to above are followed by a defeasance clause....
A Hindu, no doubt, may give property by way of executory gift upon
an event which is to happen, if at all, immediately on the close of a life
in being and in favour of a person born at the date of the gift, and such a
4. (1853) 4 HLC 1.
5. 1931 SCC OnLine PC 38: (1930-31) 58 IA 270; Jagdish Prasad v Mauleshtvar, 1982
SCC OnLine All 20: AIR 1982 All 163; Kali Sadhan Banerjee v K.K. Banerji, 1981 SCC
OnLine Cal 216: AIR 1982 Cal 158.
6. Tagore v Tagore [1872 SCC OnLine PC 36: (1872-73) Supp IA 47].
7. Lalit Mohun Singh Roy v Chukkun Lal Roy, 1897 SCC OnLine PC 8: (1896-97) 24 IA
76.
gift over might be a sufficient indication that only a life-estate to the first
taker is indicated.8 That, however, is not the case here. The event which
is referred to in the grant is an indefinite failure of the male issue of the
grantee and the attempted gift over is therefore void.
under Section 31, the interest is divested and revested in the grantor. [See
also> S. iz]
Suppose A granted property to his wife on conditions that “if any
issue is born to us, then to that issue after your death; but if there is no
issue, then, after your death to your brothers”. She died in X’s lifetime
without issue. In a contest between A as heir and the brothers under the
grant, the brothers will succeed under Section 28.
Suppose three brothers’ partition their joint property in three equal
shares. The partition deed provides that in the event of the death of any
one without male issue, his share should pass to the other brothers. The
conditions subsequent are valid under Section 28.
I have already stated that a condition subsequent, which is a condition
of defeasance insofar as the prior interest is concerned, may be viewed as
a condition precedent in relation to the ulterior disposition. That is why
it is made subject to Sections 10, 12, 21 to 25 and 27. Section 26 is not
mentioned because the rule applicable is the one, in Section 29:
29. Fulfilment of condition subsequent. — An ulterior disposition of the kind
contemplated by the last preceding section can not take effect unless the condi
tion is strictly fulfilled.
Illustration
A transfers Rs 500 to B, to be paid to him on his attaining his majority or
marrying, with a proviso that, if B dies a minor or marries without C’s consent,
Rs 500 shall go to D. B marries when only 17 years of age, without C’s consent.
The transfer to D takes effect.
Sections 27, 30, 33 and 34 provide for certain special cases. Section 26
deals with a case of a condition precedent. If it is fulfilled, even though
not literally the property will vest in the transferee. If it is not fulfilled
the property will continue to be that of the transferor. This section,
Section 27, deals with a case when on the failure of the condition prec
edent there is a future or ulterior transfer in favour of another. Suppose
A transfers ^1000 to B on condition that B should reside with A. This
is a condition precedent, and if B does not reside with A, B will not get
the ^1000 and it will continue to be the property of A. But, if A trans
fers 1000 to B on condition that B should reside with A, otherwise to
8. Sreemutty Soorjeemony Soorjeemoney Dossee v Denobundoo Mullick, (1862.) 9 MIA
123; Tagore v Tagorey 1872 SCC OnLine PC 36: (1872-73) Supp IA 47.
C. On failure of the condition precedent, i.e. B not residing with A, the

fund will go to C under Section 27. The transfer in favour of C will take
effect in whatever way the prior disposition fails, for example, if B dies
during A’s lifetime. That is, instead of the ulterior disposition failing it is
accelerated. Of course, the condition on which the prior disposition fails
must be valid under Section 25, because, if it is not valid, for example,
when the prior disposition fails because of Sections 13 and 14, even the
ulterior disposition in favour of C will fail. Section 27 provides:
27. Conditional transfer to one person coupled with transfer to another
person on failure of prior disposition.—Where, on a transfer of property, an
interest therein is created in favour of one person, and by the same transaction
an ulterior disposition of the same interest is made in favour of another, if the
prior disposition under the transfer shall fail, the ulterior disposition shall take
effect upon the failure of the prior disposition, although the failure may not have
occurred in the manner contemplated by the transferor.
But where the intention of the parties to the transaction is that the ulterior
disposition shall take effect only in the event of the prior disposition failing in a
particular manner the ulterior disposition shall not take effect unless the prior
disposition fails in that manner.
Illustrations
(a) A transfers Rs 500 to B on condition that he shall execute a certain lease
within three months after A’s death, and, if he should neglect to do so, to C. B
dies in A’s lifetime. The disposition in favour of C takes effect.
(b) A transfers property to his wife; but in case she should die in his life
time, transfers to B that which he had transferred to her. A and his wife perish
together, under circumstances which make it impossible to prove that she died
before him. The disposition in favour of B does not take effect.
This rule is known as the doctrine of acceleration. Illustration (b) may no

