Course Manual
28 February 2018 08:52
Portions: Hypos.
Make case notes. Concentrate on facts. Clear concepts
Can take Registration Act
Week Broad Topic Particulars
1 Introduction Meaning of property, theories of
property.
Property, capital, and the
modern economy.
General Overview of relevant
land and property legislations.
2-3 Constitutional Law Eminent Domain, Right to
and Property Property as a Fundamental
Right;
44th Amendment Act.
3-4 Types of Property Definition of Movable and
Immovable property.
5 Registration and Requirement of Registration/
Stamp Duty Stamping; and consequences of
Failure to Register/ Stamp.
5 Transfer What is Transfer? What cannot
Property Law Page 1
Essential readings - Section Nos and Secondary Literature
cases (if any)
Meaning of property, theories of Alison Clarke and Paul Kohler,
property. Property Law: Commentary and
Property, capital, and the modern Materials (Cambridge: Cambridge
economy. University Press, 2005), 19–26.
Hohfeld’s Fundamental Legal
Conceptions. WH Hohfeld, Some Fundamental Legal
Overview of relevant land and Conceptions as Applied in Judicial Reasoning,
property legislations, including in 23(1) Yale LJ 16 (1913).
relation to rent control, land
reforms, land ceiling. WH Hohfeld, Fundamental Legal Conceptions as
Applied in Judicial Reasoning, 26(8) Yale LJ 710
(1917).
Articles 19(1)(f) and Article 31 of Namita Wahi, Property, Oxford Handbook of the
the Constitution before the 44th Indian Constitution (Oxford: Oxford University
Amendment Act 1978. Press, 2016), p. 943-966.
300A of the Constitution of India
1. Bela Banerjee v. State of West Austin, Granville. Working a
Bengal- AIR 1954 SC 170 Democratic Constitution: The Indian Experience.
2. Vajravelu Mudaliar v. Special New Delhi; New York: Oxford University Press,
Deputy Collector- AIR 1965 SC 1999. Pp. 69-122, 196-277, 420-430.
1017
3. Union of India v. Metal R Rajesh Babu, Constitutional Right to Property
Corporation of India Ltd- AIR 1967 in Changing Times: The Indian Experience
SC 634 (September 13, 2012). Vienna Journal on
4. State of Gujarat v. Shantilal International Constitutional Law, Vol. 6, No. 2,
1969(1) SCC 509 pp. 213-247, 2012.
5. R.C. Cooper v. Union of India, 1970
(2) SCC 298 (Bank Nationalization
case)
6. KT Plantation v. State of
Karnataka, (2011) 9 SCC 1
S. 3 TPA, S. 3(26) General Clauses Specific Relief Act – S. 5 and S. 6
Act and the Registration Act.
7. Ananda Behera v. State of Orissa Commissioner Of Central Excise,Ahmedabad v
(1955) 2 SCR 919 Solid And Correct Engineering Works And
8. Shantabai v State of Bombay, AIR Others, (2010) 5 SCC 122
1958 SC 532
9. Suresh Chand v. Kundan (2001)
10 SCC 221
10. Duncan Industries Ltd. v State of
Uttar Pradesh, (2000) SCC 633
11. Triveni Engineering & Industries
Limited v. Comm. of Central
Excise (2000) 7 SCC 29
12. Suresh Chand v. Kundan (2001)
10 SCC 221
13. State of Orissa v. Titaghur Paper
Mills Company Limited, AIR 1985
SC 1293
14. Ananda Behra v. State of Orissa
(1955) 2 SCR 919
S. 17 and 18 of the Indian Indian Stamp Act to be referred to and the
Registration Act schedule to be discussed briefly
Indian Stamp Act
15. Suraj Lamps Pvt. Ltd. v State of
Haryana, 2011 (11) SC 438.
Ss. 2(d), 5, 6, 43, 8 and 9, TPA.
5 Transfer What is Transfer? What cannot
be Transferred? Operation of
transfer?
6 General Rules of Conditional Transfers, Restraints
Transfer on Alienation and Enjoyment.
Ss. 2(d), 5, 6, 43, 8 and 9, TPA.
16. V. N. Sarin v. Ajit Kr. Poplai AIR
1966 SC 432
17. Kenneth Solomon v. Dan Singh
Bawa, AIR 1986 Del 1
Ss. 10, 11 and 40, 12; 25-34, TPA.
18. Muhammad Raza v. Abbas Bandi Delhi Dayalbagh Co-Operation House Building
Bibi, (1932) I.A. 236 Society Limited v Registrar Cooperative Societies
19. Zoroastrian Co-operative Housing and others, 2012 (195) DLT 459
Society Ltd. V. District Registrar,
Co-op. Societies (Urban) (2005) 5 Hukmi Chand v Jaipur Ice and Oil Mills Company,
SCC 632 AIR 1980 RAJ 155
20. K. Muniswamy v. K.
Venkataswamy, AIR 2001 Kant.
246
21. Tulk v. Moxhay (1848) 2 Ch. 774

Vested and Contingent Interest, Ss. 13-24, TPA. Kokilambal and Others v N. Raman, (2005) 11
Transfer to Unborn Persons, 22. Ma Yait v The Official Assignee SCC 234
Rule against Perpetuity. (1930) 32 BOMLR 125
23. Rajes Kanta Roy v Santi Debi AIR
1957 SC 255
7-8 Equitable Rules Ss. 38, 39, 41-43, 48-51, TPA. Patil, Yuvraj Dilip, Ostensible Ownership Vis a Vis
when rights Benami Transaction in India (December 20,
conflict 2012). Available at SSRN:
http://ssrn.com/abstract=2191951

Salient Features of the Benami Transactions

(Prohibition) Amendment Act, 2016
Transfer of Lis Pendens; Ss. 52 & 53 TPA. Would arbitration amount to lis pendens?
property under FradulentFraudulent Transfer. 24. Abdul Shukoor v. Arji Papa Rao
litigation, AIR 1963 SC 1150
Fraudulent 25. Guruswamy Nadar v. P. Lakshmi
Transfer Ammal (Dead) Through LRs. &
Ors., (2008) 5 SCC 796.
26. Jayaram Mudaliar v. Ayyaswamy,
AIR 1973 SC 569
27. Supreme General Films Exchange
Ltd v. Maharaja Sir Brijnath
Singhji Deo, AIR 1975 SC 1810.
Part Performance S. 53A, TPA
9 Sale, Exchange, Meaning; Difference; Sale Deed Ss. 54 – 55; 118 -121; 122-126. Ahmad, Tabrez, Comparative study of Gift under
Gift v. Agreement to Sell; 28. Vidyadhar v. Manikrao, AIR 1999 Islamic Law and Transfer of Property Law: Indian
Rights and Liabilities of Buyer SC 1441 perspective (September 11, 2009). Available at
and Seller. 29. Suraj Lamps Pvt. Ltd. v/s State of SSRN:
Haryana and another, 2011 (11) http://ssrn.com/abstract=1471926.
SC 438.
30. Satyawan v. Raghbir, AIR 2002
P&H 290
31. John Thomas v Joseph Thomas,
AIR 2000 Ker 408
32. Subhas Chandra v Ganga Prasad,
AIR 1967 SC 878

10 Lease,[IS1] License Meaning of lease; Types of Ss. 105 – 109. Kiran Wadhwa, Maharashtra Rent Control Act
lease; Overview of rent control 1999: Unfinished Agenda, EPW, Vol. 37.2002, 25,
Rights and duties of Lessor and legislations. p. 2471-2476
Lessee. 33. Sivayogeswara Cotton Press v. M.
Panchaksharappa, AIR 1962 SC
413
34. Dhanpal Chettiar v. Yesodai
Ammal AIR 1979 SC 1745
35. Shanti Devi v. Amal Kumar AIR
1981 SC 1550
36. Laxmidas Bapudas v. Rudravva
2001 (2) SCC 409
Differences between a Lease S. 52 Indian Easement Act.
and License 37. Associated Hotels of India Ltd. v.
R.N. Kapoor (AIR 1959 SC 1262)
38. Bharat Petroleum Corporation
Ltd. v Chembur Service Station,

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 Ltd. v Chembur Service Station,
2011(4) SCALE 209, ¶18-20.
11-12 Mortgage and Introduction and Meaning; Ss. 58-98, 100.
Charge Nature; 39. Vidhyadhar v Manikrao AIR 1999
Essentials and Types; Right of SC 1441
Redemption and Clog on 40. Chaganlal v. Anantaraman, AIR
Redemption; 1961 Mad 415
Subrogation; 41. Mohiree Bibi v. Dharamdas
Marshalling. Ghose , (1903) ILR 30 Cal
42. Ganga Dhar v. Shankar Lal, AIR
1958 SC 770
43. Pomal Kanji Govindji v. Vrajlal
Karsandas Purohit, AIR 1989 SC
436 : (1989) 1 SCC 458
44. Shri Shivdev Singh & Anr vs
Sh.Sucha Singh AIR 2000 SC 1935
45. Sangar Gagu Dhula v. Shah
Laxmiben Tejshi, AIR 2001 Guj.
329
13 Adverse Possession S. 27 and Articles 64 and 65 of
the Limitation Act.
46. State Of Haryana vs Mukesh
Kumar & Ors on 30 September,
2011
14 Easements Definition, creation and Easements and Licenses Act.
extinction of easements
15 Revision

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Introduction
07 February 2018 08:38

There are two rights of cars, property rights and personal rights. A personal right over a property can be claimed against the Homework
person who has ownership rights. Personal rights can only be defended against the person who gave you the right. Property Under what section can I be penalised for
rights can be defended against the world. Property right is the right of ownership. burning my own property.

Property rights incentivise innovation when you know you get financial rewards. History has shown that land that is shared is
always plundered and destroyed. Tragedy of the Commons.
Example: Russia
When people don't have property rights and ownership they have control over no resources and therefore no power and they
thus are enslaved to their government. This leads to dictatorships abuse of power etc. Power is property. Property has
implications for freedom and democracy. Privacy and property rights are the two pillars for a free society. Governments contr ol
people either by attacking their privacy or their property.
Example: China's Big Data system/pride tokens , America's NSA
Europe's new data privacy right law
Clever Incentive Engineering

Pg. 5 general qualification for ownership

NMoore v. Regents of the University of California
https://www.casebriefs.com/blog/law/property/property-law-keyed-to-cribbet/non-traditional-objects-
Clarke%2c and-classifications-of-property/moore-v-regents-of-the-university-of-california-2/2/
Alison & P... The Courts and Legal Systems around the world want to preserve property rights and innovation

The state makes it illegal to use your body, your property in certain ways. Such as prostitution, suicide , organ selling etc.

Title Co-relations Opposite

Right Duty No-right
Privilege No-right Duty Some
Power Liability Disability Fundame...

Immunity Disability Liability

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Constitutional Law and Property
07 February 2018 10:00

Namita Wahi, Land Acquisition, Development and the Constitution

When awarding compensation it is not only monetary it is also the non-monetary aspects that have
to be given . How restrained is 'public purpose.'? The new law , has it put in consent? Whether
consent is needed for taking the land over? If you want to understand the power dynamics between
the state and the people, look at the private property rights .

Constitution
Article 19(1)(f) guaranteed to all citizens the fundamental right to ‘acquire, hold and dispose of
property.’ Article 19(6) made the right subject to ‘reasonable restrictions in the public interest’ by
the federal and state legislatures. Article 31 of the Constitution provided that any state acquisition of
property must only be upon enactment of a valid law, for a public purpose and upon payment of
compensation. Article 31 codified what is often described in political and legal parlance as the
‘eminent domain’ power of the state.

The paradox implicit in guaranteeing a fundamental right to property, while simultaneously

embarking on a socialist developmental project of land reform and state planned industrial growth,
predictably resulted in tensions between the legislature and the executive on the one hand, that
sought to implement this development agenda, and the judiciary on the other, which enforced the
fundamental right to property of those affected.

The following decades saw conflict between Parliament and the Supreme Court, with the court
invalidating acquisition laws for violating the fundamental right to property and Parliament
responding with numerous amendments to the Constitution that redefined property rights. This
conflict culminated in the 44th Amendment to the Constitution, which abolished the fundamental
right to property in 1978. The same amendment however, inserted Article 300A in the Constitution,
which provided that no person shall be deprived of his or her property without the authority of a
valid law

There have been attempts to repeal the act and replace it with Land Acquisition Rehabilitation and
Resettlement Bill 2011 which is currently pending in Parliament because of land conflicts.

Land Acquisition Act 1894

Purpose for which land may be acquired: Section 3(f), public purpose - inclusive definition which SC
has held will be judicially determined as time changes. Section 39, land may be used by companies if
the work is likely to prove useful to the public

Procedure: The procedure for acquisition of land includes notification of land to be acquired
(Section 4), hearing of objections (Section 5A), final declaration of acquisition (Section 6) and
payment of compensation (Sections 23 and 24)
All disputes are to be settled in civil courts (Section 18).

Compensation: Section 23(1) of the act further provides that compensation for land acquisitions
must be computed at the market value of the land acquired.

Problems with it: 1. recognises right of only title holders 2. inclusive definition of public purpose
which SC said was elastic 3. compensation as fair equivalent of the value of land (exclusion of judicial
review by Parliament) 4. procedure of land acquisition (5. state/central conflicts in principles of
compensation)

Land Acquisition Rehabilitation and Resettlement Bill

1.change in definition of persons interested but landless laborer's and cattle farmers etc. are

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 1.change in definition of persons interested but landless laborer's and cattle farmers etc. are
affected families and they can't raise objections
2.Section 3 (za) contains a more detailed listing of ‘public purposes' but still has broad residuary
purpose as that which 'benefits the general public'
3. provisions for compensation both value and delays
4. while it can be used by private people, 80% of affected families should consent to acquisition. Also
private parties are bound by rehabilitation requirements of bill.
5. Social Impact Assessment for large projects but this committee has bureaucrats and not experts

The protections of rights and properties of Scheduled Tribes is instrumental. A major problem that
also needs to be addressed is arbitrary implementation of the Act which allows the government and
industrialists to collude and take advantage of smaller and minority groups. The removal of judicial
review provisions for land acquisition further prove this point.

1. Bela Banerjee v. State of West Bengal- AIR 1954 SC 170

Appeal from a judgement of the HC to hold certain provisions of the West Bengal Land Development
and Planning Act, 1948 unconstitutional and void. Enacted to provide provisions for settlement of
immigrants who migrated due to communal violence in East Bengal which provided acquisition for
public purposes including the aforementioned. The HC held the compensation provisions that
allowed the government to not pay the actual market value of the land on the date void. Proviso b of
Section 8 allowed the government to not pay compensation of more than the value of the land on
31-02-1946. Article 31(2) requires that the law provide compensation for property taken. Entry 42 of
List III allowed the state legislative discretion to determine principles of compensation.

The court said that the above while being true also means that the State must make principles that
will make the compensation a just equivalent of what the person is being deprived of. Full
indemnification of the expropriated owner is required by the Constitution. The methodology used
was arbitrary. It was pegged to a certain date's value of land and ignoring the value of the land as on
the date of acquisition cannot be regarded as compliance in the letter and spirit of Article 31(2). The
fixing of an anterior date may not be arbitrary. Any principle for determining compensation that
denies the owner increment in value cannot result in the ascertainment of the true equivalent of the
land appropriated. Whether such principles take into account all the elements which make up true
value of property appropriated and exclude matters which are neglected , is a justiciable issue to be
adjudicated by the court.

The latter part of proviso (b) to Section 8 was held unconstitutional and void.

2. Vajravelu Mudaliar v. Special Deputy Collector- AIR 1965 SC 1017

Filed under Article 32 challenging constitutional validity of the Land Acquisition (Madras
Amendment) Act, 1961. Through a government notification, the plaintiffs lands were sought to be
acquired by the state under the Land Requisition Act 1894 for development of neighborhoods in
Madras. The respondent though another notification said that he was authorized to take those lands
under Section 17(4) because there was an urgency. Therefore application of Section 5(a) had been
dispensed with. The act in question was enacted for laying down principles for compensation
different from those under the 1894 Act.

The petitioner was to be paid compensation under the Land Acquisition (Madras Amendment) Act,
1961 and this Act the petitioner holds offends Articles 14, 19 and 31(2). The respondents argued that
were saved by Article 31-A. Even if not, the provisions did not offend either of the aforementioned
provisions. They also contended that after the (Constitution Fourth Amendment) Act 1955 the
expression "compensation" carried a different meaning than that given to it in the Bela Banerjee
case and therefore the amount given the impugned act is justiciable.

Article 31-A lifts the ban on the State to fix compensation and acquire land for public purpose as
under Article 31(2) and 2-A to enable the State to implement the pressing agrarian reforms. This
object of the Constitution is implicit in Article 31-A. Therefore, Article 31 A doesn't apply since the

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 object of the Constitution is implicit in Article 31-A. Therefore, Article 31 A doesn't apply since the
Amending act is not in reference to agrarian reform but also housing schemes. Bela Banerjee laid
three points. Namely 1. the compensation under Article 31(2) shall be a 'just equivalent' of what the
owner has been deprived of 2. the principles which the legislature can prescribe are only principles
for ascertaining 'just equivalent' 3. if not, if all relevant elements are not taken into consideration, it
is justiciable. This is before the Fourth Amendment. This law accepts the meaning of 'compensation'
in Bela Banerjee. However, the 'just equivalent' cannot be questioned by the court on the basis of
adequacy of compensation is a reasonable interpretation of the new amendment. If the
compensation is based on principles that are irrelevant to the value of the property at or about the
time of acquisition the legislature can be said to have committed a fraud on power and therefore the
law is bad. It is use of protection of Article 31 in a manner which the article hardly intended.
Applying the doctrine of fraud on power or colorable legislation, the legislation cannot make a law in
derogation of Article 31(2). It can only make a law on acquisition or requisition by providing for
compensation in the manner prescribed in Article 31(2) Constitution. If the legislature provides for
compensation but in effect and substance takes away a property without paying compensation or
paying illusory compensation for it, it will be exercising power which it does not possess. If it makes
compensation laws that do not relate to the property acquired or to the value of such property at or
within a reasonable rate to the property acquired etc. one can easily hold that the legislature made
the law in fraud of its powers. The legal position is that if the question pertains to the adequacy of
the compensation it is not justiciable but if the compensation fixed or the principles evolved for
fixing it disclose that the legislature made the law in fraud of powers, the question is within the
jurisdiction of the court.

