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TRANSFER OF

PROPERTY

ACT

M. S. RAMA RAO B.Sc., M.A., M.L.

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TRANSFER OF PROPERTY

By M S RAMA RAO B.Sc.,M.A.,M.L.,

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QUESTIONS BANK

1. (1) Explain 'Transfer of Property' (2)' Absolute restraint on Transfer of Property is void Discuss.
2. ' Property of any kind may be transferred' Discuss.
3. (1) Explain the principles that govern transfers to Unborn persons. (2) Write a note on Contingent interest.
4. (1) Discuss the doctrine of 'Rule against prepetuity'. (2) State the English Law of the doctrine.
5. Distinguish conditions precedent from conditions subsequent.
6. Write an essay on the 'doctrine of Election'.
7. Discuss the law relating to Ostensible Owner.
8. Discuss the doctrine of Lis Pendens.
9. State & explain the principle of performance. 10. Write Short Notes on :(a) Immovable Property (b) Attestation (c) Actionable Claim (d) Constructive notice (e) Direction for accumulation (f) Doctrine of Acceleration (g) Fraudulent Transfers.
10. Explain: i) Covenants annexed to land, ii) Feeding the Estoppel, iii) Improvement made by bonafide holder with defective title.
11. i) Define Sale.ii) What are the right and the liabilities of the Vendor & the Vendee?
12. Explain the characteristic features of i) Simple Mortgage ii) Mort gage by conditional sale iii) Usufructuary Mortgage iv) English Mortgage v) Mortgage by deposit of title deed vi) Anomalous Mortgage.
13. What are the rights & liabilities of a mortgagee in possession.
14. ' Once a mortgage always a mortgage' Explain.
15. Discuss the doctrines of' Marshaling' &' Contribution'. Illustrate. 17. Explain: i) Subrogation ii) Tacking iii) 'Redeem up foreclose down'.
16. What is a lease? How is a lease terminated? Distinguish

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between a lease & a licence.

19. What are the rights & the liabilities of a lessor & a lessee? 20. Define'Gift'.Explain i) Onerous Gift, ii) Universal donee.iii) Donatio mortis causa, iv) Exchange.
20. State the facts & the decision in (i) Marshall V Green (ii) Allcard V Skinner (iii) Tagore V Tagore (iv) Cooper V Cooper (v) Laxman V Kalicharan (vi) Bellamy V Sabine (vii) Ramsden V Dyson (viii) Maddison V Alderson (ix)TulkVMoxhay (x) Aldrich V Cooper

TABLE OF CASES

Chapters

1. Preliminary Topics 1.2 Attestation Shamu V. Abdul Khadar 1.3. Immovable Property Marshall V. Green Holland V. Hodgson 1.4. Constructive Notice Thilak Devilal 's Case 1.5. Spes Successions Amrit Narayan V Gaya Allcard V walker 1.6. Actionable Claims Colonial B ank V Whinney Machiran V. Issham Chander
2. Transfer of any kind Nagaratnamma V. Ramiah Achal Ram V. Kasim
3. Gift
   1. Requisites Allcard V Skinner
4. Lease
   2. Lease & License

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Ram Gopal V Custodian Technicians Studio

13. Convenant Annexed TulkV.Moxhay Dyson V. Forster
14. Mortgage
    4. Unsfructuary SubbannaV. Nariah
    5. Anomalous Narasingh Pratap V. Yagoob'
    6. Redemption Shere Khan V. Swami Dayal
    7. Doctrine of marshalling Aldrich V. Cooper
15. Miscellaneous 2. Acceleration lull V Jones Underwood v. Ward
16. Accumulation Thalluson V. Wood Ford Berry V. Green

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CONTENTS

Chapters Pages Introduction Syllabus Questions Bank Table of Cases

1. Preliminary Topics 1. Transfer of Property 9 2. Attestation 3. Immovable Property 4. Constructive Notice 5. Spes Successions 6. Actionable Claims 7. Exchange 8. Charge 2. Transfer of 1. Property of any kind 14 3. Gift 1. Requisites 16 2. Revocation 3. Onerous Gift 4. Universal Donee 4. Lease 1. Lease 18 2. Lease & Licence Distinguished

