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The Law of Transfer (Transfer of Property Act, 1882) Background of the Act: The Indian Law Commission prepared

the first draft of the Transfer of Property Act in 1882. The said commission was headed by Lord Romilly and several others British jurists. The Act was finally passed in 1882 and come into force on the 1st of July 1882. Since passing, it underwent many amendments and after the independence of Bangladesh in 1971, The Bangladesh Laws (Revision and Declaration) Act 1973 brought over certain amendments too. But, it is interesting to note, the basic Rules and Doctrines remain unchanged. Object and Scope: The chief objects of the act are (I) to bring the rules which regulate the transfer of Property between living persons into harmony with law of interstate and testamentary succession, and (2) to complete the law of contract law so far as it relates to transfer of property. This Act is not a complete code of the law of transfer of property. Its scope is limited only with transfer by act of parties from one living person to another as distinguish from transfer by operation of law, such as interstate succession, as well as involuntary transfer as in the case of insolvency/ bankruptcy, execution sale etc. As a matter of fact, it deals with only certain specified kinds of transfer such as Sale, Mortgage, Lease, Gift etc. Question may arise what happens where the Act is silent, in such cases, the Courts are entitled to apply the rules of English common law which are not inconsistent with the Act and based on justice, equity and good conscience. It is important to note that this act is applicable to Mohammadans only if they are not inconsistence with those of Muslim law. Scheme of the Act: Total Sections 137 Divided into 8 Chapters. Ch. Ch. I II Contains 4 sections (sec 1-4) deals with extent of operation and definitions. Contains 50 Sections (Sec 5 - 53A) deals with general rules of transfer

Ch. Ch. Ch. Ch. Ch. Ch.

moveable / immovable. III Contains 4 Sections (Sec. 54 - 57) deals with sale of immovable property. IV Contains 43 sections (Sec 58-104) relates to Mortgage of immovable property of charges. V Contains 13 sections (Sec 105 - 117) relates to lease of immovable property. VI Contains 4 sections (Sec 118 - 121) relates to exchange. VII Contains 8 Sections (Sec 122 - 129) deals with gift. VIII Contains 8 Sections (Sec 130 - 137) relates to transfer of actionable claim.

Please note : Sections 74, 75, 80, 85 - 90, 97 and 99 have been repealed. General Rules of Transfer: What does Transfer of Property means: It means an act by which a living person conveys property, in presence or in future, to one or more other living persons, or to himself. It is important to note that living person may be an artificial person - like a Company incorporated under the Companies Act, 1994. It also includes an association or body of individual even not incorporated. It is important to note that it is an essential requisite of valid transfer that the property must be in existence at the date of the transfer, though a transfer may be made so as to operate immediately, or at some future date. If the property itself is non-existence on the date of the transfer the said transactions cannot operate as a conveyance but, nevertheless operate as a contract - which may be specifically enforced as soon as the property comes into existence. Transfer by act of parties means those transfer only as takes place between living persons by their own voluntary acts, as distinguished from transfer by operation of law, which occurs in case of succession, forfeiture, insolvency and court sale, such as sale in execution of a decree. Transfer of Property Act in 1882 is limited to transfer by act of parties. (Thus, a purchaser in a court sale acquires title without a registered deed).

Who can Transfer: Sec. 7 Transfer of Property Act in 1882 Any one who is (1) competent to contract and (II) have title to the property, or authority to transfer it if it is not his own, can transfer. So far the competency is concerned a minor, a lunatic, or disqualified proprietors whose estates are under the management of Court of Wards cannot transfer. In Mohari Bibi v. Dharmodas, it was held that a minors contract in Indian sub-continent is void, that is, a minor is not competent to contract, and hence a conveyance of land by a minor is not merely voidable, but void. Where a minor, however, fraudulently represents himself to a major and induces an innocent third party to purchase property from him and latter sues for its recovery on the ground that the sale was void the court will, on equitable principles, restore the property to him only if he returns the purchase money. The age of majority in English law is 21 years, while in Indian sub- continent it is 18, except when the minor is under the protection of the Court of Wards or a guardian has been appointed under the Guardian and Wards Act, 1890 in which case, the age of majority is 21 years. Minority, however, is no disqualification for being a transferee in the following cases: - a gift or device in favour of a minor, when it is not onerous; - a conveyance for consideration, where the consideration has proceeded or proceeds from a third party and no obligation is imposed on the minor; - even if the consideration proceeded from the minor, if the transaction was complete and there is no outstanding obligation to be performed by the minor Where the conveyance is for consideration which has yet to proceed from the minor or where there is an outstanding obligation to be performed by the minor, the conveyance in favour of the minor transferee cannot be upheld. For example, a Lease in favour of a minor when rent has to be paid in future. In the cases of a Lease under Section 107, since a lease has to be executed both by the lessor and the lessee, a minor can neither be a lessor nor a lessee. A transfer by a lunatic is wholly void. If the conveyance was made during a lucid interval, it would be valid provided no guardian has been appointed in respect of his property. The law is that where a conveyance is made in favour of a lunatic the property will vest in him, but it will be managed by a guardian. (AIR 1981 Pat 384)