The court held that the Amending Act did not offend Article 31(2) of the Constitution since the third
principle mentioned which excluded the compensation being paid according to the potential value
of the land related to inadequacy of compensation and not fraud on power. The contention that it
was violative of Article 14 was accepted and the Amending Act was declared void.

3. Union of India v. Metal Corporation of India Ltd- AIR 1967 SC 634

The appeal was about the validity of the Metal Corporation of India (Acquisition of Undertaking) Act
1965. The Act which allowed the government to take over the Corporation was contested by the
plaintiff to be void as it violated the provisions of Article 31. The Act in question allowed for
valuation of assets , specifically the machinery and equipment in two ways. One for those which
have not been used and are valued actual cost incurred by corporation and the second, the used
machinery and equipment would be valued at written-down value determined in accordance with
provisions of the Income Tax Act, 1961. Negating a contention of the respondent the court said that
if all the principles do not provide for the just equivalent of all the parts of the undertaking, the sum
total cannot obviously be a just equivalent of the undertaking.

For unused machinery in good condition the cost value of it in purchase is much lesser than its value
in the open market now. For used machinery the written down value rule in Income Tax Act is not
relevant. An artificial rule evolved for tax purposes has no relevance in asset value. The principle
must be such as to enable the ascertainment of its price at or about the time of its acquisition. The
judgement said firstly that the principle being used for compensation was not viable because the
cost of machinery due to technology increases. The Metal Corporation of India is arguing that
depreciated value is not a relevant standard to selling the machinery in the open market or the
actual value of the machine. Therefore the income tax rules which are used to determine profit and
therefore value machines and also require depreciation are not relevant for the case.

The right to question the methodology is not prevented by the 4th Amendment. The courts can only
challenge the compensation if the methodology is arbitrary and illusory. The court separated the
'compensation' and 'jurisdiction' parts of the provision. The law to justify itself has to provide for the
payment of a 'just equivalent' to the land acquired or lay down principles which will lead to the
result. If the principles laid down are relevant to the fixation of compensation and are not arbitrary,
the adequacy of the resultant product cannot be questioned in a Court of law. The validity of the
principles judged by the above tests, falls within the judicial scrutiny and if they stand the tests, the
adequacy of the product falls outside its jurisdiction. Judged by the tests in Bela Banerjee and

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 adequacy of the product falls outside its jurisdiction. Judged by the tests in Bela Banerjee and
Vajravelu v. Special Deputy Collector the principles for fixation of value have not provided for
'compensation' within the meaning of Article 31(2) of the Constitution and therefore is void.

4. State of Gujarat v. Shantilal 1969(1) SCC 509

This case deals with Bombay Town Planning Act 1955. The payment here was made on the basis of
the market value if the land on the date of declaration of intention to make a scheme and there was
no principle for compensating an owner of land to whom reconstituted plot was allotted.

Shah.J:
Clause (1) of Article operates as a protection against deprivation of property save by authority of law
which must be valid law. Clause (2) guarantees that the property shall not be acquired save by
authority of law providing for compulsory acquisition and either fixes the amount of compensation
or specifies principles on which it is given. If the conditions for compulsory acquisition are fulfilled,
the law is not liable to be questioned on the grounds that it is not adequate. Further Clause 2-A is a
definition clause for compulsory acquisition and reacquisition. The Act does not violate Article 31
because the specified principles on which compensation is to be determined are given. The word
'compensation' here means anything given to make things equivalent.

If the quantum of compensation is not justiciable in court then the principles will not be open for
challenge on the indefinite plea that the compensation determined by the application of the
principles is not a just equivalent or fair compensation. That principles cannot be challenged on the
basis of inadequacy of compensation does not mean that principles that are illusory and grant a
character of arbitrariness and defeat constitutional guarantee can be upheld. Principles can be
challenged on the ground that they are irrelevant to the determination of compensation. There is
justness involved in assessing what the compensation ought to be. Observations in P.Vajravelu
Mudaliar's case about Article 31(2) said to the contrary, that attack on the principles is excluded only
when is found on a plea of inadequacy of compensation would be giving a restricted meaning to
Article 31(2) practically nullifying the amendment. The observations of Article 31(2) were not
necessary in deciding the case and therefore they cannot be regarded as binding. Metal Corporation
of India Limited 's case was wrongly decided and overruled as the compensation was not illusory and
the principles used were wrong.

Hidyatullah:
The adequacy of compensation which is illusory or proceeds upon principles irrelevant to its
determination should not be questioned after the amendment of the Constitution. The amendment
was expressly made to get over the effect of earlier cases which had defined compensation as just
equivalent. Enactment of a rule determining payment or adjustment of price of land of which the
owner was deprived by the scheme estimated on the market-value on the date of declaration of the
intention to make a scheme amounted to specification of a principle of compensation within the
meaning of Article 31(2)

5. R.C. Cooper v. Union of India, 1970 (2) SCC 298 (Bank Nationalization case)
(Page 35-40)

This case concerns the constitutional validity of the Banking Companies (Acquisition of Transfer of
Undertakings) Act 1969. The petitioner held shares and had accounts in certain banks and was also a
director in one of these banks. It was held that the Act and Ordinance were invalid and action taken
or deemed to be taken in exercise of powers under the Act were unauthorised. Under the scheme of
determination of compensation total amount payable to banks was only a fraction of the value of
their net assets and compensation was not easily available to banks. The compensation was neither
just nor proportionate. Act was liable to be struck down as there was infringement of guarantee of
freedom of trade, commerce and intercourse under Article 301.

Article 31(1) and (2) arise out of limitations placed on the authority of the State by law to take over
the individuals property. If the acquisition is for public purpose, substantive reasonableness of the
restriction which includes deprivation may, unless otherwise established be presumed but enquiry
into reasonableness of the procedural provisions will not be excluded. A provision to satisfy Article

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 into reasonableness of the procedural provisions will not be excluded. A provision to satisfy Article
31 should either be 1. for public purpose 2. have fixed amount of compensation or specify principles
in order to fix compensation. Jurisdiction of court to question the law on the ground of adequacy of
compensation is expressly excluded. The court reiterated Shantilal where it said that a challenge to a
statute that the principles specified by it do not award a just equivalent will be in clear violation of
the Constitutional declaration that inadequacy of compensation provided is not justiciable. What is
fixed as compensation by statute, or by the application of principles specified for determination of
compensation is guaranteed: it does not mean however that something fixed or determined by the
application of specified principles which is illusory or can in no sense be regarded as compensation
must be upheld by the Courts, for, to do so, would be to grant a charter of arbitrariness, and permit
a device to defeat the Constitutional guarantee.

"There was apparently no dispute that Article 31(2) before and after it was amended guaranteed a
right to compensation for compulsory acquisition of property and that by giving to the owner, for
compulsory acquisition of his property, compensation which was illusory, or determined by the
application of principles which were irrelevant, the Constitutional guarantee of compensation was
not complied with. There was difference of opinion on one matter between the decisions in P.
Vajravelu Mudaliar's case(2) and Shantilat Mangaldas's case. In the former case it was observed
that the Constitutional guarantee was satisfied only if a just equivalent of the property was given
to the owner: in the latter case it was held that "compensation" being itself incapable of any
precise determination, no definite connotation could be attached thereto by calling it "just
equivalent" or "full indemnification", and under Acts enacted after the amendment of Article
31(2) it is not open to the Court to call in question the law providing for compensation on the
ground that it is inadequate, whether the amount of compensation is fixed by the law or is to be
determined according to principles specified therein.

Both the lines of thought which converge in the ultimate result, support the view that the principle
specified by the law for determination of compensation is beyond the pale of challenge, if it is
relevant to the determination of compensation and is a recognized principle applicable in the
determination of compensation for property compulsorily acquired and the principle is appropriate
in determining the value of the class of property sought to be acquired. On the application of the
view expressed in P. Vajravelu Mudaliar's case or in Shantilal Mangal's case. The Act, in our
judgment, is liable to be struck down as it fails to provide to the expropriated banks compensation
determined according to relevant principles."

6. KT Plantation v. State of Karnataka, (2011) 9 SCC 1

The Bench upheld the acquisition of properties owned by film actress Devika Rani and her husband
near Bangalore under the provisions of the Devika Rani Roerich Estate (Acquisition & Transfer) Act,
1996 and Karnataka Land Reforms Act, 1961. Public purpose was a pre-condition for deprivation of a
person of his property under Article 300A of the Constitution and the right to claim compensation
was also inbuilt in that Article. The purpose needs to be primarily public and not incidentally public.
The requirement of public purpose is invariably the rule for depriving a person of his property,
violation of which is amenable to judicial review. Acquisition of property for a public purpose may
meet with a lot of contingencies, like deprivation of livelihood, leading to violation of Article 21, but
that per se is not a ground to strike down a statute or its provisions. When a person is deprived of
his property, the State has to justify both the grounds which may depend on scheme of the statute,
legislative policy, object and purpose of the legislature and other related factors. Statute, depriving a
person of his property is, therefore, amenable to judicial review. Question of whether the purpose is
primarily public or not has to be decided on the basis of purpose and object of statute and policy of
legislation. Compensation must be 'just, fair and reasonable.' Statutes protected by Article 31A, 31B
and 31C would be amenable to challenge under Article 14 and 19 as part of the basic structure but
not Article 14 and 19 simpliciter.

Right to claim compensation cannot be read into List III Entry 42. No compensation or nil
compensation has to be justified by the State on judicially justiciable standards. While enacted 300
A parliament has only borrowed Article 31(1) i.e. the Rule of Law doctrine and not Article 31(2) i.e.
the doctrine of eminent domain. Article 300 A enables the State to put restrictions on the right to

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the doctrine of eminent domain. Article 300 A enables the State to put restrictions on the right to
property by law. The law has to satisfy the provisions of the Constitution. Acquisition of property for
public purpose may meet with a lot of contingencies, like deprivation of livelihood which may lead to
Article 21, but that per se is not a ground to strike down a statute or its provisions. The Act in the
present case is immune from challenge under Article 14 on the ground of arbitrariness and
unreasonableness. But if a statue violates rule of law or the basic structure of the Constitution it
would not be immune from the challenge.

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 Types of Property
27 February 2018 14:11

“Immovable property” shall include land, benefits to arise out of land, and things attached to the
earth, or permanently fastened to anything attached to the earth.
Section 3(26) of General Clauses Act 1897

Section 3 of TPA, talks about what involves "Immovable property"

TPA 1882

“immovable property” includes land, buildings, hereditary allowances, rights to ways, lights, ferries,
fisheries or any other benefit to arise out of land, and things attached to the earth, or permanently
fastened to anything which is attached to the earth, but not standing timber, growing crops nor
grass;

Requirements for immovable property to validly be transferred:

Needs to be in writing
Needs to be attested and executed
Needs to be registered

Transfer of Property only happens during the lifetime. So will and succession are not included.
Operation of law such as insolvency, forfeiture, court order etc. Transfer of Property does not apply.

Property is a bundle of rights. On top of the pyramid are property rights and at the bottom we have
personal rights. The difference b/w the two is that property rights can be defended against anyone
in the world. At the top of the pyramid there is absolute ownership. Property rights run with land.

In a lease, the landlord gives the lease an interest in the property. If someone say a worker can come
into the property and work there for a while till say 3 pm, then this is a personal right and this does
not run with property. If it’s a license it’s a personal right if it is a lease it’s a property right.

Only immovable property comes into the purview of the Transfer of Property. Whether ownership
passes or not, one needs to know whether there was a valid transfer of property. Therefore, one
needs to know the rules that apply.

The distinction between movable and immovable property

1. Ananda Behera v. State of Orissa (1955) 2 SCR 919

The dispute is about fishing rights in Chilka lake which was once the estate of the Raja of Purikud.
The Orissa Esatates Abolition Act, 1951 vested the estate in the State of Orissa. The petitioners had
through contracts obtained licenses for catching and appropriating the fish from the fisheries. The
lake was immovable property that had been transferred to the State of Orissa who now have all the
rights that owners have. The petitioners claim the right to obtain future goods under the sale of
Goods Act and this is purely a personal right arising out of contract to which the State of Orissa is not
a party. What was sold was the right to catch fish. The right to fish is immovable property because it
is a benefit arising from the property or a profit a pendre that is the lake.

Section 3(26) of the General Clauses Act defines "immovable property" as including benefits that
arise out of land. It follows that fish is immovable property as under Transfer of Property Act
because it cannot be determined by the definition of "immovable property" in the aforementioned
and thus the General Clauses Act has to be looked at. Because of Section 54, a sale or transfer of
immovable property requires writing and registration. The sale of the fish would constitute as
transfer of property, however they would have to follow the requisites of the Transfer of Property
Act. They did not as the contract was an oral contract. Therefore there is no interest or title in the

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 Act. They did not as the contract was an oral contract. Therefore there is no interest or title in the
petitioners.

Fishing is a right to acquire a future good. What was sold was the right to catch fish. The contract
was for two types of rights. The right to enter the property and the right to fish and carry away the
fish. The former is a personal right and the latter is an immovable property right. Personal rights do
not devolve with the property and therefore the State has no liability.

(Paragraph 9, 10 ,12 and 13)

2. Shantabai v State of Bombay, AIR 1958 SC 532

There was no transfer of proprietary right, they only had a license to enter and get wood. A
transaction like this is the right to enter the land and the grant to cut the trees and carry away the
wood. Trees have to be fit for purpose to be cut down and felled and their trunk used as timber for
sale. The question is whether it is immovable property. Section 3(26) of the General Clauses Act says
it is. However, Transfer of Property Act in Section 3 says it is not. A standing timber must be a tree
that can be looked at as timber for all practical purposes. If not, it is a tree because it will continue to
draw sustenance from the soil. Justice Bose says that those trees that have attained a certain
amount of maturity and girth and are ready to be cut in the immediate future and are standing
timber and they fall on movable property. Those trees which aren't ready to be cut as timber will be
trees and immovable property. The three types of trees 1 . That reached maturity that she could cut;
standing timber 2. that reached maturity that she could not cut; standing timber 3. that haven't
reached maturity and thus she did not have the intention to sell it; it was movable property. If the
tree stooped drawing sustenance from the soil and has been cut reasonably early then it is ready to
be cut. The grant is also for trees that are not ready to cut reasonably early. These for present
purposes are trees. They would thus be movable property. The remaining are immovable property
and under the Transfer of Property Act are unregistered.

The unregistered contract gave her personal rights, not proprietary right. The contract was between
the petitioner and her husband. Being unregistered it does not affect the immovable property or
give her any right to any share of interest . The document is in the nature of the license and that
being extinguished as soon the land was appropriated, the petitioner can ask for compensation. If
not, and if the petitioner has an interest in the property it is a profit a pendre and since the
document has not been registered, the Transfer of Property Act doesn't apply. The State does not
have to honor the personal rights arising out a contract that it was not a party to. The rights being
personal don't run with the property.

3. Suresh Chand v. Kundan (2001) 10 SCC 221

When the land was agreed to be sold to the appellant there were no trees and during the litigation
period if 25 years the plants and saplings grew into trees. The petitioner is disputing the fact that the
respondent said that the land has been sold and not the trees on the land. Trees are immovable
property and are benefits out of land. The court says that if one is selling land then everything that is
attached to the land goes with the land unless there is an intention to the contrary in accordance
with Section 8 of the Transfer of Property Act.

4. Duncan Industries Ltd. v State of Uttar Pradesh, (2000) SCC 633

The question of whether the machinery embedded in Earth is movable property depends upon the
facts and circumstances of the each case and the court is to take in intention of the party, when it
decided to embed the machinery and if such embedding was made temporary or permanent. The
conveyance deed acc. to the respondents gives both the land and machinery but the stamp duty was
paid only for the land. The plaintiffs said that the machine wasn't a part of the value of the land.
However, an artificial distinction cannot be made between the land and the machinery permanently
attached to it. The machines embedded into land were immovable property because that was the
specific intention of the parties. A fertilizer plant cannot be sold without the machinery. The
machinery was not embedded in such a way as to remove the same for the purpose of sale at any

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 machinery was not embedded in such a way as to remove the same for the purpose of sale at any
point of time. It's physically in the land and the land cannot be used without machines. It should
have been included in stamp duty free because it is immovable property and it needs to be
calculated in the valuation of the land. The contract showed that what is being sold is a fertilizer
business on an 'as is where is basis'. It is clear therefore it is not only for land but the entire business
that included plant and machinery. The conveyance deed being only for land is for the purpose of
paying less registration fee by showing less market value. Therefore the authorities are justified in
taking into consideration the value of the plant and machinery also. The appellants contented that
the valuation confirmed by the revisional authority was not based on any material and the finding
was arbitrary. Once we are convinced that the method adopted by the authorities for the purpose of
valuation is based on relevant materials then this Court will not interfere with such a finding of fact.

5. Triveni Engineering & Industries Limited v. Comm. of Central Excise (2000) 7 SCC 29

For excise duty, the goods have to be manufactured in India and be excisable. The appellants deal in
turbo alternators which have two components. They put together a steam turbine and an alternator
to make a turbo alternator. The legal test for manufacturing is if something new comes into
existence or if the components can be used individually. These two products won't do the same job
as individual machines. This new product came into existence by the coupling of the two
components. They combine the two components ; the alternator and the turbine. In the instant
case, the appellants were, according to specified designs, combining steam turbine and alternator by
fixing them on a platform and aligning them. As a result of this activity of the appellants, a new
product, turbo alternator, came into existence which has a distinctive name and use different from
its components. The two components were fixated in the ground. The test of permanency is if the
chattel can be picked up and taken to another place then it is movable but if it needs to be broken
down into parts and then taken away then it is immovable property. If a property needs to be
charged using excise, both mobility and marketability needs to be proved. Marketability means if it
can be picked up and taken to the market. Intention and the factum of fastening; that is the
intention of the sale and whether the machine has been fastened. The test of permanency fails
because the final product cannot be treated as one and the components have to be taken apart and
the foundation bolts have to be undone. The marketability test fails because it cannot be taken as it
is and sold in the product. The turbo alternator needs to be permanently fastened to function and
thus it is immovable property. The intention to use this is to fix this to Earth and use it permanently.
Immovable property cannot be excisable.

