DR.

RAM MANOHAR LOHIYA NATIONAL LAW UNIVERSITY,

LUCKNOW
SESSION-2015-16

PROPERTY LAW - I
EXCEPTION TO THE RULE AGAINST ALIENABILITY OF PROPERTY
(SECTION-10 OF TRANSFER OF PROPERTY ACT)

UNDER THE SUPERVISION

Dr. Radheshyam Prasad

SUBMITTED BY
Abhishek Kumar Singh

Assistant professor (Law)

Roll No - 171

Dr. RMLNL University

B.A. LLB. (Hons.)

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ACKNOWLEDGEMENT

Any project completed or done in isolation is unthinkable. This project, although prepared by
me, is a culmination of efforts of a lot of people.
Firstly, I would like to thank my Professor for Property Law Dr. Radheyshyam Prasad for his
valuable suggestions without which this wouldnt have been possible.
Moving further, I would also like to express my gratitude to my seniors, the library staff and my
friends who were always there for me when I needed any sort of help regarding this project.
Lastly, I would like to thank the almighty for making this happen.

Research Methodology

Method of research
The researcher has adopted a purely doctrinal method of research. The researcher has made
extensive use of the library at the Ram Manohar Lohia National Law University and also the
internet sources.

Aims and Objectives

The aim of this project is to present an overview Exception to the rule against alienability of
property and further elucidate it with the relevant case laws.

Sources of Data

The following sources of data has been used in this project1. Books
2. Internet

Introduction
Ownership of the property carries with it certain basic rights, such as a right to have the title to
the property, a right to possess and enjoy it to the exclusion of everyone else, and a right to
alienate it without being dictated to, save in accordance with a provision of law. An absolute
right to dispose of the property indicates that the owner can sell it for consideration or can donate
it for religious or charitable purposes he may gift it to anyone, mortgage it or put it up for lease.
Save with the help of law, no other person can interfere with this power or right of the owner or
dictate to him, what should be the manner of alienation, should he alienate or not, or even what
kind of use it should be put to. In short, this right of alienation, that is one of the basic rights of
the owner, cannot be unreasonably encroached upon by anyone through a private agreement.
This general rule is applicable despite there being an express contract to the contrary, and
prevents the transferor from controlling the power of alienation of the transferee once the interest
in the property is transferred.
The extent to which a person transferring real or personal property may limit its subsequent
disposition by the transferee has for centuries been a problem troubling the courts. Restrictions
upon the grantees right to transfer the property, at any time, to whomsoever he may choose, and
in whatever manner he may select, are called restraints on alienation.
Recent developments in the field of real property security law have rekindled an interest -in one
of the most ancient and important battlegrounds of the law-the extent to which the law should
protect free alienability of real property and strike down attempts to restrict or penalize an
owners ability to transfer his property. The context in which the present-day struggle arises is a
far cry from the feudalistic society existing in England when the restraints on alienation doctrine
was developed, yet the materials which follow evidence quite clearly that the judicial role in
articulating and enforcing the doctrine is beginning anew.

Importance of the subject

Understanding what the role the right to exclude plays in defining property is important for
several reasons. First, having a better grasp of the critical features of property may promote a
clearer understanding of the often-arcane legal doctrine that surrounds this institution. Second,
understanding the domain of property is an important preliminary step in developing a
justification or critique of property from the perspective of distributive justice. Third,
formulating a more precise conception of property may be necessary in order to offer a complete
account of constitutional provisions that protect property. In any event, for those who are
learning the concept of the law of property, the question is one of intrinsic interest, whether or
not it has any payoff in resolving more immediate concerns.
Ownership of property carries with it certain rights, such as the right to have the title to the
property, a right to possess and enjoy it to the exclusion of everyone else, and a right to alienate
it to the exclusion of others without being dictated to. Sections 10 to 18 of the Transfer of
Property Act, 1882 contain the first set of rules that have to be observed while alienating a
property. Since it is a principle of economics that wealth should be in free circulation to get the
greatest benefit from it, these Sections provide that ordinarily there should be no restraints on
alienation.
This project seeks to analyse the rules regarding transfer of property which talk about conditions
restraining alienation of property once it is transferred. The researcher will first look into the
general provision that all such conditions should be void and then will talk about partial
restraints and other conditions which are valid. Finally, conditions restraining enjoyment of
property which can be enforced will be discussed. The researcher will analyse the law in light of
decided Supreme Court and major High Court cases.