Thus, an administrator, guardian, trustee or agent acting under a Power of Attorney, are persons who are authorized to dispose of property not belonging to them. Persons having limited power of Transfer: The powers of statutory corporations, in Bangladesh are those authorized by the Statute, either expressly or by necessary implication. Managers of joint Hindu families with respect to the family properties, trustees and managers of temples and heads of monks are other persons coming under this class. Essentials of Valid Transfer According to Sec. 5 of Transfer of Property Act in 1882 both the transferor and the transferee must be living persons. So, it deals with transfer inter vivos, i.e. between living persons only. This living person does not necessarily indicate an animate being, but may be a juristic person, such as a corporation, or an idol in Hindu law, in whose favour, the property may be transferred. Though property cannot be transferred to an unborn person, it may be created in favour of an unborn person, subject to certain conditions which are laid down in Sections 13, 14 and 20 of the Transfer of Property Act in 1882. The transferor himself may be transferee, in a different capacity e.g., as trustee for others. The Transferee, must be a person legally qualified to be a transferee. Thus, judges, legal practitioners and court officers cannot purchase an actionable claim under Section 13 of the Transfer of Property Act 1882. A minor though not competent to be a transferer, is competent to be a transferee except in the case of a lease, since a lease is a bilateral transaction under the Transfer of Property Act 1882. Also note, however, there is a class known as ascetics or sanyasis, who have renounced the world and are deemed to be civilly dead and hence they cannot be transferees of property. If the renunciation or retirement from worldly life is only partial, he will not be so disqualified (Maynes Hindu Law). As to the Property to be transferred, it must be in existence at the time of transfer. Property includes not only physical objects, but also rights and interests existing therein. Who is an ostensible owner: An ostensible owner is a person who is held out as the real owner without being such. He must have all the indicia of real ownership, owing to the representation of

real owner, So, who hold possession of property as manager, agent, guardian or any other fiduciary character cannot be an ostensible owner (refer to Sec. 41 Transfer of Property Act in 1882). This theory enunciated under Sec. 41, of the Transfer of Property Act in 1882 is a principle of natural equity and based on the Doctrine of Estoppel. (Ramcoomer Vs Hacqueen). Its is a principle of natural equity which must be universally applicable that, where one man allows another to hold himself out as the owner of an estate, and a third person purchases it for value, from the apparent owner in the belief that he is the real owner, the man who so allows the other to hold himself out shall not be permitted to recover upon his secret title, unless he can overthrow that of the purchaser by showing, either he had direct notice, or something which amounts to constructive notice, of the real title or that there existed circumstances which ought to have put him upon an enquiry that, if prosecuted, would have led to a discovery of it. It is to be noted that the provision in Sec. 41 is an exception to the general rule that a person cannot confer a better title than he has. Being an exception, the onus is upon the transferee to show that the conditions for the application of the above section have been satisfied [Guruksh v. Nikka Singh, AIR 1963 SC 1917]. Transfer by an ostensible owner is binding on the real owner, if the transferee can prove: 1. That the transferor is an ostensible owner; An ostensible owner is a person who is held out as the real owner without being such. He is clothed with all the indicia of real ownership, owing to the representation of the real owner. The term, therefore, excludes persons who hold possession of property professedly as manager, agent, guardian, or in any other fiduciary character. 2. That the transferor is ostensible owner by the consent express or implied, of the real owner. The real owner is not bound, unless the apparent ownership has been permitted or created by him. Thus, a person who holds adversely to the real owner, cannot be said to be an ostensible owner. Consent may be implied from conduct. Thus, if the real owner knows that another person is dealing with his property as if it were his

own, and acquiesces, his inaction will imply consent. The consent must be valid consent. A minor cannot give consent, so during the minority of the true owner no one can hold himself out as ostensible owner. It is to be noted, where one co-share transfers his share to other co-sharers and the latter leave the transferor in management of the property and the transferor obtains a mutation of his name in the revenue records, but beyond this, there was nothing to show that the co-sharers had held the transferor as the owner of the property, held that sec. 41 was not attracted to debar the co-sharers from asserting their title (Suraj Vs. Azamabed Tea Co. AIR 1965 SC. 295). (3) That the transfer is for consideration. (4) That the transferee has acted in good faith and has made reasonable enquiries to ascertain that the transferor had power to transfer. Reasonable care means such care as an ordinary man of business would take. What amounts to reasonable enquiry depends on the particular circumstances of each case. The purchaser must act not only carefully but also honesty. He may have made a reasonably careful inquiry, but if after asserting the true facts, he chooses to ignore them, he is not protected (Gurbuksh v. Nikka Singh, AIR 1963 SC. 1917) Provisions of Sale of immovable property: Sale is a transfer of ownership in exchange for a price paid or promised or part paid or part-promised (Sec. 54). So, in terms of the Section sale is a transfer of ownership in exchange for a price and not in exchange of land or anything else. (Umar Din Vs. Fazal Din 1952 LAH 166). On the other hand, a contract for sale of an immovable property is a contract that a sale of such property shall take place on terms settled between the parties. So it does not itself, create any interest in or charge on such property. It is important to note, a sale passes an absolute interest in the property to the purchaser. But a contract for sale does not by itself confer any interest on to the buyer. Buyers only right is to a specific performance of his contract. A sale creates a right in rem i.e. a title which is available against the whole world; a contract for sale only gives a right in personam which is available against the vendor, gratuities transferor or a transferees with notice, but not against a transferee for value without notice from the vendor. The only modes by which a sale of property, whether tangible or intangible, be effected is by registered instrument. Moreover, a contract for sale of any