longer be good law, if A and B are Hindus, in view of Section 21 of the
Hindu Succession Act, 1956.
A testator believing his wife to be pregnant made a disposition to the
child and that in case the child died before attaining the age of 21, to A.
After the testator’s death, it turned out that his wife was not enceinte. It
was held that the limitation in favour of A took effect, because the first
disposition having failed the only question was whether the disposition
in A’s favour should also fail, because the failure of the prior disposition
did not occur in the precise manner contemplated, that is, by the birth
of the child and its death before 21. The beneficial rule in the first part
of the section was held applicable. It would not have been applicable if
the ulterior disposition was to take effect only in the particular manner
contemplated as provided in the second part of the section.
This section may be compared with Section 16. Under the earlier sec
tion the prior disposition was invalid because of Sections 13 and 14. In
the present section [S. 27] the prior disposition is valid but fails for some
reason.
gift over might be a sufficient indication that only a life-estate to the first
taker is indicated.8 That, however, is not the case here. The event which
is referred to in the grant is an indefinite failure of the male issue of the
grantee and the attempted gift over is therefore void.
under Section 31, the interest is divested and revested in the grantor. [See
also, S. 12]
Suppose A granted property to his wife on conditions that “if any
issue is born to us, then to that issue after your death; but if there is no
issue, then, after your death to your brothers”. She died in A’s lifetime
without issue. In a contest between A as heir and the brothers under the
grant, the brothers will succeed under Section 28.
Suppose three brothers’ partition their joint property in three equal
shares. The partition deed provides that in the event of the death of any
one without male issue, his share should pass to the other brothers. The
conditions subsequent are valid under Section 28.
I have already stated that a condition subsequent, which is a condition
of defeasance insofar as the prior interest is concerned, may be viewed as
a condition precedent in relation to the ulterior disposition. That is why
it is made subject to Sections 10, 12, 21 to 25 and 27. Section 26 is not
mentioned because the rule applicable is the one, in Section 29:
29. Fulfilment of condition subsequent.—An ulterior disposition of the kind
contemplated by the last preceding section can not take effect unless the condi
tion is strictly fulfilled.
Illustration
A transfers Rs 500 to B, to be paid to him on his attaining his majority or
marrying, with a proviso that, if B dies a minor or marries without C’s consent,
Rs 500 shall go to D. B marries when only 17 years of age, without C’s consent.
The transfer to D takes effect.
Sections 27, 30, 33 and 34 provide for certain special cases. Section 26
deals with a case of a condition precedent. If it is fulfilled, even though
not literally the property will vest in the transferee. If it is not fulfilled
the property will continue to be that of the transferor. This section,
Section 27, deals with a case when on the failure of the condition prec
edent there is a future or ulterior transfer in favour of another. Suppose
A transfers ^1000 to B on condition that B should reside with A. This
is a condition precedent, and if B does not reside with A, B will not get
the ^1000 and it will continue to be the property of A. But, if A trans
fers ? 1000 to B on condition that B should reside with A, otherwise to
8. Sreemutty Soorjeemony Soorjeemoney Dossee v Denobundoo Mullick, (1862) 9 MIA
123; Tagore v Tagore, 1872 SCC OnLine PC 36: (1872-73) Supp IA 47.
C. On failure of the condition precedent, i.e. B not residing with A, the

fund will go to C under Section 27. The transfer in favour of C will take
effect in whatever way the prior disposition fails, for example, if B dies
during A’s lifetime. That is, instead of the ulterior disposition failing it is
accelerated. Of course, the condition on which the prior disposition fails
must be valid under Section 25, because, if it is not valid, for example,
when the prior disposition fails because of Sections 13 and 14, even the
ulterior disposition in favour of C will fail. Section 27 provides:
27. Conditional transfer to one person coupled with transfer to another
person on failure of prior disposition. — Where, on a transfer of property, an
interest therein is created in favour of one person, and by the same transaction
an ulterior disposition of the same interest is made in favour of another, if the
prior disposition under the transfer shall fail, the ulterior disposition shall take
effect upon the failure of the prior disposition, although the failure may not have
occurred in the manner contemplated by the transferor.
But where the intention of the parties to the transaction is that the ulterior
disposition shall take effect only in the event of the prior disposition failing in a
particular manner the ulterior disposition shall not take effect unless the prior
disposition fails in that manner.
Illustrations
(a) A transfers Rs 500 to B on condition that he shall execute a certain lease
within three months after A’s death, and, if he should neglect to do so, to C. B
dies in A’s lifetime. The disposition in favour of C takes effect.
(b) A transfers property to his wife; but in case she should die in his life
time, transfers to B that which he had transferred to her. A and his wife perish
together, under circumstances which make it impossible to prove that she died
before him. The disposition in favour of B does not take effect.
This rule is known as the doctrine of acceleration. Illustration (b) may no

longer be good law, if A and B are Hindus, in view of Section 21 of the
Hindu Succession Act, 1956.
A testator believing his wife to be pregnant made a disposition to the
child and that in case the child died before attaining the age of 21, to A.
After the testator’s death, it turned out that his wife was not enceinte. It
was held that the limitation in favour of A took effect, because the first
disposition having failed the only question was whether the disposition
in A’s favour should also fail, because the failure of the prior disposition
did not occur in the precise manner contemplated, that is, by the birth
of the child and its death before 21. The beneficial rule in the first part
of the section was held applicable. It would not have been applicable if
the ulterior disposition was to take effect only in the particular manner
contemplated as provided in the second part of the section.
This section may be compared with Section 16. Under the earlier sec
tion the prior disposition was invalid because of Sections 13 and 14. In
the present section [S. 27] the prior disposition is valid but fails for some
reason.
Section 30 deals with the validity of a prior disposition when the ulte
rior disposition is invalid. It provides:
30. Prior disposition not affected by invalidity of ulterior disposition, —If
the ulterior disposition is not valid, the prior disposition is not affected by it.
Illustration
A transfers a farm to B for her life, and if she does not desert her husband, to
C. B is entitled to the farm during her life, as if no condition had been inserted.
In Narsingh Rao v Mahalakshmi Bai910 , a person executed a gift deed in

