1.
Transfer of Property: Definition and Essentials of Valid Transfer
Introduction:
The Transfer of Property Act, 1882 governs the transfer of property between living persons in
India. This Act lays down various principles regarding the transfer of both movable and
immovable property. The aim of the Act is to provide a clear and structured legal framework
for property transfers to ensure the protection of rights and interests.
Definition of Transfer of Property:
According to Section 5 of the Transfer of Property Act, 1882, the transfer of property means
an act by which a person conveys property, in present or in future, to one or more other
persons or to himself and one or more other persons. The term “property” encompasses both
tangible and intangible properties, including rights and interests in the property. The
definition also clarifies that a "living person" includes a company, association, or body of
individuals, regardless of their legal standing.
Essentials of Valid Transfer:
For a transfer of property to be valid under the Act, certain conditions must be satisfied.
These conditions ensure the legality and enforceability of the transfer.
1. Competent Parties:
o The transferor must be competent to transfer the property. As per the Indian
Contract Act, the transferor should be a major, of sound mind, and not
disqualified by law.
o The transferee, on the other hand, must also be competent to receive the
transfer. If the transferee is a minor or of unsound mind, a guardian must
represent him/her.
2. Transferable Property:
o Only properties that are transferable can be subject to transfer under the Act.
Section 6 of the Act specifies certain properties that cannot be transferred,
such as the right to future maintenance, mere right to sue, public offices,
pensions, etc. Transfer of such properties would be void.
3. Lawful Object and Consideration:
o The transfer must be made for a lawful object and consideration. This means
that the purpose of the transfer should not be illegal, immoral, or opposed to
public policy. For instance, a transfer of property for illegal purposes like
gambling or smuggling would be invalid.
4. Free Consent:
o The transfer must be made with the free consent of both the transferor and the
transferee. Consent is considered free when it is not obtained through
coercion, undue influence, fraud, misrepresentation, or mistake, as specified in
the Indian Contract Act, 1872. A transfer obtained through such means would
be voidable at the option of the aggrieved party.
5. Formalities Required for Transfer:
o The transfer of immovable property worth Rs. 100 or more must be registered
under the Registration Act, 1908. If it is not registered, the transfer becomes
invalid. In addition, for immovable property, the transfer must be made by a
written instrument, duly signed by the parties and attested by witnesses.
o For movable property, the transfer can be done by mere delivery of possession
unless otherwise stated.
6. Present and Future Interest:
o The transfer can relate to both present and future interests. However, the
interest should exist at the time of transfer. If a person transfers a property that
they do not own at the time, the transfer would be void unless they later
acquire the property.
Case Laws:
Girijanandini vs Bijendra Narain Singh (1967): The Supreme Court held that if a
transfer is made without free consent, it can be challenged in a court of law.
Kancherla Lakshminarayana vs Mattaparthi Syamala (2008): This case reaffirms
that transfers involving coercion, fraud, or undue influence are voidable at the
discretion of the aggrieved party.
Conclusion:
The essentials of a valid transfer ensure the protection of the rights of the transferor and the
transferee. Adherence to these essentials safeguards the legality of transactions and helps in
preventing disputes. The Transfer of Property Act, 1882 provides a comprehensive legal
framework for the transfer of property in India.
2. Doctrine of Lis Pendens: Does it Apply to Court Sales?
Introduction:
The Doctrine of Lis Pendens is a fundamental principle of property law that relates to the
transfer of property during the pendency of litigation. Derived from the Latin phrase "Lis
Pendens," meaning "pending lawsuit," this doctrine serves to protect the interests of the
parties involved in a legal dispute over property rights.
Meaning:
As per Section 52 of the Transfer of Property Act, 1882, the doctrine of Lis Pendens states
that during the pendency of any suit in which any right to immovable property is directly in
question, the property cannot be transferred or otherwise dealt with by any party to the suit so
as to affect the rights of the other parties involved in the litigation.
The main objective of this doctrine is to maintain the status quo of the property during the
litigation. If the property is transferred during the pendency of the suit, the subsequent
purchaser will be bound by the outcome of the litigation, irrespective of whether they had
knowledge of the suit.