Turbo Alternator is not excisable goods.

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 Registration and Stamp Duty
13 March 2018 06:48

Stamp duty is a tax charged by the government on the sale of property. It is designed to cover the
cost of the legal documents for the transaction. The main document is the ownership title of the
property and a search to ensure you are buying the property from the right person.

Registration Act , 1908

The Registration Act, 1908, was enacted with the intention of providing orderliness, discipline and
public notice in regard to transactions relating to immovable property and protection from fraud and
forgery of documents of transfer. This is achieved by requiring compulsory registration of certain
types of documents and providing for consequences of non-registration. In other words, it enables
people to find out whether any particular property with which they are concerned, has been
subjected to any legal obligation or liability and who is or are the person/s presently having right,
title, and interest in the property. It gives solemnity of form and perpetuate documents which are of
legal importance or relevance by recording them, where people may see the record and enquire and
ascertain what the particulars are and as far as land is concerned what obligations exist with regard
to them.

Section 17

Section 17 embodies the documents that need to be compulsorily registered. Under Section 17(b)
instruments which transfer rights in immovable property require registration. Under Section 53A,
part performance of sale contract is allowed with delivery of possession and under Section 17(1A),
to give effect to Section 52A, such documents need to be registered after the Amendment Act 2001.

Section 18

Documents used for transfer of immovable property of value less than 100 Rs. have optional
registration under this Section.

Section 49

Documents which are required to be registered due to non-registration cannot be used as evidence
of transaction and do not allow interference on such immovable property.

Indian Stamp Act 1899

The Indian Stamp Act of 1899 (2 of 1899), is an in-force Act of the Government of India for the charging
of stamp duty on instruments recording transactions.

1. Suraj Lamps Pvt. Ltd. v State of Haryana, 2011 (11) SC 438.

The 2009 order in the Suraj Lamps brought to light the use of SA/GPA/Will transactions to avoid
registration of sales. The court had referred the case to the Solicitor General to look into the case.
Briefly, the Suraj Lamp (2012) Judgement is but a clarification of the previous Suraj Lamps case
(2009). The issue was whether SA/GPA/Will (registered or un-registered) transfer the title and
ownership interest in property as required under Transfer of Property Act (u/s 5 and 53A).

The modus operandi in such SA/GPA/WILL transactions is for the vendor or person claiming to be
the owner to receive the agreed consideration, deliver possession of the property to the purchaser
and execute the following documents or variations thereof through a sale agreement with a future
date for execution of documents, irrevocable power of attorney or general power of attorney to
transfer and special power of attorney to manage the property and A will bequeathing the property
to the purchaser (as a safeguard against the consequences of death of the vendor before transfer is

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to the purchaser (as a safeguard against the consequences of death of the vendor before transfer is
effected). These transactions are not to be confused or equated with genuine transactions where
the owner of a property grants a power of Attorney in favour of a family member or friend to
manage or sell his property, as he is not able to manage the property or execute the sale,
personally. These are transactions, where a purchaser pays the full price, but instead of getting a
deed of conveyance gets a SA/GPA/WILL as a mode of transfer, either at the instance of the vendor
or at his own instance.

The earlier order dated 15.5.2009, noted the ill-effects of such SA/GPA/WILL transactions (that is
generation of black money, growth of land mafia and criminalization of civil disputes) as under:
"Recourse to `SA/GPA/WILL' transactions is taken in regard to freehold properties, even when there
is no bar or prohibition regarding transfer or conveyance of such property, by the following
categories of persons:
(a) Vendors with imperfect title who cannot or do not want to execute registered deeds of
conveyance.
(b) Purchasers who want to invest undisclosed wealth/income in immovable properties without any
public record of the transactions. The process enables them to hold any number of properties
without disclosing them as assets held.
(c) Purchasers who want to avoid the payment of stamp duty and registration charges either
deliberately or on wrong advice. Persons who deal in real estate resort to these methods to avoid
multiple stamp duties/registration fees so as to increase their profit margin.

Whatever be the intention, the consequences are disturbing and far reaching, adversely affecting
the economy, civil society and law and order. Firstly, it enables large scale evasion of income tax,
wealth tax, stamp duty and registration fees thereby denying the benefit of such revenue to the
government and the public. Secondly, such transactions enable persons with undisclosed
wealth/income to invest their black money and also earn profit/income, thereby encouraging
circulation of black money and corruption. It leads to an real estate mafia, for example in situations
when price of the land rises considerably and the buyer wants to sell the land. It finally, makes
verification and identification of title difficult.

There cannot be sale by execution of a power of attorney nor can there be a transfer by execution of
a power of attorney agreement of sale and a power of attorney and will. These kinds of transactions
have evolved to prevent paying stamp duty and registration charge on deeds of conveyance, to
avoid payment of capital gains on transfers, to invest black money and to avoid payment of
unearned increases. This has effects such tax evasion, black money and corruption, repeated sale of
the same land etc. Amendments to the Stamp Duty Act and Registration Act requiring registration
and stamp duty that were brought about to reduce the ill effects saw recourse to SA/GPA/Will
transactions. When a property is transferred via general power of attorney, the title deed is not
transferred. The government requires stamp duty and registration during usual sale agreements.
Using power of attorney, sale can be done without stamp duty or registration. This is why the title
deed is not transferred. As those sales done through power of attorney don't require stamp duty or
registration, this involves black money , tax evasion etc. On the same plot of land it is possible to give
multiple general power of attorneys because it is not registered and nobody knows.

One solution , as seen by the actions of the State of Haryana is reduction of stamp duty. Making
stricter undervaluation rules also helps because most properties are sold undervalued in paper, with
the difference paid in case. In many States appropriate amendments have been made whereby
agreements of sale acknowledging delivery of possession or power of Attorney authorizes the
attorney to `sell any immovable property are charged with the same duty as leviable on conveyance.

Scope of SA

Section 54 of TP Act makes it clear that a contract of sale, that is, an agreement of sale does not, of
itself, create any interest in or charge on such property.

In Rambhau Namdeo Gajre v. Narayan Bapuji Dhotra [2004 (8) SCC 614] this Court held:

Property Law Page 15

"Protection provided under Section 53A of the Act to the proposed transferee is a shield only against
the transferor. It disentitles the transferor from disturbing the possession of the proposed
transferee who is put in possession in pursuance to such an agreement. It has nothing to do with the
ownership of the proposed transferor who remains full owner of the property till it is legally
conveyed by executing a registered sale deed in favour of the transferee. Such a right to protect
possession against the proposed vendor cannot be pressed in service against a third party."

Any contract of sale (agreement to sell) which is not a registered deed of conveyance (deed of sale)
would fall short of the requirements of sections 54 and 55 of TP Act and will not confer any title nor
transfer any interest in an immovable property (except to the limited right granted under section
53A of TP Act)

Scope of GPA

General Power of Attorney is creation of an agency whereby the grantor authorizes the grantee to
do the acts specific therin on behalf of the grantor which when executed are binding on the grantor.
It is not an instrument of transfer.

Scope of Will

A will is the testament of the testator. It is a posthumous disposition of the estate of the testator
directing distribution of his estate upon his death. It is not a transfer inter vivos.

The court reiterated that immovable property can be legally and lawfully transferred/conveyed only
by a registered deed of conveyance. Transactions of the nature of `GPA sales' or `SA/GPA/WILL
transfers' do not convey title and do not amount to transfer, nor can they be recognized or valid
mode of transfer of immoveable property. The courts will not treat such transactions as completed
or concluded transfers or as conveyances as they neither convey title nor create any interest in an
immovable property .They cannot be recognized as deeds of title, except to the limited extent of
section 53A of the TP Act. The court allowed for prospective application of the case given that many
people were misled to believing that SA/GPA/Will transactions were prospective. It encouraged
regularization by authorities and immediate registration.

Section 2(d)

Section 5
Transfer of Property Act applies to those transfers which occur between two living persons.
Therefore, transfer through a will does not come under the Transfer of Property Act. In futuro would
mean for example a reversionary interest in property. This means I have an interest in the future
possession of property.

A Contingent Interest and A Vested Interest

In Futuro
When there is a condition for one to get ownership of property and that is certain and there is
nothing left for you to do, but you have to wait for a certain event to happen, one has a vested
interest.

Section 6
The following property rights/interests cannot be sold. The chance to inherit a property. A woman
can sell her right to past maintenance but not future maintenance.

Section 8
Assumption that a transferee transfers all interests in property capable of passing unless a contrary
intention is expressed or implied.

Section 9
Under this unless provided by law, oral transfers are allowed.

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 Under this unless provided by law, oral transfers are allowed.

2. V. N. Sarin v. Ajit Kr. Poplai AIR 1966 SC 432

V.N. Sarin is a tenant who lives in HUF Property. Ajit Kumar Poplai owns the property after partition
where Sarin lives. The three members of this undivided Hindu family partitioned their coparcenary
property on May 17, 1962, and as a result of the said partition, the present premises fell to the share
of respondent No. 1. The appellant V. N. Sarin had been inducted into the premises as a tenant by
respondent No. 2 before partition at a monthly rental of Rs. 80. After respondent No. 1 got this
Property by partition, he applied to the Rent Controller for the eviction of the appellant on the
ground the he required the premises bona fide for his own residence and that of his wife and
children who are dependent on him. To this application, he impleaded the appellant and respondent
No. 2.

The appellant contended that Respondent No.1 got the suit by partition, then it was acquisition by
transfer as under S.14(6) and made the suit incompetent. It provides that where a landlord has
acquired any premises by transfer, no application for the recovery of possession of such premises
shall lie under sub-section (1) on the ground specified in clause (e) of the proviso thereto, unless a
period of five years has elapsed from the date of the acquisition. It is obvious that if this clause
applies to the claim made by respondent No. 1 for evicting the appellant, his application would be
barred, because a period of five years had not elapsed from the date of the acquisition when the
present application was made. The appellant also contended that the respondent was not his
landlord and that his use was not bona fide but these two were negated by the Punjab High Court.
The issue therefore was whether co-parcenery property can be called 'transfer' as under the Delhi
Rent Control Act, 1958.

The court examined the objective of Section 14(6).It seems plain that the object which this provision
is intended to achieve is to prevent transfers by landlords as a device to enable the purchasers to
evict the tenants from the premises let out to them. If a landlord was unable to make out a case for
evicting his tenant under s. 14(1)(e), it was not unlikely that he may think of transferring the
premises to a purchaser who would be able to make out such a case on his own behalf; and the
legislature thought that if such a course was allowed to be adopted, it would defeat the purpose of
s. 14(1).

Community of interest and unity of possession are the essential attributes of coparcenary property;
and so, the true effect of partition is that each coparcener gets a specific property in lieu of his
undivided right in respect of the totality of the property of the family. Having regard to this basic
character of joint Hindu family property, that each coparcener has an antecedent title to the said
property, though its extent is not determined until partition takes place. He already owned it , just
the nature of rights changed.

The appellant contended that partition was a transfer for S.53 of TPA according to judicial decisions.
The argument is that if it is 'transfer' under TPA it should be so under the Delhi Rent Control Act.
'Convey' means to give someone legal ownership of something he did not have before. It is not
conveyance as under Section 6, and therefore it is not transfer. That this was transfer as per Section
14(6) of the Delhi Rent Control Act was a contention by the respondent that was rejected by the
court taking into consideration the objective of Section 14(6). Basically , this section requires waiting
for 5 years in order to file a bona fide eviction petition. The court said that before partition, the co-
parceners only have an unspecified interest , but an interest nonetheless. The object of the Act is for
protection of property rights of strangers. But here, Arjit Kumar Poplai already had an interest in the
property. Therefore, he could file the eviction petition.

3. Kenneth Solomon v. Dan Singh Bawa, AIR 1986 Del 1

The tenant who was a lessee under Dan Singh Bawa bequeathed in her will all her movable and
immovable properties to her nephew who is the appellant in this case. On the tenant's death, the
landlord sought eviction under proviso b of Section 14(1)b of the Delhi Rent Control Act, 1958 on the
allegation that she had left no heir and had in her lifetime parted with the property without consent
of the landlord. The Delhi Rent Control Act requires consent of the landlord before transfer of lease.

Property Law Page 17

of the landlord. The Delhi Rent Control Act requires consent of the landlord before transfer of lease.
The appellant said that the tenancy rights had only devolved on him through the will which was not
parting of possession. Does the act of transfer of lease by writing a will amount to parting with the
tenancy rights without taking consent of the landlord as required under the Delhi Rent Control Act?

The expression "parted with possession", Therefore, means giving the legal possession acquired
under the lease to a person who was not a party to the lease agreement. Undoubtedly, there must
be vesting of possession of the tenancy premises by the tenant in another person by divesting
himself not only of physical, possession but also of a right to possession. The court held that the
process of parting with possession starts on the execution of the will but matures only on the death
of the testator. The tenancy rights deposed under the will would vest in the devisee immediately on
the death of the testator and this vesting would amount to parting with possession within the
meaning of proviso (b). The Transfer of Property Act excludes transfer by will, for a will operates
after the death of a testator.
No landlord can claim eviction, during the life time of the tenant, on the ground that the tenant had
made a will disposing the tenancy rights. It is for the simple reason that it can be revoked at any
time. By itself it does not vest the legal possession in the devisee. However, there is no escape from
the conclusion that by his voluntary act the tenant parts with the possession of the tenancy premises
though from the date of his death in case the will remains unrevoked. Dr. Sury by her act of
bequeathing the tenancy rights by means of the will in favor of the petitioner and his brother had
parted with possession within the meaning of proviso (b). The process stared in her life and the act
matured on her death. The landlord was, therefore, entitled to claim eviction. Anyway, it would've
passed on to the nephew through intestate succession.

Property Law Page 18

General Rules of Transfer
13 March 2018 07:02

It is a principle of economics that wealth should circulate and move freely, in order for the economy to get the greatest ben efit from it. The
Sections 10-18 on alienation provide that ordinarily there should be no restraints on alienation. 'Where wealth accumulates, men decay'

1.Muhammad Raza v. Abbas Bandi Bibi, (1932) I.A. 236

To settle a dispute in property two cousins got married, and executed an agreement for the property in dispute in lieu of the marriage. The
property in dispute was decided to be shared by the two wives in a limited capacity. They would have no power to transfer the property but
the ownership thereof as family property shall devolve on the legal heirs of both the wives, from generation to generation The condition was
put on the wives that the husband would manage the property and the ownership would be on the wife. They couldn't however sel l it to a
stranger or manage it. If on the part of the husband there is any act of neglect) or estrangement towards either of the wives, then, in that
case, the wife's only remedy will be to have the management of her share performed by the Government through the Court of War ds ; but
during the lifetime of Afzal Hasan neither of the wives shall have the power on her own authority to have the management of t he share which
is owned by her. Afzal Hussain thereafter duly married Sughra Bibi and died in 1872 childless, his first wife Fattina Begum h aving predeceased
him in 1871. Sughra Bibi took possession of her share in the properties, but had sold or mortgaged it all before her death, w hich occurred on
July 26,1914. Her transferees remained in undisturbed possession for nearly twelve years after her death. The respondents to the appeal
instituted a suit for the recovery of Sughra Bibi's share from the appellants to whom the alienations were made.

The respondents contended that Surga Bibi had only life estate without power of alienation and her heirs had vested interest in it on her
death. Their share was two -thirds. The present appeal, therefore, is concerned only with two-thirds of the property, and the rights of the
parties depend in the first instance on the validity of the alienations by Sughra Bibi, the title of the respondent, if these alienations were
invalid, not being disputed. She sold the property to a stranger and that stranger has enjoyed it for 12 years. The court assumed that the
settlement deed passed her ownership of property. The only thing that limited her was the restriction on alienation and manag ement. The
court says that the constraint was only partial and not absolute since she could still sell it to people in her family. T heir Lordships think that
the restriction was not absolute, but partial; it forbids only alienation to strangers, leaving her free to make any transfer she pleases within
the ambit of the family. The question, therefore, is whether such a partial restriction on alienation is so inconsistent with an otherwise
absolute estate that it must be regarded as repugnant and merely void . The settlement was not in the nature of transfer or conveyance. The
court said it would judge on the basis of justice, equity and good conscience, the three pillars of public policy. Family arr angements are to be
viewed upon on the lens of public policy. Even under Section 10 , partial constraint is allowed. In their Lordships' opini on Sughra Bibi had no
power to transfer any part of the properties to the appellants, and upon her death the respondent became entitled to the two -thirds share in
the properties which she claims.

