UNIT -1 UNIT - II UNIT -IIl UNIT IV, CONTENTS GENERAL PRINCIPAL - Immovable Property Attestation ~ Actionable Claim - Transfer of Property - What Properties may be Transferred? - Persons Competent to Contract - Other General Principles - Transfer by Ostensible Owner - Ownership IMPORTANT QUESTIONS SALE, EXCHANGE AND GIFT - Sale - Exchange - Gift IMPORTANT QUESTIONS MORTGAGE OF IMMOVABLE PROPERTY - Kinds of Mortgages - Rights and Liabilities of Mortgagor - Right to Foreclosure - Marshalling Securities - Doctrine of Subrogation Charges IMPORTANT QUESTIONS LEASES OF IMMOVABLE PROPERTY - Rights of the Lessee - Liabilities of the Lessee - Determination of Lease - Waiver of Forfeiture - Effect of Actionable Claims Transfers of Actionable Claims Patents and Designs Goodwill Trademark CopyrightUNIT -V. IMPORTANT QUESTIONS INDIAN EASEMENTS ACT (ACT V OF 1882) - Introduction of Easements - Definition and Nature of Easements - Essential Elements/Characteristics of Easement - Creation and Classification of Easement The Disturbance of Easements Extinction, Suspension and Revival of Easements Licences IMPORTANT QUESTIONS SUGGESTED READINGSStrictly for Internal Circulation - KCL UNIT - GENERAL PRINCIPLES Introduction: The Transfer of Property Act, 1882, is limited to transfer by act of parties. The Act does not apply to cases of transfer by operation of law. It defines the word ‘transfer’ in Section 5. The distinction between movable and immovable property is given in this Act and the word ‘immovable property’ has been negatively defined Chapter II, Part A (from Sections 5-37), and Chapters VI, Vil, VIll apply and clarify whether property is immovable or movable. Part B (Section 38-53-A) and Chapters Ill, IV and V of this Act apply only to transfer ofimmovables. Hence, we can say that the scope of this act is limited to transfer of property by act of parties as distinguished from a transfer by operation of law, e.g. in case ofinsolvency, forfeiture or sale on execution of a decree. For instance, if agrees to sell his land to B, the transaction will be governed by the Act. But, if, purchases the land ofA, at the auction-sale held by the Court in execution of decree against, the transfer ofthe land to B takes effect by operation of law, and none of the provisions of the Act requiring the transfer to be effected in a particular way, e.g., by a registered document, shall apply to it. This Actrelates to transfer of property inter vivos and has no application to disposal of property by Will. This Act also does not apply to transfers made by or on behalf of the Government. Act Not Exhaustive: The Transfer of Property Actis not exhaustive. The Preamble of the Act suggests that it simply defines and amends certain parts of the law relating to transfer of property by act of parties. Hence, where any case is not covered by any provisions of this Act, the Court as a Court of Equity is entitled to apply the principles as laid down in English or Indian cases which are not distinctly prohibited by statute. Itis only where the statutory Law in India is of no help, that the Court may look to English cases for rules of justice, equity and good conscience. IMMOVABLE PROPERTY “Immovable Property” does not include standing timber, growing crops or glass. The definition of immovable property” in this section is a negative definition. It merely excludes standing timber, growing crops and grass. It only says that three things, namely, standing, standing timber, g rowing crops and grass are not immovable. What then is immovable? This includes probably the residue, So the definition of immovable property includes three things namely — Land, benefits arising out of land, and things attached to earth. Itexcludes three things, namely — Standing timber, growing crops and grass. Section 3, sub-section (25) of the General Clauses Act, 1897, which applies to this Act defines immovable property as including "land", "benefit arising out of land and things attached to earth, or permanently fastened to anything attached to the earth" Land: This word includes the upper surface of. the earth and things belowit, for example minerals. Any right in these or in respect ofthese or any other interest in tare all immovable property.Strictly for Internal Circulation - KCL Benefits Arising out of Land: The benefits arising out of land are immovables. For example rent from house, revenue from agriculture, rightto collectlac, leaves or other things from forest trees, etc, Things Attached to Each: It means three things a. Things rooted in the earth, for example, trees and shrubs. b. Things embedded in the earth, for example, walls and building etc. c. Things fastened for the permanent beneficial enjoyment of anything so embedded, for example, doors, windows, ceiling fans, pegs etc. After studying both the definitions of Transfer of Property Act, 1882 and General Clauses Actit conveys that term "Immovable Property" includes three things -land, benefits to arise out of land, things attached to earth and excludes three things - standing timber, growing crops and grass. Standing Timber: "Timber" means a tree that is chiefly meant to be used either for building or for burning purposes. Transfer of Property Act provides an exception. Standing timbers are not immovables. They are movables like, goods or chattels. in case of fruit-bearing trees, it becomes difficult to establish whether they are standing timber, particularly when such trees are to be used for building or burning purposes. Ithas been held that fruit-bearing trees are immovable property when the intention of the parties is that the fruit ofthe trees should be enjoyed and not that the trees should be cut down for use as timber. A fruit bearing tree would not be standing timber and would be classed as immovable property. But in certain areas where mango trees are used for building or preparing houses, it has been regarded as standing timber, Growing Crops: These are movables. It includes grain crops, like wheat, barley, gram, vegetable plants, flower plants and creepers. Glass Crops: These are movables. It includes grain crops, like wheat, barley, gram, vegetable plants, flower plants and creepers. Now a question arises whether Mortgage of an interest in immovable property is immovable property? The answeris "Yes", Amortgage is a transfer of an interest in specific immovable property and the mortgage's interest therein can, even in the case of a usufructuary mortgage, only the immovable property and not movable property. Thus a mortgage can only be assigned by a registered deed of assignment and not by a document which merely purports to recite a previous partition. “Instrument” means a non-testamentary instrument ATTESTATION “Attested’ in relation to an instrument means and shall be deemed always to have been meantattested byStrictly for Internal Circulation - KCL two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the direction of the executant or has received from the executant a personal acknowledgement, of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shalll have been present at the same time, and no particular form of attestation shalll be necessary; In English law an attesting witness is one who has witnessed, that is, actually seen the execution of the document. In India, Section 50 of the Indian Succession Act, 1865, recognised the validity of an attestation ‘on admission or acknowledgement of execution though the witness had not actually seen the execution. It was held by the Allahabad and Bombay High Courts that even as to transfer governed by the Transfer of Property Act, attestation on admission of execution was sufficient. The Madras and Calcutta High Courts tooka contrary view and required that an attestator should have actually witnessed execution. In the case of Shamu Patter v. Abdul Kabir’, the Privy Council held that ‘attested’ means that a person signed the document by way of testimony to the fact that he actually saw it executed. This decision overruled the view of Allahabad and Bombay High Courts. This definition of attestation in Section 3 of the Transfer of Property Act, makes a two-fold departure from the English law. According to the English law: (i) both witnesses should be presentat the same time; and (i) they should actually see the execution of the instrument. In India, it is not necessary that both the at testators would be present at the same time or see the actual execution ofthe document. Essentials of a Valid Attestation: Definition under section is confined to only non-testamentary instrument. 2. Minimum two attesting witnesses are needed A) Each attesting witness has seen the executant signing or fixing mark » B) Each sees some other person signing in the presence and by the direction of the executant, or C) Each has received from the executant the personal acknowledgement (i) executant sign; (ii) or Executant's mark; (i) sign of one who signed for the executant in his presence and by his direction. Each witness signs the instrumentin presence of executant. itnesses at the same time is not essential prescribed. Presence ofboth or all attesting No particular form of attestation 5. 6. Legal Effect of Attestation: Mere attestation of a document does not show that the at testator had notice of its contents. Itestops him from denying the fact of execution only. In the case of Abdul Jabbar vs. Venkat Shastri & Sons’, the Madras High Court held that a valid registration requires two witnesses and signature, etc. of the executor:- as required under the Transfer of Property Act. ‘The Sub-Registrar puts the signature in course of his duties as laid down under Registration Act. Therefore, a scribe, identifier, o registering officer as such may not be competent to attest unless of course contrary is proved by the facts and circumstances of any particular case. Taned 7 Poy 2 AIR ae SCT?Strictly for Internal Circulation - KCL “Registered” means registered in any part of the territories to which this Act extends under the law for the time being in force regulating the registration of documents. “Attached to the Earth" means- 1) Rooted inthe earth, asin the case oftrees and shrubs; 2) Embeddedin the earth, asin the case of walls or buildings; or 3) Attached to what is so embedded for the permanent beneficial enjoyment of that to which it is attached; ACTIONABLE CLAIM “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; This definition was substituted by the Transfer of Property (Amendment) Act, 2 of 1900. The definition before amendment read as - “A claim which the Civil Courts recognise as affording grounds of relief actionable, whether a suit fo:-its enforcementis oris not actually pending or likely to become necessary. “Actionable Claim” to be a Claim: 1) Tony debt other than a debt (a) secured by mortgage of immovable property, or (b) by hypothecation orpledge off; 2) Or, to any beneficial interestin movables; notin possession (a) actual, or (b) constructive of the claimant; 3) Which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent. Hence, the claim must be a claim to a debt as distinguished from suit for damages, and further the debt should notbea secured debt. The term ‘debt includes a sum of money due by one person to another and which actually includes not only the amount payable at the time, but also sum of money which is not immediately due but might become payable after. In the case of Bhupati VS. Phanindra’, a debtis defined as "a sum of money which is payable or will become payable in future by reason of a present obligation.” liability to arise in future on the part of an unknown person, out of a relationship, contractual or otherwise, which does not yet exist, cannot be described asa debt. Actionable Claim Covers Two Things; TaoMTeStrictly for Internal Circulation - KCL 1) Claimto any debt, whether existent, accruing, conditional or contingent. 2) Claim to any beneficial interest in movable property whether existent, accruing, conditional or contingent, notin the possession of the claimant. But the question of actionable claim will notarise- 1) Whendebtis secured by mortgage ofimmovable property, 2) When debtis secured by pledge of movable property, 3) Whendebtis secured by hypothecation of movable property a. Provided that the movable property is notin possession of claimant, and b. Which the Civil Courtrecognises as ground for giving relief. "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, of gross negligence, he would have knownit. Explanation |- 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 (XVI of 1908) from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part ofthe property which is being acquired or of the property wherein a share or interestis 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 (XVI of 1908), and the rules made thereunder. 2) The instrument or memorandum has been duly entered or filed, as the case may be, in books kept under Section 51 ofthat 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 I!- 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 Il! -Aperson shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalfin 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,Strictly for Internal Circulation - KCL Notice: The Transfer of Property Act, 1882 contemplates three kinds of notice namely - Actualnotice |. Actual notice Il. Constructive orimplied notice Ill. Notice to agent orimputed notice. Actual Notice: Actual Notice means definite information given by a person interested in the thing in respect, of which the notice isissued. ‘Amere casual conversation in which knowledge of a certain thing is imparted, is not notice of it. In other words, the party inputting notice must show that the other party had knowledge which would operate upon the mind of any rational man, or man of business, and make him act with reference to the knowledge he has so acquired. Constructive Notice: Constructive notice is the knowledge which the Courts impute to a party upon a presumption so strong that it cannot be allowed to be rebutted that knowledge must have been communicated. The broad principle underlying the doctrine of constructive notice is that a person who is bound to make an inquiry and fails to do it should be held to have notice of all facts which would have come to his knowledge had he made the inquiry. When the Indian Courts apply the principle that a man has notice because if he had made reasonable inquiries he would have ascertained the facts and ifhe has not ascertained the facts he has been guilty of gross negligence- the Court must carefully regard all the circumstances of the case and of the people to whom the Courts are going to apply the principle. Inthe case of Kalyanji VS. Krishnan‘, Madras High Courtheld that classes of Constructive Notice- 1, Wilful abstention from inquiry or search Grossnegligence Registration Actual possession Notice toagent State of property, amountto notice. TRANSFER OF PROPERTY oak eN TRANSFER OF PROPERTY Transfer of property is defined in Section 5 of -P. Act. According to this section- “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.” TAR veeStrictly for Internal Circulation - KCL In this section “living person” 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. The term "transfer" means a process or an act by which something is made over to another. Ingredients of Transfer of Property: On the basis of this definition given in Section 5, the following are the ingredient of Transfer of Property. 1) Only 5 conveyances are transfer of property for the Act. Three modes convey absolute title ¢.g., sale, gift, exchange. Two convey limited interest e.g., mortgage and lease. 2) Transferinter vivos alone are included as transfer in Transfer of Property Act. 3) Transfer can be present or future. 4) Living person is wider term than natural human beings. Itincludes juristic persons like company and other like associations or body of individuals whether registered or not registered. Act not Executive of all Kinds of Transfers: Section 5 makes it clear that only transfers inter vivos are dealt with in the Act. Even as to transfers inter vivos the Act is not exhaustive. It deals with sale, mortgage, gift, lease and exchange. There may be other kinds of transfers and they would not be governed by the Transfer of Property Act. Abandonment or Release of Claim: An abandonment of a claim to property is not transfer. A relinquishmentin favour of a coparcener is nota transfer. A Hindu widow's surrender in favour of the nearest reversioneris nota transfer. Family Arrangement: A family arrangement is a transaction between members of the same family. The true nature of family arrangement i that it does not involve any transfer. Hence, a family arrangementis not atransfer of property. Section 6 does not apply to those transactions. Family settlement and family arrangement are almost interchangeable expressions. Compromise does not amount to transfer and is not incompetent and ineffective for being inconsistent with the term of Will Partition: A partition is not a transfer because it merely affects a change in the mode of enjoyment of property and is not an act of conveying property from one living person to another. Partition is really a process in and by which a joint enjoyment is transformed into an enjoyment in severability. Each one of the co-sharers had an antecedent title and, therefore, no conveyance is involved inthe process asa confermentof a new ttle is not necessary. Transfer may be in Present or in Future: A transfer of property may take place in present or in future, that is to say the actual conveyance of the property may take place in present or in future, but the property itself must be in existence. A transfer of property not in existence operates only as a contract to be performed in future as soon as the property comes into existence, and such a contract can be specifically enforced if the transferor fails to transfer the property to the transferee after the property comes into existence.Strictly for Internal Circulation - KCL Transfer can be only Between/Amongst Living ‘Persons’: A transfer presupposes two distinct persons ‘one of whom is callled a transferor and the other transferee. The expression ‘living persons’ includes juristic persons such as a corporation; since such persons being the creatures of law are regarded as standing on the same footing as other living beings. An idol, however, though a juristic person and capable of holding property, isnot aliving person. Property: The word ‘property’ for the purposes of the Transfer of Property Act is not restricted only to physical thing but goes beyond what is seen, touched or felt by a layman but much ahead of what law considers to be property. The right or interests which cannot be seen, cannot be felt or touched by naked senses but which can be enjoyed in respect of and over the physical thing WHAT PROPERTIES MAY BE TRANSFERRED? Section 6 of the Act lays down that property of any kind may be transferred. Accordingly, the property is not only the thing which is capable of physical possession’ and subject to ownership, but it also includes the right of ownership or partial ownership. According to Supreme Court ‘transfer of property’ means passing of a right in the property from one person to another. In one case there may be passing of entire bundle of rights from transferor to transferee e.g. in sale, gift, exchange, butin another case there may be transfer of only some of such rights i.e. partial interest e.g. inmorigage, lease etc. Legal and Equitable Estates-Indi in the country between legal and equitable estate. Sections 40 and 54 of the TP. Act, clearly show that merely by virtue of contract of sale of animmovable property, no interest is created in favour of purchaser but only an obligation is annexed to the ‘ownership of the property. Now the question arises whether a person can transfer future interest in the property. The answer is given by the English Court in the famous case of Holroyed vs Marshall that if a vendor or a mortgagor agrees to sell or mortgage property, real and personal, of which he is not possessed at the time and he receives the consideration for contract and afterwards becomes possessor of property answering to the description in the contract, there is no doubt that the contract would in equity transfer the beneficial interest to the ‘mortgage or purchaser immediately on the property being acquired. In India, no equitable estate is recognised. However, in Indian law a transfer of future property for consideration operates as a contract to be performed in future. The contract may be specifically enforced as soon as the property comes into existence What may be Transferred?: Property of any kind may be transferred, exceptas otherwise provided by this Act or by any other law forthe time being in force- a. The chance of an heir-apparent succeeding to an estate, the chance of relation obtaining a legacy on the death ofa kinsman, or any other mere possibilty ofa like nature, cannot be transferred, b. Amere rightof re-entry for breach of a condition subsequent cannot be transferred to anyone except the ‘owner of the property affected thereby. c. Aneasement cannot be transferred apart from the dominant heritage. TnStrictly for Internal Circulation - KCL d. Allinterest in property restricted in its enjoyment to the owner personally cannot be transferred by him. . Arright to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred f, Amererightto sue cannotbe transferred. g. Stipends allowed to military, naval, air-force and civil pensioners of the Govemment and political pensions cannot be transferred. h. Notransfer can be made (1) in so far as itis opposed to the nature of the interest affected thereby, or (2) for an unlawful object or consideration within the meaning of Section 23 of the Indian ContractAct, 1872 (90f 1872), or (3) toa person legally disqualified tobe transferee. |. Nothing in this section shall be deemed to authorize 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 orlessee. The general policy of law is to promote free alienation and circulation of property whereas its non- transferability is an exception. The only test to determine whether a property is transferable or not is to see whether such a transfer is prohibited either by the provisions of this Act or by any other provision of law. Ifthere is no such prohibition, it istransferable, Exception to the Rule of Transferabi wherein a property is nottransferable- Clauses (a) to (i) of this Section enumerate ten exceptions 1. Spes Succession is [Clause (a)]: During the lifetime of a person, the chance of his heirapparent succeeding to the estate or the chance of a relation obtaining a legacy under his Will is a “spes succession is" (chance of succession). Such an expectancy does not amount to an interest in property and cannotbe made the subject-matter ofa transfer. Therefore, a transfer of any mere possibility or expectancy is a nullity and has no effect in law. For instance, the right of reversionary heir expectant, on the death of a Hindu widows a spes successions. Legacy is chance to get something from somebody on his grace. Expectation to receive legacy is more uncertain than the chance of heir apparent. It has been made non transferable because itis also spes succession is Vested and contingent interests both have been held to be transferable because they are coupled with an interest. 2. Mere Right of Re-entry [Clause (b)]: A mere right of re-entry refers to the right of re-entry which a transferor reserves to himself, after having parted with the whole estate, for breach of a condition subsequent. A lessor may reserve to himself a right of re-entry on breach of a covenant by his lessee. That right cannot be transferred by itself, apart from the estate to which it belongs.Strictly for Internal Circulation - KCL 3. Easement [Clause (c)] : An easement is an incident of the ownership of the dominant heritage and passes with it. It cannot be detached from the dominant heritage and transferred separately. The sections refer to the transfer of an existing easement and notto the grant of an easement. The grant of easementis not a transfer of property and the provisions of this Act have no application. 4, Restricted Interest [Clause (d)]: An interest restricted in enjoyment to the owner personally is by its nature not transferable, unless the restriction is void under Section 10 of this Act. For example- If Ram lends his house to Shyam for treating Shyam’s guests on the occasion of Shyam’s sister's marriage, Shyam cannot transfer that right to anyone else. The reason of this rule is that right given to Shyam is purely a personal one, and if Shyam is allowed to transfer it, the transfer would be ‘opposed to the nature of the right given to Shyam’s and the transfer made in contravention of this. principle will be void. The right of a Mohammedan widow to retain possession of her husband and property in lieu of her dower debtis personal to her anditis a restricted interest within this section. 5. Right to Future Maintenance [Clause (dd)]: A right to future maintenance is solely for the personal benefit of the person to whom it is granted and, therefore, this clause provides a statutory prohibition againstits transfer. In the case of province of Orissa v Vankata Rangammatit has been held that arrears of maintenance can be transferred but right to future maintenance can not be transferred. Hence the right to maintenance of a Hindu widow is a personal right and from its nature incapable of assignment, but arrears of maintenance can be attached and sold like any other debt. 6. Mere Right to Sue [Clause (e)]: Rights of action for damages in tort or in respect of a breach of contract are bare rights to sue and cannot be transferred. Buta right to sue coupled with some interests transferable. Transfer of a mere rightto sue is also against rublic policy and void under Section 23 of the Indian ContractAct, 1872, Arightto sue should be distinguished: from an actionable claim. In the case of Jafar Mehar Ali v Budge Budge Jute Mills Co’., Aagreed to sell to B a certain quantity of gunny bags deliverable on a future day. B assigned the contract to C, A then committed a breach of contract. It was held that C could sue for the recovery of damages. The assignment to him was of an actionable claim and so valid One testto distinguish between an actionable claim and a mere right to sue is to consider whether claim is for a precise and ascertained amount or for unliquidated damages. In the latter case, itis only a right tosue. Aright to recover mesne profits is a mere right to sue and is not transferable. But, itis clear, that where the property itself is sold together with the mesne profits, the case does not fall under this clause, and the transferis valid. 7. Public Office, Salaries and Pension [Clauses (f) and (g) : A public office has been defined in CPC, 1908 and IPC, 1860. Since the public is interested in the performance of the duties of a public officer, TAR Tome D WRIA Cal 382 10Strictly for Internal Circulation - KCL such offices as well as the salaries attached to them are made not transferable. The word ‘pension’ implies periodical payments of money by Government to pensioner. The right to receive a political pension is not transferable. A bonus or a reward is not a pension and is therefore transferable. Apension retains its character as long as itis unpaid and in the hands of Government but as soon as itis paid to the pensioner or his legal representative or agentit can be attached or transferred 8. Consideration or Object of Transfer Being Unlawful [Clause (b)] : No transfer can be made for an unlawful object or consideration within the meaning of Section 23 of the Indian Contract Act, 1872. The resultis that the validity of a transfer of property must be tested in the light of Section 23 of the Contract Actalso. Section 23 of the Contract Act provides that the consideration or object of an agreement is lawful unless- 1) Itis forbidden by law. 2) Itis of sucha nature that, if permitted, it would defeat the provisions of any law, or 3) Itis fraudulent. 4) Itinvolves or implies injury to the person or property of another. 5) The Courtregardsitas immoral or opposed to public policy. In each of these five cases, the consideration or object of an agreementis said to be unlawful, and every agreement of which the object or consideration is unlawtul, is void In the case of Pyare Mohan v Narayani Deviitis held that past illicit cohabitation may serve as a motive to gift, since a gift requires no consideration and past cohabitation cannot be regarded as the object of a transfer. The gift in sucha case is nothitby Section 6(h) of TP Act. 9. Interests of Farmers, Tenants and Lessees [Clause (i)]: This clause declares: interests of farmers, tenants and lessees to be non-transferable on account of public policy. These interests have been created by statutes. Distinction should always be drawn between restriction on transfers imposed by the Legislature and those imposed by a contract or a decree. In the former case, the prohibition is absolute; inthe latter, itis imposed only with a view to regulate the relations of parties inter se. Section 7 of TP. Act states that every person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, is competent to transfer such property either wholly or in part and either absolutely or conditionally, in the circumstances, to the event and in the manner, allowed and prescribed by any law for the time being in force. According to Section 7, the following are the essentials ‘of competency to transfer- 1) he should be competentto contract; 2) heis either entitled to transferable property, or is, authorised to dispose of transferable property not his own. 1"Strictly for Internal Circulation - KCL PERSONS COMPETENT TO CONTRACT Section 11 of the Indian Contract Act, 1872 provides and defines who are competent to contract. According to Section 11 of Indian Contract Act- "Every person is competent to contract who is of the age of majority according to the law to which he is subject, and who is of sound mind, and is not disqualified from contracting by any law to which he is subject” This means a person who is major In age, and of sound mind is a competent transferor but transferee may bea minor. This section applies to transferor only, nottto the transferee. In the case of Mohori Bibi v Dharmodas Ghose’, it was held by the Privy Council that a minor's contract is void. Atransfer of property by a minor is also void. In the case of Raghvachariar v Sriniwasa Raghvachariaf’, a Full Bench of the Madras High Court held that a transfer completed in favour of a minor is valid and enforceable provided it does not bind the minor to contractual obligations to be discharged in future. Section 12 of the Indian ContractAct, 1872 tells us about unsound person. According to this section- "Aperson is said to be of sound mind for the purpose of making a contractif, at the time when he makes it, he is capable of understanding it and of forming a rational judgment as to its effect upon hisinterests" Aman has no right o deal with property which is nothis own, and unless he can show some right to deal with the either as agent or guardian oras trustees or the like, any transfer which he purports to make cannot bind the lawful owner. OTHER GENERAL PRINCIPLES Oral Transfer (Section 9): A transfer of property may be made without writing in every case in which a writing is not expressly required by law. The last of the ingredients of a valid transfer is that it must be made in the manner and form, if any, required by the Act. Section 9 of the Act provides that a transfer of property may be without writing in every case in which a writing is not expressly required by law. The transaction is not a transfer of property and ifthere is no express provision of law requiring to be in writing then it can also be done without writing On the basis of the study of all the provisions of this Act, we can say that a transfer can be made orally exceptin the following cases- 1) assale ofa tangible immovable property of the value of Rs. 100 and upwards (Section 54); 2) _ asale ofrevision or other intangible things (Section 54); 3) a simple mortgage irrespective of the amount and all other mortgages (except a mortgage by deposit oftitle-deeds) when the principal sum secured is Rs. 100 or more (Section 59); 4) allease from year to year or for any term exceeding one year or reserving’ a yearly rent (Section 107); case 0 Nd 308 (8) 2Strictly for Internal Circulation - KCL 5) _agiftofanimmovable property (Section 123); 6) _anexchange, subjectto the same rule asa sale (Section 118); and 7) __alltransfers ofactionable claims. Inall these cases writing is compulsory and also registration exceptin the case of assignment of actionable claims, Condition Restraining Alienation (Section 10): 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, exceptiin the case oflease 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 ofa woman (not being a Hindu, Mohammedan or Buddhist), so that she shall nothave power during her marriage to transfer or change the same or her beneficial interest therein. On the basis of the study of this section, the following are the ingredients- 1) There mustbe transfer of property. 2) Such transfer of property must be subjectto condition or limitatic 3) Absolute restraint on alienation by transferee, 4) Consequences- a. Condition or Limitation is void, b. Transfer valid, 5. The exceptions of this section are- a. Lease, where condition is forthe benefit of lessor or those claiming under him,’ b. Conditionis ona named woman, provided; she is not () Hindu, (i) Mohammedan, (iii) Budhist. This section says that a right of transfer is incidental to, and inseparable from, the beneficial ownership of the property. One cannot transfer a property to its total destruction. The right of owner does not include the liberty to destroy the ownership. The owner can destroy the property if he so likes but he cannot destroy the ‘ownership. The owner has full liberty to transfer a property but he has no right to make it non-transferable for ever. It is not reasonable exercise of the liberty to make the property non- alienable with the help of condition or limitation in this regard. Transfer with total restriction is void, but with partial restraintis valid This section applies only where the transfer is made subject to a condition against alienation. If there is a valid transfer, the condition in restraint of alienation is void and the transfer stands. Absolute Restriction: The condition or limitation on alienation may be either absolute or partial. If it is absolute, itis against the provisions of Section 10 andis void. Ifitis partial, itis beyond the access of Section 10 and may be perfectly valid. Section 10 provides that absolute restriction on right of transfer is void. The test to distinguish between partial and absolute restriction is what remains with the transferee after the condition is enforced. If it takes away the right to transfer substantially, itis absolute and void. If it leaves it 3Strictly for Internal Circulation - KCL substantially itis partial and valid. The real test of the validity of the condition is whether it takes away the whole power of alienation substantially. In the case of the Allahabad High Court Devi Dayal v Ghasita”, A sold a house to B and on the date of the sale B executed a separate unregistered agreement that if he wished to sell the house he would sell it back toA for the same price and he would sell it to no one else unless A declined to purchase. If this had been a condition of the sale it would have been invalid as a restraint on alienation. Restriction Repugnant to Interest Created (Section 11): Where, on a transfer of property, an intBrest 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 an \dispose of such interestas 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 ofa breach thereof. Ingredients of Section 11: On the basis of this Section, the following are the ingredients of Section 11- 4) There should be transfer of property. 