immovable property can be made only by an instrument in writing and registered under the Registration Act, 1908, whether or not the transferee has taken possession of the property or any part thereof. In a contract for sale of any immovable property, a time, to be effective from the date of registration, shall be mentioned for execution and registration of the instrument of sale, and if no time is mentioned, six months shall be deemed to be the time. Sec. (54A). Such a contract for sale need to be presented for registration within 30 days from the date of execution [Sec. 17A(2) of Registration Act 1908].

Rights and liabilities in Sale / Transfer: According to Sec. 55 of Transfer of Property Act in 1882 1. Seller is bound, subject to any contract: - to disclose to the buyer any material defect in the title: - to show the buyer all titled documents relating to the property for his examination; - to answer to the best of his information all relevant questions in respect of his property put forward by the buyer; - on payment of amount due in respect of the price, to execute a proper conveyance of the property when the buyer wants; - between the date of contract of sale and delivery of the property, to take as much care to the property and the title documents as is reasonably expected; - to hand over possession, in part-performance of contract, if desired by the buyer; - to pay all public charges and rent accrued on the property till the date of the sale and to delivery a unencumbered property (Sec. 55 Cl. I). In terms of Cl. (2) of Sec. 55 in all case of transfer of immovable property, it deemed that seller (vendor) have the right and interest, which he intends/professes to transfer and has also the power/authority to transfer the same. Moreover, in cases where the seller (vendor) is in receipt of the total purchase money (consideration and value of the property), he is also bound to deliver to the buyer all title documents of the property that are within his possession and power, unless he retains any part of the property comprised in such title documents, in which case, he (seller/vendor) is entitled to retain them. Where whole of the property is sold to different buyers, the buyer of the lot of greatest value is entitled to title documents. [Sec. 55, Cl. (3)].


The buyer is bound: - to pay or tendered, at the time of completing the sale, the purchase money, to the seller or such person as he directs. - to disclose to the seller any fact as to the nature or extent of the sellers interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and which materially increases the value of such interest - where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller - where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charge and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.

Purchasers remedies in defective title: Where defects can be discovered before conveyance which has not been disclosed by the seller, the purchaser (1) can claim damages or (2) rescind the contract for misrepresentation. The right to rescind for defect of title must be exercised immediately once the defect is discovered. But if the purchaser does not want to rescind he may still sue for damages for breach of the convent for title (Sec. 55 Clause (2). A non disclosed material defect on the sellers title is considered fraudulent by Sec. 55 Clause 6 (b) and thus the purchaser can sue to set aside the sale or for damages on the ground of fraud. (But if there is no fraud, coercion or undue influence, even after the completion of the sale, no suit for damages will lie for mere error of description, and such compensation could only be claimed from the seller before conveyance).

Provisions of Mortgage of immovable property: A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability [Sec. 58(a) of Transfer of Property Act in 1882]. In a mortgage the transferor is called a mortgagor and the transferee as the mortgagee and the instrument / deed by which the mortgagee created is known as mortgage - deed. Kinds of mortgage: As contained in the Transfer of Property Act, 1882 (1) Simple mortgage [Sec. 58(b)] (2) Mortgage by conditional sale [Sec. 58(c)] (3) Usufructury mortgage [Sec. 58(d)] (4) English mortgage [Sec. 58(e)] (5) Mortgage by deposit of title deeds [Sec. 58(f)] (6) Anomalous mortgage. [Sec. 58(g)] In a simple mortgage there is (a) a personal covenant to pay and (b) the transfer of a right to cause the property to be sold in case the money is not paid. But possession is not delivered, On the other hand, in a usafaructury mortgage (a) there is no personal liability of the mortgagor and (b) there is no remedy by foreclosure of sale. But possession is delivered to the mortgagee, and he retains the possession of the mortgaged property until the repayment by the mortgagor is mad. A mortgage by deposit of title deed is commonly known as equitable mortgage. It was used to be created only by deposits of material title deeds and no other formality was required, but after the new amendment to the Transfer of Property Act in 1882, as well as recent amendment in the Registration Act 1908 such mortgages need to be registered. An anomalous mortgage is combination of the above three types (1,2 and 5 above) of mortgages. In English mortgage (a) mortgagor binds himself to repay the mortgage money on a certain date and also (b) transfer the property absolutely to the mortgagee, but with the condition to retransfer upon payment of the mortgage money. In a mortgage, if the mortgagor ostensibly sells the mortgaged property on condition that (a) on default of payment of installments (of mortgage money) on a certain date the sale shell become absolute, or (b) on such payment made, the sale

