LAW ON DRAFTING, PLEADING AND

CONVEYANCING
INDEX

Chapter Particulars Page

No.
1. Introduction on Pleading and Conveyance 3
 Pleadings
 Objectives of pleading
 Fundamental rules of pleading
 Conveyancing
 Principles of drafting documents
 Essentials of Deeds
Conveyance Deeds
2 Sale Deed 10
 Provisions before incorporating the Sale
Deed
 Modes of transfer
 Contents of Sale Deed
 Stamp duty
 Registration of Sale Deed
 Agreements for Sale

3 Mortgage Deed 21
 Difference between Mortgage and
Hypothecation
 Provisions before incorporating the
Mortgage Deed
 Contents of Mortgage Deed
 Registration of Mortgage Deed
 Right of redemption
 Right for foreclosure
 Difference between Deed of Trust and
Mortgage
4 Lease Deed 35
 Essentials of Lease
  Provisions before incorporating the
Lease Deed
 Contents of Lease Deed
 Registration of Lease Deed
 Execution and Stamp Duty
 Lease Holding Over
 Determination of lease
 Notice to Quit
 Effects of Rent and Eviction Control
Legislation
 Lease Agreement versus Rental
Agreement
5 Gift Deed 52
 Provisions before incorporating Gift
Deed
 Gifts under Hindu Law
 Gifts under Mohammedan Law
 Contents of Gift Deed
 Registration of Gift Deed
 Revocation of Gift Deed
 Gift Deed over Will

6 Power Of Attorney 65
 Provisions before incorporating the
Power of Attorney
 Authority of Donee
 Contents of power of Attorney
 Registration and Stamp duty
7 Will 75
 Provisions before incorporating Will
 Contents of Will
 Signature and Attestation
 Registration and Stamp Duty
 Revocation of Will
 Probate and Letter of Administration

8. Conclusion 90
CHAPTER 1: INTRODUCTION ON PLEADING AND
CONVEYANCING

Drafting, Pleading and Conveyancing are the three common

terms used in the law sector. Drafting refers to the act of
preparing the legal document like agreements, contracts and
deeds. In drafting besides seeking right words, the draftsman
seeks the right concepts. Conveyancing refers to the
transferring of a real property to its new owner by means of
deeds and whereas pleading refers to a legal document filed in
a law suit. This can be a document pertaining to the initiation
of litigation or a document in response to this initiation.

(a) Pleadings:

The art of drafting the pleading has not yet fully developed in
spite of the increase in the civil litigation. Many dead sure win
cases drag on for years in the Courts only because of the faulty
drafting. Hence it is important to understand that pleading is
an art, of course, and art which requires not only technical and
linguistic skill but also an expert knowledge of the law on the
given point brought before a lawyer. Even the experienced
lawyers and attorneys are not infallible and sometimes they
also make mistakes. However, in the matter of pleading longer
experience and great linguistic acumen are both essential
ingredients and ultimately what matters is how clearly and
systematically have the facts been presented before the court of
law.

According to Lord Halsbury – “Where system of pleadings

may exist, the sole object of it is that each side may be fully
alive to the questions that are brought to be argued in order
that they have an opportunity of bringing forward such
evidence as may be appropriate to the issue”.

When a person comes to seek the assistance of court of law in

any matter, he has to prepare a statement of his claims, and the
facts on which such claims are founded. Such statements fully
drawn up, setting out all contentions are called “pleadings”.
Thus pleadings are the foundations of all sort litigation. No
judicial system in the world can do justice in any matter unless
and until the court of justice is fully aware as to the claims and
contentions of the plaintiff and of the counter claims and
defences of the defendant. There can be Civil Pleadings like
Plaint, Interlocutory Applications, Execution Petition,
Affidavits etc. and Criminal Pleadings like Complaint, Bail
Application etc.

When the civil codes came to be drafted, the principles of

pleadings were also given statutory form. Vide Order VI Rule
1 “pleading” – shall mean plaint or written statement. The
elaborated definition of pleading is that pleadings are
statements, written, drawn up and filed by each party to a case,
stating what his contentions will be at the trial and giving all
such details as his opponent needs to know in order to prepare
his reply for the same.