2) Aninterestin that property should be created absolutely in favour of a person. 3) The terms of the transfer should direct that such interest shall be applied or enjoyed by the said person ina particular manner. This section refers to a restriction on the enjoyment of property, while Section 10 refers to a restriction on the transfer of property. Both sections declare that a condition repugnant o the interest created is void. Distinction Between Sections 10 and 11: Section 10 deals with any transfer, whatsoever, e.9., sale, gifts, exchanges, mortgage etc.; and absolute restraint on further transfer whereas Section 11 deals with absolute transferi.e. sale, gift or exchange; and any restriction on enjoyment. In both sections the transfers valid but the restriction is void. Restrictions are void in both cases. In the case of Chamaru Sahu v Soma Kuer", Hindu widow transferred her husband's property to reversioners. A condition was attached that they cannot re-transfer it to other during her lifetime. It was a case under Section 10 but the Court decided it as one under Section 11. Restrictions on partition likewise fall under both sections. A Hindu widow transferred her husband's estates to the reversionary heirs with the condition that they should notalienate in her lifetime. The case was one under Section 10, but in view of some observations of Jessel, M.R. Mookerjee, J., was of opinion that the restraint was not absolute within the meaning of Section 10, and, therefore, he had decided the case under this section. oy TALL a, 4 (1989) 14 Cal L909 4Strictly for Internal Circulation - KCL Exception to Section 11: The exception made by the second paragraph is a recognition of the rule that the transfer may impose conditions restraining the enjoyment of land if such restrictions are for the benefit of his adjoining land. This section relates to the enforcements of the restriction against the transferee, while Section 40 refers to the enforcement of the restriction against purchaser from the transferee. Proviso: The proviso of Section 11 is based on the ratio of Tulk v Moxhay”. According to this case, the transferor may impose conditions restraining the enjoyment of land if such restrictions are for the benefit of adjoining land. Section 11 and 40 lay down similar law. Section 11 relates to enforcement of restrictions against the transferee while Section 40 refers to the enforcement of the restriction against purchasers from the transferee. The fact ofthis case was that the plaintif was owner of a vacant piece of land as well as of several houses. He sold the land in 1808. There was a condition in the sale-deed providing for that the buyer, his heirs, and assignees will keep the land and houses in sufficient and proper repair and uncovered with buildings. The land passed through many intermediate transferees and ultimately it came to defendant with notice of the condition aforesaid. Despite the defendant expressed an intention to build on the land. The plaintiff sued for injunction, The Court distinguished two conditions-positive, to keep the land etc. in sufficient and proper repair and the negative one, not to build. The suit was only for the latter. Therefore, the Court granted the injunetion. Condition Making Interest Determinable on Insolvency or Attempted Alienation (Section 12): Where property is transferred subject to a condition or imitation making any interest therein, reserved or given to 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. According to Section 31 of T.P. Act, 1882, the general rule is that on transfer of property a condition may be superadded whereby on the: happening or not happening of a specified uncertain event, the interest of the transferee shall cease. But Section 12s an exception to the rule contained in Section 31 There is an exception to the above provision. According to the exception such a condition may be imposed onalessee so that when he becomes insolvent, the lease maybe forfeited and the lessor may re-enter upon the land. Transfer for Benefit of Unborn Person (Section 13): 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 itextends to the whole of the remaining interest of the transferor in the property. Mustration - A transfers property of which he is the owner to B 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 nottake effect, because it does not extend to the whole of A's remaining interestin the property. According to Section 13 of T. P.Act, 1882, the ingredients of this sections are- 4) Section 13 is an exception inter-vivos transfer. Transfer by a person in favour of unborn person is, valid according to Section 13. FE amayz Pr. 774 15Strictly for Internal Circulation - KCL 2) Section 13 applies when transferee is notin existence at the date of transfer. 3) Deed of ransfer creates an interest in favour of such unborn person. 4) The property must be conveyed to unborn person absolutely. Aperson who is notin existence can neither be a transferee of property, nor a beneficiary under a trust until he comes into existence. The principle is recognised by this Act as well as by the Indian Trusts Act. Section 5 of this Act uses the word "living person” and will not include a person, notin existence. But a transfer cannot be made directly to an unborn person, for the definition of transfer in Section 5 is limited to living person. Both under English and Hindu law a child in the womb is treated in existence and transfer to a child in wombs nota transfer to an unborn person, Rule Against Perpetuity (Section 14): 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, ifhe attains full age, the interest created is to belong. The law has always regarded the creation of perpetuity as being against public policy. Every attempt, therefore, to create a perpetuity is held void and ofno effect. Meaning of "Perpetuity”: "Perpetuity” for a beginner means continuous of unending transaction For example, Atransfers his house B for life and then to B's children generation after generation. This is a perpetuity A perpetuity in the primary sense of the word is a disposition which makes property inalienable for an indefinite period. Perpetuity may arise by taking away from the owner of property, power of alienation thereofand by creation of future remote interests. On the basis of language used in Section 14 we can say that all such transfers to be inoperative and void which purportto be effective beyond- Life of the transferor and life or lives of persons in existence at the date of transfer. ) ») Life orlives in existence at the date of the transfer and the minority of the ultimate transferee. 3) Minority of ultimate transferee (who qualify as per Section 14); ) ) be Provided that the conditions under Section 13 of Transfer of Property Actare also fulfilled; Provided that the ultimate transferee comes in existence on or before the prior estate expires. 2 ‘The man who has made the property or procured it, is free to use or abuse it at his sweet will during his life. Law of transfer does not objectto it and after owner's death, the directive of the owner may still remain valid and transfers operative ifthe transferee or transferres use personsin existence at the date of transfer. child in womb is considered to be a person in existence for some purposes. But under Section "14, this words interpreted to include only those cases where child is born. On birth the child will get vested interest. It matters not as to when actual possession will fall on him. It may be postponed til he does not become major. The rule against perpetuities, however, does not require that the vesting shall take place at the birth of the ultimate beneficiary. What it does require is that the vesting cannot be delayed in any case beyond his 16Strictly for Internal Circulation - KCL minority. The rule against perpetuity does not apply to personal agreements, that is agreements which not create an interestin property though these may be related directly or indirectly to some immovable property. Section 15 - Transfer to Class Some of Whom Come Under Sections 13 and 14: If, on a transfer of property, and 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 the whole class. The rule laid down in Leake v Robinson”, has been rejected by this section. Prior to the amendment of 1929, Section 15 of the Act provided that when an interest was created in favour of a class of persons, and it failed with regard to some of the persons of that class by reason of any of the rules contained in Section 13 or Section 14, such interest failed as regards the whole class. The decisions in the case of Ram Lal v Kunwar La‘ and the Privy Council's decision in Sundar Rajan v Natrajan” led to the amendment of Section 15 in 1929 and this rule has been amended by substituting the words "in regard to those persons only and not in regard to the whole class" for the words "as regards the whole class." Entire transfers are not vitiated simply because there may happen to be some clauses in the deed which are repugnant to the free transfer and circulation of property- such restrictive clauses are to be treated as void. The Section now says that the interest created in favour of a class will only fail as to those who may not be able to take itby reason of any of the rules contained in Sections 13 and 14 and not as to the whole class. Butthis rule has an exception that itis not applicable to a case where a property is transferred for the benefit ofthe public but this rule has an exception Section 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 benefit 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. Principles: This section contains the law that a limitation following upon a limitation is void. The real reason why the ulterior disposition cannot take effect is that itis a part of the scheme for tying up land by means of void limitations. For Example - settles property in trusts for B and his intended wife successively for their lives and then on their eldest son for life and then on the eldest son of such eldest son for his life and then on C. The prior interest of the son and grandson of B fails under Section 13 and 14 and therefore the subsequent interest of Calsofails. It must, however, be noted that the prior interest must fail only by reason of Section 13 or Section 14 before Section 16 can be invoked. Ifthe prior interest fails for some other reason, the subsequent interest does not always fail Rule in Section 16 does not apply where there is an alternative limitation also. Where there are two nae 14 UR 98 Cal 468 (PC) 7Strictly for Internal Circulation - KCL altemative limitations one branch of which is remote and void and the other is capable of taking effect, the Courtwill disregard the void limitation and give effect to that whichis legal. In Girjesh Dutta v. Data Din’, the application of Section 16 was considered. In this case the transferor transferred the property to B and then to male issues of B absolutely, if any. If no male issue then to female issue of B for life. Ifneither, then to B's nephew, B had no issue. The nephew claimed. The Court held in this, case that the transfer to nephews void hence has failed under section 16 of 1. P. Act, 1882. Direction Against Accumulation: According to Section 17 of 1. P.Act, 1882- 1) Where the terms of transfer of property 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 itransferor, 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 period, and at the end of such lastmentioned period the property and the income thereof shall be disposed of as if the period during which the accumulation has been directed to be made had elapsed. This section shall not’ affect any direction for accumulation for the purpose of- 1) the payment of the debts of the transferor or any other person taking any transferor; or 2) the provision of portions for children or remoter issue of the transferor or of any other person taking any interestunderthe transfer, or 3) the preservation or maintenance of the property transferred and such direction may be made accordingly. The policy of law is to check the restriction of property for an unreasonable period. This policy has developed the rule against perpetuities which regulates the period for which the vesting of the property may be postponed. Any direction against the rule against perpetuities is thus void. The principle of Section 17 is based on an English case- Theluson v Woodford”, The rule against perpetuities has for its object the circumscription of the period during which property might be tied up in such a way as to prevent its being transferred absolutely. The object of this section is to make a separate rule further restricting the period for the accumulation of the income. But a direction for accumulation is valid provided it falls under anyone of the two statutory periods mentioned in Section 17. The essentials of this section are the direction for accumulation is void except- 4) _uptolife of the transferor; or Te a0 7 ER 100M) 18Strictly for Internal Circulation - KCL 2) 18years from the date of transfer. Between the two, the longer one will decide the fate of the direction, for example, transfer to A with a direction that he shall collect and accumulate the rent for 18 years. If A dies 10 years after, 18 years’ direction will be effective, if A dies, 20 years after, direction for accumulation tll he is alive shall be valid and effective, Butthis rule has 3 exceptions also- a. Payment of Debts: The directions for the payment of debts of transfer or the provisions for the accumulation of income for that purpose, for however, a long period, are not only exempt from the statutory restriction on accumulation but also do not infringe the rule against perpetuities. b. Butthe debt may be existing debts or contingent liabilities to arise in future. Ifthe debts are paid not out of income, but out of capital, the exception ceases to apply. But only the debts of the transferor or any other person taking any interestin the transfer have been included therein. ¢. Provision of Portions: The word ‘portion’ ordinarily means a share. It does not apply to the making of additions ofincome to capital in order to increase the capital for the person to whom itis given d. Preservation and Maintenance of the Property: A fund provided to meet dilapidations at the end of the lease is within the exception. A direction which simply keeps the property its present value is not affected by the rule restricting accumulation of income. for Benefit of Publi Transfer in Perpeti \ccording to Section 18 of T.P.Act, 1882- The restrictions in Sections 14, 16 and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety or any other object beneficial to mankind, Gift and transfer to charities useful and beneficial to the public have been excepted from the operation of the rule contained is the Sections 14, 16 and 17. Thus, Sections 14, 16 and 17 do not apply to transfers for the benefit ofthe public. But now the question arises what is "Charity" for the purpose of this section. "Charity in its legal sense comprises four principal divisions- trusts for the relief of property; trusts for the advancement of education; truts forthe advancementoof religion; and trusts for other purposes beneficial to the community not falling under any ofthe preceding heads.” aege Atransfer must, in order to fall within the exception provided by this section, be “for the benefit of the public.” The law recognises no purpose as charitable unless it is of a public character. In other words, a purpose, in order to be charitable, be directed to the benefit of the community or a section of the community. ‘The question whether a particular charity was for the benefit of the public or notis a question of fact on which 19Strictly for Internal Circulation - KCL evidence can be had. Vested Interest: According to Section 19 of 1. P.Act- "Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when itis to take effect, orin terms specifying that tis 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. 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 accumulated Until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another perso! Whether an interest is vested or otherwise, depends on the intention of the person creating the interest. Such intention must be gathered from the language employed by the grantor in the grant, giving the plain and natural meaning of the words used by him. A person takes a vested interest in the property when he acquires a proprietary rightin itbut the right of enjoymentis only deferred tll a future event happens which is certain the happen. Thus, ifa Hindu Widow adopted a son but there was an agreement postponing the son's estate during the lifetime of the widow, the interest, created in favour of the adopted sonis a vested right; it does not depend upon any condition precedent the right of enjoyment and possession being deferred, and therefore, he can transfer the property during the widow's life-time. This Section provides the rule that unless a contrary intention appears from the terms of the transfer, a person gets vested interest when itis created in his favour. This section provides the rule that- 1) without specifying the time when itis to take effect; or 2) interms specifying thatitis to take effect forthwith; or 3) interms specifying thattis to take effect on the happening of an event which must happen. Time not Mentioned: if a property is transferred by Ato B and the deed of transfer deed does not mention the exact time from which the transfer shall come into effect, in such a case the transferee gets vested interest. For example- X sells his agricultural land to Y. Y gets vested interest from the day of sale. He gets right at once though possession may not be given to him immediately. Forthwith: When the deed of transfer mentions clearly that the transfer is to take effect at once and forthwith. With such a thing being clearly mentioned, the deed conveys vested interest alone. Certain Event: Sometimes the operation of the transfer is made to depend upon some specified certain event. The event must be clearly explained and legibly fixed and its ocourrence should be only a matter of time. It should be of a nature as it must happen. Interest that is dependent upon such event is classed as a vested one. 1) Postponement of Enjoyment: A condition postponing enjoyment cannot prevent the interest 20Strictly for Internal Circulation - KCL vesting immediately; butitis itself void for repugnancy after the transferee has attained majority. For example- X transfers property to Y in trust for Z and directs Y to give possession of the property to Z when he attains the age of 20. Zhasa vested interest ands entitled to possession at the age of 18. But there is an exception in India when thee is no limit numerically fixed as above. Forexample-M executed a deed of giftin favour of N, but directed that N was notto take possession ofa portion of the property until after the deaths of M and M's wife. N has a vested interest, enjoyment only being postponed. 2) Prior Interest: Aprior interest does not postpone the vesting of the subsequent interest. For example-A fundis given to for life, and after his death to B. On the testator's death the legacy to B becomes vested interest in B. The expression “after his death" refers to the time when the gift becomes reduced to possession, and not to the time when the interest vests. 3) Accumulation of Income: In the case of accumulation of income within the limits sanctioned by Section 17, there is a provision for the postponement of enjoyment, and as such it does not postpone the vesting of the interest. 4) Conditional Limitation: A provision that if a particular event shall happen, the interest shall pass to another person is called a conditional limitation. A conditional limitation divests an estate which has vested and vests it in another person. Section 28 deals with conditional imitations. In a contingent interest, the transfer is not complete until the specified event happens or does not happen. ina vested interest itis complete, but on the happening of a specified event it may be divested. A vested interestis heritable, divisible and transferable. In a contingent interest if person dies before the contingency disappears and before the vesting occurs, the heirs of such a person do not get the benefit ofthe interest. According to Section 15 ofthis 1. P. Act, 1882, the grantor has liberty to specify the time of vesting. Atransfer may note only in present but also in future. But the time of vesting cannot be beyond the period allowed by the rule against perpetuity. Death of Transferee: But when an interest is vested it becomes the property of the transferee and is under Section 6, transferable by him even before he has obtained pOssession. If the transferee dies, his interest vests in his representatives whether or not he has obtained possession. When Unborn Person Acquires Vested Interest on Transfer for his Benefit: According to Section 20- "Where, ona 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” Aninterest created for the benefit of an unborn person vests as soon as that person is born. Thus, ifAsettles property on himself and his intended wife for their joint-lives and then on the eldest son of their marriage, the son takes a vested interest as soon as he is born. It matters not that he is not entitled to possession during the lifetime of his parents. 24Strictly for Internal Circulation - KCL Contingent Interest (Section 21): Section 21 of T. P. Act deals with 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, onthe 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. ‘The wording of this section defines what a contingent interest is and when such interest becomes vested. The language of this Section shows that an estate or interest is contingent when the vesting is to accrue on an event which is uncertain. The test to see whether an interest created is vested or contingent is to see whether there is an immediate right of present or future enjoyment, or whether the right itselfis to accrue on the happening of an uncertain event. contingent interestis not a mere possibilty but itis a well recognised form of property which is capable of being transferred. Inthe case of S.G. Deb vB.K. Deb". Ithas been held that a contingent interest is not an existing right and may never ripen into an existing right, and is not a sufficient ground to an action for declaration or right. Acontingentinterestis not a heritable interest. On the death of a person having contingent interest, his legal heirs do not get anything, not even the contingent interest. Examples- The death of a person is not an uncertain event, buts a certain one. An interest created to take effect on the death of another person is, therefore, not a contingent one, but is a vested interest. The survival or being alive of a person at the death of another is, on the other hand, an uncertain event and consequently a transferto a personithe survives ors alive at the death of another creates only a contingent interest Atransferto.a person to take effect upon his attaining a particular age gives him only a contingentinterest tll heattainsthatage. For example- A certain sum of money is transferred to A"in case he shall attain the age of 18" or "when he shall attain the age of 18". Held, in both the cases contingent interest was given. When Contingent Interest Becomes Vested: On the happening of a specified event the contingent interest becomes vested but ifthe contingency becomes impossible, the interestnever comes into effect. Difference Between Vested and Contingent Intere: Vested Interest 1. According to the definition contained in Section 19 According to Section 21 Where on transfer property an interest there is created in favour of a person- 1. without specifying the time when itis to take effect, or wear 22Strictly for Internal Circulation - KCL 2. specifying thatitis to take effect forthwith, or 3. onthe happening ofan event which musthappen; Such interestis vested 2. Vested interest does not depend upon the fulfillment of any condition; it creates an immedi though the enjoyment be postponed toa future date. 3. Vested interest does not defeat by death of transferee before he obtains possession. 4. Itis both transferable as well as heritable. This means if transferee of a vested interest dies before actual enjoyment, itpasses on tohis heirs. 5. Invested interest there is a presentimmediate right even when its enjoymentis postponed. Contingentinterest 4. According to Section 21 i) _totake effect only on the happening ofa specified uncertain event, or ii) _ifaspecified uncertain event mayor may not; 2. tis solely dependent upon the fulfilment of the condition, so that f the condition is not fulfilled, the interest would fail 3. _Ifbefore the fulfilment of the condition transferee dies, it cannot take effect, 4, tis transferable but not heritable. This means if transferee dies before fulfilment of condition, his heirs get nothing. There is no present right. Section 22 of TP. Act deals with transfer to member of a class who attains a particular age. Transfer to Members of a Class Who Attain a Particular Age: According to Section 22 of this Act "Where, ona transfer of property, an interest therein is created in favour of such members only ofa class as shall attain a particular age, such interest does not vest in any member of the class who has not attained thatage" According to this section, the transfer is contingent on the members attaining a particular age and the interest does not vest in any member of the class who has not attained that age. The section’ is applicable only where an interest has been created in favour of such a member of a class who attains a particular age, notwhere interests created in favour ofall members ofa class. For the application of this section the elementof time must be the essence of the transfer. Section 23 deals with transfer contingent on happening of specified uncertain event. 23Strictly for Internal Circulation - KCL Transfer Contingent on Happening of Specified Uncertain Event: According to Section 23 "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 the event, the interest fails unless such event happens before, or at the same time as, the intermediate or precedentiinterest ceases to exist” Apersonis entitled to create an interest in property in favour of another to take effect on the happening of an uncertain event. He is also entitled to specify the time within which such uncertain event is to happen provided the time-limit so fixed does not offend the rule against perpetulties. But where no time is mentioned by the transferor for the happening of the contingency the law fixed the time-limit within which the contingency should happen. This section accordingly provides that the contingency must happen before or at the same time as the intermediate or the precedent estate ceases to exist. This section has no application where the interest is to accrue on the happening of a, certain event, suchas, the death ofa person. The principle behind this sections that property should never be without any owner, it must always vest in some person This section therefore, enacts that the contingent interest will fail or cannot vest unless the event happens before or atthe same time as the prior interest ceases. For Example - There is a gift for life to A, and then to B in case he gets called to the Bar: The gift to B fails unless he is called to the Bar in the lifetime of Aor at the same time as Adies. Section 25 deals with Transfer to Such of Certain Persons as Survive at some Period not Specified. According to this Section- "Where, ona 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, but the exact period is not specified, the interest shall go to such of them as shall be alive when the intermediate or precedent interest ceases to exist, unless a contrary intention appears from the terms of the transfer’ This section deals with cases where the transfer refers to some period within which a particular contingency is to happen; but does not exactly specify the period. This section enacts a rule of construction. Ithas been explained by Justice Tumerin White's case as follows- "Where there is a bequest to for life and after his death to Band C or the survivor of them, some meaning must of course be attached to the words ‘the survivor’. They may refer to anyone of the three events-to one of the persons named surviving other, or to one of them only surviving the testator, or to one of them only surviving the tenant for fe, and in the absence of any indication to the contrary they are taken to refer to the latter eventas being the more probable one to have been referredto.” Section 25 ofthis Act deals with conditional transfer. According to this Section- “An interest created on a transfer of property and dependent upon a condition fails ifthe 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, oris 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" Conditions may be of three kinds, conditions precedent, collateral conditions and conditions subsequent. For Example -A contract to sell his house to B if B marries C. This is a case of a contract with a condition 24Strictly for Internal Circulation - KCL precedent and its effect is that until B marries C, the obligation to sell the house does not arise against. Section 25 deals with transfer which takes effect if a condition precedent is satisfied. If a condition precedents invalid in law this section enacts that the transfer itself fails. The test whether a condition is valid or void is to be judged by its character without taking the intention of the parties in consideration. Intention of the parties is irrelevant. transfer of property on the condition that the transferee will commit crime or civil wrong is void under this section. Soalso, a transfer of property which is based on a condition against public policy is void. Section 26 of this Act deals with the condition precedent when the condition precedent should be treated as fulfilled Fulfillment of Condition Precedent: According to Section 26- "Where the terms of transfer of a property impose a condition to be fulfilled before a person can take an interest in the property, the condition shall be deemed tohave been fulfiled ifithas been substantially complied with’ Conditions precedent are the conditions which are essential to be performed before the interest arises. For Example -Amakes a gift of his property in favour of B, his wife, and also provides in the instrument that his son, C, will be entitled to the property after performing the obsequies on the mother, B. This section deals with the fulfilment of a condition precedent. The general principle is that where a transferis made ona condition precedent, the transfer fails unless the condition is first fulfilled if itis substantially complied with. The High Court came to this conclusion that the condition in this case is not a condition precedent and the son gets a vested interest in the property. Acondition precedentis fulfilled if it is substantially complied with. This section deals with the fulfilment of a conditions precedent. The general principle is that where a transfer is made on a condition precedent, the transfer fails unless the condition is first fulfilled. This section provides that such a condition shall be deemed to be fulfilled ifitis substantially complied with. Election When Necessary: According to Section 35 of T.P. Act, 1882- "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 inthe latter case he shall relinquish the benefit so conferred, and the benefit so relinquished shall revert to the transferor or his representative as if it had not been disposed of, subject nevertheless, where the transfer is gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh transfer, and in all cases where the transfer is for consideration, to the charge of making good to the disappointed transferee the amount of value of the property attempted to be transferred to him.” Mlustrations- a. The farm of Sultanpuris the property of C worth Rs. 800. Aby an instrumentoof gift professes to transfer it to B, giving by the same instruments. 1,000 to C. C, elects to retain the farm. He forfeits the gift of Rs. 4,000. 25Strictly for Internal Circulation - KCL b. Inthe same case, Adies before the election. His representative must out of the Rs. 1,000 pay Rs. 800 to B. Section 35 of the Act contains a doctrine popularly known as "Doctrine of Election’. It appllies to all kinds of property, vested, contingent, reversionary and remote as well as immediate interests, whether movable or immovable. The doctrine of election may be stated thus; he who accepts a benefit under a deed or Will or other instrument must adopt the whole contents of the instrument, must conform to all its provisions and renounce all rights that are inconsistent with it. This principle is often put in another form that a person cannot approbate and reprobate the same transaction, or blowhot and cold at the same time. The doctrine is that "a donee shall not be allowed to approbate and reprobate and that if he approbates, he shall do all in his favour to confirm the instrument which he approbates. The foundation of the doctrine of election is that the person taking a benefit under an instrument must also bear the burden.” According to Section 35(1), the circumstances in which a person may be putto his election are- 1) Where another person transfers his property to someone else; and 2) by the same instrument and as a part of the same transaction the transferor confers some benefit out of his own property on such person. 