2. Zoroastrian Co-operative Housing Society Ltd. V. District Registrar, Co-op. Societies (Urban) (2005) 5 SCC 632

The Zoroastrian Co-operative Housing Society was registered under the Bombay Co-operative Societies Act. One of the members of the
society sold the plot of land to the father of respondent 2 with the consent of the society on which he had constructed a re sidential building.
Respondent 2 became member of society on death of his father. Respondent 2 applied to society for permission to demolish bung alow and to
construct a commercial building in its place . Rejection of application by Society stating that bye laws of society did not p ermit commercial use
of land. Respondent 2 subsequently applied to society for permission to demolish bungalow and for construction of residential flats to be sold
to Parsis. Application allowed by society. Negotiations entered into by Respondent 2 with Respondent 3 a builder’s associatio n in violation of
restriction on sale of shares or property to a Non Parsi. Challenged by Society by filing a case before Board of Nominees. Bo ard held that
society could not restrict its membership only to Parsi Community. Rejection of application of Respondent 2.Tribunal held tha t bye law
restricting membership to Parsis was a restriction on right to property and was violative of Article 300 A. Writ petition - Dismissed by High
Court - Appeal to Supreme Court

The petitioners submitted that their fundamental right under 19(1)c was infringed. He also submitted that there was no absolu te restraint on
alienation to attract Section 10 of the Transfer of Property Act and the restraint, if any, was only a partial restraint, valid in law. The
respondent said that Section 4 of the Act clearly indicated that no bye-law could be recognized which was opposed to public policy or which
was in contravention of public policy in the context of the relevant provisions in the Constitution of India and the rights o f an individual under
the laws of the Country. A bye-law restricting membership in a co-operative society, to a particular denomination, community, caste or creed
was opposed to public policy and consequently, the Authorities under the Act and the High Court were fully justified in rejec ting the claim of
the Society. Allowing appeal held that when a person accepts membership in a cooperative society by submitting himself to its bye laws and
places on himself a qualified restriction on his right to transfer property by stipulating that same would be transferred wit h prior consent of
society to a person qualified to be a member of society, it could not be held to be an absolute restraint on alienation offen ding Section 10 of
Transfer of Property Act. Hence finding of High Court that restriction placed on rights of members of a society to deal with property allotted
to him was invalid as an absolute restraint on alienation, held unsustainable and set aside. Not selling to anyone other than a Parsi does
amount to absolute restriction. It's partial restraint and therefore cannot be hit by Section 10. He becomes a member of the society by
devolution. He has voluntarily agreed to be a member of society. Section 10 of the Transfer of Property Act cannot have any a pplication to
transfer of membership. Transfer of membership is regulated by the bye -laws. The bye-laws in that regard are not in challenge and cannot
effectively be challenged in view of what we have held above. Section 30 of the Act itself places restriction in that regard. There is no plea of
invalidity attached to that provision. Hence, the restriction in that regard cannot be invalidated or ignored by reference to Section 10 of the
Transfer of Property Act. It is difficult to postulate that such a qualified freedom to transfer a property accepted by a per son voluntarily,
would attract Section 10 of the Act. Moreover, it is not as if it is an absolute restraint on alienation. Respondent No. 2 ha s the right to transfer
the property to a person who is qualified to be a member of the Society as per its bye -laws. At best, it is a partial restraint on alienation. Such
partial restraints are valid if imposed in a family settlement, partition or compromise of disputed claims.

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The appellant is a housing society. It was stated that the essential feature of every housing society was at least that its h ouses formed one
settlement in one compact area and the regulation of the settlement rested in the hands of the managing committee of the soci ety. What is
relevant for our purpose is to notice that normally, the membership in a society created with the object of creation of funds to be lent to its
members, was to be confined to members of the same tribe, class, caste or occupation. It appears to us that unless appropriat e amendments
are brought to the various Cooperative Societies Acts incorporating a policy that no society shall be formed or if formed, me mbership in no
society shall be confined to persons of a particular persuasion, religion, belief or region, it could not be said that a soci ety would be disentitled
to refuse membership to a person who is not duly qualified to be one in terms of its bye -laws.

There is no transfer of property, it is getting inherited and the plaintiff consented to the society's laws and the Zoroastri an way of life.

3. K. Muniswamy v. K. Venkataswamy, AIR 2001 Kant. 246

The two brothers along with their father partitioned the property in 1969 under registered property deed where the property w as allotted to
the share of the father and mother with a stipulation that they should enjoy the properties during their life time in the man ner they like and
after their death, the property shall devolve in equal shares to the appellant and respondent, the two sons. In 1977, the par ents sold the
property under registered sale deed in favor of the respondent. After they died a suit is filed by the appellant seeking part ition of half share in
property contending that the parents had no absolute rights of alienation. The respondent contested the suit claimed exclusiv e title in the
property and also set up a plea of limitation that the suit is barred by time. Plaintiff filed a suit against the defendant s eeking partition of half
share in the suit property.
When a partition takes place b/w two or more members of a Hindu Joint family, it would be difficult to regard the partition a s involving a
transfer of any property from one co-sharer to the another. All that a partition brings about is a dissolution of the coparcenary and the
coparcenary property is transferred into more than one estate in severalty and each one of the persons who formed the Hindu joint family
becomes entitled to one of such estates to be exclusively enjoyed by him as its sole proprietor. Hence a condition in a partition deed to
which one of the parties agreed that he could not alienate certain properties but would enjoy them during his and his wife’s life tie cannot
be regarded as a void condition. Provisions of Section 10 of the Transfer of Property Act would not apply to family partition since there is
transfer of title, but on the ground of sound public policy any total restraint on right of alienation in respect of immovabl e property which
prevents free circulation would be held void. Partial restraint would be valid and binding.
It was held that interpreting the deed in the manner in which the Plaintiff wants, would be putting a total restraint on alie nation. The
question in the instant case, be whether the stipulation creates a limited estate or an absolute estate regarding the constru ction of deeds.
Partition deed emphasised that each of them get the property in their name and can do with it what they like. What is granted is therefore
absolute estate and not limited estate. Latter stipulation provides that after the demise of the parents, the plaintiff and the defendant shall
equally take the cannot override the clear terms of grant under petition. In the event of them dying intestate and that full or any part of the
property is available is left for intestate succession, in such a situation latter stipulation may come into effect otherwise not.

"In the instant case the partition deed is in Kannada. The plain reading of the partition deed suggests that " 'A', 'B' and ' C' schedule properties
are given to the shares of the respective parties with a emphasis added that each one of them should get their khata of the p roperty mutated
in their names and should enjoy the properties in the manner they like". This would give us no doubt and difficulty to apprec iate that what is
granted is a absolute estate and not a limited estate. May be that the latter stipulation provides that after the demise of t he parents, the
plaintiff and the defendant shall equally take the property. This cannot be interpreted to override the clear terms of grant under partition.
The restrictive covenants should be cautiously and carefully interpreted. The restrictions which are express would render no difficulty.
However, while implied restrictions if they are to be read into the terms of the document should be so clear and unambiguous to suggest the
one and only inference in favour of the restrictive covenant set up or pleaded otherwise, if stipulations are ambiguous, susc eptible to
contrary or alternative meaning, it would not be permissible to read into the said stipulation by inference restrictive coven ant. In the instant
case, it is possible to assume from the stipulation that an absolute estate is granted in favour of the parents in view of th e terms that they
should enjoy the property in the manner they like and in the event of they dying intestate and that full or any part of the p roperty available is
left for intestate succession, in such a situation latter stipulation may come into effect, otherwise not."

Section 10
Is a general section that talks about how if one person gives another ownership over property who is not a woman who is not a Hindu,
Muslim or Buddhist they cannot sell it to another person. Restraint on a new buyer's right to transfer of property/alienation . Under this
section the transferor cannot impose an absolute restraint on alienation the interest or right given. Total restraints are vo id, partial restraints
are fine.

Section 11
This is read with Section 40. When a transfer has been done absolutely, i.e. transferring absolute rights to property. That i s without any
conditions. Restraining the enjoyment of the right/interest . The exception to this is if that the seller imposes certain res trictions that will
allow better enjoyment of his/her property. If such restrictions have been breached then X has a remedy in court. The second paragraph
relates as to the right of a transferor against a transferee to (1) enforce performance of a positive covenant and (2) to res train the breach of a
negative covenant. After the 1929 Amendment both covenants are valid , though only negative covenants are enforceable. (due t o S.40)
Under the above, it could be imposition of a positive act or a restrain of an act. A hand in pocket test differentiates b/w p ositive and negative
covenant. The person to whom the promise is made is covenantee and the person making the promise is covenanter. A positive co venant is a
promise to do something a negative covenant is not to do something. Section 40 says that positive covenant do not run with the land while
negative covenants run with the land.
The hand in the pocket test says that if a person has to reach out to their pocket and only then they'll be able to fulfil th eir promise it is a
positive covenant. Negative covenant is restraining me from doing actions, which means I don't have to reach into my pocket o r spend
resources to act on it. If there is no notice, then negative covenants don't run with land. They need to be done with good fa ith and

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resources to act on it. If there is no notice, then negative covenants don't run with land. They need to be done with good fa ith and
consideration. If it is a positive covenant it doesn't run with the land. In the case of a positive covenant only the origina l owner and buyer can
enforce it. If he has paid consideration for the land and had no notice, constructive or actual notice. If there is ambiguity , mention both.
If there is a registered contract about the land in the public domain, then the buyer is on constructive notice. If the buyer acted negligently
and didn’t check the other title deeds to the land, then it is the buyer's fault . Notice can be constructive or actual.
Section 40
The first part deals with the right against the transferor from the first transferee. The position is that positive covenants may be enforced
between original parties and are not ordinarily binding on subsequent transferees. Whereas negative covenants are if they hav e notice of
such covenants. See Tulk v Moxhay. The second part talks about the conditions for enforcement of positive covenants. Namely, obligation
arising out of contract and annexed to ownership of immovable property. There has to be notice or not in case of gratuitous t ransferee. It is
important acc. to case law that is for the beneficial enjoyment of the original owner for another piece of property.

These conditions aren't as strict in lessor lessee relationships.

Section 12
Section 12 is an exception to a general rule embodied in Section 30 and 31.
Tulk v. Moxhay (1848) 2 Ch. 774
In 1808, Tulk conveyed a piece of land in fee simple to hold Elms, to his heirs and assigns forever. There were certain coven ants put on the
land. The deed contained the following covenant: That Elms, his heirs and assigns, shall and will, from time to time and at a ll times hereafter,
at his and their own proper costs and charges, keep and maintain the said piece or parcel of ground and square garden in pres ent form and
uncovered with buildings. Elms could also charge an annual reasonable rent from the tenants of Leicester Square to have keys for admission
into the garden

At 1848, the property was sold to the defendant. At the time of the purchase, the Defendant knew about the covenant contained in the
original agreement of 1808. The defendant tried to build a road on the land. Can the petitioner get an injunction to prevent the building of
the road on the land? Does the covenant run with the land? The court said that a positive covenant will not run with the land , but a negative
covenant will. He had actual notice of the covenant. The restriction on building of the road was a negative covenant and thus would run with
the land. This was a remedy in equity.Moreover, as a covenant amounts to a contract between a vendor and vendee, it is enforc eable against
a purchaser for value with either constructive or actual notice. As Moxhay had actual notice of the covenant, he was obligate d to abide by it.
Whether or not the covenant runs with the land, such an agreement could properly be enforced in equity because the one who pu rchases the
land from Tulk had notice of that covenant. Defendant, Moxhal could not stand in a different situation from the owner from wh om he
purchased the property.

Section 13
For a grant to an unborn person to be valid it must exhaust the whole of the grantor's remaining interest, that is , it shoul d be of the form to A
for life and to B (unborn person) absolutely. It does not apply to Mohammadans because gift to unborn children is void under their law. This is
also called the rule against double possibilities.

A direct transfer to an unborn child is not allowed, it has to go through a living person/persons. Whatever interest I want to transfer to an
unborn child, it has to only be an absolute transfer of that interest, it can't be a partial transfer. If transfer to an unbo rn child is required
Section 13 and Section 14 need to be used in conduction. TPA applies to intervenors. After birth and before death

Section 14
If I am transferring property to an unborn child I can't say that he will only get this property post his minority. The unbor n child I am
transferring property to has to come into existence before the person who is being transferred to should be alive.

Section 17
Section 17 is based on the principle that period of accumulation of income is restricted in order to prevent hardship to heir s by postponing
their enjoyment to property unreasonably and also to prevent locking up of property and hamper the economy of the country.

Contingent and Vested Interest

There are certain interests in property that don't give you immediate interest in the property. Specified events that are cer tain, with no
contingency, that they have to come to pass, then it is vested interest. If the passage of time is such, that certain specifi ed events are
uncertain there is contingent interests. Mere postponement of enjoyment , prior interest in another or where the interest pas ses on to
another on the happening of an event does not make a vested interest a contingent interest.

The main characteristics of a contingent interest are;

1. It is a transferable interest but not a heritable interest. On the death of a person having a contingent interest it does not pass on to its legal
heirs.
2.Death is not an uncertain event but survival at the death of another is an uncertain event.

3. The charge of an heir apparent to succeed to a person as heir or similar possibilities of a like nature are not contingent interest within the
meaning of this section.

If no time is specified for a contingent interest it is covered by Section 21 else, Section 23.

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Rajes Kanta Roy v Santi Debi AIR 1957 SC 255

Ramani Kanta Roy, in possession of considerable properties had three sons. One of his sons, Rabindra, one of his sons died ch ildless leaving a
widow Santi Debi in 1938. In 1934 he created in endowment in favor of his family deity and appointed his three sons as shebai ts. After the
death of her husband, Shanti Devi instituted a suit against her family members for a declaration that she as an heir of her h usband was
entitled to function as a shebait in place of him. The suit terminated in a compromise recognizing the right of Santi Debi a s a co-shebait.
Shortly thereafter, however, i.e., in the year 1944, Ramani and his two sons, Rajes and Ramendra, filed a suit against Santi Debi, for a
declaration that the above mentioned compromise decree was null and void.

During the pendency of that suit Ramani, the father, executed a registered trust deed in respect of his entire properties on July 26, 1945. The
terms of that trust-deed will be referred to presently. The eldest of the sons, Rajes, was appointed thereunder as the sole trustee to hold the
properties under trust subject to certain powers and obligations. After the execution of this trust deed the father died. By the said
compromise Santi Debi gave up her rights under the previous compromise decree of 1941 and agreed to receive for her natural l ife a monthly
allowance of Rs. 475 payable from the month of November, 1946. It was one of terms of the compromise that on default of payme nt Santi
Debi will be entitled to realise the same by means of execution of the decree. It appears that the monthly allowance as afore said was
regularly paid up to the end of February, 1948, and that thereafter payment was defaulted. Consequently Santi Debi filed an a pplication for
execution on July 8, 1949, to realise the arrears of her monthly allowance from March, 1948, to July, 1949, amounting to Rs. 8,075 against
both the brothers, Rajes and Ramendra. Execution was asked for by way of attachment and sale of immovable properties.

Now, coming to the second point, the contentions raised are that, on a true construction of the terms of the trust deed the i nterest of the
judgment-debtor, Rajes, (1) in the properties covered by the trust deed, and (2) in particular, in property No. 44/2, Lansdowne Road s ought to
be attached, is only a contingent one and hence not attachable. That a mere contingent interest though transferable inter viv os is not
attachable is well settled since the Privy Council decision in Pestonjee Bhicajee v. P. H. Anderson I.L.R. [1939] Bom. 36. Th e question as to
whether the interest of the judgment-debtor, Rajes, in this case is vested or contingent, in one not altogether free from difficulty.

As regards the first of the main points raised with reference to the terms of the compromise decree, it is not disputed that clause (c) does
impose a personal obligation on the plaintiffs therein to pay to the first defendant therein a monthly allowance of Rs. 475 a nd that, therefore,
the decree-holder is entitled to a personal remedy. What is urged, however, is that taking cls. (c) and (d) together, the clear intentio n is that
when any default occurs, the decree-holder has to look for payment first to the properties charged and that, it is only in the event of not
being able to obtain satisfaction out of it, that the personal obligation can be enforced. It is pointed out that the settlor was very particular
about the property not going into the hands of the two sons for their enjoyment as owners until after the debts are liquidate d and that this is
emphasised in various clauses of the trust deed. It is urged that this clearly shows the intention of the settlor to be that the discharge of the
debts should be a condition precedent for the vesting in them of any interest in the properties. Thus clause 3 of the trust d eed imposes a
specific obligation on the trustee that "he shall pay the present existing just debts of the settlor. There is no doubt that these terms show
that the settlor attached great importance to the discharge of the debts becoming an accomplished fact before the two sons ta ke the full
benefit by way of devolution of the property and that in order to facilitate the same he restricted his own enjoyment and tha t of his two sons
to an aggregate. limited sum or Rs. 1,500/- per month out of the income (apart from a few other minor monthly payments). But can it be said
that their interest in the property was made to depend on the event of the total discharge of the debts and that the discharg e of the debts
was contemplated as an uncertain event.

The determination of the question as to whether an interest created by such a deed is vested or contingent has to be guided g enerally by the
principles recognized under Sections 19 and 21 of the Transfer of Property Act, 1882, and Sections 119 and 120 of the Indian Succession Act,
1925. He drew our attention to the fact that both s. 19 of the Transfer of Property Act and s. 119 of the Indian Succession A ct clearly indicate
that if "a contrary intention appears" from the document that will prevail.

One of the main purposes of the trust deed, as appears from its preamble is to give the property to his two surviving sons, R ajes and
Ramendra, after excluding his widowed daughter-in-law, Santi Debi, against whom he had developed prejudice on account of hers being a
sagotra marriage. An equally important purpose of the trust was the discharge of his debts. The main intention that was gathe red was that 1.
he wanted to leave Shanti Devi out of his properties. He struck a compromise with her saying that she would get maintenance , if she didn't
get maintenance, she could take his property and sell it and get the money and take the maintenance in arrears through a cour t decree. 2. All
his debts are cleared off and once done both sons can share and enjoy the property. The court has to figure out whether the a bility to clear
off the debt is uncertain or certain. In this case, the court said that in the contemplation of the father it was a certainty . The property was
substantial, it was enough to pay. He was certain that the income from the property will be enough to maintain his two sons a nd Shantabai.
He had set out measures to be taken with the surplus of the property left after payment of debt and income. The courts thus s aw this as a
vested interest. The brothers said that they don't have a vested interest but a contingent interest, hence Shantabai could n ot claim against
the interest.

It is quite clear that clause (c) gives her an unqualified right to obtain payment of the monthly allowance from the plaintif fs. Clauses (d) and
(e) give her a liberty or option to pursue the remedies specified therein. There is nothing in these two clauses to limit, in any way, the
unqualified right that she was given under clause (c). Thus the court held that the contention raised to the effect that the personal remedy is
not available in this case before exhausting the charged properties, is not sustainable.

