TRANSFER OF PROPERTY ACT, 1882
List out certain General rules relating to transfer of immovable Property?
| What is meant by transfer of Property? | S.5 says its act by which a living living person conveys property to another living person or persons or to himself, in present or future. The term living person includes a company or association or body of individuals whether incorporated or not. | |
| Who can transfer Property? | S.7: 02 Conditions: Competency as per S.11 + Title to the Property. | |
| Whether a person without title can transfer Property? | Generally No. However, they are certain exceptions to this rule. They are: 1.Doctrine of election 2.Transfer by Ostensible owner3. Transfer by Unauthorized person who acquired title, subsequently. | |
| Which Properties can’t be transferred? | S.6 says that property of any kind may be transferred but not the following. They are: 1)Spe successions 2) A mere right of re-entry 3) An easement right apart from dominate heritage 4) Personally restricted interest 5) Right to future maintenance 6) A mere right to sue 7) Public offices 8) Stipends and Pensions 9)Transfer for unlawful object 10)Transfers which are opposed to the nature. | |
| What are the formalities to affect transfer? | Any Property can be transferred by way of oral agreement unless law mandates to be in writing, stamped or registered or attested. The T.P.Act requires the following transfers to be effected by a written instrument: 1) Sale or exchange of immovable property of the value of Rs.100/- or upwards. 2) Mortgage (except mortgage by deposit of title deeds) when the principal money secured is Rs.100/- or upwards. 3) Lease 4) Gifts. | |
| Whether Transfer of property can be with conditions also? | Yes, Transfer of property can be with conditions also: Transfer of Property can be made either with or without conditions. In case they are subject to conditions. The following shall not be the conditions:1. Absolute restraint of alienation (S.10)2. Restraining mode of enjoyment of property by transferor (S.11)3.Transfer terminates upon transferee becoming insolvent or attempted alienation (S.12) 4.Transferring property against rules of perpetuity (S.13 &14) 5. Condition imposed is impossible to perform (s.25) 6. Transfer is subject to unlawful conditions or unlawful object or consideration (S.25). | |
| Write a note on doctrine of Election? | S.35: Essential requisites: (1) If a person professes to transfer a property by way of will or deed in which he has no right to transfer and (2) as a part of the transaction, he confers any benefit on the owner of the property. On fulfilment of above conditions the doctrine of election applies and the owner of the property, so transferred, is required to make election. Such owner must elect either to confirm the election such transfer or to dissent from it. He who accepts the benefit under the transaction of this choice must adopt the whole of it and renounce everything inconsistent with it. Election once made is final. | |
| Whether transfer made by an Ostensible Owner is valid? | Yes, as per S.41. The following shall be the conditions: There is a transfer of property by an ostensible owner. The transferor should hold the immovable property either with express or implied consent of the real owner. The transfer must for consideration. The transfree shall be bonafide purchase. It means he should have taken all reasonable steps by acting in good faith to find out transfeere’s capacity to transfer. The purchaser should not have any notice as to the rights of the real owner. | |
| Whether unauthorised person who transferred property without title acquires the right of the same property what is the fate of such earlier transfer? | It is valid, it binds such transferor. It is called Doctrine of feeding the grant by estoppel. S:43: If a man sells the property in which he has no title, if subsequently he acquires the title, he will be compelled to convey that title to the purchaser. The transferor is bound to perform his legal obligaton when he enters into contract wihout the power of performing it when he subsequently acquires the power of performance. | |
| Whether property can be transferred subject to conditions? What is Vested interest and Contingent interest? | Yes, Basing on kind of conditions imposed interests are classified into two kinds: a) Vested interest b) Contingent interest. In both cases the condition to be happened or fulfilled is of future one. However, such event is certain to happen it is called vested interest and whereas in case of contingent the happening of event is uncertain. | |
| What are Condition Subsequent, Precedent and Limitation? | Conditions basing on time classified into: condition subsequent, precedent and limitation.Condition Precedent means a condition to be performed before an interest arises.Condition Subsequent means property arises immediately and divests upon happening of condition. Conditional limitation is a condition subsequent as regards the prior interest and condition precedent as regards the ulterior interest. If Condition Subsequent is unlawful or unlawful object or consideration, transfer is valid and whereas in case of Condition Precedent both transfer and condition are void. Condition Subsequent must be strictly complied and in case of Condition Precedent substantial compliance is adequate. This substantial compliance is called Doctrine of Cypress (S.26). | |