Right to exclude
Right to exclude others is one of the most essential sticks in the bundle of rights that are
commonly characterised as property.
Three schools of thought regarding right to exclude
Generally speaking, it is possible to identify three different intellectual traditions regarding the
role of the right to exclude. These may be called single-variable essentialism, multiplevariable essentialism, and nominalism.
Single-variable essentialism
Probably the oldest continuing tradition in attempts to define property is essentialism-the search
for the critical element or elements that make up the irreducible core of property in all its
manifestations. The patron saint of property essentialism is William Blackstone, the first fulltime law professor at an English-speaking university. In fact, Blackstone endorsed not one but
two essentialist definitions of property, corresponding to what is called the single-variable and
the multiple- variable versions.1
The first or single-variable version of essentialism posits that the right to exclude others is the
irreducible core attribute of property.
Thus, Blackstone:There is nothing which so generally strikes the imagination, and engages the
affections of mankind, as the right of property; or that sole and despotic dominion which one
man claims and exercises over the external things of the world, in total exclusion of the right of
any other individual in the universe.2
Single-variable essentialism also finds extensive if somewhat qualified support in the decisions
of the contemporary U.S. Supreme Court. The Court has said of the right to exclude that it is
universally held to be a fundamental element of the property right; 3 that it is one of the most
1 Merill, Thomas W., Property and the Right to Exclude, 77 Neb. L. Rev. 737 1998
2 William Blackstone, Commentaries on the Laws of England
3 Kaiser Aetna v. United States, 444 U.S. 164, 179-80 (1979)
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essential rights of property;and that it is one of the most treasured rights of property. 4
Although all these statements imply that the right to exclude is not the only right associated with
property, no other right has been singled out for such extravagant endorsement. Moreover,
governmental interference with the right to exclude is more likely to be considered a taking of
property without compensation than are interferences with other traditional elements of
property.5
Multiple variable essentialism
The second version of essentialism, also found in Blackstone, posits that the essence of property
lies not just in the right to exclude others, but in a larger set of attributes or incidents, of which
the right to exclude is just one. Thus, Blackstone II: The third absolute right, inherent in every
Englishman, is that of property: which consists in the free use, enjoyment, and disposal of all his
acquisitions, without any control or diminution, save only by the laws of the land.
This version of essentialism holds that property is defined by multiple attributes or incidents.
Blackstone describes these multiple attributes as the rights of free use, enjoyment, and
disposal. Curiously, the right to exclude others fails to make an appearance on this list.
Moreover, it would seem that the rights of free use and enjoyment are arguably redundant, or
at least largely overlapping. But these anomalies have been overlooked in subsequent accounts,
which have translated the Blackstonian trilogy as the rights of possession, use, and
disposition,18 or alternatively, the rights to exclude, to use or enjoy, and to transfer.6
Under the multiple-variable version of essentialism, the right to exclude is a necessary but not a
sufficient condition of property. Without the right to exclude, there is no property. But more than
the right to exclude is needed in order to create a package of rights sufficiently impressive to be
called property.7
4 Loretto v. Teleprompter Manhattan CATV Corp., 458 U.S. 419, 435 (1982)
5 Dolan v. City of Tigard, 512 U.S. 374, 384 (1994)
6 RichardA. Epstein, Takings:Private Property and thePower ofEminent Domain58-59 (1985).
7 The Development of Restraints on Alienation Since Gray, 48 Harv. L. Rev. 373 1934-1935
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NOMINALISM
This school of thought views property as a purely conventional concept with no fixed meaningan empty vessel that can be filled by each legal system in accordance with its peculiar values and
beliefs. On this view, the right to exclude is neither a sufficient nor a necessary condition of
property. It may be a feature commonly associated with property, but its presence is not essential;
it is entirely optional. A legal system can label as property anything it wants to.8
These three schools of thought-single-variable Essentialism, Multiple-Variable Essentialism, and
Nominalism-do not exhaust the possibilities with respect to understanding of the nature of
property. One of the most sophisticated modern expositions of property by a philosopher is that
of Jeremy Waldron9. Borrowing a distinction developed by Ronald Dworkin, Waldron argues that
private property is best understood as a general concept, of which the various incidents or
elements embody different conceptions. He defines the general concept of private property as
the understanding that, in the case of each object, the individual person whose name is attached
to that object is to determine how the object shall be used and by whom. His decision is to be
upheld by the society as final. This general concept, Waldron argues, takes on different
conceptions in different contexts, depending on the type of resource involved, the traditions of
the legal system, whether ownership is unified or divided, and so forth.