Ma Yait v The Official Assignee (1930) 32 BOMLR 125

A settler made a settlement through trust law of his property in favor of his wife and children. Under the terms of the sett lement, the settlor
was entitled to the income for his life and thereafter (and till the events next specified) the income was to be distributed between his widow
and children in certain proportions. As regards the properties comprised in schedules 1st., 2nd and 3rd., they were to be sol d after the

Property Law Page 22

and children in certain proportions. As regards the properties comprised in schedules 1st., 2nd and 3rd., they were to be sol d after the
youngest child attained the age of twenty and the proceeds divided in equal shares between the children then surviving. With regard to the
property comprised in the 4th schedule, the same was to be sold on the death of the youngest child the proceeds divided among st the
children then living . After the death of the settlor and before the happening of the events entitling the trustees to sell t he properties
comprised in any of the schedules, one of the settlor's sons assigned and transferred, for valuable consideration, his entire interest in the
settled property (both as regards the income and the corpus) in favor of a third party.

The first part of the property could be sold only when the child obtained the age of 20 and the other part could only be sold after the
youngest child died. Section 6 clause (a) and (e) is dealt with. One of the sons sold his share in property. This the court h eld is not violative of
Section 6 because it is not the same as a heir apparent or legacy obtaining a property, it is a settlement. Since the settlem ent has created
vested and contingent interest then obviously it is not falling within Section 6. The court spoke about the vested interest w hich was the
income they derive and the contingent interest which is share in the property. The vested right was the right to income. The right to income is
an immovable right because it is profit da pendre. The transfer was valid because the contingent interest was of a well ascer tained form of
property. Now, it is plain that the result of this disposition was to create first of all, a vested interest in all the child ren in the income of the
property; secondly, it created a contingent interest in all the children in the corpus in respect of all the property until, at any rate, the
youngest child reached the age of twenty. When the youngest child reached the age of twenty, the children who were alive at t hat date
obtained a vested interest and a right to have the proceeds distributed among them as to the property in the first, second an d third
schedules. As to the property of the fourth schedule, all the children took a contingent interest until the death of the youn gest child, and, as
soon as the youngest child died, the children then surviving, and, of course, their issue, obtained a vested right to have th e property
distributed among them.

A contingent interest is dependent on a condition that has to be complied with which is an uncertainty. As soon as the condit ion is complied
with the interest converts from a contingent interest to a vested interest. Contingent interest is transferable but the condi tion has to be
fulfilled by the transferrer. A vested interest is alienable and inheritable. The effect of the settlement was to create (a) a vested interest in all
the children in the income of property, and (b) a contingent interest in their favor in the corpus until (as regards the prop erty in the first three
schedules) the youngest child attained the age of twenty and (as to the property of the 4th schedule) the death of the young est child, A
contingent interest of this nature is a well-ascertained form of property and clearly transferable. This case is covered in the exception.

In case of condition precedent it needs to be substantively fulfilled and in case of condition subsequent it needs to be stri ctly fulfilled. (S.26)

Section 43
If there is an erroneous representation or a fraudulent representation then the transferee can get protection under Section 4 3. If at any
subsequent time if the transferrer gets good title to it, then the transferee has the right to the property. The transferrer is estopped from
escaping from the earlier representation made. These are the three conditions need to be fulfilled. If they could've easily f ound out that the
transferrer does not have title to it, then it is not in good faith. It does not matter that the transferrer did it erroneous ly or fraudulently.
Transfer at the option of the transferee + during the subsistence of contract of transfer – the transfer does not vest with the transferee
automatically – it is at his option – not necessary it has to be express – the contract should not rescinded or extinguished in any manner – the
contract should subsist while the interest has been derived. It is based on the Rule of estoppel – Known as “feeding the grant by estoppel” –
the general rule no one can give another what he himself does not have

There should not be another transferee in good faith – the second paragraph of the Section specifically provides that the transferee cannot
enforce his claim against a person who has taken a subsequent transfer from the transferor in good faith, for consideration, and without
notice of the option vested in the transferee.

Eg. A represented his authority to B that he can lease the immoveable property to him. A had no interest but subsequently acq uired an
interest on the death of his father and now transfers the property to C. B cannot claim anything from C. The only way B c an have an action
lie against C is that C was aware of the transaction b/w A and B and that there was no consideration involved i.e. It is a gift.

Section 41
This section deals with the doctrine of holding out. It is an exception to the rule that one cannot transfer a title greater than what they
possess. This depends on factual circumstances, as to whether the person holding out to be the real owner has all the charact eristics of a real
owner should a prudent man examine so, and has consent of the owner to hold himself out as the ostensible owner.

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Property Law Page 24
Equitable Rules, Litigation and Fraud
20 May 2018 14:16

Section 53
This section is to protect unsecured creditors. In order for such creditors to avail the protection of
this section they need to show that the debtors had an intent to delay or defeat while selling
his/her property to the transferee who brought the land in good faith for consideration. For
Section 53(1) it has to be proved that 1. there was a genuine transfer and not a benami or sham
transaction 2. there was an intent to delay/defeat the creditor's claims 3. the transferee should
have brought the property in good faith and consideration. If it is a benami transaction then the
creditor can straightaway go to the transferor and proclaim so.

Abdul Shukoor v. Arji Papa Rao AIR 1963 SC 1150

Partners of a partnership firm were in heavy debts and were suffering losses. It was agreed
between the partners that the 3rd defendant Abdul Shukoor Saheb should go out of the
partnership taking with him one item of property in Vaniyambadi valued at Rs. 20,000/- while the
suit tannery which was estimated as of the same value was to become the sole property of the 4th
defendant who was described in the deed as "the continuing partner. Soon after this deed of
dissolution the 4th defendant entered into an agreement with the plaintiff for the sale to him of
the suit property for a sum of Rs. 19,000/-, and later executed the deed of sale on May 20,
1949.The plaintiff was, however, advised that it would be safer to have the conveyance in his
favour executed by the other partner also and accordingly the 3rd defendant was also an
executant of the sale deed. On the execution of the sale deed the plaintiff entered into possession
and he claimed to have thereafter effected improvements to the property.

While so, the 1st defendant - Arji Papa Rao - filed suit O.S. 46 of 1950 in the Court of subordinate
Judge at Visakhapatnam for the recovery of a sum of Rs. 12,950/5/8 against the 2nd defendant
firm and its partners defendants 3 & 4 and obtained a decree for the sum claimed with interest
and costs on June 19, 1951. Soon after filing the plaint he obtained an order for attachment before
Judgment of the suit property and that order was on the passing of the decree made absolute,
subject however, to the result of a claim petition which had been filed by the plaintiff for raising
the attachment. The plaintiff claimed that he purchased the property bona fide and for its full
value, that since its purchase he having entered into possession, was in enjoyment thereof in his
own right, paying the rates and taxes due thereon and had effected valuable improvements
thereto, and that consequently the property was not liable to be attached as belonging to the
partnership or any of its partners.

Learned counsel for the appellant raised four principal points in support of the appeal : (1) that on
a proper construction of the written statement the only real and effective defense that was raised
was that the sale in favour of the appellant was sham and nominal and that the Courts below were
in error in proceeding on the basis that the sale was in the alternative impugned as brought about
to defeat or delay creditors within s. 53(1) of the Transfer of Property Act; (2) that on the facts and
circumstances of the case it had not been established that the sale in favour of the appellant was
vitiated by fraud against creditors falling within s. 53(1) of the Transfer of Property Act; (3) that in
any event, the plaintiff was a purchaser in good faith and for valuable consideration and was
therefore protected even on the basis that the transferor intended, by the alienation, to defraud
his creditors; (4) that on a proper construction of s. 53(1) of the Transfer of Property Act, as it now
stands, read in the light of the provisions of the Code of civil Procedure particularly those relating
to claim petitions under O. XXI, Rules 58 to 63, a transfer which was voidable under s. 53(1) could
be avoided only by a representative suit on behalf of creditors and not by an individual creditor
who may be defeated or delayed, by way of defence to a suit to set aside a summary order under
O. XXI, r. 63, Code of civil Procedure.
. In view of this, the course which we intimated to the learned Counsel that we would adopt was
that we would ourselves consider the entire evidence on the record and arrive at our own
conclusions on such evidence in regard to the two issues : (a) whether the sale was in fraud of

Property Law Page 25

conclusions on such evidence in regard to the two issues : (a) whether the sale was in fraud of
creditors, and (b) whether the plaintiff was a bone fide purchaser for value and that if it became
necessary to arrive at any finding as regards the reality of the sale, we would remand the appeal to
the High Court for the matter being considered since the learned Judges had expressly reserved
the consideration of that question.

The second defendant-firm was in financial embarrassment at the time of the sale. The deed of
dissolution dated March 31, 1949 recites that the business carried on by the firm was resulting in
losses and that the debts The next feature to be noticed is that the plaintiff and the 4th defendant
were both members of the same community - labbais of North Arcot district, a fairly small and
well-knit community several of whom are engaged in the hides and skins businessamounted to
about 2 1/2 lakhs of rupees. The significance of the plaintiff and his vendors being members of the
same community and well-known to each other consists in this, that the plaintiff might have been
chosen because of his willingness to take the sale without any searching enquiry as to the
circumstances necessitating it, and because there would be less publicity in the transaction being
put through between them-such as for instance inspection of the property or enquiries in the
locality as regards value etc., which would take place if the sale was to be to a total stranger which
would attract the attention of the firm's creditors.that though the properties were at
Vizianagaram, the document was registered at Madras and the suggestion made to the plaintiff
was that this was meant as a measure of secrecy to keep this alienation from the knowledge of the
firm's creditors. The explanation offered by the plaintiff was that having regard to the distance
between the native places of the two parties from Vizianagaram and the proximity of these to
Madras and the fact that both the Plaintiff as well as the executants were at Madras it was found
more convenient to have the document presented for registration at Madras instead of incurring
the expenses of a journey to Vizianagaram for having it registered there.

It is needless to add that if this were the case and if creditors who were not so provided were
defeated or delayed it would merely be a case of a fraudulent preference which could be
impugned only under the law relating to insolvency and not as a fraud on creditors for which s. 53
of the Transfer of Property Act makes provision. It is, however, common ground that apart from
the sale deed not making any provision that the consideration was to be utilised for the discharge
of any particular debts, it is not the case of the plaintiff that there was any such stipulation as to
the application of the money or that without any stipulation therefore the money was so utilised.
It would therefore not be an unreasonable inference to drew from the circumstances of the sale at
the juncture at which it took place that the vendor's object was merely to convert this immovable
property into cash, so that it may not be available to the creditors. Each of these circumstances
might be capable of some explanation consistent with the case that the transfer now impugned
was effected in the normal and ordinary course of business by the 4th defendant for some
purpose which did not involve an intention to defeat or delay his creditors, but the question we
have to consider is their cumulative effect and so viewed the conclusion appears irresistible that
the object of the transaction was to put the property out of the reach of the creditor. The transfer
was therefore plainly within the terms of the 1st paragraph of s. 53(1) of the Transfer of Property
Act and was voidable at the instance of the 1st defendant who was a decree-creditor.

The next question is whether the plaintiff is a bona fide purchaser for value so as to be protected
by the second paragraph of s. 53(1) reading :
"Nothing in this section impairs the rights of the transferee in good faith and for consideration." .
Where fraud on the part of the transferor is established i.e. by the terms of paragraph (1) of s.
53(1) being satisfied, the burden of proving that the transferee fell within the exception is upon
him and in order to succeed he must establish that he was not a party to the design of the
transferor and that he did not share the intention with which the transfer had been effected but
that he took the sale honestly believing that the transfer was in the ordinary and normal course of
business.

The plaintiff and the vendor belong to the same community, a small, compact and well-knit one
and they must obviously have known each other having been in trade for several years in several
places in common and must therefore have been well-acquainted with the financial and business
affairs of each other.

Property Law Page 26

affairs of each other.
(2) This general inference apart, the plaintiff admittedly had with him a copy of the deed of
dissolution dated March 31, 1949, which disclosed that the firms's business had resulted in losses
and that it was greatly indebted, the debts amounting to Rs. 2 1/2 lakhs.
(3) If as we have held that registration of the sale deed at Madras was with a view to keep the
transaction secret from the creditors, the plaintiff was as much a party to the secrecy as the
transferor.
(4) One matter which would be of considerable relevance and significance in this connection
would be the enquiries that the plaintiff made before he look the transfer. He no doubt led
evidence to show that he consulted his lawyers about the title of the vendor; but any attempt at
an enquiry of the 4th defendant as to why he was effecting the sale of the only immovable
property of the firm which was allotted to him under the deed of dissolution is significantly absent.

We are therefore satisfied that the plaintiff was not a transferee in good faith and that the transfer
itself was a scheme by the transferor with the knowledge and concurrence of the transferee to put
the property out of the reach of the creditors. The result therefore would be that the plaintiff's
suit was liable to be dismissed for the reason that the defence plea invoking s. 53(1) of the
Transfer of Property Act was made out.

In this case the court is saying that the plaintiff should have stipulated or ensured that the money
from the sale of the property would go toward the debts of the respondents. What is incumbent
upon the buyer is to check if the title of the property belongs to the seller or not. To avail the
benefit of Section 53(1) it is important to act in good faith. It is whether the transaction was in
good faith or not that the court is checking. The court says that acting in good faith, the transferee
should have checked if there were more assets that could be used to pay out the debt. The
petitioner had access to the partnership deed and knew that there were debts that had to be paid
off using the assets in the partnership firm. This was done in secrecy because the registration was
done somewhere else. The transferee was someone well known to the transferrer.

Doctrine of Lis Pendens

During the pendency of the suit where the title to the property is in dispute when either of the
parties sell the property, this doctrine comes into play. The transfer according to this doctrine is
not void but the transferee is sub-servient to the decree of the court. Section 52 talks about the
sanctity of court proceedings and says that when a transferee acquires a property in dispute the
transferee his bound by the decision of the court. The transfer is not an invalid transfer. List here
means suit. This section was further amended to make clear that notice plays no role. This is
because there is a greater public policy concern here. To avoid never ending litigation, this
doctrine has been got into the statute books.

Ordinarily, it is true that the judgment of a court binds only the parties and their privies in
representations or estate. But he who purchases during the pendency of an action, is held bound
by the judgment that may be made against the person from whom he derives title. The litigating
parties are exempted from taking any notice of the title so acquired; and such purchaser need not
be made a party to the action. Where there is a real and fair purchase without any notice, the rule
may operate very hardly. But it is a rule founded upon a great public policy; for otherwise,
alienations made during an action might defeat its whole purpose, and there would be no end
to litigation. And hence arises the maxim pendente lite, nihil innovetur; the effect of which is not
to annul the conveyance but only to refer it subservient to the rights of the parties in the litigation.
As to the rights of these parties, the conveyance is treated as if it never had any existence; and it
does not vary them.
Faiyaz Husain Khan v. Munshi Prag Narain Allahabad High Court

Guruswamy Nadar v. P. Lakshmi Ammal (Dead) Through LRs. & Ors., (2008) 5 SCC 796

An agreement for sale dated 4.7.1974 under which the first defendant in the suit had through her
husband and power of attorney holder contracted to sell a house property in sum of Rs.30,000/-. A
sum of Rs.5,000/- was given as advance and the remaining Rs. 25,000/- was to be paid before
31.7.1974. The said amount was not paid by 31.7.1974. The owner again sold the suit property to

Property Law Page 27

31.7.1974. The said amount was not paid by 31.7.1974. The owner again sold the suit property to
the appellant herein on 5.5.1975 for a sum of Rs. 45,000/- and possession in question was handed
over to the appellant herein. Therefore, the plaintiff filed the aforesaid suit for enforcement of the
specific performance of contract. The main argument which was advanced before learned Single
Judge was that Section 19 of the Specific Relief Act, 1963 provides that a decree for specific
performance against a subsequent purchaser for bona fide who has paid the money in good faith
without notice of the original contract can be enforced as the same is binding on the vendor as
well as against the whole world. As against this, it was contended by the respondents that Section
52 of the Transfer of Property Act which lays down the principle of lis pendens that when a suit is
pending during the pendency of such suit if a sale is made in favor of other person, then the
principle of lis pendens would be attracted.

Our attention was invited to a decision of this Court in R.K. Mohammed Ubaidullah and ors. v.
Hajee C. Abdul Wahab (D) by L.Rs. And ors. (A.I.R. 2000 S.C. 1658). In this case it was observed that
a person who purchased the property should make necessary effort to find out with regard to that
property, whether the title or interest of the person from whom he is making purchase was in
actual possession of such property. In this case, the Plaintiff filed the suit for specific performance
of contract and during the pendency of the suit, rest of the Defendants brought subsequent
transaction of sale by the Defendant in their favour claiming the title to the suit property on the
ground that they were the bona fide purchasers for value without notice of prior agreements in
favour of Plaintiff and they were also aware that the Plaintiff was in possession of the suit property
as a tenant for last several years and that they did not make any inquiry if Plaintiff had any further
or other interest in the suit property on the date of execution of sale deed in their favour apart
from that he was in possession of the property as a tenant. In that context Their Lordships
observed that subsequent purchaser cannot be said to be bona fide purchaser of the suit property
for value without notice of suit agreement and Plaintiff would be entitled to relief of specific
performance. Their Lordships after considering the effect of Section 19 of the Specific Relief Act as
well as Section 52 of the Transfer of Property Act held that subsequent purchaser has to be aware
before he purchases the suit property. So far as the present case is concerned, it is apparent that
the appellant who is a subsequent purchaser of the same property, he has purchased in good faith
but the principle of lis pendens will certainly be applicable to the present case notwithstanding the
fact that under Section 19(b) of the Specific Relief Act his rights could be protected.