Application to Court Sales:
A key question that arises is whether the doctrine of Lis Pendens applies to court sales, i.e.,
the sale of property under the direction or order of the court during the pendency of litigation.
1. Court Sales vs Private Sales:
o The doctrine applies to private transfers of property during litigation. The
principle is that any private transfer should not affect the rights of the parties
involved in the litigation.
o However, court sales are a different scenario. In the case of a court sale, the
property is sold under the direct supervision of the court. In such situations,
the rights of the litigating parties are protected by the court itself.
2. Judicial Precedents:
o In the case of Krishna Mohan vs Bal Krishna (1955), the court held that the
doctrine of Lis Pendens does not apply to court-ordered sales because the sale
is conducted under the court’s supervision and therefore does not affect the
litigating parties' rights.
o The Supreme Court in Usha Jain vs Satish Chand Sharma (2010) clarified
that a court sale is different from a private sale and is not subject to the
doctrine of Lis Pendens. The reason being, court sales are made to satisfy the
decree and under the scrutiny of the court, which ensures the protection of the
parties' rights.
3. Objective of Doctrine:
o The primary objective of the doctrine of Lis Pendens is to avoid conflicting
decisions and multiplicity of suits. In a court sale, the court ensures that the
rights of the parties are safeguarded, and hence, there is no need for the
application of Lis Pendens.
Conclusion:
The doctrine of Lis Pendens is designed to prevent private parties from affecting the outcome
of litigation through the transfer of property. However, it does not apply to court sales, as
court sales are supervised by the court itself, ensuring the protection of all parties involved.
This distinction helps maintain the balance between safeguarding litigation rights and the
execution of court-ordered decrees.
3. Mortgage: Definition and Types of Mortgages
Introduction:
A mortgage is an important legal concept that involves the transfer of an interest in specific
immovable property as security for the repayment of a loan. The term "mortgage" finds
mention in Section 58 of the Transfer of Property Act, 1882.
Definition:
A mortgage is defined as a transfer of interest in specific immovable property for the purpose
of securing payment of money advanced, an existing debt, or the performance of an
obligation, which may result in pecuniary liability. The person who transfers the interest is
called the mortgagor, and the person to whom the interest is transferred is called the
mortgagee.
Essentials of a Mortgage:
The essential elements of a mortgage include:
1. Transfer of interest: The mortgagor does not transfer ownership, but only an interest
in the immovable property.
2. Specific immovable property: The property must be specifically identifiable,
described by metes and bounds.
3. Purpose: The mortgage is created to secure repayment of a loan or the performance
of an obligation.
Types of Mortgages:
1. Simple Mortgage:
o In a simple mortgage, the mortgagor undertakes a personal obligation to repay
the debt, and in default, the mortgagee has the right to cause the sale of the
mortgaged property.
o Possession of the property remains with the mortgagor.
2. Mortgage by Conditional Sale:
o Here, the mortgagor ostensibly sells the property with a condition that if the
mortgagor fails to repay the debt, the sale becomes absolute.
3. Usufructuary Mortgage:
o The mortgagee is placed in possession of the property and is entitled to receive
rents and profits in lieu of interest or principal.
4. English Mortgage:
o The mortgagor transfers ownership of the property to the mortgagee on the
condition that upon repayment of the debt, the property will be transferred
back to the mortgagor.
5. Mortgage by Deposit of Title Deeds (Equitable Mortgage):
o This is commonly used in urban areas where the mortgagor deposits the title
deeds with the mortgagee as security.
6. Anomalous Mortgage:
o Any mortgage that does not fall under the above categories is considered an
anomalous mortgage.
Conclusion:
Mortgages provide security to lenders and a means of raising finance for property owners.
The Transfer of Property Act, 1882, offers flexibility by recognizing different types of
mortgages to cater to varying needs and circumstances.
4. Rights and Liabilities of a Lessee
Introduction:
The Transfer of Property Act, 1882, under Section 108, prescribes the rights and liabilities of
lessors and lessees. These provisions protect both parties in a lease agreement.
Rights of the Lessee:
1. Right to Accretions (Section 108(d)):
o The lessee has the right to any accretions (increases) to the leased property,
whether naturally or artificially caused.
