Property Law

Chanderprabhu Jain College of Higher Studies & School of Law
Plot No. OCF, Sector A-8, Narela, New Delhi – 110040
(Affiliated to Guru Gobind Singh Indraprastha University and Approved by Govt of NCT of Delhi & Bar Council of India)
Semester: Sixth Semester
Name of the Subject: Property Law
UNIT- 1

. Definition of Transfer of Property
“Transfer of property” defined.— (Sec 5)
In the following sections “transfer of property” means an act by which a living
person conveys property, in present or in future, to one or more other living
persons, or to himself, or to himself and one or more other living persons; and “to
transfer property” is to perform such act.In this section “living person” includes a
company or association or body of individuals, whether incorporated or not, but
nothing herein contained shall affect any law for the time being in force relating to
transfer of property to or by companies, associations or bodies of individuals.

After analyzing the language of section 5 the following point may be
observed
1. Act of Conveyance
2. In present or in future
3. Living Persons
4.To himself or himself with on or more other persons

Non-Transferable Property
1. Spes Successionis [sec 6(a))
2. .Right of Re-entry [Sec6 (b)]
3. Easement [Sec6 (c)]
4. Restricted interest [Sec6 (d)]
5. Maintenance [Sec6 (dd)]
6. Mere right to sue [Sec6 (e)]
7. Public Office [Sec6 (f)]
8. Pensions [Sec6 (g)]
9. Nature of Interest [Sec6 (h)]
10.Untransferable Interest [Sec6 (i)]

Essentials of A Valid Transfer
1.The property must be a transferable property
2.Transferor must be competent
3.The transferor must also have right to transfer
the property being transferred
4.Transferee must also be competent
5.Necessary formalities prescribed by law for the
transfer must also be completed

Modes of Transfer
1. Delivery of possession- Where writing is
not necessary under the Act, the property
may be transferred orally i.e. only by
delivery of possession
2. Registration- Where registration is
necessary, the transfer must be in writing.

Transfer For The Benefit Of An Unborn Person
Property cannot be transferred directly to an unborn
person but property can be transferred for the benefit of
an unborn person. Sec 13 provides that property can be
transferred for the benefit of an unborn person subject to
following conditions:
1. Transfer for the unborn must be preceded by a life
interest in favour of a person in existence at the date of
the transfer.
2.Only absolute interest may be transferred in favour of
the unborn
.

Rule Against Perpetuity
Perpetuity means indefinite period. Rule against
perpetuity is the rule which is against a transfer making
the property inalienable for an indefinite period or for
ever.
Sec 14 of the transfer of property act provides that in a
transfer of property, vesting of interest in the living
person(or persons) and the minority of the ultimate
beneficiary.

The essential elements of the rule against perpetuity are as follows:
1. There is a transfer of property
2. The transfer is for the ultimate benefit of an unborn person who is
given absolute interest
3. The vesting of interest in favour of ultimate beneficiary is
preceded by life or limited interests of living person
4. The ultimate beneficiary must come into existence before the
death of the last preceding living person
5. Vesting of interest in favour of ultimate beneficiary may be
postponed only up to the life or lives of living persons plus
minority of ultimate beneficiary; but not beyond that.

Exceptions to Rule Against Perpetuity
1. Transfer for the benefit of public- Where a property is transferred for
the benefit of public in the advancement of religion, knowledge,
commerce, health, safety or any other object beneficial to mankind,
the transfer is not void under the rule against perpetuity.
2. Personal Agreement- Personal agreements which do not create any
interest in property are exempted from the rule against perpetuity.