CASE PILOT which two intentions appeared, namely, one to exclude his son B who
was of a bad character and to bring in B’s son on attaining majority. He
also gave all his property to his junior widow and the settlor’s intention
was that the property should pass to her and her heirs, unless a son was
born to B and attained majority. B’s son filed a suit to recover the prop
erties on his attaining majority. It was held:
Both intentions are effectuated under the deed by holding that the Rani and
her successors took an estate subject to defeasance on the happening of a
certain event, the attainment of majority by a son of Balwant. But this con
dition of defeasance was illegal and void under Hindu law as it created an
interest in favour of an unborn person according to the decision of this Board
in Jatindra Mohan Tagore v Ganendra Mohan Tagore™. Their Lordships are
of opinion that the provisions in the unborn sons’s favour amount to a condi
tion subsequent, and it is a well-settled principle of law, which has now been
embodied in Sections 28 and 30, Transfer of Property Act, that in such a case
if the ulterior disposition is not valid the prior disposition is not affected by it.
Under Section 133, Succession Act, 1925, is given the following
illustration:
An estate is bequeathed to A for his life with the condition superadded that,
if he shall not on a given day walk 100 miles in an hour, the estate shall go to B.
The condition being void, A retains his estate as if no condition has been inserted
in the will....
The remaining two sections, Sections 33 and 34, TPA are as follows:
33. Transfer conditional on performance of act, no time being specified for
performances.—Where, on a transfer of property, an interest therein is created
subject to a condition that the person taking it shall perform a certain act, but
no time is specified for the performance of the act, the condition is broken when
he renders impossible, permanently or for an indefinite period, the performance
of the act.
Suppose a grant is made to A subject to the condition that he enters

the army, otherwise the gift is to go over to B. A takes holy orders and
9. 1928 SCC OnLine PC 7: (1927-28) 55 IA 180.

10. 1872 IA Supp 47: (1872) 9 Beng LR 377.
thereby renders it impossible that he should fulfil the condition. The gift
over to B will take effect.
Suppose a grant is made to A, subject to the condition that he shall
marry B’s daughter. If the condition be not complied with, the gift is to
be of no effect. A marries a stranger and thereby indefinitely postpones
the performance of the condition. The gift will cease to have effect. But
this illustration would not apply to Muhammedans who can take a sec
ond wife at any time.
34. Transfer conditional on performance of act, time being specified.—
Where an act is to be performed by a person either as a condition to be fulfilled
before an interest created on a transfer of property is enjoyed by him, or as a con
dition on the non-fulfilment of which the interest is to pass from him to another
person, and a time is specified for the performance of the act, if such performance
within the specified time is prevented by the fraud of a person who would be
directly benefited by the non-fulfilment of the condition, such further time shall
as against him be allowed for performing the act as shall be requisite to make up
for the delay caused by such fraud. But if no time is specified for the performance
of the act, then, if its performance is by the fraud of a person interested in the
non-fulfilment of the condition rendered impossible or indefinitely postponed,
the condition shall as against him be deemed to have been fulfilled.
This section exemplifies the principle which is basic to every civilised sys
tem of jurisprudence, namely, that no man should be permitted to take
advantage of his own fraud.
These two sections deal with transfers conditional on the performance
of certain acts.
EXERCISES
i. What are conditions precedent and subsequent? (pp. 97-102)
2. The law favours vesting. How does the Act give effect to the principle?
(P- 98)
3. Explain—If the ulterior disposition fails, the prior disposition is
not affected, (p. 104)
4. Discuss the rule of acceleration of a subsequent interest on the fail
ure of a prior disposition, (p. 103)
5. What is meant by saying that a conditional limitation is a condition
subsequent as regards prior interest and a condition precedent as
regards the ulterior interest? (pp. 97-100)
6. What is the effect of an interest created by a transfer of property
dependent upon a condition, if the condition 1) is precedent and
void; and 2) is subsequent and void? (pp. 97-100)
108 LAW OF TRANSFER OF PROPERTY

and statutes referred to in the book '"’I EBC

• Edwards v Hammond, (1683) 1 B 8c PNR 32.4a CASE PILOT
• Ghumna v Ram Chandra Rao, 1925 SCC OnLine All 48

• Narsingh Rao v Mahalakshmi Bai, 1928 SCC OnLine PC 7
• Saraju Bala Debi v Jyotirmoyee Debi, 1931 SCC OnLine PC 38
• Veerabbadra Raju Bahadur Garn v Chiranjivi Raju Garu, 1905 SCC
OnLine PC 5
Chapter 6
Election and Apportionment