2. Right to Avoid Lease (Section 108(e)):
o If the leased property is substantially destroyed by fire, flood, or other natural
calamities, the lease becomes voidable at the lessee's option.
3. Right to Repairs (Section 108(f)):
o The lessee can repair the property if the lessor fails to do so, provided
reasonable notice has been given. The lessee can deduct the cost of repairs
from rent.
4. Right to Deduct Taxes (Section 108(g)):
o The lessee can pay any taxes that the lessor fails to pay and deduct the amount
from rent.
5. Right to Remove Fixtures (Section 108(h)):
o The lessee can remove any fixtures attached to the property during the lease,
as long as they do not damage the property.
6. Right to Sub-Lease (Section 108(j)):
o Unless restricted by the lease agreement, the lessee has the right to sub-lease
the propertyLiabilities of the Lessee:*
7. Duty to Maintain Property (Section 108(m)):
o The lessee is responsible for maintaining the property in a good condition,
subject to reasonable wear and tear【19†sourcuty to Restore Property (Section
108(q)):**
o At the end of the lease, the lessee must hand over the property to the lessor in
the same condition as it was at the beginning, except for normal wear and
tear【19†sourcConclusion:* The rights and liabilities of the lessee are
designed to ensure that the lessee enjoys the property during the lease term
while maintaining the integrity of the property for future use【19†sourcnerous
Gift**
Introduction:
An onerous gift refers to a gift that comes with a burden or obligation attached to it. The
recipient of the gift (the donee) must either accept both the benefit and the burden or reject
the entire gift.
Definition (Section 127 of the Transfer of Property Act, 1882):
Section 127 of the Transfer of Property Act, 1882, deals with onerous gifts. It provides that
when a single transfer includes properties with both benefits and burdens, the donee must
accept or reject the whole gift .
**Illust B 200 shares in a profitable company and 100 shares in a company suffering
losses, B must accept both sets of shares if he wishes to accept the gift. He cannot take
only the beneficial shares .
*Effect of Onerous Gifts:bility to the Donee:
The donee is liable to fulfill the obligations attached to the onerous property .
2. **Onerous Gift to a Disqualified Personf a minor or a legally disqualified person
accepts an onerous gift, they are not bound by it until they attain legal capacity .
Conclusion:
Onerous gifts require carefultion from the donee, as accepting the benefit also means
accepting the associated burdens .
8. Right of Redemption
**Introduction:*ption is an essential right of the mortgagor in a mortgage agreement,
which allows them to reclaim their property once the mortgage debt has been paid off.
This right is protected under Section 60 of the Transfer of Property Act, 1882.
Meaning:
The right of redemption ensures that the mortgagor can reclaim their property by repaying the
debt, and any provision that seeks to deny this right is considered void. This principle is
encapsulated in the maxim "once a mortgage, always a mortgage"【19†source】.
Case Law:
In Noakes & Co. vs. Rice (1902), it was heldondition that clogs the right of redemption is
invalid .
Exceptions:
The right of redemption may be extinguished by:
1. Act oies
2. Operation of law
3. A decree from the court .
Conclusion:
The right of redemption safeguards the mortgagor’s interest and et the mortgagee cannot
make the mortgage irredeemable 【14†source】.
9. Apportionment
Introduction:
Apportionment refers to the dis or obligations related to property between two or more
parties. Sections 36 and 37 of the Transfer of Property Act, 1882, govern apportionment.
Types of Apportionment:
1. Apportionment by Time (Section 36):
o This involves distributing periodic payments such as rent between the
transferor and transferee based on the period of ownership .
2. Apportionment by Estate (Section 37):
o When the property is divided and transferred to multipthe obligations are
distributed among the new owners proportionately【15†source】.
Conclusion:
Apportionment ensures fair division of property-related benefits and obligations bees based
on ownership or contractual agreements【15†source】【13†source】.
. Define Trust and Explain the Duties and Liabilities of Trustees
Introduction:
A trust is a legal obligation that arises when a property is held by one party (the trustee) for
the benefit of another party (the beneficiary). The Indian Trusts Act, 1882 governs the legal
aspects of trusts in India.