3. Rights & Duties of Lessor & Lessee
4. Termination **5. Unborn Person 23
5. Perpetuity 24
6. Conditions Precedent & Subsequent 26
7. Doctrine of Election 28
8. Ostensible Owner**
9. Ostensible (Benami) 30
10. Feeding the Estoppel 10. Lis Pendens 32

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CHAPTER 1 PRELIMINARY TOPICS

Ch. 1-1 Transfer of Property : Sn.5 of Transfer of Property. Act defines Transfer of Property'. It means an act by which a living person conveys property in present or in future to one or more living persons, or to himself, or to himself and to one or more other living persons. Living person includes a Company, Association or body of individuals. The T.P. Act deals with sale, mortgage, gift, lease and exchange. Hence, abandonment is not a transfer. Partition is not a transfer. Transfer to himself and others: This is possible in case of trust. Future property can be transferred (subject to Sn.6.). The persons must be competent to make a contract. The trans- fer of property passes all the interests of the transferor and the legal incidents, to the transferee. Registration, under the Registration Act is compulsory if the value of. the immovable property is worth Rs.100/- and above. Ch.1- 2 Attestation: The T.P. Act defines attestation in Sn.3. Attesting in respect of an instrument means that the documents must be attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the document. Further each of them must have signed the instrument in the presence of the executant. The attestors must have animus attestandi (intention of attesting). It is not necessary that more than one should be present at the same time. Law also does not prescribe any particular form of attestation. The usual procedure is that the attestors must sign with address and date. The Privy Council in Shamu Vs. Abdul Khandir, resolved the controversy whether the attestors should have actually seen he execution or not, of the document. It held that the attestors who sign the document must have actually seen the document executed. This was accepted in Sn.3. but it is given retrospective effect. In English law attestors should all be present at the same time and must have seen the execution. But it is not so, according to Indian Law. Attestors should be a sui juris (person legally capable) Even thumb impression is allowed. Attestation does not mean that attestors have notice of the contents of the document. But attestation estops from denying the factum of execution. They vouch to the execution, not to contents.

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Ch.1-3 Immovable Property: The Transfer of Property Act deals with various transfers relating to immovable property. S.3(2) says, Immovable Property does not include standing timber , growing corps or grass. The General Classes Act says, Immovable Property includes lands, benefits that arise out of land and things attached to the earth. 'Attached to the earth' means rooted to the earth i .e., trees, shrubs etc., imbedded in the earth i .e., walls or buildings, attached to what is so embedded. Further right to receive future rent is Immovable Property. Marshall V Green: Sale of trees to be cut and taken away. Held: sale was not for Immovable Property, if the intention of the parties is that the trees should have further nutriment from the land, then it is Immovable Property otherwise not. In English Law, there is the doctrine of fixtures. Whether a chattel is resetting merely, by is weight on the floor, it is not immovable. In Holland V. Hodgson : a mortgage of a mill was made. Held: Certain looms attached to the stone of the mill, was also covered by the mortgage. Ch. 1- 4 Constructive Notice. Section 3 defines notice. A notice may be actual or construc- tive. There is actual notice, when knowledge of a fact is brought directly to the person concerned. It is constructive when there is a presumption of the knowledge of the fact. The following are its different kinds: i) knowledge is presumed when the party wilfully abstains from making enquiry. ii) Gross negligence of the party. iii) Registration: The privy council had held that registration was not a constructive notice to subsequent transferees. (Thilak Devilal's Case). This is now superseded by T.P.Act. Hence, registration of a transfer amounts to notice, from the date of registration. iv) Possession as notice: If a person is actually in possession of a property, then the acquirer of the property is deemed to have notice of the title, if any, of the person in possession of the property. v) Notice to agent is treated as notice to the principal. The agent must have notice during the course of his business.

