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)
PAPER NAME- PROPERTY LAW
PAPER CODE- BBALLB 306
CLASS- BBALLB 6TH SEM.
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. Transferor must be competent
2. The transferor must also have right to transfer the property being
transferred
3. The property must be a transferable property
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.

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
(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:
•the landlord and the lessee the tenant.
•Parties- The parties to a lease are the lessor and the lessee. The lessor is also
called 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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