3) Where these circumstances exist, the person whose property is transferred has got to choose whether he would take the benefit conferred upon him or not. If he elects to accept the benefit, then he has to carry out the other terms of the instrument as well, namely, that he must relinquish all the rights to his property which the transferor has transferred in favour of some one else. One of the essentials of Section 35 is that where a property is preferred to be transferred and in the same transaction some benefit is given to the owner of the property then such owner is duty bound to elect either to accept he instrument with allits contents or rejectit altogether. Where he elects to acceptthe instrument, he is entitled to gel the benefit but at the same time he is bound to transfer his property. If he elects to reject the instrument he cannot claim the benefit buthe can retain his property. Section 35 will apply inall the cases whether the transfer or proposal to transfer is under any misconception to title of the transferor over affected properties ors motivated by any known or unknown device or design. TRANSFER BY OSTENSIBLE OWNER According to Section 41 of T.P. Act, 1882- "Where, with the consent, express or implied, of the person interested in immovable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it: provided that the transferee, after taking reasonable care to ascertain that the transferor had power tomake the transfer, has acted in good faith. The law contained in Section 41 of Transfer of Property Act is now to be read with modification introduced by Benami Transaction (Prohibition of the Right to Recover Property) Act, 1988. The Act takes away the right of the real owner to recover property held benami. The section is based on the principle that where one of 26Strictly for Internal Circulation - KCL two innocent persons suffers from the fraud of a third party, the loss should fall on him who has created or could have prevented the opportunity for the fraud. The section forms an exception to the general rule thata person cannot convey a better title than he himself has in the property. A third person who bona fide deals with that other may acquire a good title to the property as against the true owner. The principles of Section 41 are really the law on the subject of equitable estoppel. Essentials of Transfer by Ostensible Owner: The following are the essentials of transfer by ostensible owner- 1), The transferoris person interested in property or the ostensible owner, 2) heissobythe consent, express orimplied, of the real owner; 3) the transferis for consideration; 4) the transferee has acted in good faith, taking reasonable care to ascertain that the transferor had powerto transfer. fanyone of those elements is wanting the transferee is not entitled to the benefit of the section. The burden of proof that the transaction is benamiand that the transferor is an ostensible ownerlies on the person who claims that heis the real owner." Fraudulent Transfer: According to Section 53 of TP. Act, 1882-"(1) Every transfer of immovable property made with ‘intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed. Nothing in this sub-section shall impairthe rights ofa transferee in good faith and for consideration. Nothing in this sub-section shall affect any law for the time being in force relating ‘to insolvency. A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution ofhis decree) to avoid a transfer on the ground thatit has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, orfor the benefitof, all the creditors. (2) Every transfer of immovable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee, For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made. Where the effect of any transfer of immovable property is to defraud, defeat or delay the creditors of the transferor and such transfer is made gratuitously or for a grossly inadequate consideration, the transfer may be presumed to have been made with such intentas aforesaid. Where a transfer is made with fraudulent intention, it cannot be upheld in equity as the very object of such transfer is to defeat the interest of the creditors. Although, such fraudulent transfers are otherwise valid in law, yet they are not void. On the other hand they are held to be voidable at the option of the person defrauded arStrictly for Internal Circulation - KCL The term ‘creditor’ in section means a person to whom a debt, thats, a specific or liquidated sum of money is due. It includes a person who has obtained a decree for his debt and ordinary creditors who have still a claim to prove. The term also includes those who become creditors subsequent to the date of the fraudulent transfer. The test to determine whether certain transaction is fraudulent or not is to see whether the transfer was executed as a mere cloak, the real intention of the parties being that the ostensible owner should retain the benefit for himself. Doctrine of Part Performance: According to Section 53-A of TP. Act 1882- Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty; and the transferee has, in part performance of the contract, taken possession of the property of any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and done some act in furtherance of the contract; and the transferee has performed or is willing to perform his Part of the contract; then, notwithstanding that where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract- Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract of the part performance thereof. This section contains the doctrine of part performance. According to this doctrine, where a person has taken possession of immovable property on the basis ofa contract of sale and he has either performed or is willing to perform his partof contract, then he would notbe ejected from the property on the ground that sale was unregistered and legal tle has not been transferred to him. The principle on which the doctrine rests is that if a man has made bargain with another and allowed that other party to act upon it, he will have equity against himself which he cannotresist by setting up the want of a formality in the evidence of the contract out of which the equity in part arises. Hence, itis that where a contract in relation to. land has been partly performed by one party to it, the Court may enforce specific performance. ofit, notwithstanding the want ofa sufficient memorandum in writing, The leading case on the subject of part-performanceis that of Maddison v Alderson”. Apart from this section and excepts provided therein, the doctrine of part-performance is not applicable in India. The doctrine of part-performance as provided in Section 53-A forms part of substantive law. Essentials of Doct ¢ of Part-Performance: The following are the essentials of Section S3A- 1) That there should be a contract to transfer for consideration, any immovable property. 2) Thatthe contract should be in writing and its terms can be ascertained with reasonable certainty. 3) That the transferee in part-performance of the contract has taken possession of the property or any part thereof or ithe is already in possession, he continues in possession in part-performance of the TAC wT 28Strictly for Internal Circulation - KCL contract, 4) Thatthe transferee has done some actin furtherance of the contract, 5) Thatthe transferee is ready and willing to perform his partof the contract. The right conferred by this section is a right only available to the defendant to protect his possession. This section does not create a title on the defendant, it merely operates as bar to the plaintiff assenting to his title, Transferee has a right only to plead estoppels to protect his possession against transferor. The cardinal principle that the doctrine of part-performance should be used as a shield and notas a ground of attack was overlooked This section protects the possession of the transferee. He cannot be dispossessed or ejected by a legal process. It does not confer any title on the transferee. It also does not give any additional right to him than what he has got under the original contract. The transferor will, however, be at liberty to enforce any other right against the transferee that he might have reserved for himself under the main contract. OWNERSHIP Ownership is an akin conception of possession. The conception of ownership seems to have come into being when the society changed from nomadic to agricultural. This course of development illustrates the principle that developments of law and society are interconnected and therefore one cannot be understood without the other. Before entering into the analysis of ownership it is necessary that we should distinguish it from other kindred conception and presenta definition ofit. Definition of Ownership: Ownershipis defined as "a right over a determinate thing indefinite in the point of user unrestricted in pointof disposition and unlimited point of duration According to this definition there are three elements of ownership- 1) _Indefiniteness in Point of User: Itis one ofthe incidents used in a variety of ways which cannot be defined. There are certain limitations on the owner's power. Law obliges that an owner should not use his property in. such aways to injure the rights of other persons. 2) _ Power of Disposal: The owner has power to dispose of the property. There are no limitations upon this power. This is considered to be very important incident of ownership. 3) Unlimited in Point of Duration: It means that right of ownership exists as long as the thing owned exists. After the death of owner the thing goes to his successors. Classification of Ownership: 1) Corporeal and Incorporeal Ownership 2) Sole and Co-Ownership 3) Trustand Beneficial ownership 4) Legal and Equitable Ownership 29Strictly for Internal Circulation - KCL 5) Vested and Contingent Ownership 6) Absolute and Limited Ownership IMPORTANT QUESTIONS Q.1. Define Transfer of Property. Whois competentto transfer? Q.2. Amererightto sue cannotbe transfer. Explain fully. Q.3, Whatis the doctrine of perpetuity? Q4. _ Distinguish between vested interest and contingentinterest. Q.5. Canan immovable property be transferred for the benefit of an unborn person? Explain with example. Q6. Explain doctrine of election with illustration and decided cases. Q.7. "Aperson can not transfer the better title than he has". Explain with exceptions. Q.8. Writeshortnotes on- a) Doctrine oflis pendens b) Doctrine of part performance. ©) Rulesagainst accumulations. Q.9. Define the following terms - a) __ Immovable property. b) Actionable claim. ©) Notice. 4) Conditional transfer. e) Attestation. f) Ownership. Q.10. Whatdo you know by ostensible owner? Whatis the legal position of the transfer done by him? Q.11, What properties can not be transferred under Transfer of Property Act, 1882? Explain with decided places. 30Strictly for Internal Circulation - KCL UNIT -II SALE, EXCHANGE AND GIFT SALE Chapter Ill (Section 54-57) of T. P. Act, 1882, deals with sale. This chapter applies on sale of immovable's only sale of movable property is dealt in Sale of Goods Act, 1930. Section 54 of this Act defines sale. Definition of Sale: According to Section 54 of TP. Act- "Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part promised. ‘Sale How Made: Such transfer, in the case of tangible immovable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by aregistered instrument. In the case of tangible immovable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.’ Delivery of tangible immovable property takes place when the seller places the buyer, or such personas he directs, in possession of the property. Contract for Sale: A contract for the sale of immovable property is a contract that a sale of such property shalltake place on terms settled between the parties. Itdoes not, of itself, create any interestin, or charge on such property. This section deals with three subjects- 1) Definition of sale. 2) Mode of transfer by sale. 3) Contract for sale. "Sale" implies an absolute transfer of all rights in the property sold. No rights are left in the transferor. Ina lease, there is a partial transfer or demise and the rights left in the transferor are called reversion. If the transferee has eventually to pay the entire purchase price, itindicates that the transaction was meant to be asale. Inasale, the property is absolutely transferred to the purchaser and be, thereby, becomes the owner ofthe property. In Vidyadhar v Mankirao and another’, itwas held that in order to constitute a sale, there must be a transfer of ownership from one person to another. The transferor cannot retain any part of his interest or right in that property. Price constitutes an essential ingredient of the transaction of sale. Even ifthe whole of the price is not paid but the document is executed and thereafter registered, ifthe property is of the value of more than Rs. 100 the sale would be complete. The real test is the intention of the parties. In order to constitute a ‘sale’, the parties must intend to transfer the ownership of the property and they must also intend that the price would be paid either in the present or Tar wesc 31Strictly for Internal Circulation - KCL in future. The intention is to be gathered from the recital in the sale deed, conduct of the parties and the evidence on record. The Essential Elements of Sale: The essential elements of sale are- 1) Two Parties (Seller and the buyer) 2) The subject-matter (Immovable property) 3) The transfer or conveyance. 4) The price or consideration. 1. Parties: The parties are the seller and the buyer. The seller must be a person competent to transfer. He must be competent to contract and he must have title to the property or authority to transfer it, ifitis not his own. In short there are two qualifications of a buyer- (i) Financial capacity to pay; and (ii) willingness tobuy. 2. Subject-matter: The subject-matter of sale under TP. Act is an immovable property, which is transferable in nature. Immovable property is transferable except in the cases specified in Section 6. Immovable property includes (i) land, (i) the benefits to arise out of land, and (ii) the things attached to the earth except standing timber, growing crops and grass. 3. The Transfer or Conveyance: Where the immovable property is of value less than rupees one hundred, the sale may be effected by delivery of possession. Where the valuation of the tangible immovable propertyis Rs. 100 or more, the sale of such property requires registration of the deed, 4, The Price: Price is of the essence of contract of sale, and unless the price is fixed there is no enforceable contract because if no price is named, the law does not imply as in the case of sale of goods, a contract to buy at a reasonable price. If no price is paid or promised even a registered deed does not effect: a sale. Itis also a well established principle of Law of Contract that though consideration need not be adequate, it must be real. Itmustbe "something whichis of some value in the eye of law but cannot be illusory." Non-payment of Price: Where a sale has been completed by execution and registration of tle conveyance the mere non-paymentof the price does not stop passing the title from the seller to the buyer. The seller may bring a separate suit claiming purchase money. The Court cannot compel payment of price in a suit filed by the buyer claiming delivery of possession, nor can the decree of possession be made conditional on the payment of purchase money. Ithas also been help that though the sale deed may recite that the c:onsideration has been paid, but there is nothing to prevent the parties from adducing evidence to show that the recitals untrue. The payment of price is not necessarily a sine qua non to the completion of the sale. Ifthe intention is that property should pass on registration, the sale is complete as soon as the deed is registered whether the price has been paid or not; and the purchaser is entitled to sue for possession although he has not paid the price. Since the sale of immovable property may be effected in exchange for the price paid or promised to be paid, 32Strictly for Internal Circulation - KCL the mere non-payment of consideration (price) will not prevent the passing of the title. The finding that the particular sale deed is sham or fictitious is a finding of fact. Itis, therefore, open to the Courtto hold that notwithstanding the execution and registration of a particular document, purporting to be assale deed, there isin fact, no sale, in view of the definition of sale’ in Section 54 of the Transfer of Property Act. Mode of Transfer: The section provides two modes of conveyance i.e., transfer of property- a) Delivery of Possession: In such a case writing or registration is not necessary. The registration in such casesis at the option of the parties. b) Registration of Sale-Deed: Registration is necessary to complete the sale in all such cases. Where the property is intangible immovable property, registration is necessary even if the property is of any valuation. Rights and Liabilities of Buyer and Seller: According to Section 55 of T/P.Act, 1882- In the absence of a contract to the contrary, the buyer and the seller of immovable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold- 1 The selleris bound- a) to disclose to the buyer any material defect in the property or in the sellers title thereto of which the sellers, and the buyeris not, aware, and which the buyer could not with ordinary care discover. b) to produce to the buyer on his request for examination all documents of ttle relating to the property which are in the seller's possession or power, ©) toanswerto the best of his information all relevant questions put to him by the buyer in respectto the property or the ttle thereto; d) onpayment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders itto him for execution at a proper time and place; ) between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as; an owner of ordinary prudence would take of such property and documents; of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents; f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits; 9) to pay all public charges and rent accrued due in respect of the property up to the date of the’ sale, the interest on all encumbrances on such property due, on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing. The seller shall be deemed to contract with the buyer that the interest which the seller professes to 33Strictly for Internal Circulation - KCL transferto the buyer subsists and thathe has powerto transfer the same: Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is encumbered or whereby heis hindered from transferring it. The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested. 3. Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of ttle relating to the property which are in the seller's possession or power- Provided that, (a) where the seller retains any part of the property comprised in such documents, he is, entitled to retain them all, and, (b) where the whole of such property is sold to different buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest vale, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts therefrom as he may require; and in the meantime, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, and uncancelled, and undefaced, unless prevented from so doing by fire or other inevitable accident. 4. Theselleris entitled- a. tothe rents and profits of the property til the ownership thereof passes to the buyer. b. where the ownership of the property has passed to the buyer before payment of the whole of the. purchase-money, to a charge upon the property in the hands of the buyer, any transferee without consideration or any transferee with notice of the non-payment, for the amount of the purchase- money, or any part thereof remaining unpaid and for interest on such amount or part from the date onwhich possession has been delivered 5, The buyerisbound- ‘a. to disclose to the seller any fact as to the nature or extent of the sellers interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and Which materially increases the value of such interest; b. to pay or tender, at the time and place of completing the sale, the purchase-money to the seller or such person as he directs- provided that, where the property is sold free from encumbrances, the buyer may retain out of the purchase-money the amount of any encumbrances on the property existing atthe date of the sale, and shalll pay the amount so retained to the persons entitled thereto; ¢. where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller; d._ where the ownership of the property has passed to the buyer, as between himself and the seller, to 34Strictly for Internal Circulation - KCL pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due. 6. The buyerisentitled- a) where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof, b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, to the extent of the seller's interest in the property, for the amount of any purchase-money properiy paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to acceptthe delivery, also for the eamest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree forts rescission. ‘An omission to make such disclosures as are mentioned in this section, paragraph (1), clause (a) and paragraph (5), clause (a), is fraudulent. Duties of the Seller 1) Duty of the Seller to Disclose: According to Section 55(1), although, the duty of disclosure is not absolute, the seller is under an obligation to disclose latent defects of which he is aware. 2) The duty of disclosure is confined to such patent defects and to these only if- a. Seller is aware of its existence; b. Itis material defect, and ©. Which the buyer could not discover with ordinary care. 3) Presentation of Title Deeds: According to Section 55 (1) (b). Under this sub-section, the selleris to produce his title-deeds for inspection and not for delivery. Title-deeds are delivered on receipt of the whole of the purchase money under Section 55(3). Ifthe seller fails to produce the title deeds for inspection by the buyer on his demand, itwould entitle the buyer to repudiate the contract of sale. He can also claim refund of the earnest money if any with interest. 4) Objections or Requisitions: According to Section 55 (1) (c), when the documents of title are produced under the last sub-section the buyer examines them and if he is not satisfied he makes requisitions or objections. These are (1) requisitions on ttle, (2) requisitions as to matters relating to conveyance, and (3) merely enquiries. 5) Duty to Execute Conveyance: According to Section 55(1)(d), the execution of conveyance and payment of price are reciprocal duties to be performed simultaneously. If either party sues for specific performance, he must show that he was ready and willing to perform. Itis duty of the buyer to tender a conveyance, but this duty of the buyer is subject to contracttto the contrary. Where the buyer has performed his part of the contract itis the duty of the seller to execute the conveyance. 35Strictly for Internal Circulation - KCL When the seller has executed the conveyance tendered by the buyer and handed it over to him and the buyer has received it, the seller is not under any further obligation to getit registered. The buyer can himself getthe deed registered. 6) Personal Obligation: According to Section 55 (1) (e), although, a contract of sale transfers no rightin remasitdoes in Eilglish law, the sale imposes upon the sellera personal obligation in the nature of trust and though he is still the owner, this sub-section imposes on him the same duties as are imposed upon a trustee by Section 15 of the Trusts Act. The seller must also take care of the title- deeds, for loss of deeds depreciates the value of the property and damage done to the estate. On completion, he must deliver the title-deeds to the buyer. 7) Possession of the Property-Action Available in Law to be Taken-Force not to be Applied According to Section 55(1 )(i). Under Section 55(1 )(f), the buyer is not entitled to take forcibly the possession of the property from the seller. Likewise, the seller cannot forcibly eject a trespasser for the delivery of the possession to the buyer. Thus, the seller or the buyer, for getting the possession ofthe property has to take only those actions which are available in law. 8) Liability Collateral to the Contract: According Section 55(1) (g), the liability imposed upon the seller by this sub-section is collateral to the contract and may be enforced after completion. When the vendor has contracted to sell the property free from encumbrance but due to nonpayment of interest since the contract of sale on the mortgage already created on the property, the mortgage dues have been considerably increased, and the vendor is unable to deliver possession of the property free from encumbrance, he cannotbe allowed to take advantage of his own wrong Marshalling by Subsequent Purchaser: If the owner of two or more properties mortgages them to one person and then sells one or more of the properties to another person, the buyer is, in the absence of a contract to the contrary, entitled to have the mortgaged-debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgage of persons claiming under him ot of any other person who has for consideration acquired an interest in any of the properties, The section is intended for the benefit of the buyer and not the real owner. The principle of marshalling applies only to cases when there is common debtor and not to cases of more than one debtor mortgaging their separate properties jointly for contracting debt. The right of marshalling by a subsequent purchaser provided by this section should be distinguished from the right of marshalling by a subsequent mortgagee enacted in Section 81 of the Act. Marshalling is the converse of contribution. The first requires that a mortgagee of several properties shall exercise his right of satisfying his debt so as not to prejudice the purchaser or any of them; the second requires that if several properties are subject to a mortgage and the mortgagee has been paid out of them, the other shall be liable to make their respective contribution. In one, the property is sold free from encumbrance, in the other itis sold subject toit. The right of marshalling is an exception to the rule of contribution enacted in Section 82. Contract to the Contrary: The charge on the unsold property may be excluded by contracttto the contrary. Thus, if X and Yare subject to a mortgage and the mortgagor sells X to Aand deposits with A sum of money to discharge the mortgage and agrees that if the sum is not sufficient he will pay the excess with interest, a contract to the contrary, which excludes A's charge on Y and makes the seller personally liable. A contract to the contrary need notbe express, it may be implied. 36Strictly for Internal Circulation - KCL EXCHANGE Introduction: Transfer of Property Act 1882 is a legislation with deals with the transfer of immovable property such as sale, exchange, mortgage, etc. Butit does not deal with the transfer between living person and non-living person. For example, Will-because a wil is written in the life time of the testator but it comes into operation after his death. This means it is not a transfer intervivos. Hence, this act deals with the transfer between living persons. Both the parties must be living at the date of transfer. Exchanges: Transfer of property Act 1882 deals with transfer of an interest in immovable as well as movable property. When all the interests in the property are transferred and when there is consideration against the property in terms of money or partly in money it is known as sale. But transfer of property Act deals with exchanges also where the ownership of a property is transferred to the another person in consideration of ownership in another property. Section 118 of T. P. Act 1882 defines exchange as - "When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an"Exchange”. transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale, The literal meaning of exchange is the "change of ownership of one thing for the other”. This means when two parties agreed to transfer their things for properties to each other itis known as exchange. In exchange ownership is transferred. The definition of exchange in. Section 118 is not limited to immovable property but it extends also to barter of goods, Essentials of Exchange: According the definition given in Section 118 the following are essentials of exchange: 1) Twoparties (Transferorand the Transferee) 2), Mutual transfer of ownership 3) Properties may be movable or immovable 4) Exchange includes barter 5) Property may be both things money or neither thing money only. Hence, exchange is the transfer of ownership is some existing property against the transfer of another thing inwriting In exchange, like sale, two parties are necessary. There can not be an exchange if the parties are not the same. Exchange is the transfer of ownership of the one patty to another, hence partition is not an exchange. Exchange is similar to sale because there is mutual transfer of ownership in both the transactions. But it differs from sale because there is neither of the things transferred was price of the others. Hence in sale there is consideration in terms of money, whereas in exchange the consideration is the other property. 37Strictly for Internal Circulation - KCL There can be an exchange of one form of money for another form. For example, whenever a person transfers coins against RS.50 currency note thisis an exchange. In the case of Than Singh vs. Nandu Kripa Ja’, Saraswati and Nandu exchanged pieces of land with each other. Saraswati sold the land so acquired on the same day for Rs.2100 to Nandu's brother Goverdhan. The appellant contended the transaction to be sale and it was given colour of exchange with a view to defeat the appellant to right of pre-emption. The matter was referred to Full Bench of Punjab High Court in view of conflict between Gut Mohd's case and Narain Singh's case on the point whether pre-emption puts restriction on the right of ownership, and in view of changed social attitudes, is any revision of the law needed? The Court held, that iftwo possible interpretations of a deed are possible, one that discourages pre-emption should be preferred. The Court held the deed to be exchange. A partition is not an exchange because there is no exchange of ownership in different properties but they only hold them in severalty, which were previously held in common. Similarly, a family settlement which involves distribution of family properties among the heirs is not an exchange, nor where a wife gives up her right to future maintenance in consideration of her husband Mode of Exchange: The second paragraph of Section 118 prescribes the mode in which a transfer of property in completion of an exchange can be effected. Where the exchange is of movable things mere delivery is enough to complete the transfer. Where it is immovable properties or where one of them is immovable, and the value of any of such properties is of RS. 100 or more the provisions of Section 54 will be applicable and the transfer will be completed only by a registered instrument. Where both properties are immovable, exchange is usually effected by mutual conveyances, butitis not necessary that there should be two separate deeds. In exchange the substance of the document should be considered. If the title of the deed is something else but the substance of the deed fulfills the essential of the exchange, the court will discard the title of the deed and will treat the document as exchange. Section 119 of the Transfer of Property Act gives rights to the party who is deprived of thing received in exchange. According to section 119. "if any party to an exchange or any person claiming through or under such party is by reason of any defect in the title of the other party deprived of the thing or any part of the thing received by him in exchange, then, unless a contrary intention appears from the terms of the exchange, such other party is liable to him or any person claiming through or under him for loss caused thereby, or at the option of, the person so deprived, for the return of the thing transferred, ifstill in the possession of such other party or his legal representative ora transferee from him without consideration” According to Section 119, if any party of the transaction exchange received property which has defective title, he is entitled to take back his property under exchange. This means he can sue the other party for the return of the thing, transferred in exchange or he may claim for damage. This section provides for contingency where one of the parties to exchange is deprived of the property received by him by reason of some defect in the ttle of the other party. Itsays that he can sue the other party {i)in damages for the loss caused to him, or ji) for the retum of the thing transferred by him, TAROT Pana 38Strictly for Internal Circulation - KCL Contract to the Contrary: But this covenant cannot be implied where the parties have agreed to the contrary. For instance, where one of the parties binds himself to pay a certain amount of money in case of dispossession of the other party, the contract is a contract to the contrary, and the other party if dispossessed, will have no right to rescind the transaction and recover his property under this section. Right and 5 of Parties (Section 120) : Save as ‘Otherwise provided in this Chapter, each party has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and is subject o the liabilities of a buyer as to that which he takes. In exchange the ownership of the thing is transferred in consideration of the ownership of another thing. The formalities prescribed are those required for a transfer by way of a sale. Each party to an exchange has a dual capacity. Heis a selleras to that which he gives and a buyer as to that which he takes, Ifa party to an exchange (or person claiming through or under him) is deprived of the thing received by him in exchange owing to a defect in the title of the other party, then he can claim whathe had given in exchange provided it is still in the possession of the other party to the exchange or his legal representative or a transferee from him without consideration. Exchange of Money (Section 121): On an exchange of money, each party thereby warrants the genuineness of the money given by him, The mere delivery of money to person conveys a perfectly valid and indefeasible title to it. It includes current coin of the realm and all things which are accustom ably transferable in the country in the same manner as.a cash. In an exchange of money there is no occasion for a warranty of ttle as the title to money passes by mere delivery to one who receives it honestly. There is, however, an implied warranty as to the genuineness of the money, GIFT Chapter Vil (Section 122-129) deal with gifts; Section 122 of this Act defines gift Definition of Gift: According to Section 122 of T.P, Act- "Gifts the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another called the donee, and accepted by or on behalf of the donee" Acceptance When to be Made: Such acceptance must be made during the life-time of the donor and while heis still capable of giving. If the donee ‘dies before acceptance, the gift is void. Definition of gift under Gift Tax Act is of wider import than the one under Transfer of Property Act inasmuch as acceptance of gift by donee or some one on his behalf does not appear to be specific requisite condition for gift under Gift Tax Act. Section 122 of the Transfer of Property Act defines gift executed in the manner indicated thereunder divesting the title to and possession of the donor in the property and vesting the same in the donee under Section 123. There must be proof of delivery and acceptance of possession of the gifted property. Types of Gift: 4) Gift inter vivos; 2) Giftmortis causa; 39Strictly for Internal Circulation - KCL 3) Giftby will, Gifts mortis causa are excluded by Section 129 and gifts by Will are also outside the scope of this Act. The subject of this Chapter, is, therefore, gift inter vivos only. Essentials of Gift: The essential elements ofa giftare the following- 1) Twoparties (donor and Donee) 2) Voluntary transfer without consideration 3) Subject matter (movable or immovable properties) 4) Transfer of subject matter 5) Acceptance of gift by donee. 