shall become void, or (c) on such payment being made, the buyer shall transfer the property to seller, the transaction in called a mortgage by conditional sale, provided however, the condition is embodied in document which effects the sale [Sec. 58 (C) ]. No personal liability on the part of the mortgagor to pay the debt. So the remedy of the mortgagee is by forclosure only and mortgager will have to remain content with the mortgage property and can not look to the other properties which are to ripen into an absolute sale on breach of the conditions as to payment back the borrowed amount. Mortgagors rights and liabilities: - Right to redeem the mortgage property (Sec. 60). - Right to ask the mortgagee to transfer the property to a third person (Sec. 60 A). - Right to inspection and production of documents - Right to redeem separately or simultaneously, if there are two mortgages. - Right (usefructuary mortgagor) to recover possession - Right to improvements to the mortgaged property - Right to grant lease of mortgaged property when he is in possession. If in a mortgage it is revealed, and where the title have been proved defective, the mortgagee can sue the mortgagor for the principal money as well as the damages to indemnify mortgagee against all expenses incurred in protecting his title and to pay government revenues and other public charges.

Provisions of Lease of immovable property: According to Section 105 of Transfer of Property Act in 1882 a Lease of immovable 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. The transferor is called the Lessor, whereas transferee the Lessess, the price paid is known as the premium and the money, share, service or other thing to be so rendered are called the rent.

Essential / elements of Lease: The essential elements of a lease are: - The parties: If the Lessor is an absolute owner, he can grant a lease for any unlimited period but a limited owner can grant a lease for only to the extent permitted by law or to the extent of his interest. For instance, a lease granted by a Hindu widow may ensure only during her lifetime. To be a lessee the person must be competent to contract. - The subject matter: Anything which is an immovable property within the definition of Section 3 of the TP Act 1882 may be the subject matter of lease. Thus, leases may be granted not only of land and minerals but also of benefits arising out of land such as fisheries, ferries and the like. - The demise or transfer: A lease is not a mere contract but a transfer of a right in land as defined in Section 105 of the TP Act of 1882 and creates a right in rem. It is, however, a partial transfer in as much as what is transferred is not the entire interest of the lessor, but a right to enjoy the property for a certain time. The interest remaining in the lessor is called the reversion and the lessees interest is known as leasehold interest in the form of encumbrance on the property. - The term or period: The transfer of the right to enjoy the property must be made for a certain time, express or implied, or in perpetuity. - The consideration: The consideration for a lease may be either a premium or rent or both, such as, (a) where a sum of money is paid or to be paid as a price for the transfer, it is a premium (b) rent on the other hand, is a sum of money, a share of crops, service or any other thing of value to be rendered periodically or on specified occasions by the lessee to the lessor. Distinction between Lease and License: While a Lease is defined in Section 105 of the Transfer of Property Act in 1882as a transfer of a right to enjoy such property made for a certain time express or implied or in perpetuity ......., a License, on the other hands, 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 interest in the property (under Section 52 of the Easement Act 1882). The cardinal distinction between a lease and a license is that in a lease there is a transfer of right to enjoy a property/land, whereas in the case of a license there is no transfer of such right of enjoyment of property/land though a licensee acquires only right to occupy the land. It is not the form, but the substance of the agreement/transfer document that makes the distinction. Thus, in a lease there is a carving out of the interest in favour of the person in whose favour the lease is granted. But a license is merely a permission to enter on the guarantors property and do some act which, without such permission, would be unlawful to do. In other words, in a lease there must exist a power and intention to hold the leasehold property to the exclusion of the grantor, and in the result: A license is not assignable or heritable, whereas a lease is. A license does not entitle the licensee to sue strangers in his own name, while a lessee can do so. A license is revocable at the pleasure by the grantor except in a few cases, Sec. 60 Cl (2) of the Easment Act 1882 while a lease is not. A license is terminated when the grantor makes as assignment of the subject - matter but a lessesss leasehold interest is unaffected by a subsequent disposition of the property by sale, mortgage or by another lease.

Provisions of Gift: Gift is the transfer of certain existing movable or immovable property made voluntarily and without consideration by a person to another. The person who makes the gift is called the donor and in whose favor the gift is made is known as donee, who accepts the gift (Sec.122).

Essentials /Requisites of valid Gift of immovable property: To have a valid gift following essentials are must, - Distinguishing feature of a gift from other alienations/ transfer is that it should be an act of mere liberty on the part of the donor who makes the gift and there is a total absence of consideration. As a matter of fact, natural love and affection excludes consideration.