In Jugraj Singh and anr. v. Labh Singh and ors. [(1995) 2 S.C.C. 31], it was also emphasized that the
plea that the Plaintiff was to prove that he was ready and willing to perform his part of the
contract. It is personal to him. The subsequent purchasers have ot only the right to defend their
purchase on the premise that they have no prior knowledge of the agreement of sale with the
Plaintiff. They are bona fide purchasers for valuable consideration, though they were not
necessary parties to the suit. But in the present case, the second purchaser was a Defendant in the
suit and this plea was also considered by learned Single Judge and it found that there was
sufficient allegation made in the plaint that the Plaintiff was ready and willing to perform his part
of the contract.

Section 52 of the Transfer of Property Act. But in the present case it is more than apparent that
the suit was filed before the second sale of the property. Therefore, the principle of lis pendens
will govern the present case and the second sale cannot have the overriding effect on the first
sale.

The effect of Section 52 on the sale of the same property to the second purchaser who is the
petitioner in the case. He was a bona fide purchaser who had paid consideration for the property.
The first purchaser says that since the owner can't sell the property because of Section 52. The
court ruled that the doctrine of les pendens takes precedence of Section 19(b) of Specific
Performance Act which allows for specific performance of property disputes. In the present case
the principle of lis pendent will be applicable as the second sale has taken place after the filing of
the suit.

Section 53(A)
This is about part performance. A right of the buyer to ask the seller for specific performance

Property Law Page 28

This is about part performance. A right of the buyer to ask the seller for specific performance
when the contract has been signed , then the seller cannot throw him out saying that the title of
the property cannot transfer because the contract has not been registered. Since the property has
not been registered under the buyer's name , the immovable property won't come TPA. Thus, this
is to protect the right of the buyer. The Amendment required written and signed contracts and
some performance of it to trigger the section.

Under Section 27 of the Special Relief Act both the lessor and the lessee can invoke the doctrine of
part performance but under the TPA only the transferee can.

Jayaram Mudaliar v. Ayyaswamy, AIR 1973 SC 569

Munniswami is the Karta of the HUF and Jayaram who is his son-in-law. Jayaram bought leasehold
property from Munniswami under a sale deed to enable to pay off his debt. Ayyaswamy is
Munniswami's brother who was also a part of the same HUF. Munniswami had taken money from
Jayaram and from the government to improve the land as under Land Improvement Act. Section 7
of the Land Improvement Act allowed using the land that had been improved to pay off the debt
to the government. In order to clear out his debt, he was forced to publicly auction to the property
where Jayaram bought the property through sale certificate on 15- 7-196. This is not a voluntary
sale. He also voluntarily sold his property to Jayaram through a sale deed to pay back his debt to
him. Ayyaswami Mudaliar challenged the validity of the sales on the grounds that these sales of
joint property in a partition suit (23-6-1957) were struck by lis pendens as in S.52 of TPA through
an amendment of his suit on 18-9-1961.

The property was under partition dispute in June 1958. In July 1958 the property is sold off to
Jayaram through sale deed to pay off debts. The property was auctioned off in 1960 through sale
certificate. The sale deed in 1958 was voluntary sale and the one through auction and sale
certificate is involuntary. The property was in litigation with his brother over a property dispute.
On the facts stated above, the appellant Jayaram claims that both kinds of sales were outside the
purview of the doctrine of lis pendens inasmuch as both the sales were for the discharge of
preexisting liabilities of the Hindu joint family of which Munisami was the karta. The liabilities
incurred by Munisami, it was submitted, as karta of the family, had to be met, in any case, out of
the properties which were the subject matter of the partition suit. It was urged that where
properties are liable to be sold for payment of such debts as have to be discharged by the whole
family, only those properties would be available for partition in the pending suit which are left
after taking away the properties sold for meeting the pre-existing liabilities of the joint family. The
plaintiff-appellant has relied upon certain authorities laying down that the doctrine of lis pendens
is not to be extended to cover involuntary sales in execution of a decree in a mortgage suit where
the mortgage was prior to the institution of the suit in which the plea of Lis pendens is taken.
contend that, since Section 52 of the Transfer of Property Act does not protect transferors, a
transfer on behalf of the whole joint 'Hindu family would be outside the purview of the principle in
a partition suit. The contention advanced on the strength of the last mentioned case erroneously
assumes that the impugned sales were on behalf of the joint family. However, the sale deed
does not purport to be on behalf of the Hindu joint family of which Ayyaswami the plaintiff and
Munisami Defendant No. 1 could be said to be members.

It is evident that the doctrine, as stated in Section 52, applies not merely to actual transfers of
rights which are subject-matter of litigation but to other dealings with it "by any party to the suit
or proceeding, so as to affect the right of any other party thereto". The purpose of Section 52 of
the Transfer of Property Act is not to defeat any just and equitable claim but only to subject them
to the authority of the Court which is dealing with the property to which claims are put forward.

The principle of lis pendens does not affect pre-existing rights. If there is a valid charge or
mortgage on a property, this does not vanish because the property becomes the subject-matter of
a partition suit. Section 42 of the Madras Revenue Recovery Act provides that all lands brought to
sale on account of arrears of revenue shall be sold free of all encumbrances. The liability of the
land to be sold under Section 7(c) of the Act was a pre-existing charge and that subsisted as from
the date of the loan. This was not affected by the institution of the suit for partition. This charge

Property Law Page 29

the date of the loan. This was not affected by the institution of the suit for partition. This charge
could be enforced by the State notwithstanding the pendency of the partition suit. No decree in
the Partition suit could have effaced the charge. therefore, if the State has sold only the property
in respect of which loan was taken, the purchaser-defendant No. 12-is not prejudiced by the
principle of lis pendens.

His brother said that was there was no legal necessity and that since there was a partition dispute,
lis pendens. The court said that it was voluntary sale and therefore lis pendens applied. Voluntary
sale by Karta of HUF in discharge of a personal debt cannot bind the party.

Supreme General Films Exchange Ltd v. Maharaja Sir Brijnath Singhji Deo, AIR 1975 SC 1810

The owner of a cinema theatre in Jabapur named Bhatia took a loan from the Maharaja. Bhatia
borrowed 2 and a half lakh rupees against the security of bales of cotton were. But since this was
not enough, Bhatia mortgaged the theatre to secure the loan in 1951. Bhatia did not pay back the
loan and hence the Maharaja filed a suit to recover the money. The Maharaja used the cinema
property to get the loan back through a compromise deed. According to this dead, the Plaza
Theatre would be sold to make good the loan. The CBI , another creditor of the owner filed a suit
for attachment of properties including the theater to make good a loan taken by the Bhatias. A
decree was executed in 1955 for attachment of property.

The Supreme General Films Exchange was a company that had contracted a lease with Bhatia
where they occupied the theatre for running a cinema. This was an unregistered lease obtained on
1940. This expired on 1946. The renewal was done after the property was attached. The 1956-64
lease was a deed for renewal of the lease which was registered. The lease was executed after the
company filed a suit for specific performance of an agreement to lease.

We are unable to accept the argument that the lease was merely an enforcement of an
antecedent or pre-existing right because of the letter used by the company to support their
specific relief claim that shows an antecedent claim over the property. We think that the 1956
lease purported to create entirely new rights pendente lite. It was, therefore, struck by the
doctrine of lis-pendens, as explained by this Court in Jayaram Mudaliar v. Ayyaswami and Ors.
1973 (3) SCR 139 embodied in Section 52 of the Transfer of Property Act

The Maharaja/Plaintiff argued that the lease of 1956 was void as it was struck down by Section 52
of the Transfer of Property Act, Section 65A of the Transfer of Property Act, and Section 64 of the
Civil Procedure Code. He argued that he had mortgagee rights over the land and therefore new
lease rights cannot be created. The lease was therefore void. The Lease deed according to the SC
did not create any antecedent rights but created new rights and therefore lis pedens applied. We
however, think that, as the special doctrine of lis pendens is applicable here, the purported lease
of 1956 was invalid from the outset.

Property Law Page 30

Sale , Exchange and Gift
28 March 2018 06:59

Corpus is the principal or property of an estate or trust. It does not include the income it earns,
receives or realizes from the corpus. Income is earned by the estate or trust on its assets and could
be realized in the following six classes of income:

When there is contract the seller cannot take retain possession just because it has not been
registered as long as the requirements of Section 53A are fulfilled.

Sale

Section 54
Ordinarily, ownership passes when registration is compulsory on the execution of the sale deed and
where delivery is the proper method by delivery of possession of property. A contract for sale would
not become a sale by the payment of money because a sale requires a registered document.

Section 55: Rights and Liabilities of Buyers and Sellers

The seller has to disclose to the buyer anything that the buyer cannot find out by due diligence. The
reciprocal duty of the buyer is under (5) (a) which basically means that if the buyer knows something
that the seller is not aware of, then the buyer has to let the seller know.

Exchange

Unlike a sale, if money is not paid, a charge on the exchanged property is not created. If one of the
parties are deprived of a part, the other can (a) retain the rest and ask for compensation (b)
repudiate the contract. Partition is not an exchange because parties are not in exclusive possession
of properties when they inter-change.

Gift

Section 122
Definition of gift. The gift needs to be registered. Unless, the donor dies and the acceptance is made
before the death of the donor; registration is not mandated and the gift is valid. If there is a valid
contract, the donor cannot take it back merely for want of registration. Even if the document is
registered, the gift can be revoked if there is no acceptance. What is most important therefore is
acceptance. It completes the gift. The chapter only deals with gifts inter vivos. The property can' be
future property.

Meaning; Difference; Sale Deed v. Agreement to Sell;

Suraj Lamps Pvt. Ltd. v/s State of Haryana and another, 2011 (11) SC 438
Ramnath and Family sold property through GPA to Suraj Lamp. Agreement to Sell/ GPA/ Will are all
imperfect titles

John Thomas v Joseph Thomas, AIR 2000 Ker 408

The suit against which the appeal is pleaded for was filed for specific performance of an agreement
and for directing the first defendant to execute the sale deed in respect of 96 cents of land
scheduled in the plaint and for an injunction restraining the first defendant from trespassing upon
the plaintiff's land and other relief.

P and D1 knew each other and on 27-4-1982 , they entered into an agreement for mutual exchange
of properties. P had control and enjoyment of 12 acres of plantation in Poonjai village and D1 had 96
cents of land at Palai. An agreement was made to exchange the properties with D1 paying Rs. 1 lakh
extra as equalization of value. At the date of execution 10,000 was paid and possession of each plot

Property Law Page 31

extra as equalization of value. At the date of execution 10,000 was paid and possession of each plot
was taken by parties. No specific date was mentioned in the agreement for execution of registered
documents.

In Sept 1982, D1 wanted to take the title doc. w.r.t the lands in Poonjar in the name of his son and
daughters. P however, did not have title to the property and shared possession with J.J. Construction
Company. So at D1's suggestion three documents were prepared , executed and registered in the
name of the children on D1 giving them the 12 acres.

D1 still hadn't executed the documents for his land and kept making excuses to the P. On
23-12-1986, P through an adv. gave notice to D1 giving him 15 days for execution. D1 sent a reply
with frivolous contentions. Before the institution of the plaint, D1 tried to trespass into plaint
property. P was ready to perform his part of the contract but D1 wasn't and hence the suit.

Acc. to the court possession was not given when the agreement was made. D1 got possession when
P executed the agreement and P hadn't gotten possession yet. However, P had fraudulently and
through misrepresentation sold his land to D1 and when D1 found out he refused to give possession
of his property especially since it was found to be 10 times its value given in the agreement. This is
why conveyance was not executed. Unwillingness and refusal was expressed before 1-12-1986. D1
was in posession of plaint property and the agreement was a result of representation. However, the
suit was barred by limitation.

Then D1 died. The other Defendants either didn't file a statement or said that they were not aware
of the original agreement. The lower court ordered the plaint property to be given to plaintiff as per
the sale deed.

First Contention: Limitation

Not barred

Second Contention: vitiated because of fraud and misrepresentation

- D1 unwell and bedridden
- P lied about property - said is high yielding rubber plantation - trees etc.

However , D1's son had visited the property before sale deed and nothing to show that the plaintiff
was able to dominate the will of D1. There is also no evidence. Moreover, D1 did not try to
terminate the agreement . Therefore, there is no vitiation.

Third Contention: SP being discretionary and P having delayed giving notice by 4 years there was
delay or laches the court will refuse to pass decree of SP. Here court said it wasn't delay/laches
because after sale deed, in 1982 D1 took possession of lands and paid balance amount. Basically the
only reason there was delay by P was because D1 kept postponing it.

Fourth Contention: Only exchange and not sale and hence when D1 executed the sale deed in 1982
there was immediate frustration of contract. However, court said that this was not a mere exchange.
First, there was also the money involved and second, documents can be executed in favour of all
persons nominated by parties. This contemplates sale deeds by both parties and therefore it was not
an exchange.

Decree in favor of petitioner

Section 58 (C)
It talks about conditional sale. In conditional sale, the mortgagor has the right to sell the property to
another party under a certain conditions:
The sale becomes absolute only when the mortgagor has defaulted in his payment
The sale becomes void if the debt has been cleared
When such payment has been made, the buyer shall transfer the said property back to the seller

Property Law Page 32

Vidhyadar v. Manikro

Defendant 1(B) is the mortgagee and Defendant 1(A) is the mortgagor. A owns a property worth Rs.
5000 which he mortgaged to B to obtain a loan of Rs. 1500 on 24th of March, 1971 and delivered the
property to B. A was supposed to pay back the debt on or before 15th of march, 1973 and A would
get back his property. B did not receive the mortgage money by 15th March, 1973. Meanwhile, A
sold the property to C, plaintiff. The plaintiff instituted a suit against A and B for redemption of the
mortgage by conditional sale or in the alternative for a decree for specific performance of the
contract for repurchase.

1.B contended that the sale deed executed by A in favour of the plaintiff, was fictitious and the
whole transaction was a bogus transaction as only Rs. 500 were paid as sale consideration to A.
2.A claimed that he tried to pay back his debts to B on two occasions but, B refused to accept the
money. Once by cash and the other time, he tried to send a money order.
3.The issue was also whether it was a mortgage for conditional sale or a contract for re-purchase ,
the agreement b/w A and B.

In Lal Achal Ram v. Raja Kazim Hussain Khan (1905) 32 Indian Appeals 113, the Privy Council laid
down the principle that a stranger to a sale deed cannot dispute payment of consideration or its
adequacy. This decision has since been considered by various High Courts and a distinction has been
drawn between a deed which was intended to be real or operative between the parties and a deed
which is fictitious in character and was never designed as a genuine document to effect transfer of
title. In such a situation, it would be open even to a stranger to impeach the deed as void and invalid
on all possible grounds. Thus, the whole question would depend upon the pleadings of the parties,
the nature of the suit, the nature of the deed, the evidence led by the parties in the suit and other
attending circumstances. Here A alone who was the executant of the sale deed, could have raised an
objection as to the validity of the sale deed on the ground that it was without consideration or that
the consideration paid to him was highly inadequate

The court says that B was not part of the transaction and he had no personal knowledge about the
terms of the contracts. Hence, he cannot raise any objections in regard to the sale deed. Definition
of sale provides for the price to be paid in future. In this case too, only the consideration has been
paid during the signing of the contact. While making a sale deed, the intention has to be considered
from the conduct of the parties and the evidence on record. It was clear in this case that A and the
plaintiff were aiming at a sale agreement. Hence, this contract is a valid contact. Section 55 (4)(b)
says that when the ownership of the property is transferred to the buyer before payment of the
whole sale price, the vendor is entitled to a charge on that property for that amount of sale price.
The contents of the document have already been considered which indicate that A had executed a
mortgage by conditional sale in favour of B. He had promised to pay back Rs. 1500 to him by a
particular date failing which the document was to be treated as a sale deed. The condition had been
fulfilled from A’s side as he tried to return the money. B breached his duty by not accepting the
money. So far as the contention of the learned counsel for B that the mortgage money was not paid
within the time stipulated in the document and, therefore, the transaction, even if it was a
mortgage, became an absolute sale, is concerned, the finding of the Courts below is that this money
was tendered to B who refused to accept it. A had thus performed his part of the agreement and
had offered the amount to B so that the property may be re-conveyed to him but B refused to
accept the money. He, therefore, cannot complain of any default in not paying the amount in
question within the time stipulated in the deed. Since there was no default on the part of A, the
document would not convert itself into a sale deed and would remain a mortgage deed. The suit for
redemption was, therefore, properly filed by the plaintiff who was the assignee of A.

This transfer does not, in any way, affect the rights of B who was the mortgagee and the mortgage in
his favour, in spite of the transfer, subsistedIt is pertinent to note that the transaction between the
A and B itself was a money-lending transaction and that the sale-deed was a mortgage sale.
Therefore, the B cannot become the owner of the property. Section 54 defines sale. The transferor
cannot retain any part of his interest or right in that property or else it would not be a sale. The

Property Law Page 33

cannot retain any part of his interest or right in that property or else it would not be a sale. The
words "price paid or promised or part-paid and part-promised" indicate that actual payment of
whole of the price at the time of the execution of sale deed is not sine qua non to the completion of
the sale. 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 presenti or in future. The intention is to be gathered from the recital in the sale deed,
conduct of the parties and the evidence on record. Applying these principles, it will be seen that A
executed a sale deed in favour of the plaintiff, presented it for registration, admitted its execution
before the Sub-Registrar before whom remaining part of the sale consideration was paid and,
thereafter, the document was registered. These facts clearly establish that a complete and
formidable sale deed was executed by A in favour of the plaintiff and the title in the property passed
to plaintiff. Since there was no default on the part of A, the document would not convert itself into a
sale deed and would remain a mortgage deed. The suit for redemption was, therefore, properly filed
by the plaintiff who was the assignee of A.

S. 55 (4)(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 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 on which possession has been delivered. Clause (b) extracted above provides that
where the ownership of the property is transferred to the buyer before payment of the whole of the
sale price. The vendor is entitled to a charge on that property for the amount of the sale price as also
for interest thereon from the date of delivery of possession. This clause obviously applies where: the
ownership in the property has passed to the buyer before the whole of the purchase money was
paid to the seller. Since the title in the property had already passed to the plaintiff, even if the
balance amount of sale price was not paid, the sale would not become invalid. The property sold
would stand transferred to the buyer subject to the statutory charge for the unpaid part of the sale
price.