8 Supra at 1
9 Jeremy Waldron, What is Private Property?, 5 OxFoPnJ. Legal Stud. 313(1985)
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RULE AGAINST ALIENABILITY

Section 10 of the Transfer of Property Act: 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 property, 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 women (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.
Conditional transfers
Every owner of a property, who is competent to transfer, may transfer his property either
unconditionally or with certain conditions. Conditions are limitations or restrictions on the rights
of the transferees. Transfers which are subject to restrictions are known as conditional transfers.
These conditions may be either conditions precedent or conditions subsequent. Conditions
precedent is put prior to the transfer and the actual transfer depends upon compliance of those
conditions. Subsequent conditions are those conditions which are to be fulfilled after the
transfer.10These conditions are those conditions which are to be fulfilled after transfer. These
conditions affect the rights of the transferees after transfer.
This provides that if a property is transferred subject to a condition or limitation restraining the
transferees right of parting with or disposing his interest in the property absolutely, then such a
condition is void. This general rule is referred to as the rule against inalienability. The rule
against inalienability gives effect to the overarching principle behind the Transfer of Property Act
10 G.P. Tripathi, The Transfer of Property Act, 1882, 15th ed., (Central Law Publications,

Allahabad: 2005)
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that, generally, all property should be transferable. Therefore, any condition that restrains
alienation is considered void. The transferee can ignore such a condition and continue his
enjoyment of the transferred property as if such a condition did not exist in the first place.
However, while an absolute restraint is void, a partial restraint may not be. For instance, a partial
restraint that restricts transfers only to a class of persons is not invalid. However, if the transfer is
restricted to being allowed only to specific individuals, then it is an absolute restraint and hence,
void.

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EXCEPTIONS TO THE RULE AGAINST ALIENABILITY OF PROPERTY.

Section 10 provides two exceptions to the rule against in alienability. First, Section 10 does not
prohibit conditions or limitations in the case of a lease, which are beneficial to the lessor or those
claiming under him. Second, property may be transferred for the benefit of a woman who is not a
Hindu, a Muslim, or a Buddhist, such that she shall not have the power to transfer theproperty or
change her interest therein during her marriage. This exception is based on the doctrine of
coverture that operated in England in the nineteenth century. There, women could be given
property for their enjoyment without the right to alienate theproperty during her marriage. The
rule protected women from being forced to alienate their property in favour of their husbands.
However, despite the abolition of the doctrine of covertures in England, this exception continues
to remain on the statute books in India.
Lease
Conditional transfer is valid in the case of lease where the condition is for the benefit of the
lessor or those claiming under him. Lease is a transfer of a limited interest where the lessor
(transferor) reserves the ownership and transfers only the right of enjoyment to the lessee
(transferee). A lessor can impose a condition that the lessee will not assign his interest or sublease the property to any other person. Such a condition will be valid. This exception is
applicable to permanent leases too. The Supreme Court has held that this section does not carve
out any exception with regard to perpetual or permanent lease. Thus, any condition restraining
the lessee from alienating leasehold property is not invalid.11
A condition in the ease that the lessee shall not sublet or assign his interest to anyone during the
tenure of the lease is valid.12 Similarly, a stipulation in the contract of lease that the lessee would
not sublet the premises and if he does, he would have to pay a fourth of the consideration
11 RaghuramRao v Eric P. Mathias, AIR (2002) SC 797
12 Raja JagatRanvir v Bagriden, AIR 1973 All 1
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as nazaar to the lessor, 13is valid and enforceable. A condition in the lease deed that the lessee
would compulsorily have to surrender the lease in the event the lessor needs to sell the
property14 again is valid.
Married women
Restraints on the power of alienation in dispositions in favour of married woman, who are not
Hindu, Mohammedans or Buddhists, will be valid. This proviso was introduced to serve a similar
purpose as English law in this regard. The English Courts recognized the rule that it was open to
the settler 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 from anticipating the future income of the
property and from encumbering it or alienating it while she is under husbands protection and
shelter.
The section is enacted to check that the transferor shall not impose an absolute restraint on the y
power to alienate that interest or right which was transferred to the transferee. Therefore, a
limited interest in property can be created in favour of a transferee, but a restraint on the power
to alienate that limited interest will be invalid.