- Person making the gift is known as the donor, who must be a person competent to transfer property in terms of Section 7 of T P ACT 1882. Thus gift made by a minor would be void. - Person accepting the gift is knows as the donee, who must be an ascertainable person. It is to be noted, though the donee should be a ascertainable person but he may be a person not competent to contract. Therefore, a minor may be a donee on whose favor the gift is made and accepted by someone else. - The subject matter of the gift / the gifted property must be actually in existence when the gift is made. In other words, there cannot be any gift of a non-existing property, vague or indefinite things. - Gift must be made voluntarily. In other words, when a gift is made it must satisfactorily be proved that the donor knew what he was doing and understood its effect in law and there were no undue influence or pressure on the donor from the donee, in whose favor the gift was made. - Acceptance of the gift by the donee /or by someone on his behalf is a must, otherwise, there would be no gift. It is important to know that acceptance by the donee must be made during the lifetime of the donor, that is while he (donor) is still capable of making gift. However, it is not necessary that acceptance should take place immediately on making of the gift and it is good enough if made during the lifetime of the donor. But, if the donee dies before the acceptance, there would be no gift. Registration of a gift is only a formality prescribe by law for validating the gift. So, a gift of immovable property is not invalid merely because registration of the Dead of Gift may have taken place after the death of the donor, if there has been acceptance during his (donor) life time. When the donor can revoke a Gift? Generally, a gift cannot be revoked, save as provided under Sec. 126 of the Transfer of Property Act in 1882. In a gift if the donor and the donee mutually agrees that on the happening of any specified event, an event that does not depend on the will of the donor, the gift may be suspended or revoked by the donor; but in a gift where the parties agrees to make the gift revocable (wholly or in part) at the mere will of the donor would be void (wholly or in part, as the case may be). A gift may also be revoked in any of the circumstances under which contract might be rescinded, save for want/ failure of consideration. However, the rights of

transferees for consideration without notice shall not be affected under such revocation. Thus in short, a gift may be revoked only in following cases: 1. If while making the gift, parties mutually agree that the gift shall be revoked on the happening of a specified events which does not depend on the will of the donor, the gift may be revoked on the happening of that particular event. For example, suppose Mr. X gifts a property to his brother Mr. Y reserving to himself (with Ys consent) the right to take back the gifted property in case Y and his decedents die before him (X). His brother Y dies without decedents in Xs life times. In such a case X may take back the gifted property. Anyway, subject to this exception, as a general rule gift can not be revoked or suspended at the pleasure of the donor, even if donee agrees that it shall be revocable. It is to be noted that while making the gift if there is any such agreement the gift would be considered as void. 2. Without previous agreement while making the gift, a gift may also be revoked in any of the circumstances under which a normal Contract be rescinded under the Contract Act 1872, if the gift was induced by vitiating elements of contract, that is, undue influence, coercion, fraud or misrepresentation. It is to be noted here that such right of revocation cannot be exercised by the donor if the gifted property has in the meantime been acquired by a third party stranger for consideration without notice of such rights of the donor (Sec. 126). Thus, a donor cannot revoke a gift merely on the ground that he had an absolute indefeasible title to the gifted property. Onerous gift: Provisions in law: Gifts, which are burdened with an obligation(s), are known as onerous gift. Section 127of Transfer of Property Act in 1882 makes provision regarding such gifts and provides Where a gifts is in the form of a single transfer to the same person of several things of which one is, and the others are not burden by an obligation, the donee can take nothing by the gift unless he accepts it fully. Where a gifts is in the form of two or more separate and independent transfers to the same person of several things, the donee is at liberty to accept one of them and refuse the others, although the former may be beneficial and the later onerous.

Thus, the essence of the provision of the Section 127 in short, is that if in a gift several things being gifted away some of which are burden with obligation but others not, the donee while accepting the gift would have no option but have to take all the things as a whole/package or refuse or do not accept the gift (a rule which is analogous to the Rule of Election under Sec 35 of Transfer of Property Act in 1882). In other words, acceptance from the donees side must be the whole of gifted property but not a portion of it. However, if there are separate gifts made by separate transfer from the donor to the donee then the above rule would not apply, that is, the donee may accept the beneficial gift and at the same time refuse to accepts the rest of the gifts- the onerous portion. It is also to be noted that when a donee who is not competent to contract (a minor) accepts a gifted property which is burden with obligations would not be bound by his acceptance. But, when such a minor retains the gifted property given to him even after becoming competent to contract (become a major) and being aware of such obligations then he will be bound by it. An Universal Donee and his liabilities: If a gift consists of the donors whole property and the donee accepts such a gift this donee will be known as a universal donee. Anyway, on many occasion legal position of a universal donee may not be a covetable one, where donor has died living debts. Thus, Section 128 of Transfer of Property Act in 1882 stipulates that universal donee would be personally liable for all the debts due by and liabilities of the donor at the time of the gift to the extend of the property comprise therein. So, in short, the universal donee not only would enjoy benefits out of the gift made to him but also would have to shoulder debts and liabilities of the gifted properties, since he alone would be the owner of the property and the debts are , in fact, liabilities on the gifted properties. Doctrines / Rules of Transfer: Doctrine of Cy press: Its application in cases of Transfer of Property (Under some of the provisions of the Transfer of Property Act in 1882) Literally, the word Cy press means as nearly as possible. It is a doctrine of Equity. The Cy press doctrine prescribes where in a transfer if literal execution of the intention of the transferor becomes inexpedient or impracticable, the Court will execute it as nearly as it can according to the original purpose /or Cy pres.