| What is Covenant? | It is a written binding obligation between contracting parties.S:40: says only Negative covenants are binding even on subsequent assignes of the covenantor’s interest if they have notice of such covenants. Ex: Krish sells a vacant site to Rakesh with the condition that Rakesh should not build on his portion in such a way as to obstruct Krish’s enjoyment of his house.This is a negative covenant and can be enforced against Rakesh but also agianst a transfee from Rakesh, if suh transfree had notice of the covenant, even if the transfer was for consideration. | |
| Write a note on Rule against Perpetuity? S.14 & 13 | Any condition in the transfer limiting the transferee’s right to transfer the property is void. However, for some special reasons law permits some period with in which property can be tied up. This period is called rule of perpetutiy. The period of Perpetuity in India is: Living persons plus the minority of the ultimate beneficiary.These rules are: 1. A life interest should be created in favour of persons who are in the existence. 2. The entire property must be transferred to the unborn person i.e., no life interest can be conferred on an unborn person (S.13). 3. To the above rule there is one exception namely, that is permissible to lay down that the unborn person is not to acquire ownership in the property until he attains the age of majority. (S14) 4. The unborn son must come into existence on or before the termination of the last life estate. The effect of this rule is that the property can be tied up in the hands of living persons plus the minority of the ultimate beneficiary. | |
| What are the exception to Rule against Perpetuity? S.14 & 13 | Exceptions: 1. Covenants of redemption in a mortgage don’t offend the rule. 2. The rule does not apply in the case of transfer of property for the benefit of the public, in the advancement religion, knowledge, commerce, health, safety or another object beneficial to the mankind (S.18). 3. Perpetual leases.4. A direction that the income of the property shall be accumulated for payment of debts doesn’t tie up the property absolutely because the person indebted discharges the debt at any time.5. Personal agreements which cannot create in interest in the property. | |
| Whether Property can be transferred during court litigation? | According S.52 pending suit property can be transferred by party to the suit. However, such transfer is subject to ultimate decision of the court. The transfer is subject to ultimate decision of the court: In such suit the right to immovable prioperty should be directly or specifically in question in the suit or proceeding. However, this rule has no application if the party to the suit obtained permission of the court to sell the property or suit is collusive one.Thus it must be noted the transfer of property pending the suit is not ipsofacto void, but it is only voidable at the option of the party.It means the party can transfer the property pending the suit, but the trasnfer will not affect the right of any party, thereto under any decree. | |
| When a third person is entitled for maintenance or profits over property but same is sold. What is the fate of such third party rights? | S:39 says such third person can enforce right against the transferee. Provided transferee has a notice of such right or such transfer is gratutios only. However, if the transfer is for consideration and without notice of right, such can’t be enforced. | |
| If a property is covered under policy of insurance for loss or damage of immovable property, whether transferee of such property can receive benefits under policy? | Yes, as per S.49. However, there is a contract to the contrary this rule doesn’t apply. | |
| If a person is possession made improvements of property is evicted by a person with superior title, what is the fate of improvements made by such person? | As per S.51 he is entitled ask either to sell the prperty or to pay compensaion to transfreee at the then market value thereof, irrespevctive of the value of such improvement. The only rider is transferee undertaken improvements in good faith. | |
| If a person who is liable to pay rents or profits arises out property paid to a person with defective title? What is the legal consequence of such act? | As per S.50 It’s a proper payment and he can’t be charged with liability again as he acted in good faith believing that person to whom he has paid is entitled to receive the same. | |
| Whether two or more persons can purchase property? What is there quantum of interest in the property? | Yes, There are equally entitled to equal shares in such property if consideration is paid out of joint funds (S.45).If the property is purchased from distinct funds, interest would be in accordance with consideration advanced. If no evidence to this effect it shall be presumed that both are equally entitled. | |