1. The Parties: There are two parties of a gift- The donor and the donee. The donor means a person who gives. Aminor because he is incompetent to contract is incompetent to transfer and a gift by the minor would therefore be void The donee is the person who accepts the gift. A gift may be accepted by or on behalf of a person who is not competent to contract. Thus, a minor can be a donee; but ifthe gftis onerous, the obligation cannot be enforced against him while he is a minor. But when he attains majority he must either accept the burden or return the gift “Voluntarily and Without Consideration”: The word ‘voluntarily denotes the exercise of unfettered will. The word ‘consideration’ is used in the same sense as in the Indian Contract Act and excludes natural love and affection. But a transfer in consideration of an expectation of spiritual and moral benefit, or in consideration of natural love and affection is a gift, for such consideration is not that contemplated by the section. Presence of undue influence does not necessarily show that the transfer was not made voluntarily and that gftis therefore void. Where the facts disclose that donor has acted at his own, presence of undue influence would render gift voidable. For proof of undue influence one has to show that the party exercising such influence was in a position to dominate the will ofthe other and that the donee used that position to obtain unfair advantage. Fraud, ‘on the other hand, suggests concealment of real fact, misrepresentation of facts and some other ‘camouflage resorted to obtain certain gain. In the case of Subhas v Ganga Prasad, it was held by the Supreme Court that merely because the parties were nearly related to each other or merely because the donor was old or of weak character, no presumption of undue influence can arise. When, however, a gift is made in favour of a spiritual organisation the Courts always expect a very high degree of proof about the voluntary and genuine character of the transaction. That has been the case from the days of Allcard v S. Kinner. Therefore, there was evidence that, there was a spiritual domination over the mind of the donor, an attempt was made to keep the transaction a guarded secret, the registration of the deed was made at a far away place, the donee had a lifelong ill-health and almost blind religious devotional frame of mind, the gift of the only property made by him to a spiritual organisation was held vitiated by undue influence and fraud. 3. Subject-matter: The subject-matter of the gift must be certain, existing movable or immovable property, but must be transferable under Section 6. A future property cannot be made the subject matter of a gift. ‘According to Section 124, the gift of future property is void. 40Strictly for Internal Circulation - KCL 4, Transfer: A transfer in consideration of natural love and affection or services is gift. So also is a transfer in consideration of an expectation of spiritual and moral benefit. A transfer of immovable property should be in writing and executed by the donor. It must also be signed by two witnesses and it should be registered butin case of the transfer of movable property only by delivery the registration is optional. 5. Acceptance: The English law necessitates acceptance because a man will accept that what is for his benefit. There is nothing in the section to show that the acceptance under this section would be express. However, where the donor and the donee are closely related and they are living together, mere acceptance of the gift by the donee is sufficient for the validity of the gift and delivery of possession may notbe necessary. ‘Acceptance may be by a donee who is not competent to contract, for a minor may accept benefit although he cannot incur an obligation. And a minor's guardian may accept a gift for him. The acceptance must be in the life-time of the donor and ifthe donee dies before acceptance there is no gif. If the gift has been accepted but the donor dies before the deed is registered, the transfer may be completed by registration after the donor's death. Donor Dying Before Acceptance: Itis essential that there should be a transfer of the ownership during the lifetime of the donor. Acceptance to be effective must be made before the death of the donor. Transfer How Effected: For the purpose of making a gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. For the purpose of making a gift of movable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery. Such delivery may be made in the same way as goods sold may be delivered. With regard to immovable property the section provides that irrespective of the value of the property, the transfer must be effected only by a registered instrument signed by or on behalf of the donor and attested by atleasttwo witnesses, With regard to movable property, the section lays down two modes of transfer; ie., it may be effected either by registered instrument or by delivery of property. According to Section 123 a gift deed is required to be altested at least by two witnesses. Attestation is meant to ensure that the executant was a free agent, and not under pressure nor subject to fraud while ‘executing the same. In Mallow v Bhaktwari, a suit was filed by an literate lady for the cancellation of a gift deed executed by her on the ground that it was obtained by fraud. The donee did not produce attesting witnesses. Itwas held that the attestation of the gift deed was not proved. The only point for consideration was whether there was a completed gift or not, the Lower Courts held that it was not proved that the possession of the gifted land was delivered to the donee, nor it was proved that the gift was accepted by or on behalf of the donee. Consequently, the suit was dismissed. But on appeal the gift was held to be valid Where a person was not only the scribe of the documents, but he has also seen execution and signing of the said documents he could not be teated as an attest or to the said document with the required animus: The scribe of a document can also be an attesting witness thereof, if he has signed the document with the 44Strictly for Internal Circulation - KCL required animus to attest. Gift of Movable Property: One important question that arises is whether physical delivery is necessary in allcases irrespective of the circumstances. The Supreme Court in Maqbool Alam v Khadaija, held that a gift is valid provided the donor either obtains and gives possession of the property to the donee or does all that he can to.put within’ the power of the donee to obtain possession, The same principle has been extended to the cases of delivery of possession of movable property under Section 123 because delivery of the subject-matter of gift is as much an essential requirement for the validity of the gift under Mohammedan lawas itis under Section 123 governing Hindus. The delivery of immovable property must be supported by a registered document otherwise no valid title can passto the donee. Gift of Existing and Future Property (Section 124): A gift comprising both existing and future property is void as to the latter. The gift of future property is prohibited even under Mohammedan law. In a case where the deed transferred the whole income of property but the property was not, transferred, it was a gift of future income and would be void under Section 124. Gift to Several of Whom One Does not Accept (Section 125): A gift of a thing to two or more donees, of whom one does not acceptit, is void as to the interest which he would have taken had he accepted For example- B makes a giftto X,Y and Z. X and Y accept, while Z refuses. What happens to the gift? Under Section 125 the gift in such a case would not fall in toto. Itis void only as to the one-third interest which Z would have taken had he accepted the gift. So X and Y can claim each his one-third share of the gifted property. When Gift may be Suspended or Revoked (Section 126): The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor a gift shall be suspended or revoked; buta gift which the parties agree shall be revocable wholly or in part at the mere will of the donor, is void Wholly orn part, asthe case may be Agift may also be revoked in any of the cases (save want or failure of consideration) in which, if it were a contract, it might be rescinded. Save as aforesaid, a gift cannot be revoked. Nothing contained in this section shall be deemed to affect the rights of transferees for consideration without notice. Mlustration- a) Agives a field to B, reserving to himself, with B's assent, the right to take back the field in case B and his descendants die before A. B dies without descendants inA's life-time, Amay take back the field. b) Agives.a lakh of rupees to B, reserving to himself, with B's assent, the right to take back at pleasure Rs. 10,000 out of the lakh. The gift holds good as to Rs. 90,000 but is void as to Rs. 10,000 which continue to belong toA. Section 126 enumerates some of the conditions under which the donor may revoke gifts but this section is 42Strictly for Internal Circulation - KCL not exhaustive. This section provides the circumstances in which a gift may be suspended or revoked. This section is not meant to raise a presumption of revocation as Section 42, butit prescribes the mode in which agiftcan be revoked by the donor. Agift revocable at the donor's pleasure is no gift at all. But it may be made revocable on the happening or otherwise of a valid condition subsequent within the meaning of Section 32 which may be agreed upon between the donor and the donee at the time of the gift and which does not depend upon the will of the donor. The condition must be agreed upon at the time of the gift, otherwise the giftis absolute, and the donor cannotimpairitby imposing some condition thereafter. The section also says that a gift may be revoked in any ofthe cases in which, ifitwere a contract, it might be rescinded. These cases are laid down in Section 19 of the Indian Contract Act which says- "Where consent to an agreement is caused by coercion, fraud or misrepresentation, the agreement is a contract voidable atthe option of the party whose consent was so caused." The third paragraph of the section expressly states that except in these two cases a gift can never be revoked. The last paragraph of Section 126 protects a transferee for value without notice of the right of revocation in either of the ways stated above. Onerous Gifts: Section 127 deals with onerous gifts. According to this Section- "Where a giftis in the form ofa single transfer to the same person of several things of which one is, and others are not, burdened by an obligation, the donee can take nothing by the giftunless he accepts it fully.” Where a giftis in the form of two or mote separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the latter onerous. Onerous Gift to Disqualified Person: A donee not competent to contract and accepting property burdened by any obligation is not bound by his acceptance. But if, after becoming competent to contract and being aware of the obligation, he retains the property given, he becomes so bound. ilustrations- a) Ahas shares in X, a prosperous joint stock company and also shares in Y, a joint stock company, in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his shares in joint stock companies. B refuses to accept the shares in Y. He cannot take the shares in X. b) A, having a lease fora term of years of a house at a rent which he and his representatives are bound to pay during the term, and which is more than the house can be let for, gives to B the lease, and also asa separate and independent transaction a sum of money. B refuses to accept the lease. He does not by this refusal forfeit the money. Meaning of Onerous Gift: Onerous means "burdened", a gift may be made of one thing or of several things to the same person at one time. It may also be made of several things independently of each other. In any of these cases, anyone or more of the things may be burdened by some obligation. The question in such a case would be whether the donee can accept the gift in part and reject what is so burdened. The answer to this question depends upon whether the gift of several things is made by one transfer or different transfers. Ifitis by one transfer, the donee must accept the gift in its entirety, otherwise he cannot take any 43Strictly for Internal Circulation - KCL thing atall. A minor though not competent to contract may be a donee, but on attaining majority he has the right to repudiate the gift. If he retains the property after attaining majority, he is estopped from repudiating. The third paragraph shows that even a gift subject td a burden can be accepted by a person incompetent to contract without the intervention of a guardian. Universal Donee: Section 128 of T.P. Act deals with universal donee. According to Section 128 of TP. Act- "Subject to the provisions of Section 127, where a gift consists of the donor’s whole property, the donee personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extent of the property comprised therein.” Meaning of Universal Donee: Universal donee is a person who gifts all his belongings movable as well as immovable andis left with nothing himself. Section 53 enables a defrauded creditor to set aside a fraudulent transfer of an immovable property. But there is no other provision in the Act whereby a fraudulent transfer of movable property can be avoided Section 128 provides a remedy not only where the transfer is fraudulent but also where it is made out of honest motives and it applies to transfer of both movable and immovable property. The position of the universal legatee and the universal donee is practically the same. Saving of Donations- Mortis Causa and Mohammedan Law: Nothing in this chapter relates to gifts of movable property made in contemplation of death, or shall be deemed to affect any rule of Mohammedan law. Section 129 saves the Mohammedan gifts from application of Chapter VII of the Act. Where a rule of Mohammedan law s in conflict with any provision in this Chapter the former will prevail over the latter. Section 129 also exempts gifts made by Mohammedans from the operation of the provisions in so far as they are inconsistent with the principles of Mohammedan law. Under Mohammedan law, a gift of an immovable property may be made orally by simple delivery of possession. IMPORTANT QUESTIONS Q.1. Define sale, What are the essential of sale? Differentiate between sale and agreement to sell Q.2. _Define-exchange. Write the characteristics of exchange. Differentiate between exchange and sale. Q.3. Whatdo you understand by gift? Write its ingredients also. Q4, _Agiftoffuture property is void. Explain Q5. Write shortnotes on- 1) Onerous gif. 2) Universal donee. 44Strictly for internal Circulation - KCL 3) Rights and liabilities of seller. 4) Rule ofmarshalling. eStrictly for Internal Circulation - KCL UNIT - Ill MORTGAGES OF IMMOVABLE PROPERTY Definition of Mortgage: Section 58 of T.P. Act and Section 2 (17) of the Indian Stamp Act, define mortgage. According to Indian Stamp Act, a mortgage is defined as- "Mortgage-deed includes every instrument whereby, for the purpose of securing money advanced or to be advanced, by way of loan or an existing or future debt, or the performance of an engagement, one person transfers or creates to or in favour of another, a right over or in respect of specified property. This definition applies to any specified property both movable and immovable." This definition is materially different from the definition given in T.P. Act, 1882. Mortgage no doubt is a transfer, but not the transfer of ownership rights. A mortgage is a transfer of an interest in a specific immovable property and the purpose of mortgage is said to secure the payment of money advanced as loan. Ifa document prima facie does not show and express any transfer of ownership, but only indicates transfer of certain interest for securing the money, it may be said to be mortgage. The essential feature of mortgages is that the right in the property created by the transfer is accessory to the right to recover the debt. Essentials of Mortgage: 1, Two parties (Mortgagor and Mortgage). 2. There mustbea transfer ofan interest; 3. Such interest must be made in specificimmovable property; and 4. The transfer must be made to secure the payment of a present or future loan of money. When a transfer of immovable property involves the abovementioned all the four elements the transaction amounts toa mortgage. 1) Two Parties-Mortgagor: The person who actually mortgages the property is a mortgagor, but a mortgagor includes a person deriving title under the original mortgagor, e.g. Heirs, executors, and administrators, who derive their title from the mortgagor. 2) Mortgagee: A mortgagee is a person in whose favour a mortgage is created. The term also includes, a person derivinga title under the original mortgage. 3) Transfer of an Interest: Mortgage is the transfer of an interest in immovable property. This, distinguishes it from a sale which is a transfer of ownership of immovable property. The interest transferred in the several classes of mortgages are, however, not identical. In a simple mortgage what is transferred is a power of sale. In a usufructuary mortgage what is transferred is a right of possession and enjoyment of the usufruct. In a conditional mortgage and in an English mortgage the right ransferredis, in form, a transfer of ownership subject to a condition. 4) Specific Immovable Property: The property in mortgage should be specific one because itis the security against loan. If the mortgagor does not pay the mortgage money, the mortgagee can realise the money from the property mortgaged 5) Mortgage-Money: The expression 'mortgage-money' means the principal money and interest of which paymentis secured for the time being. The interest is regarded as a charge upon the property 46Strictly for Internal Circulation - KCL just as much as the principal amount. Order 34, Rule 11 of the Code of Civil procedure makes it clear that interests included in '‘mortgage-money’. Mortgage-Deed: The definition of mortgage in Section 2 (17) of Stamp Act is wider than in Section 58 (a) of Transfer of Property Act. It includes pawn or pledge of movables and is not restricted to transfer of an interest or right to immovable property. It also includes charges which creates a right to property. The instrument by which the transfer of mortgage is effected is called a mortgage deed. Kind of Mortgages: According to Section 58 the following are the six kinds of mortgages - 4) Simple Mortgage 2) Mortgage by Conditional Sale 3) Usufructuary Mortgage 4) English Mortgage 5) Equitable Mortgage 6) Anomalous Mortgage 1. Simple Mortgage: In a simple mortgage, the mortgagor retains the possession of the property with himself, covenants personally to pay the mortgage money, and agrees that in default of payment the mortgagee shall have the right of realising the debt by causing the property to be sold under an order of Court. Hence the following 3 conditions are necessary for single mortgage- 1) __ the mortgagor retains the possession of the mortgaged property; 2) the mortgagor must personally undertake to pay the mortgage-money: and 3) __ the parties must expressly or impliedly agree that in the event of the mortgagor failing to pay according to his contract, the mortgagee shall have a right to cause the mortgage property to be sold. Possession not Transferred: Ina simple mortgage there is transfer of the property of the mortgagor to the mortgagee. A simple mortgage with possession is a simple usufructuary which would fall under the class of anomalous mortgage. 2, Mortgage by Conditional Sale: In this kind of mortgage, the mortgagor ostensibly sells the mortgaged property on condition- 1) thatin default of payment of the mortgage money on a certain date, the sale ~hall become absolute; buton such payment being made, 2) the sale shall become void; 3) the buyer shall retransfer the property to the seller. For example, X by a deed, conveys his landed property in outright sale but the second part of the document contains reference for getting suit land redeemed. The document will be treated as mortgage by conditional sale and not sale with rightto repurchase. In this form of mortgage there is no personal liability on the part of the mortgagor to pay the debt. The remedy of the mortgagee is by foreclosure on- A mortgage by conditional sale is an ostensible sale which is to ripen into an absolute sale on breach of the condition as to payment. To decide whether a transaction is a mortgage by conditional sale or an outright sale, its true a7Strictly for Internal Circulation - KCL nature has got to be determined by the intention of the parties thereto as evidence by the terms of the document. 3. Usufructuary Mortgage: The essential condition of usufructuary mortgage are- 1) delivery of possession, or an express or implied undertaking on the partof the mortgagor 2) todeliverit; and 3) the enjoyment of the usufruct by the mortgagee until all his dues under the mortgage are paid off; 4) the mortgagor does not incur any personal iabilty to repay the money; 5) there being no personal liability to pay there is no forfeiture and therefore, the remedies by way of foreclosure or sale not open to the mortgagee. Under Section 58 (d) no time is fixed for repayment, since the mortgagee is entitled to remain in possession, until the payment of the mortgage money, and none can say with any precision when such payment will be completely made. If the parties stipulate that the mortgage is for a definite period it is no longer a usufructuary mortgage but becomes an anomalous one. In this form of mortgage the property is given as a security to the mortgagee who is let into possession or is pepmised to be let into possession of the property and is permitted to repay himself out of the rents and profits of such property or out of a portion thereof. The consequence of the absence of a personal covenant to pay is that the mortgagee cannot sue for the sale of the property. Not being bound to bring a suit, a usufructuary mortgagee has not to be afraid of limitation. 4, English Mortgage: An English mortgage is a transaction in which the mortgagor binds himself to repay the mortgage money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a condition that the mortgagee will it to the mortgagor upon payment of mortgage money as agreed. The three essentials of this form of mortgage are- 1) thatthe mortgagor should bind himself to repay the mortgage money on a certain day; 2) thatthe property mortgaged should, be’ absolutely transferred to the mortgagee; and 3). that such absolute transfer should be made subject to a proviso that the mortgagee will recovery the property to the mortgagor on payment by him of the mortgage money on the day on which the mortgagor bound himself to repay the same. Liability of Mortgagor: In an English mortgage, the mortgagor’ undertakes a personal liability. To pay within a fixed time, ifno dates fixed for payment, the mortgage is not in the English form. Rights of Possessor: The mortgagee in the English form is entitled to possession. But when the mortgagoris in possession, he is entitled to profits and need not account to the mortgagee. 5. Equitable Mortgage: This is also known as mortgage by deposit of title deeds. The essential characteristics of an equitable mortgage are- 1) delivery ofthe title deeds; 48Strictly for Internal Circulation - KCL 2) existence of the debt, 3) specified cites “Delivery” means delivery of actual possession asa result of the agreement. It is not necessary that all tile deeds should be deposited. Writing is not necessary for recording the deposit. Thus, for a valid mortgage by deposit of tile-deeds, itis not essential to put the deed into writing, but there must be an intention to take the deed as a security for the debt and if there is such intention, itis sufficient to create a valid mortgage by deposit of title-deeds, even ifthe deedis notin writing, Document of Title: If the document deposited shows no kind of title in the depositor, no mortgage is created. Itis sufficient ifthe deeds deposited bona fide relate to the property or are material evidence of ttle and are shown to have been deposited with the intention of creatinga security thereon. 6. Anomalous Mortgage: Such mortgages are composite mortgages formed by the combination of two ‘or more of the primary types. In this class of mortgage, the rights of the parties are governed by the terms ofthe instrument. Examples of Anomalous Mortgage 1) Amortgage with possession containing also a covenantto pay the principal and the interest. 2) Mortgagor to repay the instalment with interest or to redeem at any time. The mortgagee to remain inpossession. Held, itwas anomalous mortgage. 3) Amortgage with possession with a stipulation that the transferee should appropriate the rents and profits fora specified term of years, and 4) Asimple mortgage with possession and personal ability for repayment. Mortgage When to be by Assurance: According to Section 59, where the principal money secured is one hundred rupees or upwards, a mortgage other than a mortgage by deposit of tile-deeds can be effected only bya registered instrument signed by the mortgagor and attested by at least two witnesses. Where the principal money secured less than one hundred rupees, a mortgage may be effected either by a registered instrument signed and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property. ‘Section 59 provides the following three modes of completing mortgage- 4) Registration; 2) Delivery of possession; and 3) Deposit oftitle-deeds. Section 59 creates a mandate that mortgage of Rs. 100 or upwards valuation is compulsorily registrable. In order to require registration, the document must contain all the essentials of the transaction and one essential is that the title-deeds must be deposited by virtue of the instrument or acknowledge an earlier deposit of title deeds and the title-deeds shall be deemed as security on the said mortgage. A simple mortgage can be made only by a registered instrument whatever be the amount of the principal money secured 49Strictly for Internal Circulation - KCL In mortgage by conditional sale, usufructuary mortgage and in English mortgage the delivery of possession of mortgage property makes it complete provided that the sum assured is less than Rs. 100. Thus, except in simple mortgage and mortgage by deposit of title deeds, delivery of possession may be sufficient to effectuate depending upon the principal money secured. An oral usufructuary mortgage was held invalid if the principal money securedis less than Rs. 450, In mortgage by deposit of title deeds, registration is not necessary. It is an oral transaction and mere delivery of title-deeds ofimmovable property completes a valid mortgage. Reference to Mortgagors and Mortgagees to Include Persons Deriving Title from Them (Section 59A): Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees shall be deemed to include reference to persons deriving title from them respectively. The words "mortgagor" and "mortgagee" include all persons deriving title under them as in the English Statutes. The word "mortgagor", however, does not include a transferee of the mortgagor’ in Section 68(a), as .the transferee of the mortgagor is not bound by the mortgagor's personal covenant. The word "Mortgagor" includes the subsequent purchasers of the mortgaged property. The word "mortgagee" would include a purchaser of the mortgaged rights. It would exclude a mortgagor from the mortgagee. Rights and Liabilities of Mortgagor Right of Mortgagor to Redeem (Section 60) : At any time after the principal money has become due, the mortgagor has a right, on payment or tender, ata proper time and place, of the mortgage-money, to require the mortgagee- 1) to deliver to the mortgagor the mortgage-deed and all documents relating to the mortgaged property, which arein the possession or power of the mortgagee; 2) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor; and 3) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (whf~re the mortgage has been effected by a registered instrument) to havi8 registered an acknowledgment in writing that any right in derogation of his, interest transferred to the mortgagee has been extinguished- Provided that the right conferred by this section has not been extinguished by act of the parties or by decree ofthe Court. The right conferred by this is section called a right to redeem and a suit to enforce itis called a suit for redemption. Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgage shall be entitled to reasonable notice before payment or tender of such money. Redemption of Portion of Mortgaged Property: Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except only where a mortgagee, or, if there are more 50Strictly for Internal Circulation - KCL mortgagees than one, all such mortgages, has or have acquired, in whole or in part, the share of a mortgagor. ‘Scope and Applicability of the Section: This section deals with the right of ‘redemption’. This right is given to the mortgagor. Right of Redemption-What it is?: Right of redemption isa right’ which a mortgagor may seek to enforce. This right to redeem includes the following reliefs to which the mortgagoris entitled on payment or tender at a proper time and place of the mortgage-money is claimed in a suit, the suit can be taken as a suit for redemption. Itis of the essence of every mortgage that it is liable to be redeemed by the mortgagor at anytime after money becomes due. Itis in exercise of residuary rights of ownership that the "mortgagor"is entitled to call back the rights or interest which he has parted with by paying off the mortgage-money. This rightto calll back the property or interest is called the right to redeem. It is an absolute right and cannot be defeated by the parties providing in the mortgage that the mortgagor will not have any such right, nor can it be fettered by any onerous conditions forming part of the mortgage. This right cannot be extinguished by act of parties or decree of Court If any condition has been put in mortgage that prevents the mortgagor to use right to redeem it will be treated as clog on redemption and will be invalid. The right of redemption under a mortgage deed can come toan end only in aman unknown to law. The condition in a mortgage deed which is found to be a clog on the equity of redemption is void ab initio or invalid but is not so in absolute sense, meaning that it would become so only upon the mortgagor resorting to remedy in a Court of law and on the Court, in the facts and circumstances of the case causing to the conclusion that the condition in the mortgage deed is a clog on the equity of redemption. Suit for Redemption: A suit for redemption may be instituted by mortgagor or any of the persons mentioned in Section 91 of the Act. Even a benamidar can institute a suit for redemption. The limitation period 12 years for fling the suit foris redemption Once a Mortgage, Always a Mortgage: The doctrine of the equity of redemption is expressed in the maxim ‘Once a mortgage always a mortgage’ means that a mortgage cannot be made irredeemable and thata provision to that effectis void. From the very conception of a three principles may be deduced- 1), Once a mortgage, always a mortgage. 2) The mortgagee shall notreserve to himself any collateral advantage outside the mortgage contract. 