Sec. 26 of the Transfer of Property Act. 1882 adopted the spirit of the doctrine and provides in [Section 26 of the Transfer of the Property Act. 1882]. Thus, as the law always favour the vesting of estates, a condition precedent is deemed to have been fulfilled if the wishes of the transferor are carried out substantially. For example, A transfers Tk. 5,000.00 to B on condition that he shall marry with the consent of C, D and E. E having died, B marries with the consent of C and D. B is deemed to have fulfilled the condition. However, if in this case B marriages without the consent of C, D, & E, but obtain consent after of the completion of marriage, then it would be held that B has not fulfilled the condition. (Ref Case : 32 CLJ 453). Where time is not the essence of condition, fulfillment of the condition in a reasonable time is sufficient compliance. Silence on the part of the man whose consent is necessary maybe equivalent to his consent. In the context it is to be noted that Section 15 of the Transfer of Property Act in 1882 indirectly recognizes the doctrine and provided that If on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in Sections 13 and 14, such interest fails in regard to those persons only and not in regard to the whole class (Ref Case : 32 CLJ 453).

Doctrine of Election : A person cannot accept, and reject the same instrument (One cannot take under, and against the same instrument) Doctrine of election is based on the principle that he who accepts a benefit under an instrument must adopt the whole of it, conforming to all its provisions and renouncing every right inconsistent with it. So, man cannot both approbate and reprobate at the same time. Therefore, when someone taking the benefit of an instrument must also bear the burden, otherwise, to accept the benefit and (at the same time) to decline the burden is to frustrate the intention of donor, in as much as, law presume that the author of an instrument intended to give effect to every part of it. Thus, Sec. 35 of the Transfer of Property Act in 1882provides: Where a person professes to transfer property which he has no right to transfer, and as part of the same transaction confers any benefit on the owner of the property, such owner must elect either to confirm such a transfer or to dissent from it and in the latter case he shall relinquished the benefit so

conferred, and the benefit so relinquished shall revert to the transferor or his representative as if it had not been disposed of,................. The principle of Election as enacted by Sec. 35 of the Transfer of Property Act, 1882 is a English doctrine of Equity. However, while adopting the same in this section, law has differed from the English rule in one important respect, viz., as to the effect of the transferees electing against the instrument. The English rule applies the principle of compensation while the rule contemplated by Sec. 35 is one of forfeiture. For example; If A has by an instrument disposed of the property belonging to B to a third person C, and has by the same instrument also given some other property belonging to himself to B, B is required either to elect under or against the instrument: If he elect to take under the instrument, by accepting the benefit given him by A, he must relinquish the right to his own property which has been given to C by A. But, if he wants to retain his own property, he is said to elect against the instrument. In such a case: (1) under the English principle B will not forfeit all his rights to the property given by A to him. It will first be applied to compensate C for the loss caused by Bs election against the instrument, thereafter if there is any balance left, the refractory donee (B) will get it. (ii) But in terms of Sec. 35 of The Transfer of Property Act. 1882 B will forfeit the benefit altogether, and it will revert to the transferor or his representatives (as if it had not been disposed of). Conditions of principal of Election: The necessary essential conditions for applying the principle of Election are: The transferor must transfer the property of the transferee to a third person. The transferor must at the same time grant some property of his own to the transferee. Both transfers must be made in the same transaction. Question of apply Principle of Election arises if the two gifts are not subject matter of the same transaction. The transferee must have proprietary interest in the property disposed of by the transferor in derogation of the transferors rights. Thus, a creditor is not put to election, as he has only a personal right to be paid by the debtor. A person taking no benefit under a transaction directly but deriving a benefit under it indirectly would not put to Election. No Election arises when benefit is given to a person in a different capacity.

Exception to the rule: Where a particular benefit is expressed to be conferred on the owner of the property which the transferor professes to transfer, and such benefit is expressed to be in lieu of that property, if such owner claims the property, he must relinquish the particular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same transaction. In other words, if a particular benefit is conferred expressly in satisfaction of the property of the transferee which is disposed of, the transferee is not bound to relinquish other benefits conferred by the same instrument, if he elects against it. For example, A transfers to B property X in lieu of Bs property which is given to C. A also gives to B property Y. If B elects to retain his own property, he must relinquish his claim to X but not Y. Doctrine of Lis pendens During the pendency of a suit or preceding no property can be transferred, this rule is commonly known as the doctrine of lis pendens and has been laid down in Section 52 of The Transfer of Property Act 1882 which is the legislative exposition of the common law maxime pendente lite mihil innovator (during litigation nothing new should be introduced).This doctrine ends at the prevention of multiplicity of suits. So, the law does not allow either of the litigant parties to transfer to others, pending the litigation, rights to the property in dispute so as to prejudice the opposite party. Where a litigation is pending between a plaintiff and a defendant as to the right of a particular estate, the necessities of mankind require that the decision of the Court in the suit shall be binding not only on the litigant parties but also on those who derive title under them by alienations made pending the suit whether such alienees had or had not notice of the pending proceedings because, if this were not so then there could be no certainty that the litigation would ever come to an end. It is not correct to speak of lis pendens as affecting a purchaser through the doctrine of notice. This rule is not founded on the ground of notice, but is based on the board principle that interminable litigation might be the consequence if any of the parties pending suit is allowed to alienate in favour of a third party. Thus, the law will not allow an intermeddler with outstanding dispute to say that he did not know his right. Section 100 does not override Sec. 52. The doctrine of lis pendens, however applies only to orders appropriate to the suit having regard to the nature of the property involved and the nature of the proceedings. Thus, in the leading English case, Ballam vs. Sabine Turner, L.J. said Litigation would be interminable if any of the parties thereto can prejudice the other or others by an alienation pending the suit. So, the plaintiff would be liable in every case to be defeated by the defendants alienating before the judgment or