| What is extent of interest transferee of a co-owner would take in the event sale by co-owner? Whether purchaser can demand possession in property? | As per s.47 transfer by co-owner would affect transfer to the extent of his share only. In such case, transferee for consideration would take share to the extent of his transferor interest only (s.46). As per S.44 Transferee has a right to demand for right of separate possession. However, he can’t demand right of separate possession in a dwelling-house belonging to an undivided family and he is not a member. | |
| When there are multiple transfers over a property which transfer will prevail? | As per S.48, 1st transferee will have better title. However, they are three exceptions to this rule: 1) S.78: If the successive rights are created by fraud, misrepresentation or gross negligence of a prior mortgages another person has been induced to advance money on the security of the mortgaged property, the first mortgagee will loose his preference and shall be postponed to the place of subsequent mortgagee.2.To secure future advances,3. Registered deed would prevail. | |
| What is fraudulent transfer? | As per S.53: Every transfer of immovable property made with intent to defeat or delay creditors of the transferor shall be voidable at the option of any creditor, so defeated or delayed. It means any creditor defeated or delayed can exercise this right u/s 53. | |
| Write a note on Doctrine of part performance? Section 53A | By way of registered agreement person contracted to transfer immovable property for consideration besides delivering possession. In such case transferee has right to continue in possession provided the transferee has done some act in furtherence to the contract, and the transferee performed or is willing to his part of the contract.It cab be used only as shield not as weapon to attack.Nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof. | |
| SALE | Sale is a transfer of ownership in exchange for price paid or price promised or part paid and part promised.. Since the price can be price paid or price promised or part paid and part promised, the question arises whether title passes only on receipt of consideration. It must be noted that mere registration transfers title. It doesn’t matter whether consideration is paid or not. However, if it is mentioned in the sale deed that title passes only after receipt of entire consideration, mere registration doesn’t result in transfer of title. |
| Seller Rightsand Liabilities | Before sale: Seller’s liabilities: S.55(1): a. To disclose material defects,b. To produce title deeds, c. To answer question as to title; d. To execute conveyance,e. To take care of property, f. To give the buyer, such possession of property as its nature admits; & g.To pay outgoings. After sale, Seller’s liabilities: 1. To give possession; 2. Implied covenant for title 3. To deliver title deeds on receipt of price. After sale, if the price or any part of it remains unpaid, the seller acquires a statutory charge of the seller for unpaid-price. |
| Buyer Rights and Liabilities | Buyer’s Duties before sale: S.55(5) (a): Before completion of sale, the duties of the buyer as under: To disclose facts which materially increases the value of property (ii) To pay the price.Buyer’s Duties after sale: S.55(5) (c):After completion of sale, the duties of the buyer as under: (i)To bear the loss to property, if any (ii) to pay the out goings. Buyer’s rights After sale: S.55(5) (a):Before the completion of sale, buyer has a lien on the property for any sum of money paid by him as price if sale could not be completed. |
| Difference between Contractfor Sale and Contract to sell:
| Difference between Contract for Sale and Contract to sell: 1. A contract for the sale of immovable property is agreement to make a transfer but not a sale. It does not, itself, create any kind of interest or charge in the property on the date of the agreement. Whereas transfer by way of sale. It results in the passing of ownership from the seller to buyer.2. A contract of sale is a right in rem. Contract for the sale is jus a rem which given to application connected to the ownership of the property. 3. No specific performance arises since the property is transferred immediately. It may specifically enforced by the buyer against the seller. 4. In contract of sale all rights pass over immediately. Whereas in contract for sale rights passes on the fulfillment of the terms and conditions stipulated in the sale agreement. 5. After sale, if the price or any part of it remains unpaid, the seller acquires a statutory charge over property for unpaid-price. |
| Exchange | If two persons mutually transfer the ownership of a property for the ownership of another property, the transaction is known as exchange. A transfer of property by way of exchange can affected like Sale. The rights and duties of seller and buyer would apply accordingly. |
| Lease | It’s a transfer of right of enjoyment in an immovable property. Such transfer can for a certain time or perpetutity in consederation 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 sepcified occasions to the transferor by the transferee. |