[Ss. 35 and 36]
ELECTION
The doctrine of election is dealt with in Section 35 and it provides as
follows:
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 when 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.
Illustration
(a) 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.
(B) In the same case, A dies before election. His representative must out of the
Rs 1000 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.
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 person interested in the property professed to be trans
ferred 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 trans
action 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 representatives 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.
Though the life of law is not wholly logic (it is logic applied to experi
ence) one of the logical rules which comes up for constant application in
courts is: Allegans contraria non est audiendus, which means, he is not
to be heard who alleges things contradictory to each other. This is the
principle underlying the doctrine of election or as it is known in Scotland
as that a man cannot approbate and reprobate, or more picturesquely,
that a man cannot blow hot and cold. The rule is explained by Lord
Cairns thus:
Where a deed or will professes to make a general disposition of prop
erty for the benefit of a person named in it, such person cannot accept a
benefit under the instrument without at the same time conforming to all
its provisions, and renouncing every right inconsistent with them.
The doctrine being general and universal, is applicable to Hindus,
Muslims as well as Christians.
It is necessary for the application of the doctrine that the dispositions
giving rise to the inconsistent right must form part of the same trans
action. In Ramayya v Mahalakshmi1, a Hindu widow, who was only
CASE PILOT
1. 1920 SCC OnLine Mad 321: AIR 1922 Mad 357. Piara Singh v Charan Singh, AIR 2009
NOC 3020 (P&H), it is necessary that the right of election was offered to the transferor
in the same deed. In the absence of such a right, he cannot claim the benefit of election.
S. 35] ELECTION AND APPORTIONMENT 111
entitled to a life interest, made a gift of some property in excess of her

right. She died subsequently leaving a will. By that will she disposed of
all her properties to the plaintiff, except those which she had already
gifted away. On the question whether the plaintiff was entitled to dis
pute the earlier gift, it was held, the gift and the will being two entirely
different transactions, the plaintiff could not be compelled to elect, but
could take under the will and could also dispute the earlier gift. The
question whether two dispositions form parts of the same transaction, is
a question of substance and not form and the fact that the dispositions
are contained in different instruments will not necessarily make them
independent.
The elector-owner, who relinquishes the benefit conferred on him, is
referred to as the “refractory transferee or donee”.2
FIRST RULE
The doctrine under the English Law is different from the rule in the sec
tion. Under the English Law, if the grantee (the owner of the property
which is transferred) takes against the instrument, the court of equity
assumes jurisdiction over the benefit intended for him under the instru
ment and gives compensation to those who were disappointed by his
election. The surplus, after compensation, does not revert to the donor
but is restored to the donee. Under the Indian law, the benefit conferred
by the instrument reverts to the donor or his representatives, except in
the two cases specified in the section.
The illustrations to Section 182, Succession Act furnish additional
examples of the doctrine:
(/) The farm of Sultanpur was the property of C. A bequeathed it to B, giving a
legacy of 1000 rupees to C. C has elected to retain his farm of Sultanpur, which is
worth 800 rupees. C forfeits his legacy of 1000 rupees, of which 800 rupees goes
to B, and the remaining 200 rupees falls into the residuary bequest, or devolves
according to the rule of intestate succession, as the case may be.
(n) 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.
(Hi) A bequeaths to B 1000 rupees, and to C an estate which will, under a set
tlement, 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 prop
erty in England, to which C is heir at law, bequeaths a legacy to C and, subject
2. Dhandas v State of Chhattisgarh, AIR Z015 NOC 837 (Chh), a substantial challenge to
land acquisition proceedings was waived. Subsequently, the proceeding was challenged
for enhancement of compensation. The court applied the doctrine of election. He could
not be permitted to re-agitate the challenge to the proceedings.
thereto, devises and bequeaths to B “all my property whatsoever and whereso

ever”, 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.
A person was managing the properties inherited by his brother’s daugh
ter from her father. Under the law then prevailing she only got a life
estate in the properties. Her uncle by his will, bequeathed a portion of
these properties to A and gave his niece a sum of ^800 from his proper
ties absolutely. She filed a suit to recover the properties bequeathed to A,
because they had been inherited by her from her father. It was held that
the doctrine of election applied though she had to choose between a life
estate and an absolute right to the sum of ^800.
The reason for this rule under Indian law is that the transfer of the
benefit to the owner is regarded as a conditional transfer. Hanbury, in
his Equity, thinks the Indian rule is the better rule. The Indian rule is
based upon forfeiture, whereas the English rule is based on the principle
of compensation, i.e. compensating the disappointed transferee to the
extent of the value of the property transferred to him.
Suppose A gives to B by a document 5000 and to C a property of B
worth ^1000. B refuses to surrender the property to C. Under English
Law, B, as the refractory donor, can take ^5000 and compensate C, the
disappointed donee, to the extent of 1000. But under Indian law, 5000
reverts to A because B forfeits it and A or his representative will have to
give C the sum of 1000.
SECOND RULE
In applying the second clause of the section an interesting question might
arise where the transferor has some right in the property disposed of, but
was not absolutely entitled to it. In such cases, it must be established that
the transferor intended to transfer more than he could, before the doc
trine can be applied. For example, A who owns a life interest in certain
property grants it to B and by the same instrument confers some benefits
on C who was entitled to the reversion. In such a case C cannot be made
to elect, unless it is shown that A attempted to dispose of not merely
the life interest which he was entitled to dispose of, but also something
more than such life interest. The presumption in such cases is that the
transferor only intended to dispose of what belonged to him, though it is
a rebuttable presumption.
THIRD AND FOURTH RULES

