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Types of Rights and Interest

SUBMITTED BY VIKRAM KUMAR MALVEEYA

ABSTRACT
In this paper I will be dealing with the types of Rights and Interest governed under transfer of
property Act. Rights like right to sue, right of easement, rights of buyer and seller, rights of
mortgagor etc and also types of interest such as vested and contingent interest. The Transfer
of Property Act, 1882 is defined as an act by which a living person conveys property in
present or future to one or more other living persons or himself and one or more other living
persons, and to transfer the property is to perform such act.
Keywords: mortgagor, interest, transfer, property

INTRODUCTION
The Transfer of Property Act of 1882 specifies what defines a transfer and the conditions that
must be met. The Transfer of Property Act of 1882 defines a transfer as "an act by which a
live person passes property to one or more other living persons, or himself and one or more
other living persons, in the present or future," and "to transfer the property" means "to
accomplish such act." A living person is defined as a corporation, an association, or a group
of individuals, whether or not they are incorporated.
Before moving forward, it is important to know what the word “property” means. The term
"property" is not defined in the Act, but it has been given a broad definition that encompasses
all types of properties. The term "property" refers to both actual and intangible assets, such as
buildings and land.

Types of Rights under this Act:

Right of re-entry: section 6(b) deals with this right, This section provides the right for some
other individual to resume possession of the land for a term. Lease cases, for instance. In this
context, if there is a pure right for a violation of a condition, it can only be passed to the
owner of the property who is impacted later. This applies to the property.
Ex: A 3 year rental of land is granted to B. This transfer shall be invalid at the expiration of 3
years if the re-right is transferred to C.

Right of easement: section 6(c) deals with this right, an easement means a right that the
owner or the occupier of certain land has in his possession for the beneficial enjoyment of the
said land. It can be said that the right to use or restrict the use of the property of some other
person. An easement cannot be transferred except the dominant heritage.
Ex: M, the owner of the house has the right of way over their adjoining land with N. Hence,
M cannot transfer his right without transferring the house.

In the case of “Sital v. Delanney”, the court held that an easement cannot be transferredm
unless the dominant heritage right is attached to it.

Right to future maintenance: section 6(d) deals with this right, This provision says that no
transfer of any right to future maintenance is possible. The reason is that the right is a
personal gain to a person alone, hence he cannot transmit his gain to another person.
Ex: A woman who receives maintenance from her husband under a decree or award or order.

In the case of “Dhupnath Upadhya v. Ramacharit”, it was held that where the property is
given as maintenance, then the person cannot transfer the property during her lifetime. A
right of maintenance is a personal right and cannot be taken away.

Right to sue: This section does not allow for the transfer of a simple right to sue. A lawsuit
shall not be granted, since the transferor does not, as the owner of the property would, acquire
an interest in the subject of the lawsuit.
Ex: X published defamatory statements against Y and Y filed a suit against X. But Y cannot
transfer his right to Z to recover damages for him. If Y transfers his right to Z then this
transfer will be held void.

Rights of buyer and seller:

Right of buyer before sale: To charge for price prepaid [Section 55(6)(b)]
If the buyer legitimately refuses the acceptance of the contract, the buyer shall be entitled to
reimburse seriously (if any) as well as for the costs (if any) awarded to him to force or obtain
a decree on the particular fulfilment of the contract.

The idea of justice, equity and moral conscience underpins this part. The charge would persist
until the transport is carried out by the seller and the purchaser's ownership is likewise
granted and only afterwards ceases.

Right of buyer after sale: Benefit of increment [Section 55(6)(a)]

If the property has been owned by the purchaser, the purchaser has the right to enhance the
property, the value of the property and its rents and profits. The buyer shall not only be
entitled, but also to the increase in value and enhancement of the property, to rent and profit
of the property.

Right of seller before sale: Right to take rents and profits [Section 55(4)(a)]

Until the ownership of the property transfers on to the buyer, the seller shall have the right to
rent and profit. When ownership is passed to the buyer, sales shall be completed. The seller
will continue to own the property until ownership has been transferred and will be entitled to
the property's rents and profit in this role. Until then the seller is entitled to benefit from the
property.

Rights of seller after sale: Charge upon property for unpaid price [Section 55(4)(b)] –
This section  states that where the property is transferred to the buyer before the purchase
money is paid, the seller has the right to charge the property.

In the hands of the buyer,

 Any transferee without consideration, or

 Any transferee with notice of non-payment,
 For the amount of the purchase money or if any part of the purchase money remaining
unpaid, and
 For interest on such amount of purchase money or any part unpaid from the date on
which the possession has been delivered

Rights of mortgagor
Mortgagor: in total mortgagor have 6 rights:-

 Right of redemption 

at any time after the principal money has become due, the mortgagor has a right on payment
of the mortgage money at a proper place and time, to require the mortgagee –

1. To deliver to the mortgagor the mortgage-deed and all documents relating to

mortgaged property in possession or power of the mortgagee,
 2. To deliver possession of the property to the mortgagor where the mortgagee is in
possession of it,
3. 3. For the re-transfer of the properly, it shall be recorded in writing, at the expense of
the mortgagee, to the liability of the mortgagee or any third person directed by him,
upon extinction.