| Formalities for creating Lease | A lease of immovable property from year to year, or for any term exceding one year, reserving a yearly rent, can be made only by a registered instument. All other leases of immovable property may be made either by registered instrument or oral agreement accompained by a delivery of possesion. The lease of immovable property made by a regestered instrument shall be executed by both lessor and lesee. The State govt by notification in official gaezette can make exceptions to this rule. |
| Time period of Lease: | Parties at discretion to fix the period of lease. Otherwise, Lease of immovable property for agricultural or manfacturing purposes shall be deemed to be lease from year to year and terminable with six months prior notice. If it is for any other purpose shall be deemed to be a lease from month to month. It can be terminated either lessor or lessee by giving fifteen days prior notice. The period shall commence from the date of receipt of notice. |
| End of Lease: | a)By expiry of time. b)By happening of an event on which the term depends c)By termination of lessors interest d)By merger e)By express surrendedr f) By implied surrender g)By forfeiture and h)By notice to quit. i) The lessee is an adjudged insolnvent and the lease provides that the lessor amy re-enter on the happening of such event; and in any of these the lessor or his transfree gives notice in writing to the lessee of his intention to determine lease. |
| Lessor Rights and liabilities | Liabilities of Lessor: 1. To disclose material defects of the lease property. 2. To put the lessee in possession of the property. 3. Covenant for quiet enjoyment. |
| Lessee Rights and Liabilities: | Lessee rights: 1. Right to accession 2 Right to usufructs. 3. Right to repairs 4. Deduction from rent 5. Right to remove his belonging 6. Right on destruction of the property 7. Right to transfer his interest.Liabilities of lessee: 1. Liability to disclose facts. 2. Liability to pay rent, 3. Liability to keep and restore property in good condition 4. Liability to inform the lessor about any proceedings 5. Liability about use of property 6. Not erect permanent structure 7. To put the lessor in possession upon expiry of lease. |
| Gift (S.122)Elements of Gift | 1) Transfer of certain existing movable or immovable property made voluntarily and without consideration.2) Donee shall also accept the gift.These two conditions must be fulfilled to call there occurred a gift of property. Donee must accept the gift during the lifetime of the donor and donor is competent and entitled to deliver the property. i.e, (S.07 T.P.Act) |
| Formalities (S.123) | Gift of immovable property must be effected by a registred instrument signed by or on behlf of the donor, and attested by atleast two witnesses. Gift of moveable proprty, the transfer may be effected either by a registered instruent signed as aforesaid or by delivery. |
| S.124:If the Gift compromises both existing and future property, gift is void to the extent of future property.S.125:If there are more than two donees, of which one or few doesnot accept the gift, the gift to the extent of their share or interest, if they had taken, is void.S.126:Parties to the Gift agree that on the hapening of an event whcih does not depend upon the will of the donor a git shall be suspended or revoked. If parties agree that Gift will be revoked at he mere will of the donor it is void. Except as provided above Gift shall not be revoked. Nothing contained in this section shall be deemed to affect the rigths of transfrees for consideration withou notice. | |
| Universal Gift or Onerous Gift: S.127: It means a person who receives the advantage must also suffer the burden or loss. According to S.127 If in a single transfer by way of gift several properties are transferred to one person, of which some or any one of them burdened with obligation, donee shall accept the gift fully or reject the transfer, otherwise he get nothing from such transfer. | |
| Universal Donee: If a person by way of gift transfer’s his entire property, the donee is called as Universal donee. The donee is under personal liability for all debts due by the donor at the time of gift to the extent of property comprised therein |
| ChargeS.100 | It is a claim to any unsecured debt arised out of transaction relating to immovable property not in the possession of claimant. It may arise out of contract or operation of law. Ex: House tax to GHMC | ||
| S:3 defines Ationable cliam: | It is a claim to any unsecured debt or a claim to any interest in movable property not in the possession of claimant.Following are the actionable claims:1.Arrears of rent 2.Money due under life insurance policy 3. Fixed deposit in bank 4. Amount payable under decree Following are not actionable claims: 1.Shares in a company 2. Claim to a copy right 3. Claim to mense profits 4. Mortgage debt. | ||