3) Any stipulation which prevents the mortgagor who has paid the principal, interest and costs for getting back the property in the state in which he mortgaged it, is void. it was contended before the Supreme Court that under Section 60 of the Transfer of Property Act, at any time after the principal money has become due, the mortgagor has a right on payment or tender of the mortgage money to require the mortgagee to recovery the mortgaged property to him. The right conferred by the section has been called the right to redeem and the appellant sought to enforce this right by his suit under Section 60. However, that right can be exercised only after the mortgage money becomes due. The Supreme Courtalso ruled that the rule against clog on the equity of redemption is that, a mortgage shall 51Strictly for Internal Circulation - KCL always be redeemable and a mortgagor's right to redeem shall neither be taken away nor be limited by any contract between the parties. The right of redemption, therefore, cannotbe taken away. Section 60 of the Transfer of Property Act provides that at any time after the money has become due, the mortgagor has a right, on payment or tender, at a proper time and place of the mortgagee to deliver the mortgage-deed and all documents relating to the mortgaged property and where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor. The mortgagor being an owner who has parted with some rights of ownership has a right to get back the mortgage deed or mortgaged property, in exercise of his right of ownership. The right of redemption is a statutory and legal right which cannot be extinguished by any agreement made at the time of mortgage as part of the mortgage transaction Any provision incorporated in the mortgage deed to prevent or hamper the redemption would thus be void. The right of redemption, therefore, cannotbe taken away, Section 60 of the Transfer of Property Act confers on the mortgagor right of redemption which is a statutory right. The right of redemption is an incident of a subsisting mortgage and it subsists solong as the mortgage subsists. Whether in a particular case there is any clog on the equity of redemption, has to be decided in view of the background of a particular case. Right of Foreclosure and Right to Redeem-Whether They go Together?: What is meant by this is that the two rights arise and extinguish together atone and the same time. Therefore, when a date is fixed for the mortgage debt the mortgagee cannot foreclose nor can the mortgagor redeem before such date. In Section 60, there is nothing to prevent the parties to agree that in spite of the mortgage being for a fixed term the mortgagor may redeem at any time before the expiry of the term. Ordinarily, and in the absence of a specified condition entitling the mortgagor to redeem before the term for which the mortgage is created, the right of redemption can only arise on expiration of the specified period. The rule is now very effectively expressed by the Legislature, in Section 60 in which the word “due” is substituted for "payable" by he AmendmentAct, 20 of 1929. Priorto this amendment, there was a conflict of opinion among the High Courts on the interpretation of the word ‘payable’. In view of the conflict and in pursuance of the dictum of the Privy Council in the above case, the Legislature has substituted the word 'due' for ‘payable’ in the opening portion of Section 60. This amendment now clearly brings out the proposition that just as a mortgagee is not entitled to foreclose or sell before the mortgage money has become due, the mortgagor also is not entitled to redeem before the mortgage debt becomes due. Clog on Redemption: Contracts entered into as part of the mortgage transaction which are repugnant to the mortgagor's contractual or equitable right to redeem cannot be enforced by the mortgagee. Since a mortgage is only a security for the repayment of a debt or the performance of an obligation, any stipulation forming part of the mortgage transaction and inconsistent with this position is a clog on redemption. Factors that need to be considered for determination of clog are whether condition was such which would result in making redemption rather difficult fnotimpossible, then itwould be a clog and cannotbe enforced Test of Effect of Clog: The test to ascertain whether certain conditions in a mortgage-deed have the effect of clogging the right of redemption or not is not to took to events as they happened or as they have not happened in the past or may happen in the future. To unravel the true nature of a mortgage transaction, not only the mortgage-deed, but other contemporaneous documents executed by parties must be taken into 52Strictly for Internal Circulation - KCL consideration Exercise of the Right of Redemption: A mortgagor may exercise his right of redemption in any of the following manners— 1) Bypaying ortendering the mortgage money to the -mortgagee. 2) Bydepositing the mortgage money in the Court. 3) Byfilinga suitfor redemption. a) The payment of the mortgage money may be made directly to the mortgagee or his agent. "Tendering" means making unconditional offer for the payment of debt in such manner that mortgagee gets the money. When there are two or more joint mortgages, the payment must be made to all of them jointly. Payment of mortgage money to only one of the mortgages does not discharge the debt against the remaining mortgages. ‘The mortgagor has a right to redeem the mortgage at any time affer the principal money has become due. a. The second mode of redemption is deposit of mortgage money in the Court. As soon as it is deposited in the Court, the Court shall cause a notice to mortgagee that such a deposithas been made. b. The mortgagor may file a suit for redemption in a Court of law. Such a suit would lie only after the right of redemption accrues to him i.e, after the principal money has become due. The suit must be filed during the subsistence of mortgagor's right ofredemption. Effect of Redemption: After redemption the mortgagor becomes entitled to the following right- 1) He will claim back the mortgage deed and all the documents relating to mortgage if they are in possession of the mortgagee. The mortgagee is bound to return not only the mortgage deed butall such documents which are in his possession or power. 2) Heis entitled to get back the possession of the property. Since usufructuary mortgage requires delivery of possession of the mortgage property, the effect of redemption in such case would be to compel the mortgagee to give back the possession to him and the mortgagee will be bound to deliver the possession. 3) He is entitled to compel the mortgagee to retransfer the mortgaged property. Such a rights available in ‘an English mortgaged property. Such a right is available in an English mortgage, as such a mortgagor binds himself to repay the loan on a certain date and the mortgagee is required to transfer the mortgage property, which was transferred to him, to the mortgagor. Thus in English mortgage the mortgagee on redemption acquires the right to compel mortgagee to retransfer the property absolutely to him. Obligation to transferto third party instead of re-transference to mortgagor (Section 60-A: 1) Where a mortgagor is entitled to redemption, then on the fulfilment of any conditions on the fulfilment of which he would be entitled to require a retransfer, he may require the mortgagee, instead of re- transferring the property, to assign the mortgage-debt and transfer the mortgaged property to such third person as the mortgagor may direct, and the mortgagee shall be bound to assign and transfer 53Strictly for Internal Circulation - KCL accordingly, 2) The rights conferred by this section belong to and may be enforced by the mortgagor or by any encumbrance notwithstanding an intermediate encumbrance; but the requisition of any encumbrance shall prevail over a requisition of the mortgagor and, as between encumbrancers, the requisition of a prior encumbrance shall prevail over that of a subsequent encombrancer. 3) The provisions of his section do not apply in the case of a mortgagee who is or has been in posses: Right to Inspection and Production of Documents (Section 60-B): A mortgagor, as long as his right of redemption subsists, shall be entitled at all reasonable times, at request and at his own cost, and on payment of the mortgagee's costs and expenses in this behalf, to inspect and make copies or abstracts of, or extracts from, documents of tile relating to the mortgaged property which are in the custody or power of the mortgage. Right to Redeem Separately or Simultaneously (Section 61): A mortgagor who has executed two or more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary, when the principal money of any two or more of the mortgages has become due, be entitled to redeem anyone such mortgage separately, or any two or more of such mortgages together. Section 61 applies not only to two mortgages by the Same mortgagor to the same mortgagee, but to any number of such mortgages and embraces not only different mortgages of different properties. Where a mortgagor has executed several mortgages in favour of the same mortgagee over the same property he is in absence of contract to the contrary entitled to redeem any of them without at the same time redeeming the others. This section contains the provision of consolidation. The term ‘consolidation’ means the right of the mortgagee who holds several mortgages executed by the same mortgagor to require the simultaneous redemption of all the mortgages. The mortgagee has this right in certain circumstances, but when it is exercised the mortgagor cannotredeem the mortgage without at the same time redeeming the others. Where the parties themselves may exclude the operation of the section and the contract of mortgage allows the mortgagee to consolidate, the provisions to that effect must be clearly written or expressed. If there is stipulation for simultaneous redemption in the subsequent mortgage of the same property, this is equivalent to a contract for consolidation and the mortgages cannot be redeemed separately. Such a stipulation, however, is nota clog on redemption under Section 60. Right of Usufructuary mortgagor to Recover Possession (Section 62): In the case of a Usufructuary mortgage, the mortgagor has a right o recover possession of the property together with the mortgage deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee- a. where the mortgagee is authorized to pay himself the mortgage money from the rents and profits of the property, when such money is paid; b. where the mortgagee is authorised to pay himself from such rents and profits or any part thereof a part only of the mortgage-money, when the term (if any) prescribed for the payment of the mortgage-money has expired and the mortgagor pays or tenders to the mortgagee the mortgage money or the balanceStrictly for Internal Circulation - KCL thereof or deposits it in Court as hereinafter provided. This section deals with usufructuary mortgages only. This section provides that where the mortgagee is authorised to pay himself the mortgage-money out of the rents and profits of the property, the mortgagor can recover possession only when such money is paid, not by him in cash or otherwise but out of the usufruct of the property. In such a mortgage, no term can possibly be fixed. If the mortgage-deed provides for the payment only of, interest or a part of the mortgage money of the usufruct, a term may be fixed for payment of the principal or the balance of the mortgage-money, as the case may be. In such a case, the mortgagor can recover possession only on the expiry of the term and on payment or tender to the mortgagee of the mortgage-money or the balance thereof or depositing the same in Court under Section 83. When no terms fixed, the mortgagor is entitled to payoff the money due on any day and recover possession. Section 62 applies only to usufructuary mortgages pure and simple and has no application to anomalous mortgages which contain covenanttto pay. Right to Foreclosure or Sale (Section 67): In the absence of a contract to the contrary, the mortgagee has, at any time after the mortgage-money has become due to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgage-money has been paid or deposited as hereinafter provided, a right to obtain from the Court a decree that the mortgagor shall be absolutely debarred of his right to redeem the property, ora decree that the property be sold. Asuitto obtain a decree that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure. Nothing in this section shall be deemed- 1) to authorise any mortgagee other than a mortgagee by conditional sale or a mortgagee under an anomalous mortgage by the terms of which he is entitled to foreclose, to institute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee by conditional sale as such to institute a suit for sale; or 2) to authorize a mortgagor who holds the mortgagee's rights as his trustee or legal representative, and who may sue fora sale of the property, to institute a suit for foreclosure; or 3) to authorize the mortgagee of a railway, canal, or other work in the maintenance of which the public are interested, to institute a suit for foreclosure or sale; or 4) to authorise a person interested in part only of the mortgage-money to institute a suit relating only to a corresponding part of the mortgaged property, unless the mortgages have, with the consent of the mortgagor, served their interests under the mortgage. Section 67 deals with the right of mortgagee. The rights and liabilities have been given from Sections 67 to 77 of the Act. The mortgagee has been empowered to recover his money with interest. Where the mortgagor failed to pay it within the stipulated date the mortgagee becomes entitled to recover the same out ofthe security. The following rights have been conferred upon the mortgagee to recover the money- 55Strictly for Internal Circulation - KCL 1), Rightto foreclosure orsale. (Section 67) 2) Rightto sue for the mortgage money. (Section 68) 3) Rightto exercise the power of sale, ifso given. (Section 69) 4) Rightto geta receiver appointed where sale is to be executed. (Section 69-A) 5) Rightto appropriate the accession to the mortgaged property. (Section 70) 6) Rightto getthe benefit of the renewed lease of the mortgaged property in lease-hold. (Section 71) 7) Right to spend money in preserving the mortgaged property, if in possession of the mortgagee. (Section 72) 8) Rightto take the proceeds of revenue, sale or compensation on acquisition of the mortgaged 9) property (Section 73) Right to Foreclosure: The foreclosure can be effected only by the order of the Court in a suit property constituted for that purpose. A decree for foreclosure extinguishes the mortgagor's right to redeem and makes the mortgagee an absolute owner of the property from the date of the decree. This section is regarded as the counterpart of Section 60 which confers a statutory right of redemption on the mortgagor, whereas this section confers a right to foreclosure or sale of the mortgaged property to the mortgagee. The main difference between the mortgagor's right of redemption and the mortgagee's right to foreclosure or sales that the former is absolute and even the mortgagor cannot contract himself out oft by entering into a stipulation to the contrary; because Section 60 does not use any such words as “in the absence of a contract to the contrary". The reason for this distinction is that the mortgagor always requires protection against oppression. The mortgagor's right to redeem and the mortgagee's right to foreclosure or sale cannot be exercised earfier than the date on which the mortgage-money becomes due unless the terms of the mortgage expressly allow him to do so. ‘Simple Mortgage: In a simple mortgage there is a personal covenant by the mortgagor to pay the mortgage-money and the mortgagee is not entitled to the possession of the mortgaged-property. The mortgagee to Sue on the personal covenant and get a simple money-decree against the mortgagor [Section 68(1) (a)], or (i) to bring a suit for sale of the mortgaged property in order the realise the mortgage-debt. Usufructuary Mortgage: In this kind of mortgage, the possession is transferred from mortgagor to mortgagee but the mortgagee in this form of mortgage has neither a right to sue for sale nor a right to sue for foreclosure of the mortgaged property. He can only retain possession until the debtis discharged. Mortgage by Conditional Sale: In this form of mortgage, the mortgage terms into a sale in default of payment of mortgage money on the due date. The remedy for mortgagee is not a suit for sale buthe can file a suit for foreclosure. In an English mortgage, the mortgagee can only file a suit for sale of the mortgaged Property. Equitable Mortgage: An equitable mortgagee can only bring suit for sale. Anomalous Mortgage: The rights and liabilities of the parties in an anomalous mortgage usufructuary, the mortgagee is entitled to bring a suit for sale. If itis a mortgage usufructuary by conditional sale, he has a rightto bring a suit for foreclosure. 56Strictly for Internal Circulation - KCL Marshalling Securities: According to Section 81 of the 1. P. Act. if the owner of two or more properties mortgages them to one person and then mortgages one or more of the properties to another person, the subsequent mortgagee is, in the absence of a contract to the contrary, entitled to have the prior mortgage debt satisfied out of the property or properties not mortgaged to him, so far as the same will extend, but not 808 to prejudice the right of the prior mortgagee or of any other person who has for consideration acquired an interestin any of the properties. The right of the subsequent mortgagee under this section is enforceable only againstthe mortgagor and not against mortgagee. The section applies only to mortgages of immovable property and not to hypothecation of movable property. What is Marshalling?: "If the owner of two estates mortgaged them both to one person and then one of these was again mortgaged to another without notice, the second mortgagee may insist under the doctrine of marshalling, but without interfering with the rights of the former that the debt of the first shall be satisfied out of the estate not mortgaged to the second, so far as that shall extend. For example, Amortgages X and Y to. A, then mortgages X to C, and if B threatens to realize his mortgage out of X so as to deprive C of his security, C under the doctrine of marshalling can compel B to realize his mortgage as far as possible out of Y soastoleave X available for himself. The right of marshalling mustbe exercised at the time when the first mortgagee seeks to realize his security. The section posits two essential conditions- 4) thatthere should notbe a contractto the contrary: and 2) inany case, no prejudice should be caused to the rights ofthe prior mortgagee, Contribution to Mortgage-Debt (Section 82): Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute ratably to the debt secured by the mortgage, and, for the purpose of determining the rate atwhich each such share or part shall contribute, the value thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount of any other mortgage or charge to which it may have been subject on that date. Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another debt, and the former debtis paid out of the former property, each property is, in the absence of a contract to contrary, iable to contribute rateably to the latter debt after deducting the amountof the former debt from the value of the property -out of which ithas been paid. Nothing in this section applies to a property liable under Section 81 to the claim of the subsequent mortgagee. Doctrine of Contribution: The Doctrine of contribution settles the right of mortgagors several properties or of several shares in one property. According to this section, a property which is equally liable with the other property to pay a debt must not escape only on the ground that the creditor has been paid out of that other property. Ilustrations- Three brothers A, B, and C mortgaged their joint property fist to 0, and then to E. A, B and C effected a partition of the property into three shares. 0 brought a suit for sale on his mortgage and realized the amount by the sale of A’s share. A obtained a decree for contribution against the shales of B and C. 57Strictly for Internal Circulation - KCL Thereafter, 8 and C redeemed the puisne mortgage to E and claimed contribution from AHeld, that they had no right o contribution as A's share had been sold to satisfy the prior mortgage debt. The suit for contribution is maintainable when the whole of the mortgage debt has been paid out of the parts of the mortgaged property and itis not necessary that the whole of the debt was paid out of the properties of the plaintiffalone. Right to Contribution-Subject to Marshalling: The last paragraph of the section, means that the right to contribution is subject to the right of marshalling. Thus, where the owner of two properties X and Y mortgages X to A, Y to B, X and Y to C, and X to 0 then X and Y both contribute to C’s mortgage in the proportion of their values after deducting from X and amount of N.s mortgage and from Y the amount of B's mortgage: but under the right of marshalling 0 could require C to proceed first against Y. This right of 0 to ‘marshall would prevail against the right of contribution, Persons who may sue for Redemption: Besides the mortgagor, any of the following persons may redeem or institute a suit for redemption of the mortgaged property, namely- 1) any person (other than the mortgagee of the interest sought to be redeemed) who has any interest in, or charge upon the property mortgaged or in or upon the right to redeem the same; 2) any surety for the paymentof the mortgage debt orany part thereof; or jined a decree for 3) any creditor of the mortgagor who has in a suitfor the administration of his estate ob! sale of the mortgaged property. This section gives a list of the persons who are entitled to redeem or institute a suit for redemption of the mortgaged property. The persons who are given the right of redemption under this section broadly fall undertwo' heads - 1) Persons having interests in or charge upon mortgaged property or in or upon rights to redeem the same; and 2) Persons who have no interest or charge upon mortgaged property or in or upon right to redeem it but who are given personal right to redeem on some special grounds. Persons who can Redeem?: Besides the mortgagor the following persons are entitled to redeem- 1) Prior Mortgage: A prior mortgagee is not bound by the second mortgage. A prior mortgagee cannot redeem the second mortgage. This is in accordance with the well-known principle of law "redeem up and foreclose down" which means that of any number of mortgages, the latter can always redeem the earlier but cannot redeem the latter except by consent. 2) Lessee: Alessee of mortgaged property is also entitled to redeem a mortgage. a. Charge-holder. b. Attaching creditor. c. Puisne mortgagee. 4d. Sub-mortgagee of puisne mortgagee. 58Strictly for Internal Circulation - KCL Trespasser. Reversioner. Purchaser of equity of redemption. Donee Interestin right to redeem. e, f 9. h, Doctrine of Subrogation: According to Section 92, any of the persons referred to in Section 91 (other than the mortgagor) and any co-mortgagor shall, on redeeming property subject to the mortgage, have, so faras regards redemption, foreclosure or sale of such property, the same rights as the morlgagee whose mortgage he redeems may have against the mortgagor or any other mortgagee. The right conferred by this section is called the right of subrogation, and a person acquiring the same is - said to be subrogated to the rights of the mortgagee whose mortgage he redeems. person who has advaj1ced to mortgagor money with which the mortgage has been redeemed shall be subrogated to the rights of the mortgagee whose mortgage has been redeemed, ifthe mortgagor has, by a registered instrument, agreed that such person shall be so subrogated. Nothing in this section shall be deemed to confer a right of subrogation on any person unless the mortgage inrespect of which the rightis claimed has been redeemed in ful ‘Subrogation means that one person is substituted for another in regard to the latter's rights and liabilities in acertain matter. The word "subrogation" means ‘substitution”, The rule of substitution has been adopted and applied by Courts of Equity on principle-"He who seeks equity must do equity.” Rights of Mesne Mortgagee (Section 94): The right of a mesne mortgagee is very well summed it means that a mesne mortgagee has, so far_as regards redemption, foreclosure, and sale of the mortgaged property, the same rights against the prior mortgagee as his mortgagor has against him or them, and the same rights against subsequent mortgages (if any) as he has against the mortgagor. In other words, a mesne mortgagee can redeem any prior mortgage and he can exercise the same rights of foreclosure and sale against any subsequent mortgagee as he may do against his mortgagor. For example- Amortgages X to B, C, 0 and E successively, C as assignee of part of the equity of redemption toAhas the right to redeem B. Similarly, O can redeem either B or C or both, and for the same reason, E can redeem any or all of the three prior mortgages. But neither, C, 0 and E can foreclose any prior mortgage. On the other hand, B can foreclose all or any of C, 0 and E. Similarly, C can foreclose 0 or E or both, and 0 can foreclose E. E can only foreclose A, the mortgagor. He has none else to foreclose because there is no mortgage subsequent to his own. Asubsequent mortgagee, accordingly may redeem any prior mortgagee, as pointed out in the illustration above without foreclosing the later mortgagee and the mortgagor as a condition precedent. The only thing necessary in these cases is that all persons interested in the equity of redemption of the mortgaged property mustbe joined as parties to the suit Foreclosure Without Redemption, but no redemption Without Foreclosure: This doctrine has been 59Strictly for Internal Circulation - KCL deduced from Order XXXIV, Rule 1 of the Civil Procedure Code, which provides as follows: "Subject to the provisions of the Code, all persons having an interest either in the mortgage-securty or in the right of redemption shall be joined as parties to any suit relating to the mortgage" Explanation-"A puisne mortgagee may sue for foreclosure or for sale without making the prior mortgagee aparty to the suit; and a prior mortgagee need not be joined ina suitto redeem a subsequent mortgage.” CHARGES Section 100 of T.P. Act defines charge. According to this section, charge is defined as- "Where immovable property of one person is by act of parties or operation of law made for the payment of money to another, and the transaction does not amount to the mortgage, the latter person is said to havea charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage shall, so faras may be, apply to such charge. Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution ofhis trust, and save as otherwise expressly provided by any law for the time being in force, no charge shalll be enforced against any property in the hands of a person to whom such property has been transferred for consideration and without notice of the charge." “Charge” when immovable property of one person is made secutity for the payment of money to another and the transaction does not amount to mortgage, the latter person is said to have a charge on the property. Thus, charge is always on immovable property in order to secure payment of money. If the payment is not made by the person who is liable for such payment, itis made out of the property charged for this purpose. Acharge may look like a mortgage. But in essence it is not mortgage. Mortgage is wider than a charge. In every mortgage there is a charge, but every charges not a mortgage. A charge does not involve a transfer ofan interestin property. Charge and Mortgage-Distinction Between: The difference between a charge and mortgage has been explained in Section 58. Ina Patna case, Das, J., said- "The charge only gives right to payment out of Particular fund or particular property without transferring that fund or property; a mortgage is in essence a transfer of an interest in specific immovable property”. A mortgage is a jus in rem, a charge is a jus ad rem and the practical distinetion is that a mortgage is good against subsequent transferees and a charge is only good against subsequent transferees with notice. In the case of a mortgage as well as in a charge, the property of another person made security for a loan or debt; but whereas a mortgage is a transfer of an interest in a property, a charge does notinvolve the transfer of any interest in property. Security for the Payment of Money: In order to create a charge, it is not necessary to employ any technical or any particular form of words. All that is required is that there must be clear intention to make a particular property a security for the payment of money. Where the property is not intended to serve as security there can be neither a mortgage nor a charge. Property Must be Specified: Itis not necessary that the properties charged should be described with that amount of definiteness as is necessary in case of mortgage. There should be some expression to signify 60Strictly for Internal Circulation - KCL what properties exactly are to be charged. A general description of the property would be sufficient if from the facts and circumstances the property to be charged can be ascertained. Where the description given is too vague and indefinite, the charge will be void as uncertainty. Kinds of Charge: There are twokinds of charges, viz., 1) Charges created by act of parties. 2) Charges arising by operation of law. 1) Charge Created by Act of Parties: For creating a charge on immovable property, no particular form of words are needed. However, the deed must disclose an intention to create charge on the property or fund, ‘An agreement which gives immovable property as security for the satisfaction of a debt, or for the payment of maintenance allowance in perpetuity, without transferring any interest in the property or an agreement by which an owner of a share in a village receives in lieu of his share a lump sum out of income, constitutes a charge on the property and is nota mortgage. A charge created by will or a compromise decree is a charge created by act of parties. But a charge created by award of the arbitrator is outside the scope of Section 100 of Transfer of Property Act. 2) Charge by Operation of Law: The words "by operation of law" are more extensive than the words "by law" and a charge created by operation of faw includes a charge directly created by the provisions of an Actas well as other charges created indirectly as a legal consequence of certain conditions. Extinction of Charge: Acharge may be extinguished in the same manner as a simple mortgage. Thus, itis extinguished by- a. actofparties; b. novation; and, ©. merger. No Merger in Case of Subsequent Encumbrance: Any mortgagee of, or person having a charge upon, immovable property, or any transferee from such mortgagee or charge-holder, may purchase or otherwise acquire the rights in the property of the mortgagor or owner, as the case may be, without thereby causing the mortgage or charge to be merged as between himself and any subsequent mortgagee of, or person having a subsequent charge upon, the same property; and no such subsequent mortgagee or charge- holder shall be entitled to foreclose or selll such property without redeeming the prior mortgage or charge, or otherwise than subject thereto, Extinction of Mortgage Security: Amortgage security can be extinguished by any of the following ways- 1) Byadecree of foreclosure, or by a decree for sale after the sale is confirmed (Section 60) 2) By payment of the mortgage debt by the mortgagor or by a person under covenant to pay such a payment extinguishes the mortgage and does not operate as an assignment (Section 92); when the mortgage debt is paid by one of the several co-mortgagors it is extinguished as to his share and assigned to him as the shares of the other co-mortgagors (Section 95); when the mortgage debt is paid 61Strictly for Internal Circulation - KCL ‘out by puisne mortgagee the mortgage is not extinguished but assigned to the puisne mortgagee (Section 92); when the mortgage debt is paid by the purchaser of equity of redemption, the question of extinction of the mortgage depends upon the existence of a subsequent encumbrance. (Section 92) 3) Bymerger. 4) Bynovation. Service or Tender on or to Agent (Section 102): Where the person on or to whom any notice or tender is to be served or made under this Chapter does not reside in the district in which the mortgaged property or some part thereof is situate, service or tender on or to an agent holding a general power-ofattomey from such person or otherwise duly authorised to accept such service or tender shall .be deemed sufficient. Where no person or agent on whom such notice should be served can be found or is known to the person required to serve the notice, the latter person may apply to any Court in which a suit might be brought for redemption of the mortgaged property, and such Court shall direct in what manner such notice shall be served, and any notice served in compliance with such direction shall be deemed sufficient- Provided that, in the case of a notice required by Section 83, in the case ofa deposit, the application shall be made to the Courtin which the deposit has been made. Where no person or agent to whom such tender should be made can be found or is known to the person desiring to make the tender, the latter person may deposit in any Court in which a suit might be brought for redemption of the mortgaged property the amount sought to be tendered, and such deposit shall have the effectofa tender of such amount. Notice, etc., to or by Person Incompetent to Contract: Where, under the provisions of this Chapter, a notice is to be served on or by, or a tender or deposit made, or accepted or taken out of Court by, any person incompetent to contract, such notice may be served on or by or tender or deposit made, accepted or taken, by the legal curator of the property of such person; but where there is no such curator, and it is requisite or desirable in the interests of such person that a notice should be served or a tender or deposit made under the provisions of this Chapter, application may be made to any Court in which a suit might be brought for the redemption of the mortgage to appoint a guardian ad litem for the purpose of serving or receiving service of such notice or making or accepting such tender, or making or taking out of Court such deposit, and for the performance of all consequential acts which could or ought to be done by such person if he were competent to contract- and the provisions of Order XXXII in the First Schedule to the Code of Civil Procedure, 1908 (5 of 1908) shall, so far as may be, apply such application and to the parties thereto and to the guardian appointed thereunder. tender under Section 60 or a notice under Section 69 or 83 cannot be made or served on a guardian ad litem until such a person is actually appointed. The words "incompetent to contract” must be read in light of Sections 11 and 12 of the ContractAct. Power to Make Rules (Section 104): The High Court may, from time to time, make rules consistent with this Act for carrying out, in itself and in the Courts of Civil Judicature subject to its superintendence, the provisions contained in this Chapter. This section does not make it obligatory for the High Court to make rules. No rule inconsistent with Civil Procedure Code can be made. under this section and a rule which is inconsistent with this Act would be ultra 62Strictly for Internal Circulation - KCL vires, The rule-making powers limited to things in Chapter IV of the Transfer of Property Act. IMPORTANT QUESTIONS Q.1. Define mortgage. Explain the different kinds of mortgages. Q2. Writeshortnotes on- 1) Righttoredeem. 