Definition of Trust:
As per Section 3 of the Indian Trusts Act, 1882, a trust is defined as an obligation annexed to
the ownership of property, arising out of a confidence reposed in and accepted by the owner
for the benefit of another person or both the owner and another person. The person who
creates the trust is called the “author of the trust” or settlor, the person who holds the property
is the “trustee,” and the person for whose benefit the trust is created is the “beneficiary.”
Duties of Trustees:
The duties of trustees are enumerated in Sections 11 to 20 of the Indian Trusts Act, 1882.
These duties include:
1. To Execute the Trust (Section 11):
o The trustee must carry out the purpose of the trust according to the instructions
laid down by the author of the trust.
2. To Protect the Trust Property (Section 13):
o The trustee is responsible for maintaining and defending suits to protect the
trust property.
3. To Exercise Reasonable Care (Section 15):
o A trustee must manage the trust property with the same care that a prudent
man would exercise when managing his own property.
4. To Be Impartial (Section 17):
o The trustee must be impartial in dealing with multiple beneficiaries and must
not favor one beneficiary over another unless the trust deed allows it.
5. To Keep Accounts (Section 19):
o The trustee must maintain accurate records of the trust property and provide
details to the beneficiary upon request.
6. To Invest Trust Funds (Section 20):
o The trustee is required to invest trust funds prudently and only in approved
securities mentioned in the Act.
Liabilities of Trustees:
The liabilities of trustees are addressed in Sections 23 to 30 of the Indian Trusts Act, 1882:
1. Liability for Breach of Trust (Section 23):
o If a trustee commits a breach of trust, they are liable to compensate for any
loss caused to the trust property or the beneficiary.
2. Liability for Wrongful Acts of Co-Trustees (Section 26):
o A trustee may be held liable for the wrongful acts of a co-trustee if they
negligently hand over property to the co-trustee or fail to properly supervise
their actions.
3. Liability to Pay Interest:
o Trustees are not generally liable to pay interest unless they receive interest
from trust property or delay payment to the beneficiary.
4. No Set-Off Allowed (Section 24):
o Trustees cannot offset a gain in one part of the trust property against a loss
caused by their breach of trust.
Conclusion:
The duties and liabilities of trustees under the Indian Trusts Act, 1882, are designed to ensure
that trustees act in the best interests of the beneficiaries and manage the trust property with
due diligence. The Act also provides legal remedies for beneficiaries in case of any breach of
trust.
6. Appointment of Trustees
Introduction:
Trustees play a critical role in administering a trust, and their appointment is governed by the
Indian Trusts Act, 1882. The appointment process ensures that the trustee is capable of
fulfilling their responsibilities in managing the trust property for the benefit of the
beneficiaries.
Appointment of Trustees:
The appointment of trustees is covered under Section 73 to Section 74 of the Indian Trusts
Act, 1882. Trustees can be appointed in the following ways:
1. Appointment by the Author of the Trust:
o The author of the trust has the primary right to appoint trustees. The trust deed
typically mentions the name of the trustees at the time of creating the trust.
2. Appointment by Courts (Section 74):
oIf no trustee is appointed, or if all trustees resign, die, or are incapable of
acting, the court can appoint a trustee upon the request of the beneficiaries.
This ensures that the trust does not fail due to the absence of a trustee.
3. Appointment by Beneficiaries:
o In some cases, beneficiaries can institute a suit for the appointment of a
trustee. This usually happens when there is a vacancy or incapacity of the
previously appointed trustee.
4. Appointment by Donee:
o The donee of a power of appointment, if authorized in the trust deed, can
appoint themselves or others as trustees.
No Trust Fails for Want of a Trustee (Section 59):
A key principle under the Indian Trusts Act, 1882, is that a trust does not fail for want of a
trustee. If no trustee is available, the court can step in to ensure the proper execution of the
trust.
Conclusion:
The appointment of trustees is a crucial process that ensures the smooth functioning of the
trust. In case of any vacancy, the courts and beneficiaries have the power to fill the position
to protect the interests of the beneficiaries and maintain the trust property effectively.