The third and fourth clauses of the section are explained by the illustra
tion to Section 184, Succession Act, which is as follows:
The lands of Sultanpur are settled upon C for life, and after his death upon D,
his only child. A bequeaths the lands of Sultanpur to B, and 1000 rupees to C. C
dies intestate shortly after the testator, and without having made any election. D
takes out administration to C, and as administrator elects on behalf of C’s estate
to take under the will. In that capacity he receives the legacy of 1000 rupees and
accounts to B for the rents of the lands of Sultanpur which accrued after the
death of the testator and before the death of C. In his individual character he
retains the lands of Sultanpur in opposition to the will.
In this illustration apart from the different characters of D the benefit

under the will which D gets, not being direct but only derivative and
indirect, he cannot be compelled to elect between the legacy and his
independent title to the lands got by him after C’s death.
Similarly, a trustee or a guardian can accept a grant under a trans
action in favour of the Cestui que trust (the beneficiary —pronounced
as “Settee kee trust”) or the ward. At the same time, in his individual
capacity, he could claim other properties purported to be disposed of by
the donor in his favour. Another illustration is furnished by Section 185,
Succession Act.
The estate of Sultanpur is settled upon A for life, and after his death,
upon 6. A leaves the estate of Sultanpur to D, ^2000 to B and ^1000
to C, who is B’s only child. B dies intestate, shortly after the testator,
without having made an election. C takes out administration to B, and as
administrator elects to keep the estate of Sultanpur in opposition to the
will, and to relinquish the legacy of ^2000. C may do this, and yet claim
his legacy of 1000 under the will.
Suppose A, widow of B executes a will by which she gives her money
of ^1000 to C and the land of her husband B in her possession, to D. C
and D are the reversions of 6. On the death of A her will comes into oper
ation. Also, C and D are entitled to a half share each in the land. Under
the will, C’s half share is given to D and C is given ^1000. Therefore, C
will have to elect between ^1000 and the half share in the land. But if
A had executed a gift deed instead of a will, with the same terms, C can
take under a gift deed and there is no question of election by him at that
time because he has no right yet to the half share in the land. He would
get that half share only after A dies. Therefore, the question of election
does not arise.
Suppose again, a Hindu dies leaving a widow A who inherits the life
estate in the property of her husband and A surrenders the property to B
and C, the next reversioners. One of the items surrendered is an item of
property to which C had an independent claim. B however claimed a half
share in that item also and relied upon the Doctrine of Election. On these
facts, there is no question of election at all, because A has not given any
property of C to B and given C any property in lieu thereof.
EXCEPTION
The first exception is exemplified by the illustration to Section 186,
Succession Act. It is as follows:
Under A’s marriage settlement his wife is entitled, if she survives him, to the
enjoyment of the estate of Sultanpur during her life. A by his will bequeaths to his
wife an annuity of zoo rupees during her life, in lieu of her interest in the estate
of Sultanpur, which estate he bequeaths to his son. He also gives his wife a legacy
of iooo rupees. The widow elects to take what she is entitled to under the settle
ment. She is bound to relinquish the annuity but not the legacy of iooo rupees.
A Hindu, A, bequeathed his property to B and included therein also the

property of his brother which was inherited by his widow C. A, how
ever, made a provision for C’s maintenance. C knew that the provision
for maintenance was in lieu of her husband’s property. She filed a suit
against B and obtained a decree for her maintenance. Thereafter, she
filed a second suit for her share in her husband’s property. It was held
that the second suit was not maintainable because she had elected to take
the maintenance.
KNOWLEDGE
The obligation to elect and an actual election are two distinct things.
Suppose A, who has a life estate in certain property, grants a perpetual
lease to B. C the reversioner, after A’s death, accepted rent from B for 3
years, but C was not aware of the terms of the lease between A and B.
In such a case C could not be held to have elected to confirm the lease.
Similarly A, a pardanashin widow, took the benefits given to her
under her husband’s will. She was not aware that there were some terms
disadvantageous to her in the will which was never read out to her or
explained to her. She could not be bound by those disadvantageous terms
on the ground that she elected to be so bound by accepting the benefit
under the will. Hence, a person cannot be held to have elected unless it
is clear that he knew that he was bound to elect and he intended that his
acts should have the effect of election. That is, he must have knowledge
of the rights between which he has to elect and their nature and value
and that there is a conflict between them and that if he accepts one he
must either give up the other or make adequate compensation. The illus
trations to Section 187, Succession Act further exemplify the rule:
(/) A is owner of an estate called Sultanpur Khurd, and has a life interest in
another estate called Sultanpur Buzurg to which upon his death his son B will be
absolutely entitled. The will of A gives the estate of Sultanpur Khurd to B, and
the estate of Sultanpur Buzurg to C. B in ignorance of his own right to the estate
of Sultanpur Buzurg, allows C to take possession of it, and enters into possession
of the estate of Sultanpur Khurd. B has not confirmed the bequest of Sultanpur
Buzurg to C.
(//’) B, the eldest son of A, is the possessor of an estate called Sultanpur. A