2) ight to foreclose. 3) Redeem up foreclose down 4) Doctrine of subrogation. Q3. Define Charge. Differentiate between charge and mortgage. Q4. Distinguish between - 1) Sale andmortgage. 2) Mortgage andlease. Q.5. Whatare the rights and liabilities of mortgager andmortgagee?. 63Strictly for Internal Circulation - KCL UNIT - IV LEASES OF IMMOVABLE PROPERTY Chapter V of T.P. Act, 1882 deals with leases of immovable property. It contains Section 105 to Section 117. Section 105 defines lease. Defi n of lease: According to Section 105 of this Act- "A lease of immovable property is a transfer of a right to enjoy property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms." "Premium" and "Rent" Defined: The transferor is called the lessor, the transferee is called the lessee, the price is called the premium and the money, share, service or other thing to be so renderedis called the rent. This chapter of leases applies to all leases except agricultural leases. Although, the Transfer of Property Act does not apply to agricultural leases the definition of lease under Section 105 applies to these also. Alease is the outcome of the rightful separation of ownership and possession. Before the lease the owner had the right to enjoy possession of the land but the lease he excludes himself during its currency from that right. Aleaseis, therefore, nota mere contract, butis a transfer of an interest in land. It creates a rightin rem. The transferee must have been put in possession of the demised property. A licensee has no right in the property, not to speak of any right to the exclusive possession of the property and animus of possession always remains with the licensor, the licensee gets possession only with the consent of the licensor and is liable to vacate when so asked. Essentials of Lease: The following are the essentials of lease- Parties -Lessorand lessee, Property-immovable. Period~Any period, day, week, month or year or perpetual Premium - Money or any other valuable. Partial transfer i.e., Demise or transfer of only right to enjoy. ga eNe Alease being a transfer of an interest’ in immovable property, itis a transfer of property within the meaning of Section 5. Alease like a sale and a mortgage is a transfer of an interest in specific immovable property but that interest extends only to the enjoyment of the property. Alease conveys only limited estate in the property to the transferee. Such estate is called a leasehold and the estate remaining in the lessor called a reversion. It is called leasehold because it is held by the transferee only til ease stands. Avalid lease cannot be granted by a person not in possession of the land leased. The transfer of bare right of possession without the right to the usufruct is not a lease. There must be a transfer of the exclusive right of possession of the leased property in order to constitute a lease. 64Strictly for Internal Circulation - KCL Inorderto prove tenancy or sub tenancy two ingredients must be established- a) The tenant must have exclusive right of possession or interestiin the premises in question, that the right mustbe in lieu of payment of some compensation or rent. b) The essential of lease is that the right to enjoy the property must be transferred for a certain time, express orimplied or in perpetuity. The interest of the lease transfers only from the date of execution. The period need not be fixed at the time of making the lease, its duration may accordingly be determined either by express limitation orby reference to some event which will on its happening fixits exactlength. Apermanentlease can, likewise, be created by express words or by implication. Where no words are used to import tenancy, the conduct of the parties and the circumstances of the case may show that the lease is a permanent one. A continued long possession of the lease-hold property though by itself is insufficient to prove permanency as the only presumption from the long possession is a yearly tenancy, and where the origin of the tenancy is known, it has been held that long possession coupled with payment of a regular rent does not prove the permanency unless a custom to the contrary is proved. What a lease required is a transferor and a transferee and a transfer of immovable property on the terms and conditions mentioned in Section 105. Aperson cannot granta lease to outcast his own interest. Alease by minor is void but a lease granted by the guardian of minor in excess of the authority is not void and may be ratified, after attaining majority. It is well-settled that tenancy rights are heritable and devolve upon all the heirs of the deceasedirrespective of the question as to whether some of them are in occupation ofthe demised premises or not. Duration of Certain Leases in absence of Written Contract or Local usage: 1. Inthe absence of a contract or local Jaw or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the partof either lessor orlessee, by six months’ notice; and alease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice 2. Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice. 3. Anotice under sub-section (1) shall not be deemed to be invalid merely because the period mentioned therein falls short of the period specified under that sub-section, where a suit Cf proceeding is filled after the expiry ofthe period mentioned in that sub-section. 4, Every notice under sub-section (1) must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery isnotpracticable) affixed to a conspicuous part of the property. 65Strictly for Internal Circulation - KCL This section enacts a rule for duration of leases in cases not governed by local law, contract or usage. This section applies to a case where no period is agreed between the parties. The presumption under this section is that the lease is from year to year, month to month according to the nature of the property, and is terminable by six months’ notice or fifteen days’ notice, as the case may be. Where a lease is executed for agricultural or manufacturing purposes, itis deemed to be a lease from year to year. The expression ‘manufacturing purpose’ has not been defined in the Act, but the Supreme Court has considered the question and has laid down the principles and tests for determination of what can be said to be "manufacturing purpose" within the meaning of the Act. In the case of Idandas v Anant Ram’, the Supreme Court laid down the following tests for determining whether a lease is for purpose of "manufacturing purpose” within the meaning of Section 1 06 of the act. The tests are- 1) thatit mustbe proved that certain commodity was produced; 2) that the process of production must involve either labour or machinery; 3) that the end product which comes into existence after the manufacturing process is complete, should have different name and should be putto a differentuse. Anotice to be valid under Section 106 must definitely and unequivocally terminate the tenancy of the tenant after the expiry of the notice. What is necessary is that a notice to quit should indicate in substance and with the reasonable clarity the intention on the part of the person giving it to determine existing tenancy at a certaintime. In Budh Sen v Rahiman’, the Allahabad High Court, while holding the notice valid, observed that if an intention to terminate the tenancy can be clearly discerned by construing the words used in the notice as a whole, the mere fact that the expression that the tenancy was being terminated is not used, would not render the notice invalid. Inthe case of Dipak Kumar Ghosh v Mira Sen’ the Supreme Court held that notice to quit must not be vague and uncertain; all that is required is that there must be a clear indication in the notice to quit of the tenant's intention to vacate the premises. Duration in the Notice: In the case of periodic leases, the common law rule as to quitis that a reasonable Notice must be given to determine the tenancy. In the case of yearly a half-year's notice to quit at the end of same year of the tenancy has from early times been held to be sufficient. In the case of other periodic tenancy reasonable notice appears to be notice equal to the length of the period, so that a month's notice is sufficientto determine a monthly tenancy. The section fixes six months for yearly and fifteen days for monthly tenancies created by implied demise, ‘The month is reckoned according to the calendar by which the tenancy is regulated Section 106 provides, inter alia, thatin the absence of a contract between the parties, a lease of immovable property for manufacturing purposes shall be deemed to be a lease from year to year terminable by six months’ notice. Where from the findings of a case itis clear that the lease in question was not from year to year or for a period exceeding one year, even though the lease may be for a manufacturing purpose, since the lease is not from year to year. The notice must terminate the tenancy atthe end of the year or the month of the period of the lease. Itshould TAR TEES 2 AIR 1970 A 8 66Strictly for Internal Circulation - KCL expire on the last day of that period, otherwise it is invalid. Thus, if the tenancy is a monthly tenancy beginning with the first day of each ‘month, a notice by the tenanton the 7th of June that he would leave ina month's time is invalid, for although it gives more than 15 days' notice it did not terminate the tenancy at the end of the month. Notice to quit may be given by the lessor or by the lessee. Service of Notice to Quit: Notice to quit may be served (1) personally, or (2) by post, or (3) at residence, or (4) being affixed to the property demised. A notice to quit is necessary under this section before a suit for ejectmentcan be brought only where the defendantis a tenant of the plaintiff Lease How Made: Section 107 deals with how a lease may be made. Alease of immovable property from year to year, or for any term exceeding one year, or reserving a yearly rent, can be made only by a registered instrument. All other leases of immovable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession. Where a lease of immovable property is made by a registered instrument, such instrument or, where there are more instruments than one, each such instrument shall be executed by both the lessor and the lessee- Provided that the State Government may, from time to time, by notification in the Official Gazette, direct that leases of immovable property, other than leases from year to year, or for any term exceeding one year, or reserving a yearly rent, or any class of such leases, may be made by unregistered instrument or by oral agreement without delivery of possession. Where the Act applies, no lease can be created exceptin one of the manners specified by this section. Mere acceptance of rent cannot create tenancy. Fact of life tenancy must be supported by some evidence: mere fact that renthas been paid is not sufficient in this regard. In the case of Rajendra Pratap Singh v Rameshwar Prasad’, it was held that a lease ofimmovable property for the time exceeding one year credited a registered instrument, cannot be said to be invalid merely because the said instrumentwas not signed by both the lessor and lessee. Ithas been held that in view of Section 107 T. P.Actand Section 17 of the Registration act, alease foryearto yearrequires registration and in absence of registration, the document cannot be admitted in evidence. Section 107 of the Transfer of Property Act, 1882 provides that a lease of immovable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered document. It further provides that all other leases of immovable property must be either by a registered instrumentor by oral agreement accompanied by delivery of possession. Liabilities of Lessee: The rights and the liabilities under this section are made subject to a contract or local usage to the contrary. The first three clauses of Section 108 specify the liabilities of the lessor. The liabilities ofthe lessor are only three, namely- a. _dutyto disclose any material defect in property with reference tots intended use; b. _ duty toputthe lessee in possession athis request; 67Strictly for Internal Circulation - KCL and covenant for quiet enjoyment. 1. Duty of Disclosure: According to clause (1)(a) of Section 108. The lessor must disclose to the lessee only those defects which are material with reference to its intended use by the lessee, and at the same time which cannot be discovered with ordinary care. It extends only to those defects of which lessoris aware. This section does not declare that the omission to disclose material defects mustbe fraudulent [Section 55(1 )]. But still it seems the omission may be "a good ground for avoiding the lease on the basis of constructive fraud” [Section 18(2), Indian Contract Act]. The lessee may also sue for damages sustained by him as a result of the omission. 2. Duty to give Possession : This clause imposes a statutory obligation on the lessor to deliver possession to the lessee. What amounts to delivery of possession in any particular case depends on the nature of the property leased. Duty of a lessor to deliver possession of the leased premises to the lessee arises only when the lessee makes a request to that effect. This obligation is absolute. If the lessee is not put in possession of the entire land leased to him, there is a breach of the covenant, and his cause of action arises from the date ofthe lease, or on a future date ifso agreed to by the parties to the contract. 3. Covenant for Quiet Enjoyment: According to clause (1 )(c) of Section 108, it is a provision importing a covenant for quiet enjoyment. The lessor should see that not only possession is delivered to the lessee but also that the lessee is not disturbed in his possession by himself or anybody else claiming under him during the continuance of the lease. This clause secures the lessee the benefit of an unqualified covenant for quiet enjoyment. 4, Theruleisnow firmly settled thattlke the express covenant the implied covenant protects the lessee against all disturbances by the lessor whether lawful or not, save under aight of re-entry, butas against other persons it protects the lessee only against lawful disturbance. The covenant for quiet enjoyment would operate even if the lessee fails to perform any of the conditions of the lease, unless, of course, any such condition is expressly madea condition precedent. Rights of the Lessee [Clauses (e) to (j)]: Clauses (e) to U) of Section 108 (2) relate both to the rights and bilities ofa lessee. The following are the rights ofthe lessee- 1) Righttoavoid the lease in case of any destruction by fire, tempest, etc. 2) Rightto repairthe property when lessor fails to do so and to deduct the cost of repairs from rent. 3) __ Right to make such payments which are obligatory on the lessor and to deduct that amount from rent. 4) __ Rightto remove the fixtures made by him during tenancy. 5) __ Rightto have the benefit of crops growing on the land sown or planted by him. 6) _ Righttoassign hisinterestin the leased property. 1. To Avoid the Lease in Case of Destruction Etc.: According to clause (2)( e) of Section 108, alesseeis not responsible for the consequences of fire unless he had definitely taken that burden upon his 68Strictly for Internal Circulation - KCL shoulders by his covenant, or unless negligence is proved against him. The lease does not become ipso facto void but becomes voidable at the option of the tenant and on that option being exercised it becomes void Itis necessary that the destruction must be due to natural causes. Provided that the loss or destruction is not due to lessee or his agent's wrongful act or default. In a case where the property leased is not destroyed or substantially or permanently unfit, the lessee is not entitled to avoid the lease. A notice under this clause avoiding the lease on the ground of destruction of leasehold property by irresistible force takes effect immediately on service. Section 106 has no application to such anotice. 2. To Repair in Default of the Lessor: According to clause (2)(f) of Section 108, there is no general rule of law that a lessor is bound to keep the demised property in good repair or to expend any money on the property. Neither under this clause nor under clause (m) itis competent for the lessee or the lessor as, the case may be, to compel rebuilding or re-construction The lessee can deduct from rent expenses of only those repairs which the landlord was bound to execute either by an express stipulation in the lessee or on account of local usage; but the lessee must first give notice to the lessor to do the repairs before he can make the repairs himself. The Act imposes. no obligation on the landlord to repair. 3. Deduction of Taxes: According to clause (2)(g) of Section 108. generally a tenantis not entitled to claim ‘adjustment of all payments made by him on behalf of the landlord even though he is interested in such payment, against rent payable by him. A tenant may sue the landlord for reimbursement of the money which he had to pay in order to save his own interest and may recover the money so paid. Such adjustment cannot be made by the tenant alone without the concurrence of the landlord. Whereas notice is necessary in cases of repairs, no notice to the lessor is necessary under this clause. 4, Removal of Fixtures: According to clause (2)(h) of Section 108, a lessee under this clause is entitled to remove any trees or fixtures planted or set up by him on the leased property. But while removing the fixtures he must see that the property is left in the same condition in which he has received it 5. To Remove the Crops: According to clause (2)(i) of Section 108, a lessee has a right to remove the corps after the termination of the lease on any count excepting by his own default, and for the purpose, he is entitled to have a free ingress to and egress from the property. This clause applied to leases of uncertain duration such as a lease from year to year or terminable on the happening of some event. 6. Right of Transfer: According to clause (2)0) of Section 108. A lessee can assign his interest in any lawful manner. Such interest being itself an immovable property can as such be validly assigned. For instance he can validly transfer by sub-lease even a part of his interest in the property. Itis open to the lessor to incorporate any such condition in the lease by agreement with the lessee, and the lessee will thereby be prevented from dealing with his interest altogether. Liabi ies of the Lessee: Clause (k) to (q) of Section 108 (2) prescribe the liabilities ofa lessee. They are- 1) duty of disclose a fact materially increasing the value of the lease-hold; 2) duty to pay rent; 3) duty to keep and restore the property in a good condition; 4) duty to give notice to the lessor of any proceeding to recover the property or any encroachment 6Strictly for Internal Circulation - KCL upon itif he comes to know ofit; 5) duty touse the property reasonably; 6) duty to not to erect any permanent structure without the lessor’s consent except for agricultural purposes; and 7) duty to restore possession to the lessor on the determination of the lease. 1. Duty to Disclose: According to Section 108 (2)(k). The lessor should disclose a fact materially in increasing the value of the lease hold. The failure to disclose here, however, is not fraud. Therefore, the lessor on such failure cannot sue to set aside the lease. His only remedy is to sue for damages. 2. Duty to Pay Rent: According to Section 108 (2)(1). A duty to pay rent is a necessary incident of every lease and the amount to be paid as such is usually stated in the lease. Such duty begins not from the date of the execution of the lease but from the date the lessor puts the lessee in possession, and the lessee must pay it without any demand from the lessor. 3. Duty to Keep and Restore the Property in Repair: According to Section 108 (2)(m). Clause (m) casts on the tenanta liability of a limited nature in the matter of the repair of the demised premises. Unless there is contract to the contrary in every lease, it is implied that a lessee is to maintain the property in the same condition in which he received it and to restore the same to the lessor on the termination of the lease. This duty may involve repairs to the property and the lessee is bound to do them. 4. Duty to Inform on the Title Being Jeopardy: According to Section 1 08 (2)(n). This clause puts a duty upon the lessee to give notice to the lessor so that the lessor may protect his interest. Alessee is further bound to inform the lessor, when he becomes aware, of any proceeding to recover the property or any part thereof or of any encroachment made upon or any interference with the latter's right concerning such property. 5. Duty to Use the Property Reasonably: According to Section 108 (2)(0). Leased property as a person of ordinary prudence would use them if they were his own. He mustnot use or permit another to use the property for a purpose other than that for which it was leased. Where a professional man who takes a house for residential purpose, but carries on some professional work in the house during the spare time, Section 1 08(0) does not preventhim todo so. 6. Duty not to Erect Permanent Structures: According to Section 108 (2)(p), the clause prohibits a lessee from erecting any permanent structures on the leased property except with consent of the lessor. Ifhe does, then this becomes a ground for eject ment. Ifthe property be agricultural, he can erect structures of agricultural purposes and no consent of the landlord is necessary. In judging whether the structures were permanent or not the following factors should be taken into consideration- a. intention ofthe party who putup the structure; b. this intention was to be gathered from the mode and degree of annexation; ©. __ ifthe structure cannot be removed without doing irreparable damage to the demised premises then 70Strictly for Internal Circulation - KCL that would be certainly one of the circumstances to be considered while deciding the question of intention. Likewise, dimensions of the structure; and its removability had to be taken into consideration. But these were not the sole tests; the purpose of erecting the structure is another relevant factor; the nature of the materials used forthe structure; and lastly, the durability of the structure. These were characterised as the broad tests. enree 7. Duty to Restore Possession: According to Section 108 (2)(q). This clause enacts the well settled rule that tenant must on the expiration or on the determination of his tenancy deliver up to his landlord possession of the demised property. Itis one of the obligations of a contract of tenancy that the tenant will, on determination of the tenancy, put the landlord in possession of the property demised unless possession is delivered to the landlord before the expiry of the period of the requisite notice, the tenant continues to hold premises during he period as tenant. Exclusion of Day on Which Term Commences (Section 110) : Where the time limited by a lease of immovable property is expressed as commencing from a particular day, in computing that time such day shallbe excluded. Where no day of commencementis named, the time so limited begins from the making of the lease. Duration of Lease for a Year : Where the time so limited is a year or a number of years, in the absence of an express agreement to the contrary, the lease shall last during the whole anniversary of the day from which such time commences. Option to Determine Lease: Where the time 50 limited is expressed to be terminable before its expiration, and the lease omits to mention at whose option itis 50 terminable, the lessee, and not the lessor, shall have such option. Determination of Lease: According to Section 111 of TP. Act, a lease of immovable property may be determined by’ any of the following methods- a. byefflux ofthe time limited thereby; where such time is limited conditionally on the happening of some event-by the happening of such event; c. where the interest of the lessor in the property terminates on, or his power to dispose of the same extends only to, the happening of any event-by the happening of such event; d. _ incase the interests of the lessee and the lessor in the whole of the property become vested at the same time in one person inthe same right; e. __ by express surrender; that is to say, in case the lessee yields up his interest under the lease to the lessor, by mutual agreement between them; f_ byimplied surrender; 9. __ by forfeiture; that is to say, (1) in case the lessee breaks an express condition which provides that, on breach thereof, the lessor may re-enter; or (2) in case the lessee renounces his character as. mStrictly for Internal Circulation - KCL such by setting up a title in a third person or by claiming title in himself; or (3) the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening of such event; and in any of these cases the lessor or his transferee gives notice in writing to the lessee ofhis intention to determine the lease; on the expiration of a notice to determine the lease, or to quit, Or of intention to quit, the property leased, duly given by one party to the other. |. Determination by Efflux of Time: According to Section 111 clause (a) a lease may be determined by end of time. This clause hardly needs any explanation. A lease created for a certain time naturally determines on the last day of the term without any formality such as notice on either side. Suchalease does not terminate if the parties die during the term, the reason being that the interest transferred on a lease is a heritable interest The lessee cannot dispute the title of the lessor as a ground for refusing to give up possession at the expiry of the lease; for if he has been let into possession by the lessor, he cannot deny the title under which he entered without first surrendering possession. if the lessee has not surrendered possession, the estoppel continues even after the termination of the tenanoy. Where the lease is fixed for twenty year and there is expiry of lease by efflux of time, creation of new tenancy cannot be inferred by mere increase in rent by landlord because of increase in taxes, The landlordis entitled to decree for possession and also for mesne profits from the date of expiry oflease. Conditional Term: According to Section 111 clause (b), if the term of a lease is conditional on the happening of a certain event, the lease determines when the event happens and if any part of the term. otherwise fixed remains unexpired, itis of no consequence. A lease for life determines on the death of lessee. A lease for the duration of war determines when peace is declared. Service tenancy under which tenant holds land on condition that if he refused to render service lease will determine, may fall within the clause. Termination of Lessor's Interest: According to Section 111 clause (c), operates where the lessor has only a limited interest or power to grant a lease, and the lease is determined with that interest. For ‘example- A lease granted by a mortgagee in possession and extending beyond the term of the mortgage determines on redemption. Such a lease is not automatically determined, but the mortgagor is entitled to exercise his right to determine the lease. . Determination by Merger: According to Section 111 clause (d), the leasehold is the lesser estate, forit is carved out of the estate of the owner, whichis the reversion. The lesser estate is merged, that is sunk or drowned in the greater, and the lease is determined, for it sinks into reversion. The interest of the lessor arid the lessee in the whole of the property should become vested at the same time in on~ person inthe same right. Itis necessary that the interests of lessor and lessee in whole of the property become vestedin the same person and in the same way. Determination by Surrender: According to Section 111 clause (e), the lessee may with the consent of the lessor expressly surrender or yield up his entire interest in the lease to the lessor. Delivery of possession is essential for this purpose unless there is an agreement to surrender at some time in future. In case of an express surrender, no formality is needed. The lessee must express his intention to 72Strictly for Internal Circulation - KCL surrender, and the lessor must agree to it, and the delivery of possession must immediately follow. A mere relinquishment or abandonment by the lessee of holding without acceptance on the part of the lessorisnot a surrender. 6. Determination by Implied Surrender: Section 111 (f) of the Transfer of Property Act provides for the determination of a lease ofimmovable property by implied surrender. Implied surrender or surrender by operation of aw ocours- 1) Bythe creation of anew relationship, or 2) byrelinquishment of possession. There is an implied surrender if the lessor grants a new lease to his lessee to take effect during the continuance of the existing lease. When during the continuance of the lease, a lessee executesa fresh lease, this operates in law as surrender of the originallease. Relinquishment of possession operates as an implied surrender, if there is (1) a yielding up by the lessee, and (2) an acceptance of possession by the lessor. There must be a taking of possession, not necessarily a physical taking but something amounting to a virtual taking of possession 7. Determination by Forfeiture: According to Section 111 clause (Q) forfeiture is another mode in which alease is determined, and the case where a lease can be forfeited as stated in the clause are- a) in case the lessee breaks an express condition which provides that on breach thereof the lessor may re-enter; b) incase the lessee renounces his character as such by setting up a title in third person or by claiming titlein himself; and ¢) where the lessee is adjudicated an insolvent and the lease provides that the lessor may re-enter on the happening ofsuch event. 8. Determination by Notice to quit: According to Section 111 clause (a) deals with determination of case by notice. This is the last mode in which a lease is terminated when a notice to quit or to determine the lease expires. Such notice is necessary only in Cases of periodic tenancy such as a tenancy from year to year or from month to month under Section 106. Where the term is fixed, the lease would determine by efflux of time under clause (a) of the section. Where the tenancy is permanent no question of determining it ever arise. Where itis a tenancy-at-will, itis determinable at the will of either party by the tenant giving up possession, or by a demand for possession by the landlord, or by the death of either party. A tenancy-at-sufferance does not need any determination and the landlord can straightway sue the tenant for eviction. The question as to what constitutes a valid notice for the purpose of determining a tenancy is to be decided with reference to Section 106 and decided cases - 1) Though itis not necessary to state any ground for the notice to quit, the notice must expressly convey the intention to terminate the tenancy asa whole. 2) Thenotice must specify the date on which the tenancy should expire. 73Strictly for Internal Circulation - KCL Waiver of Forfeiture: According to Section 112, a forfeiture under Section 111, clause (g), is waived by acceptance of rent which has become due since the forfeiture, or by distress for such rent, or by any other acton the part of the lessor showing an intention to treat the lease as subsisting- Provided that the lessor is aware that the forfeiture has been incurred- Provided also that, where rent is accepted after the institution of a suit to eject the lessee on the ground of forfeiture, such acceptance is not a waiver. The concept of waiver is in essence based on agreement of landlord to waive the forfeiture. The Courts always lean against forfeiture. A lessor is not bound to forfeit the lease even if he gets an opportunity for it under any of the sub-clauses of Section 111. The forfeiture is meant entirely for his benefitand itis for him to enforce it or to abandon it. If he elects to enforce it, he must give a notice in writing to the lessee of his intention to determine the lease. This section specifies three ways for waiving a forfeiture- 1) byacceptance of rentaccrued due since forfeiture; or 2) bydistress for such rent; or 3) byany other acton the part of the lessor showing an it tention to treat the lease as subsisting Waiver of Notice to Quit: A notice given under Section 111, clause (h), is waived, with the express or implied consent of the person to whom itis given, by any actoon the part of the person giving it showing an intention to treat the lease as subsisting. Mustrations— a) A, the lessor, gives, the lessee, notice to quit the property leased. The notice expires. B. tenders and A accepts, rent which has become due in respect of the property since the expiration of the notice. The notice iswaived. b) A. thelessor, gives 8, the lessee, notice to quit the property leased. The noti'ce expires, and B remains in possession. Agives to 8 as lessee a second notice to quit. The firstnotice is waived, The section will not apply when the landlord claims to treat the tenant as a tenant from year to year but the latter asserts a permanent tenancy. Awaiver is an intentional relinquishment of a known right. There can be no waiver unless the person against whom the waiver is claimed had full knowledge of his rights and facts enabling him to take effectual action for the enforcement. Section 113 consists of two parts - a. The express orimplied consent of the person to whom notice is given; b. __Theactofthe person giving notice showing the intention to treat the lease as subsisting In orderto constitute a waiver, both the parts must concurrently operate. 