decree, and would be driven to commence his proceedings de novo, subject again to be defeated by the same cause of proceedings. The principle upon which Section 52 of the Transfer of Property Act 1882 is founded is stated by Lord Macnaghten in Faiyaz Hossain Khan vs. Munshi Prag Narain which is a leading Indian case on the doctrine of lis pendens. Referring to Bellay vs. Sabines case he observed that the correct mode of stating the doctrine is that pendent lite neither party to the litigation can alienate the property in dispute so as to affect his opponent. In fact, this Section does not absolutely prohibit a transfer. A transfer is prohibited only so far as it affects the right of any other party to the suit. It should be noted further that where there is a real and fair purchase without any notice the rule may operate very hardly, but still the court will follow it as it is a rule founded on Public Policy and alination made during an action might defeat its whole purpose, and there would be no end to litigation. For the applicability of Section 52 two conditions are needed: (i) Pendency of real suit in a court of competent jurisdiction and (ii) Transfer of the property during its pendency to the prejudice of a party to the suit. So, the essense behind the doctrine is that once a court has taken cognizance of controversy, it should be impossible for any of the party to interfere with consummantion of the judgment by any ad interim transfer, encumbrance, or change of possession. In other words, a transaction entered into during the pendency of a suit cannot prejudice the interest of a party to the suit who its not a party to the transaction. Conditions necessary for application of Doctrine Election: 1. Pendency of suit or proceeding : The pendency of a suit or proceeding begins from the date of presentation of the plaint or petition and extends right upto the conclusion of the litigation including the appellate stages and execution proceedings. Therefore, transfers during the pendency of Appeal or Execution proceedings come within the operation of this section. Competency of Court to decide such suit or Proceeding : The Court must be competent to adjudicate in respect of the subject of suit or proceeding and must have jurisdiction in law to decide the matter. If the plaint is


presented in a wrong court and a transfer takes place during such pendency, the doctrine would not apply. 3. Suit pending not to be collusive : A collusive suite is not a real suit at all. Collusive suit is one in which the plaintiff and the defendant come to secret understanding, based on fraudulent intention, to refrain from contesting the suit in order to defeat the rights of the transferee of the property in suit. Thus, if the proceedings are intended with fraud or collusive, the doctrine would not apply. A right to immovable property must be in dispute and must be directly and specifically in question: The rule applies only to cases where immovable property is the subject-matter of the suit. The property transferred must also be directly and specifically involved in the suit, such as, a suit for specific performance of a contract to sell, suit for partition and pre-emption or a suit on mortgage etc. The property in dispute must be transferred or otherwise deal with by any party to the litigation : The word transferred connotes such transfers as sales, leases, exchanges or mortgages, Also note, the words otherwise dealt with (mentioned in the section) have been held to include a contract of sale, a partition among co-defendants etc. The transfer must affect the rights of the other party: The effect of the transfer pendente lite, i.e. during the pendency of litigation is that the transfer is not ipso facto void but is only voidable at the opinion of the party whose interests are affected thereby. The doctrine does not apply where the parties are ranged on the same side.




Finally, it may be noted that the doctrine applies both to voluntary as well as involuntary transfers. Thus, a purchaser of a property at an execution sale during the pendency of a suit in respect of that property is affected by the doctrine. Rule against Perpetuity: Perpetuity means - a disposition of property by which its absolute vesting postponed for ever. A perpetuity, said Lord Guildford, is a thing odious in law and destructive to the commonwealth; it would put a stop to commerce, and prevent the circulation of the riches of the kingdom; and therefore, is not to be countenanced in equity".