These rights cannot be exercised if they have been extinguished by the act of the parties or by
a decree of a court.

The right conferred by this section is called a right to redeem and a suit to enforce it is called
a suit for redemption.

 Right to Transfer to the third party. (S. 60A)

According to this section, the mortgager may ask the mortgage agent, instead of redeploying
his property, to assign the mortgaged property and to transfer the mortgaged property to a
third party directed by it. The purpose of this section was to enable mortgages to repay the
mortgage by receiving another person's loan for the security of the same property.

 Right to inspection and production of documents (S.60B)

According to this section the mortgage is entitled to inspect those documents by handing over
title acts or other documents relating to mortgaged property to the mortgagee. He may require
a mortgage owner at the cost of a mortgage owner himself to produce those documents in his
possession. Copies, abstracts or excerpts from these documents may be made by the
mortgager.

 Right to redeem separately or simultaneously 

This section states that a mortgage provider who has carried out two or several mortgages for
the same mortgage provider shall have the right to redeem any one or more such mortgages
together. However, the agreement is contrary and may therefore be ruled out by the loaned
mortgage borrower and mortgage.

 Right to accession (S. 63) 

According to section 63 –

1. Where mortgaged property in possession of the mortgagee has,

2. During the continuance of the mortgage,
3. Received any accession,
4. The mortgagor shall upon redemption, be entitled to such accession as against
mortgagee,
5. This is so in the absence of a contact to the contrary.

 Right to grant a lease (S.65A) 

A mortgagor, who is in lawful possession of the mortgaged property, shall have the power
to make the lease the property which shall be binding on the mortgagee. However, this
right is subject to the provisions of sub-section (2).

Types of interest under this Act:

Nature of interest:

The transfers should not affect the nature of anybody's interest according to this section 6(h).
For example, it is not possible to transfer public or religious uses or services. If, under this
section, any transfers whose objective is unlawful or unlawful are not permitted. Also, if the
property is transferred to a transferor who is legally disqualified, this transfer is not valid.

Restricted interest:
A person cannot transfer anything that is interest restricted in the enjoyment to him.
Restricted rights are personal and cannot be transferred and if such transfer happens then it
would be void. The following types of interest are not considered transferable, such are:

 Service tenure;
 A right of pre-emption;
 Emoluments;
 Religious office.
Vested interest
Section 19 of the Transfer of Property Act, 1882 states about Vested Interest. It is an interest
created in favour of a person where a time or condition for the occurrence of a certain event is
not specified. The person with the vested interest will not possess the property but will
receive it when a specific event occurs.

For example, A promises to transfer his property to B on him attaining the age of 22. B will
have vested interest in A’s property till the time he does not get the possession of it. 

Death of the person who is having this interest will not have any effect over that interest as
after the deceased, the interest will vest in his legal heirs.

There are the important aspects of a vested interest as stated above, all these are discussed in
detail below:

1. Interest should be vested: This is the basic meaning of the provision that defines the
creation of interest in favour of a person where the time or condition of the occurrence
of a certain event is not specified. In order to generate this interest, a person should
claim to transfer a particular property.

2. Right to enjoy property is postponed: If interest is transferred to a person, that

property is not immediately owned and cannot therefore be owned.
3. Time of vesting: The interest is vested right after the transfer is initiated. Nothing can
stop the interest from vesting in the person in favour of whom the transfer is to be
made.
4. Contrary Intention: The transferor can specify a particular time as to when the interest
will be vested in the person who will receive the property.
5. Death of the transferee: If the transferred person dies before taking over the property,
then interest on him will now be transferred to his legal heirs, and after the condition
has been fulfilled they will take ownership of that property.
 Contingent interest:

1. A) This interest is entirely dependent upon the condition. It only happens when the
condition is fulfilled.
2. B) Death of the transferee before getting the possession of the property will result in
the failure of continent interest and the property will remain with the transferor.
3. C) Contingent interest is a Transferable right, but whether it is heritable or not, it
depends upon the nature of such any transfer and the condition.

There are some important aspects surrounding contingent interest which are explained in
detail below:

1. Interest: In a transfer if a condition is such that the transfer will take effect only upon
the fulfilment of that condition and till that time, the interest is contingent.
2. Contingent Interest exists in wills: Any bequest to a wife, son or daughter can be a
contingent interest if the condition provides so.
3. Exception: If a person who expects to own a particular property and has any income
from it until the event takes place, he or she receives any sort of income. This
ownership interest does not fall within the contingent interest aspect.

CONCLUSION

The Transfer of Property Act, 1882 deals with two kinds of interest that are vested interest
and contingent interest and rights which are very important for everyone. The concepts of
vested interest and contingent interest are something that is very important to understand as
there are many sections relating to these concepts. The main point to understand about both
the concept is that the transfer of property involving Contingent interest takes effect only
after the condition is fulfilled, if the condition is not fulfilled then the transfer will not take
effect.