Vested and Contingent interest
Vested interest: A vested interest is created in favour of a person –
without specifying the time when it is to take effect, or specifying that it is
to take effect forthwith, or on the happening of a certain event. It is
ownership. It does not depend upon the fulfilment of any condition. It
creates an immediate right, though the enjoyment may be postponed to a
future date. Thus, owner’s title is already perfect. It is not defeated by
death of transferee before he obtains possession. It is both transferable
as well as heritable. If the transferee of a vested interest dies before
actual enjoyment, it passes on to his heirs.
Example: A makes a gift to B of Rs. 100 to be paid to him on the death of
C. B gets a vested interest, as the event, namely, C’s death is certain

Contingent interest: A contingent interest is created in favour of a
person – to take effect only on the happening or not happening of a
specified uncertain event, which may or may not happen. It is only a
chance of becoming an owner. However, it is different from spes
successions. It is solely dependent upon the fulfilment of the
condition (after which it becomes vested interest), so that if the
condition is not fulfiled, the interest may fall through. Thus, the
owner’s title is as yet imperfect, but is capable of becoming perfect.
Whether it passes on the death of the transferee or not depends on
the nature of the contingency. It is transferable. Whether it is heritable
or not depends on the nature of the contingency. If the transferee dies
before obtaining possession, the contingent interest fails, and does
not pass on to his heirs.
Example: An estate is transferred to A if he shall pay Rs. 500 to B. A’s
interest is contingent until he paid Rs. 500 to B.

Important Points Regarding Vested Interest
1.Vested interest does not depend upon fulfilment of
any condition. It creates an immediate right though
the enjoyment is postponed to a future date
2.Vested interest is not defeated by the death of
transferee before he obtains possession
3. It is both transferable and heritable. If the
transferee of the vested interest dies before actual
possession or enjoyment it passes to his heirs.
4. There is present, immediate right even when its
enjoyment is postponed.

.
Important Points Regarding Contingent Interest
1.Contingent interest is solely depend upon the fulfilment of
any condition, the condition is not fulfilled the interest fails
2. Contingent interest is defeated by the death of
transferee before he obtains possession.
3. It is transferable but whether it is heritable, depends
upon nature of condition, it passes not on heir on the death
of the transferee received to transfer.
4. There is no present right of enjoyment, there is mere a
promise for giving such a right.

BBA LLB
(Sixth Semester)
Paper Code:306
PROPERTY LAW
UNIT -2

IMPORTANT INGREDIENTS OF SECTION 53A
OF TRANSFER OF PROPERTY ACT
1. Any person - contract to transfer for consideration
any immoveable property by virtue of contract in
writing signed by him or on his behalf.
2. There should not be any uncertainty.
3.Transferee has in part performance of contract has
taken possession or part possession of the property or is
already in possession and continues to do so in part
performance of the contract

IMPORTANT INGREDIENTS OF SECTION 53A OF
TRANSFER OF PROPERTY ACT
1. Any person - contract to transfer for consideration any
immoveable property by virtue of contract in writing signed by
him or on his behalf.
2. There should not be any uncertainty.
3. Transferee has in part performance of contract has taken
possession or part possession of the property or is already in
possession and continues to do so in part performance of the
contract

4. Transferee has performed or willing to perform his part of the
contract i.e. he has paid or ready to pay the consideration– then
Notwithstanding that the contract, registered or not ,or, where
there is an instrument of transfer, that the transfer has not been
completed in the manner prescribed by the law for the time
being in force-
-the transferor shall be debarred from enforcing against the
transferee any right in respect of property, other than the right
specifically provided by the terms of contract.

.
SCOPE OF SECTION 2(47)(v) & SECTION 53A OF
TRANSFER OF PROPERTY ACT
The Bombay High Court in Chaturbhuj Dwarkadas
Kapadia vs. CIT 260 ITR 491 observed, that in order
to attract section 53A,the following conditions need to
be fulfilled:-
1. There should be contract for consideration
2. It should be in writing
3. It should be signed by the transferor
4. It should pertain to the transfer of immoveable
property
5. Lastly, transferee should be ready and willing to
perform his part of contract.

“has performed or is willing to”
.
• Willingness to perform in the context of Section 53A
has to be absolute and unconditional.
• If willingness is studded with a condition ,it is in fact
no more than an offer and cannot be termed as
willingness.
• “Willingness to perform” for the purposes of Section
53A is unconditional willingness on the part of
vendee to perform his obligations.