| Mode of transfer of Actionable Claim | 130: The transfer of actionable claim whether with or without consideration. This section lays down that transfer of an actionable claim can only be effected by execution of an instrument, in writing signed by the transferor or his duly authorised agent. All the rights and remedies of the transferor, whether by way of damages or otherwise shall vest in tt transfree. A tansfer of actionable claim is complete when the instrument has been executed, even if no notice has been served. However the position of the transfree is not secures unless the necessary notice is given. Inotherwords if the debtor in the absence of express notice pays of debt to the transferor on his demand be valid agaisnt such transfer of actionable calim. Transferee of actionable cannot sue the debtor(Illustration (i) of this section). | ||
| S:131:What are rules for transfer? | Every notice of transfer of an actionable claim shall be in writing, signed by the transferor or his agent duly authorised in this behalf, or in case the transferor refuses to sign, by the transfree or his agent, and shall state the name and address of the transfree. | ||
| Judge can’t be an auction purchaser | S:136:No judge, legal practitioner or officer connected with any court of justice shall buy or traffic in, or stipulate for, or agree to receive any share of, or interest in, any actionable claim, and no court of justice shall enforce, at his instance of any perosn claiming by or through him, any actionable claim so dealt with by him as aforesaid. | ||
| S:137: | The provision of Actionable claim chapter doesn’t apply to shares or debentutes or to negotiable instruments or to any mercantile document of title goods. | ||
| LAW OF MORTGAGES: S.58 TO 104 | |||
| MortgageS.58 | “A mortgage is the transfer of an interest in specific immovable property for the purpose of securing: (a) The payment of money advanced or to be advance by way of loan or (b) an existing or future debt or (c) the performance of an engagement, which may give rise to pecuniary liability”. | ||
| Formalities | The instrument in which the transfer is affected is called a “mortgage deed”. Registration is essential u/s 59, where the amount exceeds Rs100/-and It should be attested at least by two witnesses. | ||
| Kinds of Mortgages | 1. Simple, 2.Conditional sale, 3.Usufructuary,4. English, 5.Title deeds, 6. Anomalous | ||
| Simple Mortgage: | In simple mortgage mortgagor retains possession and binds himself to pay mortgage money. Mortgage has right to get property sold through court on default. | ||
| Mortgageby Conditional sale: | Mortgagor ostensibly sells the movable property by sale. It is only ostensible not real. Conditions attached to the sale are: (a) On default of payment of mortgage money, the sale becomes absolute (b) On such payment sale become void (c) that on such payment property shall be transferred. (d) Delivery of possession is not necessary (e) It can be redeemed at any time. | ||
| Usufructuary Mortgage | Mortgagee authorizes to retain such possession until the mortgage money is paid and receive rents and profits accruing from the property, in lieu of interest or in payment of mortgage money. | ||
| English Mortgage: | The mortgaged property absolutely subject to the conditions that the mortgagor should retransfer the same to the mortgagor on the payment of money on the agreed date and the mortgagor binds himself to repay the mortgage debt. | ||
| Mortgage by title deed: | Here title deeds are deposited without any writing or formalities. It is to give facility to merchant community. This facility is allowed in towns. | ||
| Anomalous Mortgage: | A mortgage which is not a simple mortgage, a mortgage by conditional sale, a usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of section 58 is called an anomalous mortgage. | ||
| Difference between conditional sale and English mortgage: | In both the cases there is a transfer of property. However, in case of conditional sale transfer becomes void upon payment of money and whereas in case of English mortgage, mortgagee shall retransfer (register) the property upon payment of money. Otherwise, earlier sale becomes absolute. Thus in English mortgage the transfer is subject to condition of retransfer on payment of money. | ||
| Redemption | S: 60:Doctrine of redemption: The term redemption means the right of a mortgagor to get back his property or documents of title relating to property from the mortgagee on payment of debt on or before a specified time. Once the money is paid by the mortgagor, he gets the right of redemption immediately. Any stipulation forming part of the mortgage transaction & inconsistent with the right of redemption is a clog on redemption.Last paragraph of S.60 speaks about partial redemption. It says that person having a share in the mortgage property cannot redeem his share in the property as of a right where there are several mortgages, none of them can redeem his share alone, but any of them can redeem the entire mortgage. The integrity of the mortgage cannot be broken. The last paragraph is based on the principle that mortgage is one and indivisible. It prohibits the piecemeal redemption. So tenant in common or joint tenants can redeem the whole property but not their shares separately. | ||