The document is headed as MORTGAGE BY CONDITIONAL SALE. It is mentioned in this deed that the
immovable property which was described in areas and boundaries was being mortgaged by
conditional sale in favour of B for a sum of Rs. 1500 out of which Rs. 700 were paid at home while
Rs. 800 were paid before the Sub-Registrar.

The further stipulation in the deed is that the aforesaid amount of Rs. 1500 would be returned to
defendant No. 1 on or before 15th March, 1973 and the property would be re-conveyed to A. If it
was not done then B would become the owner of the property Mortgage by conditional sale is
defined under Section 58(c) as- Where the mortgagor ostensibly sells the mortgaged property - on
condition that on default of payment of the mortgage-money on a certain date the sale shall
become absolute, or on condition that on such payment being made the sale shall become void, or
on condition that on such payment being made the buyer shall transfer the property to the seller,
the transaction is called a mortgage by conditional sale and the mortgage a mortgagee by
conditional sale. Provided that no such transaction shall be deemed to be a mortgage, unless the
condition is embodied in the document which effects or purports to effect the sale.

The Proviso to this clause was added by Section 19 of the Transfer of Property (Amendment) Act,
1929 (XX of 1929). The Proviso was introduced in this clause only to set at rest the controversy about
the nature of the document; whether the transaction would be a sale or a mortgage. It has been
specifically provided by te Amendment that the document would not be treated as a mortgage
unless the condition of repurchase was contained in the same document. The basic principle is that
the form of transaction is not the final test and the true test is the intention of the parties in
entering into the transaction. Having regard to the circumstances of this case as also the fact that
the condition of repurchase is contained in the same document by which the mortgage was created
in favour of B, the deed in question cannot but be treated as a mortgage by conditional sale.

Subhas Chandra v Ganga Prasad, AIR 1967 SC 878

The facts and circumstances of the case need to be looked at. The contradictory claim of the plaintiff

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The facts and circumstances of the case need to be looked at. The contradictory claim of the plaintiff
regarding that Prassana was senile , old and of unsound mind.

The plaintiff's father, Prasanna Kumar, who died in 1948 at the age of 90 years, owned certain lands
with high value. Prasanna had two sons, Ganga Prosad, the plaintiff, and Balaram, the second
defendant and Balaram’s son (Prasanna’s grandson), Subhas Chandra, first defendant. Balaram
always lived with his father and looked after Prasanna’s properties. The father executed a will in
favor of Subhas, the grandson. The plaintiff contested the deed as fraudulent, collusive and invalid
and asked for cancellation of the document.

High Court stated that on the basis that in the circumstances of the case and in view of the
relationship of the parties the trial court should have presumed that the donee had influence over
the donor and should have asked for proof from the respondents that the gift was the spontaneous
act of the donor exercising an independent will and which would justify the court in holding that the
gift was the result of a free exercise of the donor's will. HC further presumed that with age of the
donor his intelligence or understanding must have deteriorated with advancing years and
consequently it was for the court to presume that he was under the influence of his younger son at
the date of the gift.
The suit was filed in 1952, more than eight years after the date of the transaction and more than
four years after the death of Prasanna. There is a considerable body of evidence that in between
1944 and 1948 a number of settlements had been effected by Balaram acting as the natural
guardian of Subhas Chandra and in all of them the terms had been recited and in each case Prasanna
had signed as an attesting witness. These settlements were made jointly with the other co-sharers of
Prasanna. In 1947 the Municipal Commissioners of Bankura filed a suit against Prasanna for recovery
of arrears of taxes. Prasanna filed his written statement in that suit stating that he had no interest in
the property. After Prasanna's death the Municipal Commissioners did not serve the plaintiff with a
writ of summons in the suit but obtained a decree only against Balaram ex parte. It is the case of the
plaintiff that Balaram exercised undue influence on his father, as Plaintiff was unaware of this
transaction.

Issue: Would this amount to undue influence on Prasanna?

Held: Under s. 16(1) of the Indian Contract Act, a contract is said to be induced by undue influence
where the relations subsisting between the parties are such that one of the parties is in a position to
dominate the will of the other and uses that position to obtain an unfair advantage over the other.
This shows that the court trying a case of undue influence must consider two things to start with,
namely, (1) are the relations between the donor and the donee such that the donee is in a position
to dominate the will of the donor and (2) has the donee used that position to obtain an unfair
advantage over the donor ? Sub-section (2) of the section is illustrative as to when a person is to
considered to be in a position to dominate the will of another. These are inter alia (a) where the
donee holds a real or apparent authority over the donor or where he stands in a fiduciary relation to
the donor or (b) where he makes a contract with a person whose mental capacity is temporarily or
permanently affected by reason of age, illness, or mental or bodily distress. Sub-section (3) of the
section throws the burden of proving that a contract was not induced by undue influence on the
person benefiting by it when two factors are found against him, namely that he is in a position to
dominate the will of another and the transaction appears on the face of it or on the evidence
adduced to be unconscionable.

The three stages for consideration of a case of undue influence were expounded in the case of
Ragunath Prasad v. Sarju Prasad in the following words :-
"In the first place the relations between the parties to each other must be such that one is in a
position to dominate the will of the other. Once that position is substantiated the second stage has
been reached - namely, the issue whether the contract has been induced by undue influence. Upon
the determination of this issue a third point emerges, which is that of the onus probandi. If the
transaction appears to be unconscionable, then the burden of proving that the contract was not
induced by undue influence is to lie upon the person who was in a position to dominate the will of
the other. Error is almost sure to arise if the order of these propositions be changed. The
unconscionableness of the bargain is not the first thing to be considered. The first thing to be

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unconscionableness of the bargain is not the first thing to be considered. The first thing to be
considered is the relations of these parties. Were they such as to put one in a position to dominate
the will of the other ?”

It must also be noted that merely because the parties were nearly related to each other no
presumption of undue influence can arise. As was pointed out in Poosathurai v. Kappanna Chettiar
and others;
"It is a mistake (of which there are a good many traces in these proceedings) to treat undue
influence as having been established by a proof of the relations of the parties having been such that
the one naturally relied upon the other for advice, and the other was in a position to dominate the
will of the first in giving it. Up to that point "influence" alone has been made out. Such influence may
be used wisely, judiciously and helpfully. But whether by the law of India or the law of England, more
than mere influence must be proved so as to render influence, in the language of the law, "undue".
According to Halsbury's Laws of England, Third Edition, Vol. 17 p. 673, Art. 1298, "where there is no
relationship shown to exist from which undue influence is presumed, that influence must be
proved". Article 1299, P. 674 of the same volume shows that "there is no presumption of imposition
or fraud merely because a donor is old or of weak character". The learned author notes at p. 679
that "there is no presumption of undue influence in the case of a gift to a son, grandson, or son-in-
law, although made during the donor's illness and a few days before his death". Generally speaking
the relation of solicitor and client, trustee and trust, spiritual adviser and devotee, medical attendant
and patient, parent and child are those in which such a presumption arises. Section 16(2) of the
Contract Act shows that such a situation can arise wherever the donee stands in a fiduciary
relationship to the donor or holds a real or apparent authority over him.

Several witnesses were examined to prove that Prasanna was a person of unsound mind at the time
when he executed the deed of gift. The plaintiff's only statement in examination in chief was that his
father was not of sound mind for 10 or 12 years from before his death. Is it to be believed that he
did not know about the deed until four years after the death of his father? This statement of his can
hardly be true because the deed does not stand by itself, but was given effect to in several deeds of
settlement which came out in evidence at the trial.
A case very similar to the instant one - Ismail Mussaiee Mookerdum v. Hafiz Boo 33 I.A. 88. There
one Khaja Boo, a Mahomedan woman, who died at the age of 90 years entered into the impugned
transactions when she was nearly 80. At that time she had an only son, the plaintiff in the suit, and
the defendant respondent, her daughter. It came out in evidence that she was on terms of bitter
hostility with her son and much litigation had taken place between them. The daughter was a
married woman whose husband resided in Rangoon, but she herself was living with her mother at
Rander. The result of the impugned transactions was that the daughter Hafiz Boo became possessed
of nearly the whole of her mother's Rangoon properties or their proceeds. The son alleged in the
paint that at the time of the occurrence the mother was suffering from dementia and was not in a fit
state of mind to execute contracts or to manage her affairs and was until July 1888 (she having died
in the year 1900) residing with the daughter and was completely under her domination and control.
Before the learned Trial Judge a large mass of evidence was given directed to the question of Khaja
Boo's mental capacity in 1889. The learned Judge found that the plaintiff had failed to show that his
mother was of unsound mind in 1889. The Court of Appeal came to the same conclusion.
"The mere relation of daughter to mother, of course, in itself suggests nothing in the way of special
influence or control. The evidence seems to their Lordships quite insufficient to establish any general
case of domination on the part of the daughter, and subjection of the mother, such as to lead to a
presumption against any transaction between the two. With regard to the actual transactions in
question, there is no evidence whatever of undue influence brought to bear upon them.“

The same remarks may justly be made of the pleading and the evidence adduced in this case. There
was practically no evidence about the domination of Balaram over Prasanna at the time of the
execution of the deed of gift or even thereafter. Prasanna, according to the evidence, seems to have
been a person who was taking an active interest in the management of the property even shortly
before his death. The plaintiff had no son. For a good many years before 1944 he had been making a
living elsewhere. According to his own admission in cross-examination, he owned a jungle in his own
right (the area being given by the defendant as 80 bighas) and was therefore possessed of separate
property in which his brother or nephew had no interest. There were other joint properties in the

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property in which his brother or nephew had no interest. There were other joint properties in the
village of Parbatipur which were not the subject-matter of the deed of gift. The circumstance that a
grand-father made a gift of a portion of his properties to his only grandson a few years before his
death is not on the face of it an unconscionable transaction. Moreover, we cannot lose sight of the
fact that if Balaram was exercising undue influence over his father he did not go to the length of
having the deed of gift in his own name.

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 Rent Control Legislation is a social legislation
Lease, License and is for the protection of tenants because
01 April 2018 19:07 not everyone owns property.

Ss. 105 – 109

Meaning of lease; Types of lease; Rights and duties of Lessor and Lessee

Section 105
Lease defined.—A lease of immoveable property is a transfer of a right to enjoy such 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. Lessor, lessee, 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
rendered is called the rent.
This is transfer of leasehold/lessee/tenancy rights. This is transfer of right to enjoy the property for a particular period of time which could be for
perpetuity.
Section 106
This for when a lease agreement doesn't state the duration of the lease. Sometimes, even when it is not mentioned local usage could imply the
duration. Notice is necessary and it may not be necessary however a court/rent control legislation mandated eviction order is required.

Types of lease-
1. Tenancy at will: can be terminated either at will of the lessor or the lessee
2. Periodic Tenancy: S.108, uncertain duration - can be terminated by one month's notice
3. Permanent leases or leases in perpetuity
4. A tenancy for a term of years.

1. Sivayogeswara Cotton Press v. M. Panchaksharappa, AIR 1962 SC 413

SLP granted by court against the decisions decreeing the P suit for ejectment on the ground that D is a tenant at will and negativing the claim to
permanent tenancy. The controversy depends upon the true construction of the lease dated Oct. 26 , 1914 executed b/w the predecessors in interest
of the parties to the present case.

Leaser and Lessee got into agreement of lease for 4 and a half acres of agricultural land for the purpose of erecting a ginning and pressing cotton
factory. Lessee died in 1916. The executors of the Leaser's will assigned the lease to D2, Gamodia Factories who continued to pay the rent to Leaser
until his death in May 1939. D2 then assigned its leasehold interest to D1 by a deed dated May 1944. The property contains factory, building and
residential quarters. The Leaser's two widows continued to receive rent.

P is the adopted son of the Leaser and was a minor till 1949. He sought to terminate the tenancy by issuing notices to Ds on the grounds that 1. the
lease had created tenancy at will in the events that happened 2. the original lessee had in contravention of agreement assigned to others benefits
under the lease. Ds did not vacate premises, P instituted suit.

Lower court said it was tenancy at will after 20 years since either of the parties could at will terminate the agreement and that P was entitled to the
property. High Court said that it was a tenancy for an indefinite period which would be valid for the lifetime of the lessee himself and the transferees of
the lessee specifically D2 because the OG lessee had assigned it to him. D1 having been assigned the lease from D2 was not P's tenant because the
transfer was not valid. D1 was not given certificate of fitness for appeal by the HC and therefore the SLP before the court.

Court held that on construction of the deed it was clear that the lease was certain for 20 years. The purpose was transaction of a building lease and
while there was liberty reserved for the lessee or his successor to give up leasehold after 1934, no such right was given to the Leaser. The Lease was
also heritable and assignable. Thus, there can't be a contention that it was a tenancy of will, it was one for an indefinite period at least.

The appellant's contended that when it is a lease for a building intention of permeant lease can be inferred as held in many case laws mentioned. Two
things are clear ; 1. lease was for building 2. until the time the lessee continues to pay rent the leaser cannot call upon him to quit. The P's contention
that that the agreement allowed the lessee to quit goes against the permanency argument was not allowed by the court. If correspondingly the leaser
had such a right, then it will make it a tenancy at will but it is not so in this case.

Baboo Lekhraj Roy v. Kunhya Singh where it was held that when a grant is made for an indefinite period, it ensures that there is no interest passed to
the heirs unless so stipulated. This does not apply if the term is specified.

The court applied Babasaheb Walad Mansursaheb v. West Patent to say that the nature of the tenancy created by the document must be determined
by construing the document as a whole. If it's for building purpose, prima facie it is arguable that it is intended for lifetime or even permanent lease.
However, this depends on the terms of the contract and the intention of the parties.

2. Dhanpal Chettiar v. Yesodai Ammal AIR 1979 SC 1745

This is a decision by a Bench of Seven Judges. The facts being that the land-lady moved an application for eviction of her tenant under the provisions of
Tamil Nadu Rent Act on the ground of her personal need. The petition was dismissed. On appeal, through her case of bonafide requirement was upheld
but eviction was refused due to lack of notice to quit in accordance with law. The High Court dealing with the matter in revision, held that notice to quit
under Section 106 of the Transfer of Property Act was not necessary for seeking an eviction of a tenant under the provisions of the Rent Act. This went
to the Supreme Court.

This said that giving of notice is just a formality under S.106 of TPA when an eviction order has already been taken through state law provisions.
Landlord can give it , but it is not a necessity. It has been held that the purpose of giving a notice under Section 106 of the Transfer of Property Act is
only to terminate the contract of tenant but it would not be necessary if the tenant incurs the liability of eviction under the provisions of the Statute. In
such a case the notice under Section 106 of the Transfer of Property Act would only be a formality and a surplusage and it need not be given by way of
any double protection to the tenant. It has been further observed that even though tenancy may be terminated by giving a notice under Section 106 of
the Transfer of Property Act yet the landlord will not be in a position to initiate the proceedings for eviction in absence of any liability incurred by the
tenant as provided in the Statute. Therefore, notice under Section 106 of the Transfer of Property act loses significance. Anyway he needs to meet the
eviction criteria of the rent control act. You need to file an eviction notice as under the Rent Control Act of the State Legislation.

3. Shanti Devi v. Amal Kumar AIR 1981 SC 1550

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3. Shanti Devi v. Amal Kumar AIR 1981 SC 1550
Whether the plaintiff's suit for ejectment was maintainable without a notice under Section 106 of TPA was the question before the court. The plaintiff
decreed for ejectment and thereby the defendant claimed that there was no notice received. By an indenture of lease dated March 19, 1956, the
appellant who was the plaintiff, demised a cinema theatre known as 'Shanti House' situate at Sainthia under Anchal Panchayat in district Birbhum, to
the respondent-defendant for a term of four years with a covenant of two renewals of three years each. On May 2, 1970, the plaintiff brought a suit for
ejectment on the ground that the lease had expired by efflux of time and also pleaded in the alternative that he had sent a notice dated April 3, 1970 to
the defendant both at his Calcutta address and at. his Sainthia address determining the tenancy with the expiry of the month of April, 1970. The
defendant contested the plaintiff's claim on various grounds. The defendant pleaded, inter alia, that no notice under Section 106 of the Transfer of
Property Act having been served upon him, the suit was not maintainable

The lower courts have gone into the validity of the notice without taking into consideration the fact that the lease itself was for a definite period of time
and therefore expired by efflux of time under Section 111A of TPA. Thus, notice was not necessary under Section 106. This was in pursuance of the
contract made between the parties. The lower courts have completely overlooked the fact that the lease was for a term of four years with a covenant
for renewal for two terms of three years each, i.e., a lease for a definite duration of ten years. The lease for a definite term and, therefore, expired by
efflux of time by reason of Section 111(a) of the Transfer of Property Act. That being so, the service of a notice under Section 106 of the Transfer of
Property Act was not necessary. There is no question of State Act because it only applied to municipalities.

4. Laxmidas Bapudas v. Rudravva 2001 (2) SCC 409

The brief factual background giving rise to the point is that in the year 1905, the mother and guardian of one Gurappa Channabasappa Belaguri, holding
a power of attorney, leased out his non-agricultural land to Anant Parashuram Nagaonkar for a period of 99 years, to establish a factory. In the year
1907, the lessee Nagaonkar aforesaid, assigned the lease in favour of Ramdas Vithaldas Darbar for a sum of Rs. 8,500/-.In the year 1986 the lessors
served a notice to the lessees calling upon them to vacate the premises on the ground that the lessees did not pay rents for the period 1.3.85 to 31.3.86
and that the property was also bona fide required for their occupation. Reply to the notice is said to have been sent by the lessees denying default in
payment as alleged and asserted inter alia that the lessors had not right to terminate the lease in view of the 99 years' fixed term lease under the
agreement. Thereafter, however, the lessors filed an application under Section 21(1)(h) and 21(1)(p) of the Karnataka Rent Control Act 1961 on the
ground that the premises were bonafide required by them for starting their own business.