bequeaths Suitanpur to C, and to B the residue of A’s property. B having been
informed by A’s executors that the residue will amount to 5000 rupees, allows
C to take possession of Sultanpur. He afterwards discovers that the residue does
not amount to more than 500 rupees. B has not confirmed rhe bequest of the
estate of Sultanpur to C.
If, however, a person had a right to have the estate valued before making
an election, waives such right and accepts a legacy under a will, he would
be deemed to have elected, especially, if he takes possession according to
the tenor of the will and retains it for two years. On this aspect there is
difference between the English and Indian laws. Under the former, there
is no time-limit at all while the section prescribes two years’ enjoyment
for raising the presumption that there has been an election.
Similarly, the one-year rule in the section is also not found in English
Law, where no time-limit is fixed, and it is open to one party to make his
election within a reasonable time, unless the instrument itself prescribes
a time-limit. Another difference between the two systems of law is: while
in English Law, if the person asked to signify does not do so, it will be
treated as if he elected against the instrument; in India, he is deemed to
confirm the transfer in similar circumstances.
APPORTIONMENT
The rules regarding apportionment are set out in Sections 36 and 37.
They are as follows:
36. Apportionment of periodical payments on determination of interest of
person entitled. — In the absence of a contract or local usage to the contrary, all
rents, annuities, pensions, dividends and other periodical payments in the nature
of income shall, upon the transfer of the interest of the person entitled to receive
such payments, be deemed, as between the transferor and transferee, to accrue
due from day-to-day, and to be apportionable accordingly, but to be payable on
the days appointed for the payment thereof.
The rule is similar to the one stated in Section 8. It does not apply to
transfer by operation of law. See, Section 2; but there are cases where
the rule has been applied on grounds of equity. Therefore, in the case
of transactions before the Act came into force, the rule may be applied
on grounds of equity. But the equitable rule is deemed to be the English
common-law rule, which does not allow apportionment in periodical
payments other than interest, and hence, such apportionment is not per
missible in transactions before the Act.3 Apportionment means distribu
tion of a fund among more than one claimant. Suppose a lessor leases his
property on yearly rent and the rent is payable on 30th June of each year.
3. Phirozshaw v Bai Goolbai, 1923 SCC OnLine PC 36: (1922-23) 50 IA 276.

CASE PILOT
If the lessor sells the property on ist June, the transferor (lessor) gets the
rent up to 31st May and the transferee will get the rent for the rest of the
year. The lessee however need not pay the respective amounts on the day
of transfer or on any other day before 30th June. His obligation is only
to pay on 30th June which is the day appointed for payment.
In the case of leases notice to the tenant of the transferor would be
necessary in view of Section 50.
37. Apportionment of benefits of obligation on severance.—When, in conse
quence of a transfer, property is divided and held in several shares, and thereupon
the benefit of any obligation relating to the property as a whole passes from one
to several owners of the property, the corresponding duty shall, in the absence of
a contract to the contrary amongst the owners, be performed in favour of each
of such owners in proportion to the value of his share in the property, provided
that the duty can be severed and the severance does not substantially increase
the burden of the obligation; but if the duty cannot be severed, or if the sever
ance would substantially increase the burden of the obligation, the duty shall be
performed for the benefit of such one of the several owners as they shall jointly
designate for that purpose:
Provided that no person on whom the burden of the obligation lies shall be
answerable for failure to discharge it in manner provided by this section, unless
and until he has had reasonable notice of the severance.
Nothing in this section applies to leases for agricultural purposes unless and
until the State Government by notification in the Official Gazette so directs.
Illustrations
(a) A sells to B, C and D a house situate in a village and leased to E at an
annual rent of Rs 30 and delivery of one fat sheep. B having provided half the
purchase-money and C and D one-quarter each. E, having notice of this, must
pay Rs 15 to B, 7.50 to C, and 7.50 to D, and must deliver the sheep according to
the joint direction to 6, C and D.
(b) In the same case, each house in the village being bound to provide 10 days’
labour each year on a dyke to prevent inundation. E had agreed as a term of his
lease to perform this work for A. B, C and D severally require E to perform the
10 days’ work due on account of the house of each. E is not bound to do more
than 10 days’ work in all, according to such directions as B, C and D may join
in giving.
The difference between this section and the previous one is that Section
36 deals with what is called “apportionment by time” while this section
is said to deal with “apportionment by estate”. This section also is not
applicable to transfers by operation of law.4
The notice to the person obliged to do the duty could be given to him
either by the transferor or the transferees.
4. Sk Sattar Sk Mohd Choudhari v Gundappa Antabadas Bukate, (1996) 6 SCC 373.

CASE PILOT
NOTICE
At this stage we may consider what is meant by notice and its scope.
Section 3 defines when a person is said to have notice.
“A person is said to have notice” of a fact when he actually knows that fact,
or when but for wilful abstention from an enquiry or search which he ought to
have made, or gross negligence, he would have known it.
Explanation I.—Where any transaction relating to immovable property is
required by law to be and has been effected by a registered instrument, any person
acquiring such property or any part of, or share or interest in, such property shall
be deemed to have notice of such instrument as from the date of registration or,
where the property is not all situated in one sub-district, or where the registered
instrument has been registered under sub-section (2) of Section 30 of the Indian
Registration Act, 1908 (16 of 1908) from the earliest date on which any memo
randum of such registered instrument has been filed by any Sub-Registrar within
whose sub-district any part of the property which is being acquired, or of the
property wherein a share or interest is being acquired, is situated:
Provided that—
(1) the instrument has been registered and its registration completed in the
manner prescribed by the Indian Registration Act, 1908 (16 of 1908) and
the rules made thereunder,
(2) the instrument of memorandum has been duly entered or filed, as the case
may be, in books kept under Section 51 of that Act, and,
(3) the particulars regarding the transaction to which the instrument relates
have been correctly entered in the indexes kept under Section 55 of that
Act.
Explanation II.—Any person acquiring any immovable property or any share
or interest in any such property shall be deemed to have notice of the title, if any,
of any person who is for the time being in actual possession thereof.
Explanation III.—A person shall be deemed to have had notice of any fact
if his agent acquires notice thereof whilst acting on his behalf in the course of
business to which that fact is material:
Provided that, if the agent fraudulently conceals the fact, the principal shall
not be charged with notice thereof as against any person who was a party to or
otherwise cognizant of the fraud.
Notice
r________ I
I
Actual or express notice Implied or constructive notice
(Where a person actually have notice of a fact) I
I------- 1----- 1—--- 1