| Foreclosure | S.67 Foreclosure means to take legal measures to terminate a mortgage and take possession of mortgaged property. A mortgagor has right to redeem the property u/s 60 of the Act and a corresponding right is also provided to a mortgagee in s.67 which is known as right of foreclosure or right of sale.When the mortgagor’s right to redeem has become complete and he has failed to avail himself thereof, the mortgagee has the right to apply to the court for a decree that the mortgagor shall be absolutely barred of his right to redeem the mortgaged property. Until the time fixed in the deed for payment has arrived, there is no question of foreclosure. If the mortgagor has paid or deposited the mortgage money or if a decree for redeem is made, the mortgagor is not entitled to exercise the right of foreclosure or sale. | ||
| Marshalling | Section 81 of the Act, deal with doctrine of Marshalling. It is an equitable doctrine. This doctrine explains the principles of adjustment among mortgagees. It means where an owner of several properties mortgages to one person and mortgages to one property to another, the subsequent mortgagee has a right of request, the prior mortgage to realize the mortgage debt out of the property not mortgaged to him. The main object of this section is to protect subsequent mortgages in respect of the properties mortgaged to them being sold to satisfy a prior mortgage, when the prior mortgagee has other properties also mortgaged to him, which could be sold to satisfy his dues. | ||
| Contribution | S.82 of the Act, deals with doctrine of contribution. According to this doctrine when two or more persons are the owners of the property and when they are equally liable to pay a debt, such persons are equally liable to contribute to the debt, according to the value of their shares in the property as on the date of the mortgage. It means it is an adjustment in between or among the common debtors or mortgagors. | ||
| Subrogation | S: 92: If any person (other than the mortgagor) pays the entire amount to the mortgagee, the person redeemed is entitled to all the rights of mortgagee and he will enter into the shoes of the mortgagee. He is called subrogee and his right is called right of subrogation | ||
| Rights and Liabilities of Mortgagor: | S.60: Right of mortgagor to redeem: Right of a mortgagor to get back his property or documents of title relating to property.S.60A: Obligation to transfer to 3rd party instead of re-transference to mortgagor. In case of several encumbrancers, prior encumarancer over prevail. S.60B: Right to inspection and production of documents during the subsistence of right of redemption. S.61: Right to redeem separately or simultaneously of the mortgaged properties. S.62: Right of usufructuary mortgagor to recover possession upon realization of debt;S.63:Accession acquired in virtue of transferred ownership. S.63A: Improvements to mortgaged property S.64: Renewal of mortgage lease; S.65: Implied contracts by mortgagor S.65A: Mortgagor’s power to lease;S.66: Waste by mortgagor’s power to lease | ||
| Rights and liabilities of mortgagee (S: 67 to S: 77). | S.67: Right to foreclosure or sale: It’s a right of mortgagee terminate the mortgage. Further, to take possession of the property. It also means seek the court that mortgagor may be absolutely barred of his right to redeem the mortgaged property. This right arises upon lapses of time. If there are more than two mortgages, mortgagee is bound to sue on all the mortgages over which money is due. | ||
| Right to sue for Mortgage money: (S.68): | In the following cases mortgagee has only right to sue for recovery of money:If the mortgator binds himself to pay 2) If the mortgagee due to default of mortgagor act deprived of security of the mortgaged property. 3) If the mortgagor is entitled to possession, but he was deprived of the same due to superior title, 4) If the mortgagor property is destroyed and as a result security became insufficient. | ||
| Whether mortgagee has a right to sell without the intervention of the court? | No, except under S.69. Such sale must be in accordance with rules laid down (S.69): The mortgagee must be government. 2)It doesn’t apply to particular religios viz., Hindu, Muslim, Buddhu. 3) Parties must expressly agree in the contract w.r.t power of mortgagee that in the event of non-payment mortgagee has right to sell the property. 4) It applies to certain tows only. This power can be exercised only in the following cases: 1) If money is due for a period more than three months despite service of notice 2) an interest which is more than Rs.500/- is due for a period of three months. In case if improper exercise of the power of sale, the only remedy is claiming damages by a person who sustained loss due to improper or irregular exercise of power of sale. | ||
| How the sale proceeds must be applied in case of sale under S.69 | The sale proceeds shall be applied like this:1) For the payment of the costs of the sale; For the payment of the mortgage money including post including costs in respect of the mortgageFor the payment of the surplus tom the person entitled to the mortgaged property i.e., the subsequent encumbrances and ultimately the mortgagor. | ||
| S.70: Accession to mortgage property: | Any accession to the mortgage property shall become part of the security. | ||