13 Sardakripa v Bepin Chandra, AIR 1923 Cal 679

14 Rama Rao v Thimappa, AIR 1925 Mad 732
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RELEVANT CASES
In Rosher v. Rosher15, a person A died leaving behind his wife W and a son S. He left his entire
property to S, under his Will. The will provided that S had to first offer the property for sale and
also had to sell her at L 3000 while the market price was L 15000. The court held that these
restrictions amounted to an absolute restraint on Ss and his heirs power of alienation and were
therefore void.
In Gayashi Ram v. Shahabuddin16, the sale deed contained a clause that the transferee would
not transfer the property to any person either by way of sale, gift or even mortgage except the
transferor or his heirs. The court held that this condition is void and therefore invalid.

In Manohar Shivram Swami v. Mahadeo Guruling Swami17, A and B were first cousins. A
made a will of his property in favour of B. On As death, B acquired the title of the property and
sold it to C, who was also the brother of A. The sale deed contained a condition that if C wanted
to sell the property, he would sell it to the sellers Jangam (caste) family and not to anybody else.
The court held that the condition incorporated in the sale deed absolutely restrained C from
parting with his interest in the property and therefore was void. The court upheld the validity of
sale affected by C. This decision of Bombay High Court comes as a surprise as the condition
here in fact was not to sell out of the family, which in a number of cases has been held to be a
partial restraint, and binding on the parties.
15 Supra Note 8
16 AIR 1935 All 493
17 AIR 1988 Bom 116
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In

Zoroastrian Co-operative Housing Society Ltd v. District Registrar Co-operative

Societies, a society with the object of constructing houses for residential purposes had a bye law
which stated that only Parses can be members of the society. There was also a condition that no
member could alienate the house to non-parses. The Supreme Court held that when a person
accepts the membership of a co-operative society by submitting himself to its byelaws and places
on himself a qualified restriction on his right to transfer property by stipulating that same would
be transferred with prior consent of society to a person qualified to be a member of the society it
could not be held to be an absolute restraint on alienation offending Section 10.
In K Muniswamy v. K Venkataswamy, a family partition was effected although one condition
in the partition deed provided that the mother and the father were to enjoy the properties only
during their lifetime and after their deaths, this property was to be partitioned equally amongst
the two sons. This creation of life interest meant that the parents had no power to alienate the
property during their lifetime. The parents sold their property to one son. Other son challenged
the validity of sale. The court held that a restriction prohibiting them absolutely from transferring
the property amounted to an absolute restraint on alienation and was therefore bad in eyes of law.
In Jatru Pahan And Anr. vs Mahathma Ambikajit Prasad, The two questions raised in the
appeal are (1) that the deed dated is a deed of partition, and not a family arrangement and, (2)
that the self-imposed absolute-restriction on his own power of alienation by Bikramajit was void
under Section 10 . The plaintiffs and deceased Bikramajit were brothers, being members of a
Mitakshara Hindu family. Later, they jointly executed a registered deed describing it as a deed of
partition in respect of their ancestral and joint properties. Under this document Bikramajit, took a
life interest. He provided in this document that during his" life-time he shall not sell the share
allotted to his share, or transfer the same in any manner.

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Bibliography

Books
Saxena, Poonam Pradhan, Property Law (2nd, Lexis Nexis Butterworths Wadhwa,

Nagpur), 2015
Tripathi, G.P. The Transfer of Property Act, (4th Central Law Agency, Allahabad) 2013.

Web resources
http://www.manupatra.co.in/newsline/articles/Upload/541112EC-983D-422F-88C8-

37D4082AEDD6.pdf on 25.03.2016
https://www.scribd.com/doc/35039239/Essential-Conditions-of-Transfer-of-PropertyUnder-Transfer-of-Property-Act-1882-Act-4-of-1882 on 25.03.2016

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