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Eg.: (a) A is the debtor and B is the creditor. B transfers the debt to C. B then demand from A to pay; A pays without notice of the transfer. The payment is valid. C cannot sue A for the debt. The debt is an actionable claim and may be transferred by B to C. But, C as. transferee has those rights and remedies as B. Hence, C cannot sue 'A' for the debt. b) A has a life insurance policy. He assigns it to a Bank B for securing a loan. A dies. B is entitled to receive the amount of the policy. B can sue without the consent of A's executors. The following are actionable claims : i) Share in a Company ii) Mortgage debt iii) Claim to copyright iv) Claim to mesne profits v) Mere right to sue. Ch. 1 - 7 Exchange: (T.P. Ac t Sn.111) When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things money only, the transaction is called an 'Exchange'. Any such transfer can be made in the same manner as is done in respect of sale. A partition of H.U.F. is not an Exchange. The parties to Exchange are subject to the same rights & liabilities of the Vendor and the Vendee. Any defect in the title of the property exchanged, is to be set right by that party whose property had the defective title. A transfers his house to B and B transfers his wet land and pays cash of Rs.5,000/- to A as consideration. This is an Exchange. If B had given money only, then it is not an Exchange. Ch, 1 - 8 Charge : Sn. Where immovable property of a {person is by act of parties, (or by operation of law) made a security |or the payment of money to another, the latter person is said to hav£ a charge on the property. Conditions: i) The transaction should not amount to a mortgage. ii) All matters relating to the rights and liabilities of the parties to the charge are governed by those applicable to a simple mortgage.(Sn.59 T.P.Act). iii) This will not apply to a trustee^ who makes a charge on the trust-property.

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iv) Bonafide transferees without notice of the charge on the immovable property are protected. A charge is an encumbrance on the property. v) The formalities to be observed to create a charge are the same as for a simple mortgage. In a charge, there is no transfer of any interest in the immovable property, as in a mortgage. There is creation of a right of payment out of the property specified. Charge is less than a simple mortgage & cannot take priority over it.. It is a jus ad rem, and not jus in rem. There is no personal covenant to pay ; there is merely an obligation on the property for payment. A charge cannot bind a bonafide purchaser for value who had no notice of the charge.

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An interest in property restricted in its enjoyment to the owner personally cannot be transferred by him. Service of Inams is an example. A was entitled to an Inams, for his 'Swastivachakam' service at a temple. 'A's successor x sold this interest to B. Held: That the alienation was void. Similarly, a religious office also cannot be transferred. e) Right to future maintenance in whatsoever manner arising, secured or determined, cannot be transferred. W, the wife of H was receiving a maintenance of Rs.3,000/- per year. W is not entitled to recover her maintenance for the next year in advance. But, if H has defaulted in payment she has a right to recover the arrears. This right can be transferred by her to C. Hence, a past maintenance can be transferred but not the future right to maintenance. f) A mere right to sue cannot be transferred. A has right to recover damages from B for a tortious liability (e.g. Assault), this right cannot be transferred as it is a mere right to sue. Similarly a mere right to sue for breach of contract, cannot be transferred. g) Pensions, stipends, public office etc. cannot be transferred, h) Illegal Transfers: No transfer can be made if it is i) having unlawful object or consideration, ii) opposed to the nature of interest effected, iii) to a legally disqualified transferee. Transfer of property to future illicit cohabitation is void. Transfers made for past cohabitation are not bad as the past cohabita- tion was not the 'object'. In Nagaratnamma Vs. Ramaiah the supreme Court upheld such a transfer. 'Champertous transfer' by itself is not void in India. Achal Ram Vs. Kasim. A moiety created to person in a civil suit was held as good, as it is not opposed to public policy.