74Strictly for Internal Circulation - KCL Relief Against Forfeiture for Non-Payment of Rent : According to Section 114, when a lease of immovable property has determined by forfeiture for non-payment of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of the suit, or gives such security as the Court thinks sufficient for making such payment within fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as if the forfeiture had not occurred. Relief Against Forfeiture in Certain Other Cases: Where a lease of immovable property has determined by forfeiture for a breach of an express condition which provides that on breach thereof the lessor may re- enter, no suit for eject ment shalllie unless and until the lessor has served on the lessee a notice in writing- 1)_ specifying the particular breach complained of; and 2) ifthe breach is capable of remedy, requiring the lessee to remedy the breach, and the lessee fails, within a reasonable time from the date of the service of the notice, to remedy the breach, if itis capable of remedy. Nothing in this section shall apply to an express condition against the assigning, under letting, parting with the possession, or disposing, of the property leased, or to an express condition relating to forfeiture in case ofnon-paymentof rent. This section merely defines form under which notice under section 111 (b) is to be issued in cases where breach of condition is capable of being remedied and single notice is sufficient. The section which was inserted by the Amending Act, 20 of 1929 provides for relief against forfeiture in certain other cases besides non-payment of rent, e.g., for breach of covenant to repair or for breach of covenantto insure. The section does not apply to a breach of covenant to pay rent for that falls under Section 114. The section also does not apply to forfeiture for disclaimer. The Section 114-A was added by the Amendment Act of 1929. Section 114-Ais general and is designed to cover alll cases in which notice is required under Section 111 (g). The principle of the section applies to agricultural, property. Effect of Surrender and Forfeiture on Under-Leases: According to Section 115, the surrender, express or implied, of a lease of immovable property does not prejudice an under-lease of the property or any part thereof previously granted by the lessee, on terms and conditions substantially the same (except as regards the amount of rent) as those of original lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable by, and the contracts binding on, the underlessee shall be respectively payable to and enforceable by the lessor. The forfeiture of such a lease annuls all such under-leases, except where such forfeiture has been procured by the lessor in fraud of the under-lessees, or relief against the forfeiture is granted under Section 114. Alessee cannot give to a sub-tenant what he does not possess himself. This section merely brings under- lessees into direct contract with lessor except, where the surrender is made for the purpose of obtaining a newlease Effect of Holding Over: According to Section 115, if a lessee or under-lessee of property remains in possession thereof after the determination of the lease granted to the lessee, and the lessor or his legal 75Strictly for Internal Circulation - KCL representative accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in possession, the lease is, in the absence of an agreement to the contrary, renewed from year to year or from month to month, according to the purpose for which the property is leased, as specified in Section 106. Mlustrations— a) Alets a house to B for five years. B underlets the house to C ata monthly rent of Rs. 100. The five years expire, but C continues in possession of the house and pays the rent to A. Cs lease is renewed from month to menth, b) Alets a farm to B for the life of C. C dies, but B continues in possession with A's assent. B's lease is renewed from yearto year. Section 116, Transfer of Property Act deals with the effect of ‘holding over. If a lessee or under-lessee remains in possession after determination of the lease and the lessor or his legal representative accepts rent or otherwise assents to his continuing in possession, in the absence of an agreement to the contrary, the lease is renewed from year to year or month to month according to the purpose for which the property is leasedas specified in Section 106- 1) Thatiin absence of agreement to the contrary, lease is renewed as to all terms, except duration of lease, and 2) That duration of renewed lease is from yearto year or from the effect of holding over month to month according to purpose for which property is leased as specified in Section 106. Acceptance of the rent by the landlord after the expiry of the lease is treated to be an assent. By reason of, Section 116, the possession of a tenant after cessation of the tenancy is protected. Such possession is juridical According to Section 116 there should be an offer on the part of the lessee to take a renewed or fresh lease evidenced by the lessee’s continuing in possession and the definite assent of the landlord evidenced by receipt ofrentotherwise. Where the contract of tenancy has expired but the tenant continues in possession by way of statutory protection, it cannot be said to be an offer on the part of the tenantto take a renewed or fresh lease simply by continuing in possession. Doctrine and the Section :In Ganga Outt v Kartik Chandra as’, the Supreme Court considered the principle underlying Section 116 and ruled that where a contractual tenancy has expired by efflux of time or by determination by notice to quit and the tenant continues in possession of the premises, acceptance of rent from the tenant by the landlord after the expiration of determination of the contractual tenancy will not afford ground for holding that the landlord has assented toa new contractual tenancy, Where a tenant merely holds over without the consent of the landlord there is no tenancy of any kind at all. If in such a case, the tenant continues in possession without landlord's consent he becomes what in English law is called a tenant-by-sufferance, This is no tenancy at all in the strict sense and requires no notice to determine it. SAR WSC TT 76Strictly for Internal Circulation - KCL Tenancy-at-Will: A tenancy-at-will is determinable at the will either of the landlord or the tenant. Atenancy- at-will arises by implication of law in cases of permissive occupation when a person is in possession of premises with the consent of the owner, or it may arise expressly by an agreement to let for an indefinite term fora compensation accruing from day to day so long as both parties please. Exemption of Leases for Agricultural Purposes (Section 117): None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Government may by notification Published in the Official Gazette, declare all or any of such provisions to be so applicable in the case of all or any of such leases, together with, or subjectto, those of the local law, if any, for the time being in force. ‘Such notification shall nottake effect until the expiry of six months from the date ofits publication. TRANSFERS OF ACTIONABLE CLAIMS, The term actionable claim is defined in Section 3 of 1. P. Act, 1882 but the transfers of actionable claims are dealtin Sections 130 to 137. According to Section 130 of 1.p.Act- 1) The transfer of an actionable claim whether with or without consideration shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, shall be complete and effectual upon the execution of such instruments, and. thereupon all the rights and remedies of the transferor whether by way of damages or otherwise, shall vest in the transferee, whether such notice of the transfer as is hereinafter provided be given or not- Provided that every dealing with the debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer. 2) The transferee of an actionable claim may; upon the execution of such instrument of transfer as aforesaid, sue or institute proceedings for the same in his own name without obtaining the transferor's ‘consentto such suit or proceeding and without making him a party thereto. Exception - Nothing in this section applies to the transfer of a marine or fire policy of insurance or affects the provisions of Section 38 of the Insurance Act, 1938 (4 of 1938). Mlustrations- |. Aowes money to B, who transfers the debts to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in Section 131, pays B. The payment is valid, and C cannot sue for the debt. ii, Aeffects a policy on his own life with an insurance company and assigns itto a Bank for securing the payment of an existing or future debt. If A dies, the Bank is entitled to receive the amount of the policy and to sue on it without the concurrence of I's executor, subject to the proviso in sub- section (1) of Section 130 and{to the provisions of Section 132. 7Strictly for Internal Circulation - KCL Actionable Claims: Actionable claim has been defined in Section 3 of IPAct. Itincludes- a. Unsecured money debts. b. Beneficial interestin the movables not in the possession of the claimant. As an actionable claim includes future debts, there can be a valid assignment of a future debt. No particular form of words is necessary in order to effect an assignment f the intention is clear from the language used. An assignment may be absolute or by way of security. But a deposit creating a pledge merely cannot amount to an assignment. No registration is necessary for the transfer of actionable claim. Such a transfer is not a contract and Section 25 of the Contract Actis not applicable. Proviso: The proviso is intended for the protection of a debtor who without knowledge of the assignment pays his creditor after the assignment. Such a paymentis a valid discharge as against the assignee, if the debtor has not been impleaded as a party to the assignment or has not received express notice. When the debtor has been impleaded as a party, there has been a novation and he has accepted the assignee as his creditor instead of the assignor. Express notice must be given in writing as required by Section 131 Constructive notice is no longer sufficient. Notice to be in Writing, Signed (Section 131) : Every notice of transfer of an actionable claim shall be in writing, signed by the transferor or his agent duly authorized in this behalf, or, in case the transferor refuses tosign, by the transferee orhis agent, and shall state the name and address of the transferee. The requirements of this section must be strictly complied with for bringing into operation the proviso the Section 130(1). The notice must be express-notice in writing. A notice must be unconditional, otherwise there would be an intolerable increase to the burden upon the debtor. Where the transferee finds the notice insufficient, he can give anotice of his ownto the transferor. Liability of Transferee of Actionable Claim (Section 132): The transferee of an activable claim shall take it subject to all the liabilities and equities and to which the transferor was subject in respect thereof at the date of the transfer. Ilustrations- i. Atransfers to C a debt due to him by B, Abeing then indebted to B. C sues B for the debt due by B to A. Insuch suit Bis entitled to set off the debt due by Ato him; although C was unaware ofitat the date of such transfer. ji. Aexecuted a bond in favour of B under circumstances entitling the former to have it delivered up and cancelled. B assigns the bond to C for value and without notice of such circumstances. C cannot enforce the bond against. PATENTS AND DESIGNS The Patent Act 1970’is the legislation in India which deals with patents. Itis an intangible property which can not be touched or seen. It is an intellectual property right and the patentee of this right deals with this property as the owner of any other movable property. The Patent law protects the right of a patentee so that 78Strictly for Internal Circulation - KCL he can invest his creative faculties for new inventions. Patents are new inventions that are very useful for the mankind and it should be disclosed fully for patentee. This rightis given to the patentee for a limited period and in that period no one can use that property without, the permission or licence of the patentee. Hence we can say the patent is also a property that should be protected just like any other movable or immovable property. Under the patent act the patentee has the right to exploit the patent, to licence the patent to another, to assign the patentto another, to surrender the patent, to sue for the infringement of the patent. GOODWILL Gooduillis also an intangible movable property that goes with the person. Goodwill means the reputation of a person or a firm in the minds of others. It is also a very important property that pays the person. For example- if a person wants to purchase some soft drink he prefers Pepsi instead of any other soft drink and he pays or is ready to pay some extra amount for the said brand. This means the brand of Pepsi has goodwill in the market due to which the owner of this brand gets more profit than any other brand. Goodwill is intangible property that can be exploited, assigned, surrendered or may be sold to any other person and ifthe brandis trade marked or registered one no one can use thatbrand name for his product. TRADEMARK In India the trademark is dealt by ~he The Trade Marks Act, 1999. Trademark is also intangible property that has some value. It is a symbol or a visual representation attached to goods for the purpose for indicating their trade origin or we can say that itis a mark capable of being representative graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours. The Trademark makes the product and its origin identified legally and it guarantees the quality of the product. It helps in advertising also and creates an image of the product in the minds of the public. If any person uses that trademark unauthorizedly, the person who has got the trademark registered in his name may resortto Civil remedies, Criminal proceedings and Administrative remedies. A registered trademark is assignable and transmissible. The proprietor of the registered trademark has power to assign or transmit the trademark with or without the goodwill of the business concemed. The assignment or transmission can be for all of the goods or services covered by such trade mark or only some of such goods or services. COPYRIGHT Copyright is a unique kind of intellectual property. Itis an intangible property which can be registered in the office of Registrar of Copyright in India. Copyright Act 1957 as amended by Copyright (Amendment) Act, 1999s prevailing. Copyright is a right that is used for literary property as recognised and sanctioned by positive law. It is an 79Strictly for Internal Circulation - KCL exclusive right given by law for a certain term of years to author, composer etc. (or his assignee) to print, and sell copies of his original work. This right is given for the literary, dramatic or musical work, ic work, cinematograph film and sound recording. Copyright is a negative right because it prohibits the other persons from copying or producing the work. The copyright provision does not recognise any copyright in an idea. The originator of an idea is not the owner of the copyright, copyright belongs to the person who gives concrete form to the idea. Copyright is a bundle of rights comprising multiple rights; they can be exercised independently of each other. Each of these rights can be assigned or licensed for a limited term. Assignment may be general or may be for the full term of copyright or for a limited period of time. It may also be for a particular territory or country. An owner of a copyright can assign his right in the above combination of forms. Alicence can transfer the interest in a copyright. In-a licence the rights granted are limited. The ownership in the rights remains with the author. In the case of assignment, the ownership in the rights is transferred to the assignee. Q.1. Define lease. What are its essentials? Distinguish between lease and licence. Q.2. Howmay the lease be terminated? Q.3. Write the differentkinds of lease in detail Q4. _ Define actionable claim, How may an actionable claim be transferred? Q.5. _ Differentiate between "Actionable claim and "Mere Rightto Sue". Q.6. Write shortnotes on- a. Termination of ease by forfeiture. b. Notice to determine lease. c. Lease byholding over. Q.7. Whatare the rights and liabilities of lessor and lessee? 80Strictly for Internal Circulation - KCL UNIT -V INDIAN EASEMENTS ACT IACT V OF 18821 Introduction of Easements: The word "Easement" seems to be of French or Norman origin. The right of easementis the necessary consequence of the right of ownership of immovable property. The rights in the property of another (jura in re aliena) are known as easements. Easement rights in one form or another were recognized during the Hindu and Mohammedan periods like rights about windows, drains, well, water for irrigation or discharging of water on the terrace of another. With the advent of British rule in the country, the courts of law in India naturally fell back upon the common law of easements in England. The present Easements Act was enacted in 1882. It defines, amends and codifies the whole law relating to easements. Itonly repeals sections 26 and 27 of the Limitation Act 1877. The Actis a complete and self-contained Code on the subject of easement. The Actis notretrospective in its effect. This Act may be called "The Indian Easements Act, 1882". And it came into force on the first day of July, 1882 The second part of Section 2 saves the following rights from the operation of this Act- a) Government rights. b) Customary rights. ©) Pre-existing rights The word 'Easement’ is defined in Section of Indian Easement Act, 1882. Definition and Nature of Easements: According to Section 4 of this Act- "An easementis a right which the ‘owner or occupier of certain land possesses, as such, for the beneficial enjoyment of that land, to do and continue to do something, or to prevent and continue to prevent something being done. in or upon, or in respectof certain other land not his own’. Dominant and Servient Heritages and Owners: The land for the beneficial enjoyment of which the right exists is called the dominant heritage, and the owner or occupier thereof the dominant owner; the land on which the liability is imposed is called the servient heritage, and the owner or occupier thereof. the servient owner. Explanation. In the first and second clauses of this section, the expression “land” includes also things permanently attached to the earth; the expression "beneficial enjoyment” includes also possible convenience. remote advantage, and even a mere amenity; and the expression "to do something” includes removal and appropriation by the dominant owner for the beneficial enjoyment of the dominant heritage, of any part ofthe soll of the servient heritage or anything growing or subsisting thereon. Mlustration- a) A.as the owner of a certain house, has a right of way over his neighbour B's land for purposes connected with the beneficial enjoyment of the house. This is an easement. atStrictly for internal Circulation - KCL b) A, asthe owner ofa certain house, has the rightto go on his neighbour B's land, and to take water for the purposes of his household out of a spring therein. Thisis an easement. ©) A, as the owner of a certain house, has the right to conduct water from B/s stream to supply the fountains in the garden attached to the house. Thisis an easement. 4) Ais bound to clean a water course running through his land and keep it free from obstruction for the benefit of B, a lower riparian owner. This is not an easement. Easements are the rights which one man has over another's property without having the ownership or possession thereof. The rights of easements are “private appurtenant servitudes.” On the basis of Section 4 it can be said that easement is such a right which the owner of the land for beneficial enjoyment of land on any land or relation to any land. which is not his to do something and continue to so doing. In India, the term ‘easement’ has got much wider meaning than in English Law. Itis a reasonable restriction ofthe power of alienation of an owner ofimmovable property. Essential Elements/Characteristics of Easement: An ana'lysis of the definition of easements as given in section 4 of this Act makes it clear the easementary rights exercised in favour of a dominantheritage and isimposed ona servientheritage. The following are the essential elements of easement- 1) Dominant and Servient Heritage : There must be fa dominant heritage. The land for which a right of easement exists is called "dominant heritage” and its owner is called “dominant owner". An easementary right, in-fact, exists for the benefit of the dominant heritage. It has nothing to do with the person. Any person, whosoever he may be, is in occupation of the dominant heritage, is entitled to enjoy the ealsementary right annexed to it.. The land upon which the right is exercised is called servient heritage and its owners called slervient owner. 2) No Easement in Gross: The right of easement can be claimed by the occupier or owner of the land which is independent of any other capacity. There can be no easement in gross. In other words, dominant heritage and the servient heritage must be distinct. 3) Dominant and Servient Must be Distinct: The owners ofthe servient tenement and dominant heritage must be different. The owner cannot acquire easementary right over his own property. 4) Beneficial Enjoyment of the Dominant Tenement: Every easement must have value and its existence must add to the market-value of the domjnant heritage and make it more beneficially enjoyable. 5) Easement not a Personal Right: Easements are imposed on servient heritage and not upon the ‘owner ofit. An easements nota right which belongs to the dominant owner personally, so itis nota right which binds the servient owner otherwise than in his capacity as owner of the servienttenement. 82Strictly for Internal Circulation - KCL 6) No Right for the Servient Owner: The easement exists for the benefit of the dominant heritage alone; itcreates no right in favour of the servient owner. 7) No Easement Consists in Faciendo: No right of easement can consist in faciendo. No easement can exist whereby the servient owner may be required to perform some activity. The right of easement imposes upon the servient owner an obligation to suffer something to be done by the dominant owner. There can be no easement by which the dominant owner can compel the servient owner to perform any act 8) AnIncorporeal Rightin Rem: Easements are incorporeal rightin rem. Itisa rightin rem, Le, itis.a right available not only against the servient owner but against the whole world. The dominant owner can sue any person who interferes with the exercise of his right of easement. 9) Fractional Right: Easement cannot confer exclusive use of the servient tenement. There is nothing to prevent the owner of the servient tenement from making ordinary use of land, at least so far as itis not inconsistent with the proper use of an easement. 10)New Easement may be Created: It is considered on changing value of the society. Due to changing social order a new kind of easement may be created. Some of the easement may be changed. 11) Easement may be Positive and Negative: Positive easements are those easements where owner does something on the property of servient owner. Negative easement means those easements by which servient owner is stopped to do something, 12) Easement is the Right in Rem : Easement right is the right available against whole world. Dominant ‘owner may file a suit against the servientowner or any other person who interferes with his rig ht. Continuous Wrong Does not Create Easement: The over-hanging branches of another man’s tree is a continuing wrong and the cause of action is renewed on each day of the wrong. No question of the defendant having acquired an easementary right arises in such type of cases because the continuance of over-hanging branches is not ordinarily necessary for the beneficial enjoymentof the land on which the tree stands. The Explanation appended to the definition of easement given in Section 4 of the Act says that the expression "to do something" includes removal and appropriation by the dominant owner, for the beneficial enjoyment or the dominant heritage, of any part of soil of the servient heritage or anything growing or subsisting thereon. Easement Includes Profit a Prendre: The definition of easement given in Section 4 of Indian Easement Act, 1882 includes profit prendre also. Meaning of Profit a Prendre: Profit a Prendre is a right by which a person is entitled to remove and appropriate for his own use any part of the soil belonging to another for the sake of the profit to be gained from the property thereby acquired in the thing removed. It shall always be considered in law a different species ofright from an easement, ands commonly called a profita prendre. The means that- a. _Aprofita prendre gives a rightto take away a portion, or the produce, of another's soil b. _Profitaprendreis participation in profits. 83Strictly for Internal Circulation - KCL In Indian EasementAct, there are many kinds of easements that are defined in various sections of the Act. Creation and Classification of Easement : Easements are classified into the following different classes- Affirmative and negative easements. (section 5) Continuous and discontinuous easements. (section 5) 2 Apparent and non-apparent (section 6) Permanent and limited. (section 9) Subordinate easement. (section 13) Yous Easements of quasi-nature. (section 15) 2 Natural easements or easements by prescription. (section 18) © ) ) ) ) ) ) Easements of necessity (section 13) ) ) ) Customary easements (section 24) 0 ) Accessory easement. 1) Affirmative and Negative Easements: Easements may be classified according to their nature into two kinds- a) Affirmative b) Negative Apositive or affirmative easement confers a right to commit some act upon the servient tenement. A negative easement involves merely a right to prohibit the commission of certain acts upon the servient tenement which the owner of that tenement would have been otherwise entitled commit. 2) Continuous and Discontinuous Easements: A continuous easement is one whose enjoyment may be continued without the act of man. For example an easement of light and air is a continuous easement. discontinuous easement is one of the enjoyments which can only be had by the interference of man ¢.9.-Arightof way because every 6tep a man takes is necessary for the enjoyment of the easement and such steps are all on the servient tenement; right to draw water, right of fishery etc. Easement for Limited Time or on Condition: An easement may be permanent, or for a term of years or other limited period, or subject to periodical interruption, or exercisable only at a certain place, or at certain times, or between certain hours, or for a particular purpose, or on condition that it shall commence or become void or, voidable on the happening of a specified event or the performance or non-performance of a specified act 3) Apparent and Non-Apparent Easement: An apparent easement is one the existence of which is shown or evidenced by some permanent sign, which upon careful inspection by a competent person would be visible to him. For example An easement of drainage is an apparent easement. A tight to pass through a door, a right of access of light etc. Doors, windows and drains are apparent easementas they are visible to all persons. 24Strictly for Internal Circulation - KCL Non apparent easements are those rights which are in use but there is no visible proof or sign of their beiF 1g used and that can not be seen by carefully seeing. For example, Right of a person to stop another to construct house in his land adjoining to that person's land, 4) Permanent and Limited Easement: According to Section 6 of Indian Easement Act, 1882 the easements are permanent when the dominant owner is entitled to enjoy them for all time and under all circumstances, without any condition attached to the exercise thereof, e.g., a right to free access of light and air to and from a building through a window is a permanent easement. But where the exercise of an easement is limited to certain place, time or purpose, it is a limited easement. It may be exercisable on the condition that it shall commence or become void or voidable on the happening of a certain specified eventor the performance ofa specified act. Limited easements may be limited on the basis of limited purpose, season or occasion. For example, right of way for scavengers or for agricultural purposes or for getting water from a pond are instances of easements limited to particular purpose. Aright of passage for boats may be enjoyed only during the rainy season when the servient tenements submerged in water. Easements which terminate with the efflux of a certain specified period or on the happening of certain ascertained events are temporary easements. 5) Subordinate Easements: According to Section 9 of this Act- "Subject to the provisions of section 8, a servient owner may impose on the servient heritage any easement that does not lessen the utility of the existing easement. But he cannot, without the consent of the dominant owner, impose an easement on the servient heritage which would lessen such utility”. The further easements are subordinate to the prior easements. Hence they are treated as subordinate easements. An owner of the servient property already burdened with an easement can still grant further easements. Provided such further easements do not adversely affect the interest of a previous easement-holder. 6) Easements -of Necessity: Where one person transfers or bequeathes property to another- a. Ifan easement in other immovable property of the transferor or testator is necessary for enjoying the subject of the transfer or bequest, the transferee or legatee shall be entitled to such easement; or b. fan easement’ is the subject of the transfer or bequest necessary for enjoying other immovable property of the transferor or testator, the transferor or the legal representative of the testator shall be entitled to such easement; or c. fan easementover the share of one of them is necessary for enjoying the share of another of them, the latter shall be entitled to such easement; The easements are called easements of necessity. Aneasement of necessity is an easement without which the property in question cannot be enjoyed at all 85Strictly for Internal Circulation - KCL In case of Sukhdev v. Kedarnath, |.L.R. 33 All. 467, Hon'ble High Court of Allahabad observed that easement of necessity means those’ ea'sements without which property cannot be used and not those easements which are necessary for reasonable enjoyment of the property. The following are essentials of easement of necessity- a) Severance b) Necessity a. Severance: Partition or separation of property’ The following are the ways of separation- i) bytransfer; i) bybequest; i) bypartition; and iv) by operation of law. the most essential element of easement of necessity. : Necessity means that easement is highly necessary. "Highly essential” alone is the test of necessity and without which property cannot be used. 7) Quasi-Easements : Quasi-easements are those easements, which not being easements of absolute necessity, come into existence by presumed grant on the operation of law on a severance of two or more tenements, formerly united in the sole or joint possession or ownership of one or more persons. Some examples of Particular Quasi-easements- a. Aneasementoflightand air b. Easementofdrain. c. Therightto take water forirrigation. 4d. Arightofway. 