Objectives of Pleadings:

The whole object of pleadings is to give fair notice to each

party of what the opponent’s case is. Pleadings bring forth the
real matters in dispute between the parties. It is necessary for
the parties to know each other’s stand, what facts are admitted
and what facts are denied, so that at the trail they are prepared
to meet them. Pleadings also eliminate the elements of surprise
during trail besides eradicating irrelevant matters which are
admitted to be true. The facts admitted by any parties need
not to be pursued or proved.
Thus, pleadings save the parties much bother, expense and
trouble of adducing evidence in support of matters already
admitted by a party, and they can concentrate on their
evidence to the issue framed by the court in the lights of facts
alleged by one party and denied by other party.

Another advantage of pleadings is that parties come to know

beforehand what points the opposite party will raise at the trial
and thus are prepared to take them and are not surprised,
which could certainly be the case if there was no obligatory
rules of pleadings where by the parties are compelled to lay
bare there cases before the opposite party prior to the
commencement of the actual trial.

Fundamental Rules of pleadings under Civil Procedure Code:

(1) Pleadings shall contain only statement of facts and not law.
(2) Pleadings shall contain material facts and material facts only.
(3) Pleadings shall state only facts on which the party
pleadings relies and not the evidence by which they are to be
proved.
(4) Pleadings shall state such material facts concisely, but
with precision and certainty.
(b) Conveyancing:

Conveyancing is an art of drafting deeds and documents

whereby any title, right or interest in an immovable property is
transferred from one person to another. Such person can be
natural or artificial i.e. Corporate, the Company, the Society
or the Corporate Sole as the case may be.

Conveyancing is based on law and legal principles which have

been evolved in the sphere of conveyancing over years or
rather centuries. The objective of Conveyancing cannot be
possible without a thorough knowledge and understanding of
the legal provisions applicable on the subject matter of transfer
of property or right therein.

In the present world, the scope of conveyancing has become

very wide and extensive in use and advantage to different fields
of business, profession and industries. Drafting document is
now a legal task and not merely a technical one. Different
types of deed require knowledge of different types of law on
which those deeds are based.

In India the forms of conveyancing are based on the present

English forms. No legislation in India has been ever passed on
the law of conveyancing. Both in India and England, there are
two types of deeds namely – “Deed Poll” and “Indenture”. The
deed poll is a document which is executed unilaterally in the
first person like bonds, power of attorney and will etc. The
Indenture is a document which is executed bilaterally or
consist of multilateral deed like mortgages, sale deed, gifts and
lease etc.

Principles of drafting a document may be classified into 4 parts:

(1) Clarity of expression

(2) Design of Draft
(3) Precision of language
(4) Communicability of the intention of the parties to the document

Essentials of a Deed:

(1) The non-operative part

(2) The operative part
(3) The format part

The non-operative part contains description or name of

deed, date of the deed, parties to the deed and the recitals.
The operative part contains testatum or premises, habendum,
exception and reservations and covenants.
The formal part contains testimonium, signature and attestation,
parcels of description of the parties
 CHAPTER 2: SALE DEED

Sale deed is a legal document describing the transfer of right,

title and ownership of property by a seller to a purchaser at a
price fully paid or to be paid in instalments at a future date.
The entire amount of sale transaction also known as sale
consideration is paid at the time of registration of sale deed.

It is pertinent for the draftsman to study the following provisions

before

incorporating the Sale Deed:

 Sale can be of immoveable property and moveable

property. Sale of immoveable property is defined in
section 54 of the Transfer of Property Act, 1882 as a
transfer of ownership in exchange for a price paid or
promised or part paid and paid promised. Sale of goods
(moveable property) is defined in section 4 of Sale of
Goods Act, 1930 as a contract whereby property in
goods is actually transferred by the seller to the buyer for
a price.
 Money consideration is essential in a transaction of sale
and if that consideration is not money but some other
valuable consideration, the transaction may termed as an
exchange and not a sale. The law does not require that the
consideration should be immediately ascertainable in
money. It is sufficient if it is ascertainable at the time
when payment is made. The actual payment of price is
not essential to the completion of a sale. The sale gets
complete as soon as the sale deed is registered even if the
payment of price is promised on a future date provided it
has been ascertained or made certain able.
 Immoveable property as per section 2(26) of the General
Clauses Act, 1987 states that immoveable property shall
include land and things attached to the earth or
permanently fastened to anything attached to earth.
Section 3 of the General Clauses Act, 1987 states that
moveable property means property of every description
except immoveable property. Tangible property means
something that can be touched i.e. material object but all
the abstract rights are incapable of being touched and
are hence intangible. Some examples of intangible
 property are goodwill of business, mortgagee or lessee‟s
rights or interest of a partner in a Partnership Firm etc.
 What can be transferred or sold?