Wilful Abstention from Gross negligence Registration Actual possession
I
Notice
(Search and enquiry) to agent
I
(Exp. I) (Exp. II) (Exp. Ill)
The reason why the doctrine of notice is significant is because it changes

the priority of transfer in a situation where a single property is agreed to
be sold to two or more separate transferees. Imagine that A is the owner
of a particular piece of land. A promises to sell this property to B and six

months later also promises to sell the same property to C. At this time
the final sale is not completed either between A and B or between A and
C. The question is that when A has promised to sell the same property
to two different people, between them who is entitled to transfer of the
property in his favour.
As a general principle, the transaction earlier in time takes priority
over the later transaction and A will be required to transfer the property
in favour of B. However, if C can show that he is a bonafide purchaser
for value without notice5 of B’s prior claim, then the priority shifts in
favour of C and A will be required to transfer the property in favour
of C.
This is a principle of equity. Usually, the first transferee, having trans
acted prior in time, is entitled to the property. However, the second
transferee who shows that he had no notice and could have had no notice
of the first transferee’s prior claim, then he obtains priority over the first.
This is because the first transferee has not been vigilant and has taken
no steps to protect his rights or assert his claims. The first transferee has
not taken any steps to enter his name in the record of rights, or have
his instrument of transfer registered or has not taken possession of the
property and has, therefore, not attempted to assert any of the rights of
ownership. It is because of this failure on the part of the first transferee
that it was possible for the second transferee to innocently enter into the
transaction with the owner without any notice of the first transferee’s
prior claim. It is for this reason that the equities shift in favour of the
second transferee who then gains priority and thus becomes entitled to
the property.
In Tilakdhari Lal v Khedan Lal67, the Privy Council held “that notice
CASE PILOT cannot in all cases be imputed from the mere fact that a document is to
be found upon the Indian Register of Deeds”. The legislature, following
the rules in the US law and in modern English Law in the English Law of
Property Act, 1925, amended the Transfer of Property Act by Act 20 of
1929 and provided that the registration of a document is itself, in cases
where the transfer is compulsorily registrable, constructive notice of the
transaction effected by the instrument insofar as subsequent purchasers
are concerned/ But the amendment is not retrospective. Also in parts of
5. Ram Nitvas v Bano, (2.000) 6 SCC 685.

6. 1920 SCC OnLine PC 49: (1919-20) 47 IA 239; Vinod Kumar v Suresh Pal, 1984 SCC
OnLine P&H 261: AIR 1985 P&H 361.
7. Asharfi Devi v Prem Chand, 1971 SCC OnLine All 312: AIR 1971 All 457 (case of will
dedicating property to a deity); Tangella Narasimhaswami v Mamidi Venkatalingam,
1927 SCC OnLine Mad 13: AIR 1927 Mad 636; Thamattoor Chelamanna v Thamattoor
Kurumbikkat Pare Manakkal Parameswaran, 1969 SCC OnLine Ker 102: AIR 1971 Ker
3 (case of registration of a sub-mortgage).
S.4] ELECTION AND APPORTIONMENT 119
the country where the Transfer of Property Act does not apply, the law
as laid down by the Privy Council still obtains.
A hypothecation of goods (movable property) does not require regis
tration. Therefore, even if the deed of hypothecation is registered, if the
owner of the goods sells the goods to a stranger, the purchaser cannot be
imputed with constructive notice of the hypothecation and the purchaser
would get a valid title to the goods.
The words “wilful abstention from enquiry and search” mean such
abstention from enquiry or search as would show want of bona fides and
not a mere want of caution.
Suppose a partition deed between two brothers containing a clause
of pre-emption is registered. One of the brothers sells his half share to a
stranger. The stranger cannot be imputed with notice of the pre-emption
clause even though the partition deed was registered because partition
deeds are not compulsorily registrable, except when the deed itself effects
a partition. In cases where the deed is only a memorandum of an earlier
oral partition it does not require registration.
Explanation IL — Possession of a small part of a house or other prop
erty by a person does not import that the purchaser had constructive
notice of that person’s right to the whole property. The Explanation
requires actual possession, and hence constructive possession can not
operate as constructive notice.
Section 4 provides:
4. Enactments relating to contracts to be taken as part of Contract Act.—
The chapters and sections of this Act which relate to contracts shall be taken as
part of the Indian Contract Act, 1872.
And Section 54, Paragraphs 2 and 3, 59, 107 and 123 shall be read as supple
mental to the Indian Registration Act, 1908.
Under the Registration Act, registration is optional in the case of trans