.
So if the vendee does not perform or is not willing
to perform his obligations Section 53A does not
come into operation and as the result transaction
in question cannot fall within the scope of a
deemed transfer u/s 2(47)(v) of the Act.

UNIT 3

Definition of Mortgage
Section 58 of Transfer of property Act 1882 ‘A mortgage is the transfer
of an interest in specific immoveable property for the purpose of securing
any of the following:
1. The payment of money advanced or to be advanced by way of loan,
2. An existing or future debt, or
3. The performance of an engagement which may give rise to a pecuniary
liability. The transferor is called a mortgagor, the transferee a mortgagee;
the principal money and interest of which payment is secured for the time
being are called the mortgage-money, and the instrument (if any) by
which the transfer is effected is called a mortgage-deed. In a mortgage,
out of the bundle of rights which constitute ownership, some are
transferred to the mortgagee and the other rights remain vested in the
mortgagor

ELEMENTS:
1. Specify immovable property
2. Consideration
3.Transfer of an interest
4. Parties

KINDS OF MORTGAGE
• Simple Mortgage
• Mortgage by Conditional Sale
• Usufructuary Mortgage
• English Mortgage
• Anomalous Mortgage

Charge
Charge (Section 100)—
 Where immoveable property of one person is by act of parties or operation of
law made security for the payment of money to another, and the transaction does
not amount to a mortgage, the latter person is said to have a charge on the
property; and all the provisions herein before contained which apply to a simple
mortgage shall, so far as may be, apply to such charge.
 Nothing in this section applies to the charge of a trustee on the trust-property
for expenses properly incurred in the execution of his trust, and, save as
otherwise expressly provided by any law for the time being in force, no charge
shall be enforced against any property in the hands of a person to whom such
property has been transferred for consideration and without notice of the charge.

How a charge can be created
A charge can be created by Act of parties as well as by operation of law
Charge by Operation of Law Charges by operation of law are based upon the
consideration of duty of implied intention on the part of the owner of the
property to make it answerable for a specific claim. A charge created by a
decree of a competent court is created by operation of law. Instances of
charges created by operation of law:
(a) A Hindu widow’s charge on the family property for her maintenance, if
created by a decree (sec. 39).
(b) A vendor’s charge for unpaid purchase-money [sec. 55(4)]; or the charge
of buyer for advances made by him [sec. 55(6)].
(c) A party entitled to claim contribution under sec.82 also acquires a charge
in respect thereof.
(d) Arrears of government revenue such as municipal taxes are a paramount
charge on the land.
(e) A compromise decree creates a charge on an immovable property

Basis Mortgage
Meaning Mortgage implies the transfer of
ownership interest in a particular
immovable asset.
Creation Mortgage is the result of the act of
parties.
Registration Must be registered under Transfer of
Property Act,1882.
Term Fixed.
Personal liabilities In general, mortgage carries personal
liability, except when excluded by an
express contract.
Distinction between Mortgage and Charge are as follows: -

Unit - 4

Lease
• It has been defined in section 105 of the Transfer Of Property
Act, 1882.
• A lease of immoveable property is a transfer of a right to enjoy
such property, made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or promised, or of money,
a share of crops, service or any other thing of value, to be rendered
periodically or on specified occasions to the transferor by the
transferee, who accepts the transfer on such terms.