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CHAPTER 3

GIFT

Ch. 3-1 Requisites of a valid gift: Section 122 of T.P.Act defines a gift. 'It is the transfer of certain existing movable or immovable property made voluntarily and without consideration and accepted by or on behalf of the donee'. The person who makes the gift is the donor. The donee must accept the gift: a) during the life time of the donor and b) While the donor is still capable of giving the property gifted. But if the donee dies before acceptance the gift is void. Gift of movable property may be registered or may be effected by delivery. However gift of immovable property of any value requires registration under sections 17 (a) of the Registration Act. It must be signed by the donor and must be attested by two witnesses. Gift to God Almighty may be oral or may be in writing or may be registered. A makes a gift of his jewels to B. This may be done by delivery. A makes a gift of a piece of land worth Rs.50/-. This is to be registered. The property must be existing at the time of the gift. A gift of future property is void. When a gift is made to several persons and one or more donees does not accept, then it is void respect of those who do not accept. Ch. 3-2 Revocation of gift: (i) Conditional gifts: The fundamental rule is that 'A resumable gift is not a gift at all.' A gift once given cannot be revoked at the mere will of the donor; such a gift if made, is void ab initio. But, a conditional gift is void.A conditional gift which attaches a condition subsequent is valid if the condition is not vague or illegal or immoral or opposed to public policy or impossible of performance. Hence conditional gifts may be made. Ex.: A gifts to B a plot of land, reserving to himself with the consent of B, to take back the plot if B or his descendants die before A. B dies without any descendants during A's life time. The condition is valid and A may take back the plot. b) A make a gift to C, a concubine, for her continued relation ship with the donor. The condition is immoral therefore gift is void. c) A gives Rs. 1 lakh to B reserving to himself with B's consent,

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CHAPTER 4

LEASE

Ch. 4-1 Lease : Sn.105 of the T.P.Act defines a lease. A lease of immovable property is defined as the transfer of the right to enjoy such property made for a certain time, in consideration of a price paid or promised

. The consideration may be a fixed amount or a share of crops or serving of any other thing to be rendered periodically or otherwise. Lease may be oral or in writing. If the lease is for one year or above then it must be in writing and must be registered. Leases for lesser period may be oral or in writing. Registration is optional. Delivery of possession is necessary, in both the circumstances. Ch. 4 - 2 Distinction between Lease and Licence: LEASE a) A lease creates an interest in the property. b) Lessee gets exclusive possession of immovable property. c) A lease is assignable d) A lease is not revocable e) A lessee can bring an action for trespass.

LICENCE

But a licence does not ere

• ate any interest in the property. It is a permission to do an unlawful act on the immovable property i.e, would have been unlaw
• ful had there been no licence. A licensee does not get such a right. A licence is not transfer
• able. A licence is revocable. A licence cannot sue in his own name.

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f) According to T.P. Act, lease is to But for licence registration be registered if it is for one year or is not necessary. above. g) A lease-hold creates a A licence does not create heritable interest. such an interest. It is deter mined by the death of the grantor or of the licencee. In Clubvala Vs. Russian it was pointed out that 'exclusiveness of possession' is a quality that distinguishes the lease from a licence. Effect of non-registration: If a document of lease which is to be registered has not been registered at all, the position was controver- sial due to a number of High Court decisions. To put an end to this the T.P.Act was amended in 1920. The Privy Council had held that non-registration would render the lease void. According to the amend- ment where there is no registration the doctrine of part performance may be invoked to protect the position of the lessee. An unregistered lease may be admitted in evidence only to show that the possession is under a lease. This is under section 27(a) of Specific Relief Act. Ch. 4-3 Rights and Duties of the Lessor and Lessee. The T.P. Act under section 108 provides for the rights and liabilities of the lessor and lessee: i) The rights and liabilities of the lessor. a) The lessor should disclose any material or latent defects in the property leased. b) The lessor must put the lessee in possession of the property. c) There is a covenant for quite enjoyment of the property if the lessee is paying the rent during the period of the lease. ii) Rights and liabilities of the lessee. a) Lessee's right to accretions if there is any accretion to the benefit of the property. The lessee is entitled to such accretions. This