fers of immovable property of value less than ?ioo, irrespective of
whether it is tangible or intangible. Since Section 54 is supplemental to
the Registration Act, the rules in Section 54 prevail. Under that section
a sale of intangible immovable property, of whatever value, can only
be made by a registered instrument, and, even in the case of tangible
immovable property of value less than 100, it should be by a registered
instrument, unless there was a delivery of possession.
EXERCISES
1. What is the doctrine of notice under the Act? (p. 115)
2. How far is registration by itself constructive notice of the transac
tion under the registered document? (pp. 115-116)
3. How far is possession of a person notice of his title? (p. 116)
4. How far is notice to an agent also notice to the principal? (p. 115)
5. A person cannot accept a benefit under an instrument with
out at the same time conforming to all its provisions—Discuss
(pp. 107-113)
6. What is the method of election? (pp. m-113)
7. What are the conditions for the application of the doctrine of election?
(pp. 107-113)
8. The difference between the English doctrine and the Indian is
that the former is based on compensation and the latter on forfei
ture—Explain, (pp. 109-m)

through EBC Explorer™ on SCC Online*; Explorer™
The following cases from this chapter are available .

through EBC Explorer™: f (S:.)
• Phirozshatv v Bai Goolbai, 1923 SCC OnLine PC 36 X '
• Ramayya v Mahalakshmi, 1920 SCC OnLine Mad 321
• Sk Sattar Sk Mohd Choudhari v Gundappa Amabadas Bukate,
(1996) 6 SCC 373
• Tilakdhari Lal v Khedan Lal, 1920 SCC OnLine PC 49

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Chapter 1

“immovable property” and that involves the primary question, namely*

to earth”, or, as it is sometimes put, when is a chattel deemed to have

Land Benefits to arise Things attached

out of land to the earth

(ii) Object of annexation (ii) For beneficial enjoyment

the sale is required by Section 54 of the Transfer of Property Act, 1882, to

Things which are permanently attached to things which are embed­

1. a decree for the sale of immovable property on a mortgage;

MORTGAGE AND EQUITY OF REDEMPTION

IMPORTANCE OF IMMOVABLE PROPERTY

SCOPE OF THE ACT

HOW PROPERTY IS CLASSIFIED IN ENGLISH LAW

In modern English Law, however, it is treated as real property. In fact

WHAT WERE THE BROAD FEATURES OF LAND LAW

WHAT WERE THE EFFECTS OF THE NORMAN CONQUEST

WHAT WERE VARIOUS KINDS OF FEUDAL SERVICES

WHAT WERE THE VARIOUS KINDS OF FREE OR

WHAT ARE “WORDS OF LIMITATION” AND

DIFFERENCE BETWEEN FREEHOLD AND LEASEHOLD

HOW ARE ESTATES CLASSIFIED

example, male) of lineal descendants. After the passing of the Law of

WORDS OF LIMITATION FOR CREATING

Fee simple. — Originally, an estate in fee simple could be created under

S. 8, Transfer of Property Act, 1882; and S. 95, Indian Succession Act,

Visit ebcexplorer.com to access cases

The following statute from this chapter is available

The following cases from this chapter are available

What Property is Transferable?

SOME GENERAL RULES

5. “Transfer of Property” defined. — In the following sections “transfer of

4. That for there to be a transfer there must be a conveyance, that is,

of Property Act says that property of any kind may be transferred.

which he is the beneficiary. After the amendment a transfer can be made

In Amrit Narayan Singh v Gaya Singh21, the guardian of a minor

21. 1917 SCC OnLine PC 72: (1917-18) 45 IA 35.

23. 1928 SCC OnLine PC 28: (1928) 28 LW 17.

Gark27, as to the value to be given to illustrations appended to a section,

34. Bantvari Lal v Sitkhdarshan Dayal, (1973) 1 SCC 2944.

and a present transfer, because of the services involved. A remainder was

VESTED AND CONTINGENT REMAINDERS, REVERSIONS

SCOPE OF CLAUSE (B) IS AS FOLLOWS:

a reversion of the property following upon or based on a forfeiture could

SCOPE OF CLAUSE (c) IS AS FOLLOWS: (EASEMENT)

38. 1876 SCC OnLine PC 22: (1876-77) 4 IA 76.

pecuniary advantage of the trustee, that circumstance alone would

CLAUSE (d): (RESTRICTED INTEREST)

SCOPE AND PURPOSE OF CLAUSE (dd) IS AS FOLLOWS:

SCOPE OF CLAUSE (e): (RIGHT TO SUE)

SCOPE OF CLAUSES (f), (g) AND PUBLIC OFFICE,

43. AIR 1968 SC 253: (1968) I SCR 43.

land was Bhumidhari with non-transferable rights. It was held that no

WHO CAN TRANSFER

PERSON COMPETENT TO CONTRACT

In Mohori Bibee v Dharmodas Ghose49, it was held that a minor’s con-

47. Ramkali v State of U.P., AIR 2009 NOC 190 (All).

OTHER PERSONS WITH LIMITED

PERSONS DISQUALIFIED FROM BEING TRANSFEREES

THE EFFECTS OF TRANSFER [S. 8]

UNLESS A DIFFERENT INTENTION IS

Things which are permanently attached to things which are embed

Section 8 is only a recognition by the legislature of the rule that acces

3. Every contingent remainder of a freehold estate must have a par