Lessor, lessee, premium and rent defined
The transferor is called the lessor, the transferee is called the lessee, the price
is called the premium, and the money, share, service or other thing to be so
rendered is called the rent.
HOW LEASE MADE
•A lease of immovable property from year to year, or for any term exceeding
one-year or reserving a yearly rent, can be made only by a registered
instrument.
•All other leases of immovable property may be made either by a registered
instrument or by oral agreement accompanied by delivery of possession.
•Where a lease of immovable property is made by a registered instrument,
such instrument binds both lessor and the lessee

Essential Elements
The essential elements of a lease are as follows:
•Parties- The parties to a lease are the lessor and the lessee. The lessor is also
called the landlord and the lessee the tenant.
•Subject matter of lease- The subject matter of lease must be immovable
property.
•Duration of lease- The right to enjoy the property must be transferred for a
certain time, express or implied or in perpetuity. The lease should commence
either in the present or on some date in future or on the happening of some
contingency, which is bound to happen.
•Consideration- The consideration for lease is either premium or rent, which is
the price paid or promised in consideration of the demise.
•Sub-lease- A lessee can transfer the whole or any part of his interest in the
property by sub-lease. However, this right is subject to the contract to the
contrary and he can be restrained by the contract from transferring his lease by
sub-letting

How Does A Lease End(sec 111)
•By efflux of the time limited thereby,
•Where such time is limited conditionally on the happening of some
event-by the happening of such event,
•Where the interest of the lessor in the property terminates on, or his
power to dispose of the same extends only to, the happening of any event-
by the happening of such event,
•In case the interests of the lessee and the lessor in the whole of the
property become vested at the same time in one person in the same right,
•By express surrender, that is to say, in case the lessee yields up his
interest under the lease to the lessor, by mutual agreement between them
•By implied surrender
•On the expiration of a notice to determine the lease, or to quit, or of
intention to quit, the property leased, duly given by one party to the other.

“Gift” (Section 122)
• “Gift” is the transfer of certain existing moveable or
immoveable property made voluntarily and without
consideration, by one person, called the donor, to
another, called the donee, and accepted by or on behalf
of the donee.
• Acceptance when to be made. — Such acceptance
must be made during the lifetime of the donor and while
he is still capable of giving.
• If the donee dies before acceptance, the gift is void.

Transfer how effected (Section 123)—
For the purpose of making a gift of immovable property, the
transfer must be effected by a registered instrument signed by or
on behalf of the donor, and attested by at least two witnesses.
For the purpose of making a gift of moveable property, the
transfer may be effected either by a registered instrument signed
as aforesaid or by delivery. Such delivery may be made in the
same way as goods sold may be delivered.

Section 124 Gift of existing and future property.— A gift
comprising both existing and future property is void as to the
latter.
Section 125 Gift to several of whom one does not accept.—
A gift of a thing to two or more donees, of whom one does
not accept it, is void as to the interest which he would have
taken had he accepted.

When gift may be suspended or revoked Section
(126).—
The donor and donee may agree that on the happening of any
specified event which does not depend on the will of the donor
a gift shall be suspended or revoked; but a gift which the
parties agree shall be revocable wholly or in part, at the mere
will of the donor, is void wholly or in part, as the case may be.
A gift may also be revoked in any of the cases (save want or
failure of consideration) in which, if it were a contract, it might
be rescinded. Save as aforesaid, a gift cannot be revoked.
Nothing contained in this section shall be deemed to affect the
rights of transferees for consideration without notice.

Onerous gifts Section (127) .—
Where a gift is in the form of a single transfer to the same person of
several things of which one is, and the others are not burdened by an
obligation, the donee can take nothing by the gift unless he accepts it
fully.
Where a gift is in the form of two or more separate and independent
transfers to the same person of several things, the doneee is at liberty to
accept one of them and refuse the others, although the former may be
beneficial and the latter onerous.

Onerous gift to disqualified person.—
A donee not competent to contract and accepting property burdened
by any obligation is not bound by his acceptance. But if, after
becoming competent to contract and being aware of the obligation,
he retains the property given, he becomes so bound.
Illustrations
(a) A has shares in X, a prosperous joint stock company, and also
shares in Y, a joint stock company in difficulties. Heavy calls are
expected in respect of the shares in Y. A gives B all his shares in joint
stock companies. B refuses to accept the shares in Y. He cannot take
the shares in X.
.

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