| S.71: IF the mortgaged property is a lease, mortgagee is the lessor, he is entitled for renewal of lease. | |||
| S.72: Rights of Mortgagee in possession: | Mortgagee can spend money towards: a) Preservation of the mortgaged property from the destruction etc., b) Supporting the mortgagor’s title to property c) Supporting his title agasint mortgagor d) renewal lease from mortgagor | ||
| S.73: If property is sold owing to failure to pay arrears of revenue or other public charges, after clearing of arrears mortgagee shall be entitled to claim payment of the mortgage money. | |||
| Liabilities of mortgagee in possession: | 1) To manage the property as man of ordinary prudence2) To use his best endevarous to collect the rents and profits thereof3) To pay government revenue and other charges of public nature 4) To make necessary repairs as the income of the property permits 5) Mortgagee shall not commit any act which is destructive or permanently injuries to the property 6) To keep clear and accurate accounts 7) To account receipts of the property | ||
TRANSFER OF PROPERTY ACT (Problems and Solutions)
| S.n | Problem | Principle |
| 1 | Whether standing timber, growing crops and grass are immoveable property? | No, Transfer of property Act, expressly excludes them from the purview of immoveable property though they are rooted in the earth. |
| 2 | Whether timber tree is an immoveable property? | Yes, Tree means growing and still deriving sustenance form the soil is an immoveable property. |
| 3 | Block of stone placed on the top of another for the purpose of forming a dry wall – is a immovable property? | Yes, It is considered to be embedded in land and hence part of the immoveable property. |
| 4 | Block of stone if deposited in builder’s yard and for convenience, if stacked on top of another form of wall- – is a immovable property? | No, It is not considered to be embedded in land and hence part of the immoveable property. |
| 5 | Whether the materials like fixtures such as doors, windows, and shutters of a house are immoveable property? | Yes, The material attached to immoveable property for the purpose of beneficial enjoyment of immoveable property also fall within the ambit of IMP. |
| 6 | A grants a lease of plot of land for 5 years to B with the condition that B shall not dig a tank on the land. B digs the tank. A transfers to C the right of reentry for the breach of the condition committed by B. whether the transfer is valid? | In valid. Mere right of re-entry on breach of condition subsequent is not transferable. |
| 7 | Whether right of way over one piece of land, such as right of way, for the benefit of another piece of land can be transferred? | No, Easement is not transferable independently of the dominant heritage. |
| 8 | A house lent to a person for personal use can transfer such right? | No, An interest in property, restricted in its enjoyment to the owner personally, cannot be transferred. |
| 9 | A agreed to manufacture salt for B, and the terms of contract allowed B credit for payment and a discretion as to the quantity of salt to be demanded, whether B could assign/transfer this right? | No, An interest in property, restricted in its enjoyment to the owner personally, cannot be transferred. |
| 10 | Village allotted to a person under a compromise, for maintenance but without the power to transfer during life time – can he assign/transfer this right? | No, It’s a right to future maintenance and hence not transferable. |
| 11 | A agrees to sell 10 gunny bags to B on a future date. B transfers her interest to C. Thereafter A breaches the contract. Whether C can recover damages from A. | Yes, he can. Assignment of B to C is not a mere right to sue, but for its right to receive the performance of contract. However, if the transfer is made subsequent to breach of contract, transfer is invalid as it is mere right to sue. |
| 12 | Whether a restriction that A shall not transfer property by way of gift is valid? | Valid, It’s partial restraint. S.10 only bars absolute restraint. |
| 13 | A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorised to transfer the same. Of these fields Z does not belong to A, it having been retained by B on the partition; but on B’s dying A as heir obtains Z. C, not having rescinded the contract of sale can demand the A to deliver Z to him? | Yes, As per S.43 if a person by erroneously representing himself to be owner of the property and subsequently acquire property can’t retract provided C acted boanfidely. Hence, C may require A to deliver Z to him. |
| 14 | Whether a restriction that A shall not transfer property by way of alienation for a period of three year is valid? | Valid, It’s partial restraint. S.10 only bars absolute restraint. However, if it is for 20 years invalid as it amounts to absolute restraint. |
| 15 | Whether condition that vendor must be given right of first refusal is valid? | Valid, Partial restraint. |
| 16 | A makes an absolute gift/sale of house to B with the direction that B shall reside in it. Whether such condition is valid? | Condition is void When the interest created is absolute any condition directing mode of enjoyment is void and can be ignored. Hence, condition to reside in it is invalid. |