The question that directly falls for consideration in this appeal is whether or not, a petition under Section 21(1)(h) of the Karnataka Rent Control Act, for
eviction of a tenant under a contractual fixed term lease, would be maintainable on the ground of reasonable and bona fide requirement of the
landlord. Accordingly, we hold that a landlord is entitled to an order of eviction if he satisfies one or other conditions mentioned in S.21 of the
Karnataka Rent Control Act notwithstanding the fact that the lease under which the tenant is in possession of the premises is for a term and that it has
not expired on the date when the application for eviction is filed. The landlord required a bona-fide reason to evict the lease. It may have to be
scrutinized as to what extent the provisions of Section 21 of the Karnataka Rent Act shall have an overriding effect over any other law or a contract. The
Rent Acts have primarily been made if not wholly, to protect the interest of tenants, to restrict charging of excessive rent and their rampant eviction at
will. In that view of the matter Section 21 of the Karnataka Rent Act provides that notwithstanding anything to the contrary contained in any contract,
not order for eviction of a tenant shall be made by Court or any other authority. Undoubtedly, it is a provision providing statutory protection to the
tenants as it is also evident from the heading of Sec. 21 of the Act. With great respect therefore, in our view, the decision in the case of Dhanapal
Chettiar (supra) has not been correctly construed in the case of Sri Lakshmi Venkateshwara Enterprises Pvt. Ltd. (supra) and it no more holds good nor
the Full Bench decision following it, in the case of Bombay Tyres International Ltd. (supra)

It overruled Lanxmi Venkataswara and said that it incorrectly interpreted Dhanpal Chettiar. It re-interpreted Dhanpal Chettiar to understand how
notice under S.106 of the TPA interacts with the notice requirements under the Rent Control act of the State. Subsequent cases read Dhanpal Chettiar
to mean that S.106 was not required in the purview of State Legislation and that the principles cannot be extended to cases where a term is provided
for in the lease. It is to the effect that the provisions of the Rent Control Act would apply de hors the contract. When the Supreme court has laid down
the law to that effect, this Court has necessarily to follow the same and we do so. They are adjudicating on the nature of the lease . Even if there is a
fixed term lease, even during the subsistence of a fixed term lease if there is a forfeiture clause in a lease deed. The grounds for eviction must be similar
to those in the Rent Control Act of the State. Any other grounds will be inoperative. On expiry of period of the fixed term lease, the tenant would be
liable for eviction only on the grounds as enumerated in Clauses (a) to (p) of Sub-section (1) of Section 21 of the Act. (Para 19)

Difference between lease and licence

A licence is a restricted right, it allows certain enjoyment of property. Through this a use that was unlawful is now lawful. In a lease you are being given
possession of a property, you have a right to enjoy the property; there may be restrictions given in w.r.t the enjoyment of property. If there are too
many restrictions then the court can read the lease as a licence. If it is a lease, it is a property right and property rights run with the land. Licence cannot
be inheritable or transferred but lease can be and it has to say so in the contract. Licence is revocable , lease is not . Licence does not give any right
against a third party, because it a personal right. But lease can be transferred to a third party, sub lease it until the contract says to the contrary.

S.105 defines lease, S.52 of Easements Act defines license. To ascertain whether a document creates a lease or a license, (1) the substance of the
document must be preferred to the form. (2) the real test is the intention of the parties (3) if the document creates an interest in property it is lease, if
it only permits another to make use of a property of which legal possession of the owner continues it is license (4) if under a document a party gets
exclusive possession of the property prima facie he is considered a tenant; but circumstances may be established which negative the intention to create
a lease. (Associated Hotels)
Section 52 in The Indian Easements Act, 1882

52 "License" defined. -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 to an easement
or an interest in the property, the right is called a license.

1. Associated Hotels of India Ltd. v. R.N. Kapoor (AIR 1959 SC 1262)

The appellant is the proprietor of a hotel and the respondent was occupying space in the 'Ladies and Gents' cloak rooms. The respondent applied for
fixation of rent under the rent control act alleging that he was a tenant. He contended that he was a licensee and not a lessee. R.N. Kapoor and the
people who run the saloon want to be able to tell Imperial Hotel that the Rent Control Act applies , therefore they can't be charged high rent. Under an
agreement , R.N. Kapoor and the saloon owners occupied certain cloak rooms in the Imperial Hotel. Justice Subba Rao talks about the difference
between lease and license. S.105 of TPA defines lease. Section 52 of the Indian Easements Act defines license. In order to differentiate it is important to
look at the substance of the deed, the intention of the parties. If this implied that there was an intention to transfer the property and not just limited
rights, then it is a lease and not a license. The only dissenting opinion was whether the cloak rooms were rooms in a hotel or not. Lease is transferring
one a proprietary interest in a land that gives one possession. License is a personal privilege, which is a permission to do something for that land. Was
occupation of the land , possession or just incidental to the doing of a certain activity? The Lease deed allows occupation of the two rooms. This is also
transferable. And licenses are not transferable. The deed makes it clear that they have to continue paying the rent whether they are using it for beauty
salon purposes or not. This shows that this is not a license for business. While they keep using the term 'license', the substance says that it is a lease. If

Property Law Page 39

 salon purposes or not. This shows that this is not a license for business. While they keep using the term 'license', the substance says that it is a lease. If
it is a license, then an eviction notice will not be needed. If they are rooms in a hotel, then they are excluded from 'premises' and thus Section 2 of the
Rent Control Act does not apply and therefore the party cannot be tenant. They have a physical interpretation, regarding that they should be in the
hotel or a literal interpretation, whether it is a room in a hotel i.e. if it is connected to the function of the hotel. There are business services that are
provided for by the hotel, this counts as function of the hotel. Here, it was found to be a room in a hotel because the beauty salon rooms were rooms in
a hotel. And are excluded from 'premises' . Thus the Delhi Rent Control Act does not apply. If there is exclusive possession, it is prima facie a lease
unless a contrary intention appears.

2. Bharat Petroleum Corporation Ltd. v Chembur Service Station, 2011(4) SCALE 209, ¶18-20.
BPCL , the appellant entered into an agreement (DPSL) with the Respondent who is the Chembur Service Station. The respondent has to sell the
product of the appellant and run the business of the appellant under the terms and conditions of the appellant. Under the DPCL agreement is almost
giving to a principal-agent relationship. During an inspection , a reading was found to be incorrect. The report showed that the microchip in the
machine was not original. The respondents were then given a show cause notice saying that they had cheated the company. The respondent said that
it was a lease and therefore the contract couldn't be terminated. The agreement allowed termination of the contact without any reason. The
agreement shows that the property is an absolute property of the appellant company. The license can be terminated for any ground whatsoever. The
respondent company is saying that he gets protection under the 1973 Act and would be a deemed tenant. The Bombay Rent Control Act was repealed
and the Maharastra Rent Control Act had come into force. The respondent company however, was only occupying the land for the business of the
appellant, not his own. Thus he won’t be a deemed tenant. There are illustrations in the case that show us the dividing line .

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Mortgage
03 April 2018 14:30

Mortgage is a right in land that’s being transferred. Mortgage is the transfer of specific immovable
property. It is for the purpose of securing a loan payment. Money decree executes against assets, so
that on liquidation, the money makes the loan good. Even if the property has other encumbrance,
the mortgagee still has a right over it. Irrespective of whether it was signed by other parties or not.
If I don't ask for mortgage and I just give money, it comes under charge. This is under Section 100.
This comes about my operation of law. With mortgage there is an underlying personal covenant.

The borrower has a right of redemption and the seller has a right of foreclosure.

Section 58

Under simple mortgage, there are two remedies; one on the personal undertaking to obtain money
decree against the debtor and the other to sue on the mortgage and obtain a decree for sale of
property. The remedy for the mortgagee under mortgage for conditional sale is suit for foreclosure.
Unlike mortgage for conditional sale, in the English Mortgage there is a personal covenant to repay
the amount. Under mortgage for conditional sale there is ostensible sale, under English mortgage
there is absolute transfer of property. Under deposit by title deeds, the title deeds are deposited as
security for the debt, possession of property is not given and no registration is necessary. The
remedy is a suit for sale.

Section 60
This is written in favor of the mortgager. The mortgagee is the one who has the mortgage interest in
the land. It gives me the right to have the property to be sold. The mortgagee cannot just sell the
property, the mortgagee has to go to court. The law has inclined towards the mortgager because
they have the right to redemption. Redemption is the right of the borrower. The right may be barred
by limitation or the mortgagee obtaining a decree of foreclosure. Any attempt to prevent the
exercise of the right would be treated as a clog and as invalid because the rule is 'once a mortgage
always a mortgage.

Right of redemption
The right of redemption, is to get back the land after payment of money, irrespective of time lapse.
Bank will give right of redemption to mortgager , courts give extra time to borrowers to pay back.
This is a right with mortgagers have, it is therefore only in mortgage by sale and not sale with
condition to repurchase. The equity of redemption co-relates to other principles of equity. Once a
mortgage , always a mortgage. There are two circumstances. If you have signed a contract that fully
removes from you the right of redemption , the court will strike down those clauses because they
are void. There are certain contractual clauses that may be partial restraint on the right to redeem a
property, the court will try to step in and figure out the economic positions of the parties and then
strike it down only if it was a clog on the redemption.

Section 100
Right in immovable property to have my loan repaid by examination of law. Assets of borrower will
get attached and be liable to sold, even though lender has no specific interest in any specific
property. Section 53A protects creditor because they have a charge on property.

When I'm mortgaging property, I am only giving away a mortgage interest and not possession. The
mortgager binds himself to pay the mortgage money. Mortgage by condition, is a partial restraint.

Mortgages as Personal Covenant

I mortgaged a property for loan X. Property is enough now, other property will be attached to make
good the loss.

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Mortgage money
Mortgage money = money borrowed + interest . Property doesn't stand mortgaged when mortgage
money is paid.

Mortgage Deed
Document through which mortgage interest transfers. For a minor, a guardian must act in its best
interests. You can have a mortgage for future debt or commercial service.

Types of Mortgage

Simple Mortgage
Delivery not given to mortgagee , there is a personal covenant. It is only giving an interest in
property. The underlying covenant is if mortgage property law is not sufficient to make good loan, I
am liable for rest through other assets.

Mortgage by Conditional Sale

This is not a sale agreement. The right of redemption exists. The difference is in the proviso. The
proviso was added through an amendment to clear out the contradiction between a sale for the
purpose of repurchase and a mortgage by conditional sale. If I've signed a mortgage agreement, the
same document needs to have it. The sale condition therefore needs to be in the mortgage deed.
This is ostensible sale - not a real sale. Sale appears to be a sale, but is not really because the court
can extend the time to pay the debt. It is still a mortgage. If the borrower repays the money, the sale
becomes void. This is an ostensible sale, it appears to be a sale but is not a sale. If certain conditions
are met it will become an actual sale.

English Mortgage
Starts with being an absolute sale. My right to redeem subsists.

Sale with a Condition to Repurchase

The restraint of sale with condition to repurchase is allowed. It is different from mortgage by
conditional sale. If time period lapses and the debt hasn't been made good then it is considered that
the mortgagee has purchased the property. There is a separate mortgage deed and a separate sale
agreement. The right of redemption doesn't exist here. If a buyer, buys a land that has a condition
of re-purchase, the buyer can be on actual notice or constructive notice. The proviso to Section 60
says that if the deed of sale is separate it is a sale with condition to repurchase if it in the same deed
it is mortgage by conditional sale. The Right of redemption is a right in equity.

Anomalous Mortgage
It is a mix of the other mortgage.

Vidhyadhar v Manikrao AIR 1999 SC 1441

A mortgaged property to C in 1979. In 1973 A had already sold the property to B who is the plaintiff
in the case. The question is whether the transfer b/w A and C was a sale with condition to
repurchase or a conditional sale. The intention of parties, the conduct and the circumstances along
with the deed need to be seen. Substance matters not form. In Para 48, the clauses of sale in the
same deed as mortgage in acc. with a proviso. In para 46. Defendant 1 contends that

check this for sale with a condition to repurchase and conditional sale

Usufructuary Property
Transfer of possession. In simple mortgager was binding himself , over and above the mortgage. No
personal covenant. No time period. Mortgage lasts as long as debt last. Can enjoy profits arising
from the land we use it to make good the debt.

Mortgage by Deposit of Deed

Document of title handed over to the mortgagee, deposit and intention to create security. It can be
oral. Deposit of title deed, which will be security for the fact that I have repaid the money I have

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oral. Deposit of title deed, which will be security for the fact that I have repaid the money I have
borrowed from you. If it's just this much, then it’s a memorandum. If the memorandum has terms of
return, interest, time period etc. it is a mortgage deed and requires registration.

Sale by Court Order

The mortgagee has a right of redemption. The court will then auction off the property through a
public auction.

Chaganlal v. Anantaraman, AIR 1961 Mad 415

The mortgage deed was signed in 1930 and the Sale deed was in 1952. The issue was what mortgage
money was , and whether the interest is part of mortgage money. The case says that interest is
payable in the mortgage money unless a contrary intention appears.

Mohiree Bibi v. Dharamdas Ghose , (1903) ILR 30 Cal

TPA will apply once you are competent party for which we check the contract act. Both the
mortgager and mortgagee need to be competent to contract. If there was no loan in the eyes of the
law, then there can't be a repayment in law. If one is contracting with a minor then you are doing
so , taking the risk that it might not be enforced in court. Here, he could not take shelter under the
fact that he did not know it was a minor. One gets induced by misrepresentation, then it could be
fraud however here, knowing that the mortgager was a minor, however here the mortgagee had
notice.

Ganga Dhar v. Shankar Lal, AIR 1958 SC 770

One property was the shop and one was an office. The shop was a usufructuary mortgage and the
mortgagee was allowed to take rent from the shop. The first provision in the impugned contract is
the right to redeem the mortgage after 85 years. Another provision was that after expiry of 85 years,
after 6 months , the mortgager did not have the right to redemption. The issue was whether the
time period of 85 years was a clog on the right to redeem. There was no unconscionability here,
there was no evidence to show that the borrower had no choice but to sign the long term mortgage.
The court therefore upholds the contract, the sanctity of contract because it was a bargain of equal
footing and therefore 85 years was fine . In these particular facts and circumstances there is equal
footing and the 85 years were entirely entered into willingly by the parties. The case is premature
because only 47 years had passed and the property could not be redeemed. Here they said that
rising prices made the borrower pre-maturely try to get the land back. The borrower's financial
situation was sound. He was not on an unequal footing. Just the mere need to borrow money is not
acute financial distress. The court looks at the situation to see if the lender took undue advantage
and arm twisted the borrower to get him to sign the agreement.

The rule of equity, that once a mortgage, always a mortgage. The mortgager always has a right of
redemption. The courts of equity will not allow, the right of redemption to be taken away. The court
said that a mortgage will always be redeemable, and the right of redemption cannot be taken away
by another property. It is not a sale. A provision that is a clog on the right to redemption is invalid.
The court says that the mortgager's right of redemption is co-extensive with the right to redeem by
the mortgager. The right to redeem accrues when the mortgage money becomes due.

Pomal Kanji Govindji v. Vrajlal Karsandas Purohit, AIR 1989 SC 436 : (1989) 1 SCC 458
This is a petition against three different cases, against the Gujarat High Court decision which allows
mortgagees to redeem their property even before the time period gets over. Another decision was
to allow the mortgager to recover possession from tenants when it was given to the mortgager to
the mortgagee as usufructuary property, after the mortgage money is paid off. The tenants say that
the rent agreement should stand. The court looked into the facts of all three cases, that a mortgage
needs to be more than the mortgage. More right than what has been extended to you cannot be
given. Therefore, once the mortgage is over, then the rent agreement also gets over. The court
cannot relieve you of any and all bargain because then sanctity of bargain will not remain. The
borrowers are saying that they were desperate and signed without reading properly the contract.
The borrower was poverty stricken qua the lender.

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The basic principle of law here is that you can't part with what you don't have. He didn't have
possession for the time he had given, he didn't ask for consent from the owners. You can't come to
the court without clean hands. Part of clean hands is doing due diligence. The court looks at the
circumstances of the case. It said that the fact that the interest payment only had to be done after
99 years, it would logically be hard and undoable, and reduces the likelihood of repayment. The
court found that the fact that the lender can reconstruct or tear down the building and the borrower
would always foot the bill was unconciable. This showed the desperation of the borrower. The
clause was found on a fetter on the right to redeem and a clog on the right of redemption.

Shri Shivdev Singh & Anr vs Sh.Sucha Singh AIR 2000 SC 1935
The disputed property was owned by one Prakash Singh who had mortgaged the same in favour of
Smt. Basant Kaur for a sum of Rs. 7,000/- vide mortgage deed dated 19.3.1968.The Usufructuary
mortgage deed allowed for redemption after 99 years. There is a clause in the mortgage deed that
said that the Principal amount becomes due after 5 years. A valuable property was mortgaged for a
meagre amount for that long a period of time. The amount could have been paid off in 26 years. 99
years was not required. Mortgage laws are always skewed towards the borrower, because the
borrower was in such a bad financial situation he was arm twisted into signing the contract.

Sangar Gagu Dhula v. Shah Laxmiben Tejshi, AIR 2001 Guj. 329
The deed was signed in 1914 and 99 years were supposed to end in 2013. The heirs of the suit were
brought in the suit in 1974. The plaintiff the mortgager, came to the court to ask for relief because
the 99 years was a clog on the equity principle of redemption. From the finding of the lower court,
the high court says that the 99 years is a clog. The court says that the question of voidable or void ab
initio is immaterial. It is void ab intio, but not void in the absolute sense it doesn't mean that the
contract didn't exist in the first place. If they lift the clog, then the term has become invalid because
of the court's discretion. A borrower can redeem his property when 1. when the period of the
mortgage period is over 2. when there is a clog. The respondent says that the limitation period starts
30 years from the time of signing of the contract. However, the law clearly says 30 years from the
right to redeem.

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