8) Easements by Prescription : Section 15 of this Act has provision about acquisition of easement by prescription. This section lays down the conditions for quiring easement by prescription. Continuous Use ofland uninterrupted for thirty years confers right on user of land. Easements acquired under this section are called prescriptive rights. Prescription is a manner of acquiring and losing the right of property in a thing and all other rights by the efflux of time, The following are the essential requisites for the acquisition ofa easement by prescription- The right must be enjoyed independently The enjoymentmust be peaceable. The enjoyment must be "as an easement”. The enjoymentmust have been for a period of 20 years ending within two years before suit. Alternative plea of easementary rights. eaeo8 86Strictly for Internal Circulation - KCL The enjoymentmust be open. The enjoymentmust be by persons claiming ttle thereto. The enjoymentmust be as of right. Right by prescription can be acquired only against he person who can grant it and who is in a position to acquiesce in or resistits acquisition as he likes zem 9) Customary Easements: According to Section 18 of Easement Act- “An easement may be acquired in virtue of a local custom, Such easements are called customary easements". For example, By the custom of a certain village every cultivator of a village is entitled as such, to graze his cattle on the common pasture. A having become the tenant of a plot of uncultivated land in the village, breaks up and cultivates that plot. He thereby acquires an easement to graze his cattle in accordance with the custom. The easements which are acquired by virtue of a custom are known as customary easement Customary easements are created by virtue of continued uses of land for a considerably long period, e.g. the rightof privacy is a customary easement 10) Accessory Easement: Section 24 of Indian Easement Act, 1882 deals with accessory easement. The language of the section is- "The dominant owner is entitled, as against the servient owner, to do alll acts necessary to secure the full enjoyment of the easement; but such act must be done at such time in such manner as, without determine to the dominant owner, to cause the servient owner as little inconvenience as possible; and the dominant owner must repair, as far as practicable, the damage (if any) caused by the act to the servient heritage. Accessory Rights: Rights to do acts necessary to secure the full enjoyment of an easement are called accessory rights, Accessory or Secondary Easements: A right to do such acts is called an accessory right and is incidental to the right of easement. According to this section accessory rights are sometimes called "Accessory easements" or "Secondary easements". THE DISTURBANCE OF EASEMENTS Chapter V of Indian Easement Act deals with the disturbance of easements. It contains 5 sections (Section 32-37). Section 32 gives a right to the dominant owner to enjoy his easementary right without disturbance, The language of Section 32.is- Right to Enjoyment Without Disturbance: The owner or occupier of the dominant heritage is entitled to enjoy the easement without disturbance by any other person. illustration A, as owner of a house, has a right of way over 8's land. C unlawfully enters on 8's land, and obstructs Ain his right of way. Amay sue C for compensation, not for the entry, but for the obstruction. This section lays down a general proposition that the dominant owner has a right to enjoy his easement without obstruction. The dominant owner can sue the servient owner or even a stranger who obstructs him 87Strictly for Internal Circulation - KCL and seeks his redress. The obstruction or disturbance means creating illegal disturbance in enjoyment of easementby the owner of intangible property. For disturbance, itis sufficient to prove only any such act by which obstruction or any kind of inconvenience is created. Itdoes notmean total disturbance. Section 33 of this Act gives right to certain persons to file suit against disturbances. According to Section 33 of CasementAct- Suit for Disturbance of Easement: The owner of any interest in the dominant heritage, or the occupier of such heritage may institute a suit for compensation for the disturbance of the easement or of any right accessory thereto, Provided that the disturbance has actually caused substantial damage to the plaintiff Explanation |- The doing of any act likely to injure the plaintiff by affecting the evidence of the easement, or by materially diminishing the value of the dominant heritage, is substantial damage within the meaning of this section and Section 24 Explanation Il- Where the easement disturbed is a right to the free passage of light passing to the opening in a house, no damage is substantial within the meaning of this section, unless it falls within the first explanation or interferes materially with the physical comfort of the plaintiff, or prevents him from carrying on his accustomed business in the dominant heritage as beneficially as he had done previous to institution ofthe suit. Explanation ill- Where the easement disturbed is a right to the free passage of air to the openings in a house, damage is substantial within the meaning of this section ifit interferes materially with the physical comfort ofthe plaintiff, though itis notinjurious to his health. Mustrations - a. Aplaces a permanent obstruction ina path over which B, as tenant of C's house has right of way. This is substantial damage to C, for it may affect the evidence of reversionary right to the easement. b. A,as owner of a house, has a right to walk along one side of B's house, B builds a verandah overhanging the way about ten feet from the ground, and so as not to occasion any inconvenience to foot passengers using the way. Thisis not substantial damage toA. This section provides for the remedy of damages against one who obstructs the exercise of the easement The remedy is open to the owner as well as the occupier of the dominant heritage. It provides a remedy for infringementof the easementas well as the infringement of any right accessory to that easement. According to explanation 1 of Section 33, a suit for disturbance may be instituted only if the dominant owner has suffered substantial damage, What amounts to a substantial damage is stated in the first explanation of this section. It lays down two criteria which conclusively prove substantial damage, namely- a. _ifevidence of the easementis affected by the obstruction; and b. if the value, i.e., the market price of the dominant heritage is materially diminished by the ‘obstruction According to explanation 2 of this section, the disturbances of light are dealt with and in addition to. 88,Strictly for Internal Circulation - KCL abovementioned two criteria, two additional criteria are- a. ifthe obstruction materially interferes with physical comfort of the plaintif; and b. if the obstruction prevents the plaintif from carrying on the accustomed business in the dominant heritage as beneficially he had done previous to the institution of the suit Explanation 111- of this section says that the damage is substantial if the obstruction interferes materially with the physical comfort of the plaintiffthough itis not injurious to his health. Thus along with the two criteria laid down in Explanation |, the criterion laid down in Explanation Ill would, if satisfied, always compel a conclusion of substantial damage in case of an easement of air. Section 34 specially provides for a right of support. It says that the dominant owner can file suit only after occurrence of substantial damage. According to Section 34 of this Act- When Cause of Action Arises for Removal of Support: The removal of the means of support to which a dominant owneris entitled does not give rise to a right to recover compensation, unless and until substantial damage is actually sustained Three things are necessary to entitle a person to sue for compensation for disturbance of a right of easement- a. There musthave been a disturbance in the enjoyment of the right. b. The person claiming compensation must either be occupying the dominant heritage or must have some interest init. ¢. He must have sustained some substantial damage from such disturbance of the right by the act of servient. Section 35 provides a remedy of injunction to the dominant owner against wrongful disturbances, According to Section 35 ofthis Act- Injunction to Restrain Disturbance: Subject to the provisions of the Specific Relief Act, 1877 Section 52:to 57 (both inclusive), an injunction may be granted to restrain the disturbance of an easement- a. ifthe easementis actually disturbed- when compensation for such disturbance might be recovered under this Chapter; b. if the disturbance is only threatened or intended- when the act threatened must necessarily, if performed disturb the easement. The term ‘disturbance’ means the wrongful obstruction of the owner of an incorporeal hereditament in its exercise or enjoyment. Injunction in case of disturbance to easements is a matter of judicial discretion under Indian Law. In cases of disturbance of easement whether ‘damage or specific relief by way of injunction’ should be 89Strictly for Internal Circulation - KCL granted will depend upon the provisions of the Specific Relief Act and each case will have to be determined upon its peculiar facts and circumstances. Qualities of Injunction: The following are the qualities of injunction- a. Itisjudicial process. b. Its objectto stop a person from doing; and c. theactagainstwhich action is taken is wrong. Kinds of Injunctions: Kinds of Injunctions: a. Temporary Injunction: The order issued for a definite period of tll further order of the Court is called temporary injunction. Such order can be issued at any time, b. Perpetual Injun Such orders are passed only at the time of decision of the case. Such injunction continues so long asitis not cancelled by the Court. ©. Mandatory Injunction: Such order binds the defendant to make status quo when plaintiff has applied forit Section 36 of this Act is very important in nature. It gives protection to servient owner. The dominant owner can not himself abate the wrongful obstruction of an easement, According to Section 36 of the Act- Abatement of Obstruction of Easement: Notwithstanding the provisions of Section 24, the dominant ‘owner cannot himself abate a wrongful obstruction of an easement. This Section lays down that f the survient owner wrongfully obstructs the dominant owner in the exercise of an easement, the dominant owner may go to a court of law for damages or an injunction but he himself cannot go to the servient tenement in order to remove the obstruction. The dominant ‘owner cannot personally remove the obstruction. Thus an attempt on the part of the dominant owner to remove the obstruction himself would be illegal under this section. EXTINCTION, SUSPENSION AND REVIVAL OF EASEMENTS: Extinction of Easements Sections 37-51 of this Act deal with extinction, suspension and revival of easements. Section 37-47 deal with extinction of easement. Extinction means end of easement. Extinction of easement may be by any of the following methods - i. Extinction by dissolution of right of servient owner. ji. Extinction by release. il, Extinction by revocation. iv. Extinction on expiration of limited period or happening of dissolving condition. 90Strictly for Internal Circulation - KCL v. Extinction on termination of necessity. vi. Extinotion of useless easement. vii. Extinction by permanent change in dominantheritage. viii. Extinction on permanentalteration of servient heritage by superior force, ix. Extinction by destruction of either heritage. x. Extinction by unity of ownership. xi, Extinction by non-enjoyment. 1. Extinction by Dissolution of Right of Servient Owner: When, from a case whiCh preceded the imposition of an easement, the person by whom it was imposed ceases to have ‘any rightin the servient heritage, the easementis extinguished, Mlustrations - a. A transfers Sultal1pur to B on condition that he does not marry C, B, imposes an easement on Sultanpur. Then B marries C, B's interest in Sultc:llIpur ends, and with it the easement is extinguished, b. A, in 1860, let Sultanpur to B for thirty years from the date of the lease. B, in 1861, imposes an easement on the land in favour of C, who enjoys the easement peaceable and openly as an easement without interruption for twenty-nine years, 8's interest in Sultanpur then ends, and with it C’seasement This Section only applies to easements ~/grant Itlays down a general principle that anybody who has a contingent or a limited interest in the servient tenement can grant an easement which would terminate with his own interest In fact this section is, 2omplimentaryto section 8. Itlays down in positive terms what isimplicitin section 8, 2. Extinction by Release: According to Section 38- "An easement is extinguished when the dominant ‘owner releases it, expressly or impliedly, to the servient owner. Such release can be made only in the circumstances and to the extent in and 10 which the dominant owner can alienate the dominant heritage, ‘Aneasementmaybe released as to part only of the servientheritage, Explanation 1-An easements impliedly released- a. where the dominant owner expressly authorises an act of a permanent nature to be done on the servient heritage, the necessary consequence of which is to prevent his future enjoyment of the easement, and such actis done in pursuance of such authority; b. where any permanent alteration is made in the dominant heritage of such a nature as to show that the dominant owner intended to cease to enjoy the easementin future. Mlustration - a. A, Band C are co-owners of a house to which an easement is annexed, A, without the consent of Band C, releases the easement This release in effectual only as against A and his lega,! otStrictly for Internal Circulation - KCL representatives, b. Agrants B an easement over A's land for the beneficial enjoyment of his house. B assigns the house toC, B then purports to rele.ase the easement The release is ineffectual. Section 38 says that an easement is extinguished when the dominant owner voluntarily releases it The release may be express or implied, Express Release: It can occur by a declaration, oral or-written, because there is no statute requiring an express release to be written. The relinquisher must be competentto relinquish. Implied Release: A release is implied under two circumstances, one affecting the servient heritage [Explanation |(a)] and the other affecting the dominant heritage [Explanation I (b)}- Explanation 1- (a) To constitute implied release under clause (a) of Explanation (1), the following things are necessary- a. The dominant owner has expressly authorised the sef character, int owner to do a certain act of permanent b. The consequence of such act must be to prevent the future E?njoyment of the easement and the authorised act niusthave been done. Explanation 1- (b) For the application of his clciUse, following conditions must be satisfied- a. Apermanentalteration must have been effected in the dominant heritage. b. Itmust show thatthe dominant owner intends to cease to enjoy the easementin future. Explanation Il - The second explanation to the section lays down the mere non-user is no release within the meaning of this section; mere non-user does not amount to an implied release (A.IR. 1931 Mad. 451). 3. Extinction by Revocation: According to Section 39- "An easement is extinguished when the servient owner, in exercise of a power reserved in this behalf, revokes the easement’. When dominant owner takes back easement in the use of this protected right, the easement extincts. By the express or implied act of servient owner easementalso extincts. 4. Extinction Expiration of Limited Period or, Happening of Dissolving Condition: According to Section 40 of this Act- An easement is extinguished where it has been imposed for a limited period, or acquired on condition that it shall become void on the performance or non-performance of a specified act and the period expires or the condition is fulfilled. Where a landowner leased a plot of land with a house on it to H for twenty-one years and then sold an adjoining plot, over which H had a right to light, to A, and the free hold of its plot to B, who enforced a condition of re-entry in H's lease and put to an end to it, it was held that the right to light which was granted to H as tenant came, to an end with the expiry of the lease and did not survive to B, even for the 92Strictly for Internal Circulation - KCL remaining portion of twenty-one years. 5, Extinction on Termination of Necessity: According to Section 41 of this Act- "An easement of necessity is extinguished when the necessity comes to an end” Ilustration- A grants B a field in accessible except by passing over A's adjoining land. B afterwards purchases a part of that land over which he can pass to his field. The right of way over A's land which B had acquiredis extinguished. This section codifies the principle that an easement of necessity does not last longer than the necessity. Away of necessity, therefore, is extinguished when the necessity terminates. An easement of necessity is extinguished neither by alteration of the dominant tenement nor by nonuser but only by the disappearance of the necessity (A.|.R. 1947 Pat. 266) 6. Extinction of Useless Easement: According to Section 42 of t.his Act- "An easement is extinguished when it becomes incapable of being at any time and under any circumstances beneficial to the dominant owner”. 7. Extinction by Permanent Change in Dominant Heritage: According to Section 43 of this Act"Where, by ‘any permanent cnange in the dominant heritage the burden on the servient heritage is materially increased and cannot be reduced by the servient owner without interfering with the lawful enjoyment of the easement, the easements extinguished unless- a. it was intended for the beneficial enjoyment of the dominant heritage, to whatever extent the easement should be used; or b. the injury caused to the servient owner by the change is so slight that no reasonable person would complain ofit; or c. the easementis an easement of necessity. Nothing in this section shall be deemed to apply to an easement entiting the dominant owner to J supportthe dominantheritage. 8. Extinction on Permanent Alteration of Servient Heritage by Superior Force: According to Section 44 of this Act- "An easement is extinguished where the servient heritage is by superior force so permanently altered that the dominant owner can no longer enjoy such easement” Provided that, where a way of necessity is destroyed by superior force, the dominant owner has a right toanother way over the servient heritage, and the provisions of section 14 apply to such way. 9. Extinction by Destruction of Either Heritage : According to Section 45 of this Act- "An easement is extinguished when either the dominant or the servient heritage is completely destroyed”. Mustration - Ahas a right of way over a road running along the foot of a sea-clif. The road is washed away by a permanent encroachment of the sea. as easements extinguished. 10. Extinction by Unity of Ownership: According to Section 46 of this Act- "An easement is extingui-Shed 93Strictly for Internal Circulation - KCL when the same person become entitled to the absolute ownership of the whole of the dominant and servientheritage” Mustration— a. The serient owner acquires the dominant heritage in connection with a third person; the easement isnotextinguished b. The joint owners of the dominant heritage jointly acquire tile servient heritage; the easement is, extinguished. c. Abas a right of way over 8's road. 8 dedicates the road to the public. A's right of way is not extinguished. 11. Extinction by Non-Enjoyment: According to Section 47 of this Act, A continuous easement is extinguished when ittotally ceases to be enjoyed as such for an unbroken period of twenty years. ‘discontinuous easements extinguished when, fora like period, ithas notbeen enjoyed as such Suspension of Easements: Section 49 of Indian easement act 1852 lays down that unity of possession of the dominant and servie'nt heritages merely suspends an easement, But unity of estate would be existing as provided in Section 46. For Example - Where the dominant owner, who had an easement of way took possession of the servient tenementas a lease is the suspension of easement by unity of possession. Revival of Easements: Section 51 of Indian Easement Act deals with how an easement already extinguished can be revived. Where an easement is extinguished by the operation of section 45, it can be revived within twenty years of the destruction; the destroyed heritage is restored to its original position. And the easement is also revived which is extinguished under Section 46 by the unity of ownership. It is" revived when the cause of unity is removed by, the decree of a court of law. An easement of necessity extinguished by unity of ownership revives when the unity of ownership ceases from any other cause. Asuspended easement is also revived on the removal of the cause of suspension. But the period of such suspension should be less than twenty years. Itis cleared from the illustration of this section that! unity of occupation. continues upto a period of 20 years, the easementis totally destroyed and after such period does not revive on separation. LICENCES Chapter VI of Indian Easement Act, 1882 (Section 52-64) deals with licence. Section §2 of this Act defines licence. Definition of Licence: According to Section 52 of this Act- "Where one person grants to another, or to a definite number of other persons a right to do or continue to do, in or upon the immovable property of the grantor something which would, in the absence of such right, be unlawful, and such right does not amount 94Strictly for Internal Circulation - KCL toan easement or an interestin the property the rights called a licence’. According to Austin, right is unlimited from the point of view of use, uncontrolled from the point of view of utilisation and unlimited from the point view of time. Licence as defined by. Section 52 means grant of permission by a person to the other, The grant of license may be express or implied which can be inferred from the conduct of the grantor. Alicense may be oral also. Under Section 52 of the Easement Act, a licence cannot be granted only in favour of definite number of persons and not in favour of fluctuating body or individuals, Alicence may be of two kinds- a. Abare licence whichis purely a matter of personal privilege. b. Licence coupled with a grantorinterest. Characteri ics of a Licence: The following are the essential features ofalicence- a. Arises out of permission and nototherwise. b. Itisa personal privilege totally unconnected with ownership of the immovable property. ©. Itdoes not create an interestin the property in respect of which itis granted. 4d. Itisnot-transferable and non-heritable. e. tis in the nature of a positive right and not a preventive right. There can be no licence to prevent a person from doing something Alicence does not create an interest in land as it is merely a leave to do a thing lawfully which otherwise would be unlawful and itis thus a matter purely personal between the grantor and the grantee. Itis ordinarily a personal right and carries with it the incident of non-transferability. A licence elapses with the death of the licensor. The Criteria to Determine Licence: The important criterion for determining whether the donee was a licensee or whether some interest in the property has been transferred to him is to see if exclusive possessionis granted. Exclusive right of occupation of a landis in law a demise of the land itself. Acceptance ofa licence fee subsequent to the revocation of licence does not amount to acquiescence of possession of he licensee or trespasser. It merely extends the period of licence. Difference Between Licenses and Easement: |. Alicence originates in permission while an easement originates in a grant, ILA licence is purely a personal privilege whereas easement is a right appurtenant to immovable Property. Ill Alicence is not transferable whereas easement passes with the property. IV. Alicence does not create an interest in immovable property, a licensee is not entitled to sue in his ‘own name whereas easement does create an interestin immovable property. \V.Alicenceis always a positive right but an easementis both a positive and negative right. 95Strictly for Internal Circulation - KCL Atransferee of the grantor ofa licence is not bound by the licence while an easementis enforceable against anyone in whose hands the property over which itis exercisable passes. Difference Between Lease and Licence: The cardinal distinction between a lease and licence is that in a lease there is a transfer of interest in land whereas in the case of licence there is no such transfer although the licensee acquires a right to occupy the land. The question whether a document is a lease or licence turns on the actual intention of the parties in spite and irrespective of possession of the grantee under, the particular document. The crucial testis whether the instrumentis intended to create an interest in the property, the subject matter of agreement. Ifitis intended to create in the property, itis lease, ifit does not create, itis a licence. Another distinction between a lease and a licence is that if the effect of the instrument is to give the holder the exclusive right of occupation of the land, though subject to certain reservations, or to a restriction of the purposes for which it may be used, itis a lease; ifthe contractis merely for the use of the property in a certain way and on certain terms, while it remains in the possession and control of the owner, itis a licence. Section 53 of the Act has provision for who may grantlicence. Who may Grant Licence: According to Section 53 of this Act- “Alicence may be granted by anyone in the circumstances and to the extent in and to which he may transfer his interest in the property affected by the licence". Section 53, provides in regard to the power to granta licence. The circumstances in which and the extent to which a licence may be granted are the circumstances in which and the extent to which the grantor of the "ence may transfer his interest in the property. A licence which has the practical effect of a transfer cannot be granted by a person who under his personal law has no power to effect such a transfer. This section clearly shows that it is not only the owner who can grant a licence but any person who can transfer his interest in the property. Section 54 says that the grant may be express on implied. Grant may be Express or Implied: According to Section 54 of this Act- "The grant of a licence may be express or implied from the conduct of the grantor, and an agreement which purports to create an easement, butis ineffectual for that purpose, may operate to create a licence” According to Section 54 it is not necessary for the purpose of creating a licence that the grant should be in writing. It may be created by parole and implied from conduct. In other words grant may be express or implied. The section further provides that agreements which are ineffectual to create an easement may create alicence. Implied Licence: A licence need not be created by express words may be inferred or implied for the conduct of the parties. Section 56 tells us about a particular kind of. icence' i.e. accessory licence. Accessory Licences Annexed by Law: According to Section 55 of this Act- “All licences necessary for the 96Strictly for Internal Circulation - KCL enjoyment of any interest, or the exercise of any right, are implied in the constitution of such interest or right. Such licences are called accessory licences”, Asells the trees growing on his land to B. Bis entitled to go in the land and take away the trees. The section embodied the well-recognised principle of law that when an interest or a right is granted in some thing everything which is necessary for the enjoyment of that interest or right is also deemed to have been granted therewith. Such auxiliary rights as without which the principal right cannot be enjoyed and in the absence of which the grant would become useless are called accessory licences annexed by law and are implied in the very constitution of such right. Licences are transferable in nature but under certain circumstances that are given in Section 56. Licence When Transferable: According to Section 56 of this Act- "Unless a different intention is expressed or necessarily implied a licence to attend a place of public entertainment may be transferred by the licensee: but, save as aforesaid, licence cannot be transferred by the licensee or exercised by his servants oragents". This section lays down the following rules- a. Alicence being a mere personal privilege, is ordinarily non-transferable. b. tis ordinarily exercisable by the person to whomitis granted. ©. If, however, there is a contrary intention, expressed, or necessarily implied, a licence can be transferred or can be exercised by others. There are two exceptions — ‘a. where the licence is a licence to attend a place of public entertainment; and b. where it is coupled with a grant of immovable property or of an interest in the immovable property stich as a profita prendre. Itis the duty ofthe grantor to disclose the defects in the licensed property of which he is aware. Grantor's Duty to Disclose Defects: According to Section 57 of this Act- “The grantor of licence is bound to disclose to the licensee any defect in the property affected by the licence likely to be dangerous to the person or property ofthe licensee, of which the grantor is, arid the licensee is not aware” Section 57, imposes a duty upon the licensor to disclose the defects existing in his property to the licensee, of which the grantor is and the licensee is not aware. If the failure on the part of the licensor to do so, is an injury to the licensee, the licensor would be liable to damage as under the common law. Grantor's Duty not to Render Property Unsafe: According to Section 58 of this Act- "The grantor of a licence is bound notto do anything likely to render property affected by the licence dangerous to the person or property of the licensee". Grantor's Transferee not Bound by Licence: According to Section 59 of this Act- "When the grantor of 7Strictly for Internal Circulation - KCL the licence transfers property affected thereby, the transferee is not as such bound by licence’. According to this section a transferee of the grantor who was not a party to the original licence is bound by the licence. In other words, where the licensor transfers the property to another, the licence ceases to exist by the operation of law. This section is not applicable to a case in which one of the two joint licensors’ transfers lie in the property. The transferee contemplated in the section mustbe a person who was not licensor himself. Alicence may be revoked and Section 60 contains the condition in which a licence may be revoked by the grantor. The revocation may be express or implied Licence When Revocable: According to Section 40 of this Act, a licence may be revoked by the grantor, unless- a. Itis coupled with a transfer of property and such transfer is in force; b. the licensee, acting upon the licence, has executed a work of a permanent character and incurred expenses in the execution Section 60 lays down that a licence may be revoked by the grantor, except in two circumstances namely (a) when the licence is coupled with a transfer of the property, and such transfer is in force; and (b) when a licensee has, acting upon the licence, executed a work of a permanent character and incurred expenses in executing it Alicence which is revocable under the section could be made irrevocable and policed outside the ambit of the section by an agreement between the parties [AIR.'970"SC 970 (971)]. The creation of a tenancy in respect of an immovable property always means transfer of interest in immovable property to the tenant. Tenancy rights constitute immovable property. Therefore, when the landlord let out the premises in question to the tenant, there was transfer of interest in the immovable property by the landlord to the tenant. (Magan Lal v Chiman Lal, AIR 1980 Guj. 15). Mere termination of the licence of a licensee does not enable the licensee to claim adverse possession. unless and until he sets up a title hostile to that of the licensor after termination of his licence. (AIR 1984 SC 930). Revocation oflicence may be express or implied. According to Section 61-"The revocation of alicence may be expressed orimplied’ Mustration- a. A, the owner of a field, grants a licence to use a path across it, A, with intent to revoke the licence locks a gate across the path. The licence is revoked. b. A, the owner ofa field, grants a licence to B to stock hay on the field. Alets or sells the field to C. The licence is revoked. 98Strictly for Internal Circulation - KCL Alicence may be deemed to be revoked under certain circumstances. Licence When Deemed Revoked: According to Section 62 of this Act, a licence is deemed to, be revoked- a. when, from a cause preceding the grant of it, the grantor ceases to have any interest in the property affected by thelicensee; b. when the licensee releases it, expressly or impliedly to the grantor orhis representative; ¢. when it has been granted for a limited period, or acquired on condition that it shall become void on the performance or non-performance of a specified act, and the period expires or the condition is, fulfilled; d._ where the property affected by the licence is destroyed or by superior force so permanently altered that the licensee can no longer exercise his right; e. where the licensee becomes entitled to the absolute ownership of the property affected by the licence; where ‘the licence is granted for specified purpose and the purpose is attained, or abandoned, or becomes impracticable; g. where the licence is granted to the licensee as holding in a particular office, employment or character, and .such office, employment or character, ceases to.exist;, h. where the licence totally ceases to be used as such for an unbroken period of twenty years, and such cessation is notin pursuance of a contract between the grantor and the licensee; i. inthe case ofan accessory licence when the interest of right to which itis accessory ceases to exist. This section enumerates the various circumstances under which a licence shall be deemed to be revoked, no matter whethr the licence is revocable or irrevocable. According to clause (a) of this section, the licence is deemed to be revoked, when the grantor cases to have any interest in the subject-matter of the licence from a cause preceding the grant of it. Thus if a person having a life interestin the property dies, the licence granted by him, while hewasinpossession 0 enjoyment of the property in question, will be deemed to be revoked. According to clause (b) of this section, the licence may be extinguished be under certain circumstances. According to clause (c) of this section, a licence granted fér a limited period will be deemed to be revoked when the period expires. It further provides that when a licence is granted or acquired on condition that it shall become void Sn the performance orA1on-performance of a specified act the licence will be deemed revoked when the condition is fulfilled, According to clause (d) of this section, when subject matter of licence is destroyed, the licence is revoked automatically. if the property is not destroyed completely and that facility can be used in any way, the licence will continue. When the alteration is only temporary, the licence may remain suspended until the property is again 99Strictly for Internal Circulation - KCL restored to a condition fitfor its exercise. According to clause (e) of this section, a licence ceases to be enjoyed as a licence when the property in the land on which itis exercised becomes vested in absolute ownership of the licensee. According to clause (f) of this section, where a licence is granted for specified purpose and when the purpose is attained, abandoned or has become impracticable a licence will be deemed to be revoked under this clause. According to clause (g) of this section, a licence is deemed to be revoked where the office, employment or character of the licensee for which licence was granted ceases to exist. According to clause (h) of this section, an easement is extinguished which is not enjoyed for full twenty years. The use of the words "as such” is very significant. It shows that in order to keep a licence alive, it should be usedas licence. According to clause (i) of this section, an accessory right or licence is deemed to be revoked when the licence ends. To invoke the equitable doctrine of acquiescence it must be established that the conduct of the parties has been such that equity would presume the existence of a contractjustfying the action in dispute as a matter of plain implication. Licensee's Rights on Revocation (Section 63) : Where a licence is revoked, the licensee is entitled to reasonable time to leave the property affected thereby, and to remove any goods which he has been allowed to place on such property. Licensee's Rights on Eviction (Section 64): Where the licence has been granted fora consideration, and the licensee, without any fault of his own, is evicted by the grantor before he has fully enjoyed, under the license, the right for which he contracted, he is entitled to recover compensation from the grantor. IMPORTANT QUESTIONS Q.4,._ Define easement. Write its nature and characteristics also. Q2, Howisan easement acquired? Q3. _ Define Licence. Distinguish between lease and licence. Q.4. Howmayalicence be revoked? Q.5. Whatare the different ways by which an easement may be extinguished? Q.6. Write shortnotes on - Revival ofeasement Creation of easement. ‘Supervision of easement. Disturbances of easement. aegp 100Strictly for internal Circulation - KCL SUGGESTED READINGS The Transfer of PropertyAct Prof. R. K. Sinha The Indian EasementAct S.k. Agarwal The Transfer of PropertyAct Bare Act The Indian EasementAct Bare Act The Transfer of PropertyAct G.P. Tripathi The Transfer of PropertyAct V.N.Pandey Commentary on Transfer of Property Act, 1882 Dr. S.K. Awasthi NOORONS 101