The rule against perpetuity is a comparative modern development of the ancient rules of English Law that one of the inseparable incidents of property is the right of alienation by appropriate assurances. The underlined principle of this rules as stated under Section 14 of Transfer of Property Act. 1882 forbids any disposition by which the absolute vesting of property is or may be postponed beyond the period of the life or lives of any number of persons living at the time of disposition and a further period of the minority of the unborn person. This unborn person must come into existence on or before the determination of the last life estate and the life in being must be those referred to in the disposition and must be ascertainable. The transfer in favour of the unborn person (after the life time of one or more living person at the date of transfer) cannot be deferred to a longer period then is necessary for his attaining majority. As illustration note: - 1. A makes the gift of certain property to B, a person living and then to C and P living person for live; with reminder to E on his attaining 18 years. The gift is valid: (Contingent interest becomes vested at 18). But it would be invalid if the reminder was given to E on his attaining 19 years, whatever may be his present age because the gift in favour of an unborn person cannot be postponed beyond minority of that person. - 2. To C for life with reminder to Cs eldest son in which case the eldest son would take a vested interest at birth and take possession immediately on termination of the last prior estate ( C for life) : although he may not have been born at that date of the transfer. But, if he is not born before the termination of the last prior estate the transfer to him falls under Section 14. The necessity of imposing such restriction on the power of postponing the acquisition of the absolute interest in, or dominion over property, will be obvious if we consider for a moment, what would be the state of a community in which a considerable proportion of the land and capital was locked up. The free and active circulation of property, which is one of the springs as well as the consequences of commerce, would be obstructed; the improvement of land checked; its acquisition rendered difficult; the capital of country withdrawn from trade and the incentives to exertion in every branch of industry diminished. Indeed, such a state of things would be utterly inconsistent with national prosperity, and those restrictions which were intended by the donors to guard the objects of their bounty against the effects of their own improvidence or originated in more exceptional motives, would be baneful to all.

The rule mentioned under Section 14 of the Transfer of Property Act,1882 may be compared with Section 114 of the Succession Act, which allows one to make a transfer to a person not in existence, but the Section sets a limit to such transfer. The limit is that the transferee must already be in existence when the immediate transfers come to an end, and he must have the property not later than the attainment of majority. The rule is also known as the Rule against Remoteness because it disfavors the vesting of an estate beyond a prescribed period. If this period is exceeded, the transfer will be void for remoteness. In this context it should be noted further that since gift to unborn person is not allowed under the Shariat, the rule against perpetuity pronounced under this Section will have no occasion to apply to the Muslim. But, the Hindu law was brought into line with the rule stated here since the Act V of 1916 was incorporated in the amending Act of 1929. The rule also applies to immovable as well as movable property ( Cowasji vs Rustamjee). But it must noted that the rule applies where there is a transfer of any interest but does not apply to personal agreements. ( Ram Baran vs Ram Mohit AIR 1967 SC 744 ), which do not create an interest in property. Exception to the Rule: The Rule does not apply: (i) In case of transfer for the benefit of public in the advancement of religion, knowledge, commerce, health, safety or any other objects beneficial to mankind (Sec. 18). To the contracts for personal renewal of leases. Where the property is held by a corporation. Where only a charge is created which does not amount to transfer of any interests or to mere personal contracts. ( Personal contracts bind only the parties to the contracts but not their heirs or assigns, whereas covenants running with the land are binding not only on the parties to the covenants but their assigns as well. The Rule against Perpetuity does not affect the former, but invalidates the latter).

(ii) (iii) (iv)

As Illustrations note:

(i) A fund is bequeathed to A for his life and after his death to B for his life; and after Bs death to such of the sons of B as shall first attain the age of 25. A and B survive the testator. Here the son of B who shall first attain the age of 25 may be a son born after the death of the testator ; such son may not attain 25 until more than 18 years have elapsed from the death of the longer liver of A and B; and the vesting of the fund may thus be delayed beyond the lifetime of A and B and the minority of the sons of B. The bequest after Bs death is void. (ii) A fund is bequeathed to A for his life, and after his death to B for his life, and after Bs death to such of Bs sons as shall first attain the age of 25. B dies in the lifetime of the testator, leaving one or more sons. In this case the sons of B are persons living at the time of the testators decease, and the time when either of the will attain 25 necessarily falls within his own lifetime. The bequest is valid. (iii) A fund is bequeathed to A for his life, and after his death to B for his life, with a direction that after Bs death it shall be divided amongst such of Bs children as shall attain the age of 18, but if no child of B shall attain that age, the fund shall go to C. Here the time for the division of the fund must arrive at the latest at the expiration of 18 years from the death of B, a person living at the testators decease, All the bequests are valid. (v) A fund is bequeathed to trustees for the benefit of the testators daughters, with a direction that if any of them marry under age, her share of the fund shall be settled so as to devolve after her death upon such of her children as shall attain the age of 18. Any daughter of the testator to whom the direction applies must be in existence at his decease, and any portion of the fund which may eventually be settled as directed must vest not later than 18 years from the death of the daughters whose share it was. All these provisions are valid.

WARMING-UP EXERCISE QUESTIONS LAW 203 Property Law and Transfer 1. How legal and political philosopher visualize the concept of property? Whom do you support and why? How would you define Property (since the Transfer of Property Act 1882 did not provide any definition of property) and why? In short, indicate the variety of senses in which the term Property has been in use in modern days. Would you agree with the proposition - Rights in re aliena are nothing but encumbrances having Rights in rem over a property owned by another? Support your contention. What are the different modes by which property may be acquired? In short, explain any two of them.