| 17 | A makes an absolute gift/sale of house to B and made a direction for the purpose of securing the beneficial enjoyment of another piece of property belonging to transferor – is it valid? | Valid condition Ex: Not to raise wall this obstructs the passage of light and air to transferor adjoining house. Similarly, transfer who has some plots in the middle of the property can make direction to allow the passage to the reserved plots. |
| 18 | A has only one piece of land and sells it to B, whether a covenant is binding on B? | No, However, if A has X and Y (two) pieces of land and sells X to B, the covenant binds B, whether it is positive or negative. Further, if B sells X to C, C would be bound by the covenant with A, if the covenant is negative and C has notice to it. |
| 19 | A transfer’s property to B for life and thereafter to B’s unborn first child. However, if the B’s child changes religion the property shall be forfeited. Is it a valid transfer to unborn person? | Not a valid condition. When property is transferred to an unborn child it must be absolute as in the present case it is limited by condition, it is void. |
| 20 | A is given an estate for life and then to B for life and then to B’s unborn child. The child in this case didn’t come into existence before the death of B. what is the effect of transfer? | It’s invalid transfer. |
| 21 | A transfer’s property to B for life and thereafter to such child of B as shall attain age of 25 years. Is it a valid transfer to unborn person? | Yes, The child being unborn as on the date of transfer of B for life is valid, but interest created in favour of B’s son is void, as that extends beyond – minority of an unborn person. |
| 22 | A makes a transfer of property to B for life and then to B’s unborn children, with the condition that a female child shall get only a life interest. | It doesn’t fail completely The interest of the daughter will fail on account of S.13, but it doesn’t fail with regard to the whole class, or the sons. |
| 23 | A transfer a property to B on the condition that B marries C. At the date of transfer, C was dead (or B shall desert her husband). | The transfer is void. |
| 24 | A makes a bequest to B, with a condition that it shall not have any effect if B doesn’t marry A’s daughter. B marries a stranger and thereby indefinitely postpones the fulfillment of the conditions. | The bequest ceases to have an effect. |
| 25 | A sues B in respect of a house in B’s possession. During the pendency of the litigation, B sells the house to C. | A’s suit is dismissed. B’s transfer to C shall hold good. |
| 26 | A suit for specific performance, where the agreement did not mention the khasra number or the exact area of the land sold, and its boundaries – It is void for uncertainty. | Yes, when there is an ambiguity suit for specific performance wouldn’t lie |
| 27 | Where A contracts with B to sell a house for a sum of Rs.1,00,000/-, B is entitled to a decree directing A to convey the house to B, by payment of the purchase money. | Yes, as per S.10 the presumption in case of immovable by way of compensation in money is not an adequate remedy. |
| 35 | ‘A’ assigned leasehold rights in property leased from the Government to B. A was not entitled to assign such interest, and therefore, the Government forfeited the lease and leased it to B. A’s claim against for Government for forfeiture succeeded, and A obtained repossession of the property. A surrendered the property to the Government after the expiry of the lease. In this scenario whether B has to reclaim the lease from government | B has the right reclaim it from the Government. If the vendor or the lessor subsequently acquires any interest in the property, the purchaser or the lessee may make good the contract out of such interest. |
| 28 | Where a person is entitled to assign a lease with the consent of the lessor, and the lessor is required not to withhold the consent if the lease is to a respectable person. Whether lessor can refuse to give consent? | No, the purchaser of leasehold right is entitled to seek a specific direction to the seller, that the seller must obtain such consent. |
| 28 | Whether in a suit for specific performance vendor can cliam the defence of bad or incomplete title? | No |
| 29 | The inhabitants of a village claim property, B alleges to be the owner of the right of way on A’s land. Whether a declaratory suit can be filed over the property claiming the possession back from A. | Yes, A may seek a declaration to hold the property. There is a cloud on the title. |
| 30 | Where A makes a settlement of an estate on B and his children, and then contracts to sell the estate to C. Whether B, or any of his children, may sue for injunction to restrain the sale. | Yes, as the defendant is trustee of the property of the plaintiff; |
| 31 | The inhabitants of a village claim right of way on A’s land. In a declaratory suit against several such villagers, A obtains a declaration to hold that that they do not have a right of way on their land. Several other villagers’ file suits against A for obstructing their way. Whether A can file a suit for perpetual injunction. | Yes, he can file suit for injunction. |