Generally, the right to property includes the right to

transfer it to other person. Section 6 of Transfer of
property Act provides that property of any kind can be
transferred, except as provided by this act or by any
other law for the time being in force.

Exceptions:

(1) The chance of an heir- apparent succeeding to an

estate, the chance of a relation obtaining a legacy on the
death of a kinsman or any other mere possibility of a like
nature, cannot be transferred.
(2) A mere right of re-entry for breach of a condition
subsequent cannot be transferred to anyone except the
owner of the property affected thereby.
(3) An easement cannot be transferred apart from the
dominant heritage.
 (4) An interest in property restricted in its enjoyment
to the owner personally cannot be transferred by him.
(5) A mere right to sue cannot be transferred

(6) A public office cannot be transferred nor can the

salary of a public officer whether before or after it has
become payable.
(7) Stipends allowed to military, naval, air force and civil
prisoners of the government and political pensions cannot
be transferred.
 Section 7 of the Transfer of property Act deals with the
competency to carry out a transfer. Transfer must be
done by persons who are:
1.) Competent to make a contract.

2.) Have title to the property or authority to transfer it if not his

own.

 Consequences of transfer :

Section 8 of the transfer of Property Act states that all

interest which the transferor is capable of passing passes
forthwith to the transferee, if the property is land, the
easements annexed, the rents and profits accruing after
the transfer and all things attached to the earth pass to
the transferee and if the property is machinery attached
to the earth, the moveable parts thereof. In case of a
house, the easements annexed
 to it and the rents, doors, locks, keys, windows, bars and
all other things provided for permanent use therein pass
to the transferee. If the property is a debt or other
actionable claim, the securities thereof but not arrears of
interest accrued before the transfer. If the property is
money or other property yielding income, the interest or
income accruing after the transfer passes to the
transferee. But is open for the parties to decide among
themselves other terms and consequences other than
mentioned at the time of transfer.
 Section 55 of Transfer of Property Act lays down the
rights and liabilities of a buyer and a seller. These
conditions are implied in every transfer and it is not
necessary to mention them in the deed of transfer.
 Section 10 to 14 of the Transfer of Property Act lays
down the unlawful conditions which may not be included
in the deed of transfer. So this should be kept in mind
while drafting a Sale Deed.

Modes of transfer by sale:

There are only two modes of transfer of property by sale and those
are:
(1) By registered instrument
(2) By delivery of possession

Such transfer in case of tangible immoveable property of the

value of 100 rupees or upwards or in the case of reversion or
other intangible thing can be made only by registered
instrument. In case of tangible immoveable property of a value
less than 100 rupees, such transfer shall be either made by a
registered instrument or by delivery of the property.
In case of registration the ownership is deemed to pass not on
the date of registration but on the date of the instrument. But
in case where the vendor refuses to deliver the property or
the registered deed, because he had not paid the price, it may
be inferred that there was no transfer of ownership because
there was no intention to transfer. In case of delivery it must be
actual and not constructive. Ordinarily ownership passes when
registration is compulsory, on the execution of sale deed and
where delivery is the proper method by delivery of possession
of the property.
Contents of Sale Deed:

A sale deed is usually executed as deed poll by the vendor/

seller and written in the first person. The law does not require
execution by the purchaser also. Sometimes a deed is executed
between a vendor and a purchaser, particularly when it
contains covenants binding on the purchaser.
A sale deed must contain apart from the description of the
deed and date, details of the following elements:
(i) The name of the parties to the deed with their full address

(ii) The capacity and capability of the vendor to transfer the party.

(iii) The vendor title to the property.

(iv)The property and its capability of being transferred and

also the details of the property.
(v) The encumbrances and charges if any upon the property
and whether the sale is subject to encumbrances and
whether any money was being left with purchaser to pay
off the encumbrances.
(vi)The Price settled, how and when to be paid (earnest
money if paid to be set off)
(vii) The other terms agreed upon
 (viii)Delivery of possession, actual or constructive

The signing of the deed signifies that the process of sale has
been completed. The seller transfers the right of ownership to
the buyer through sale deed. As soon as the document is signed,
the buyer becomes the complete owner of the property.
Usually the sale deed is executed only when both the sellers
and buyers are fully satisfied and are ready to comply with the
terms and conditions as mentioned in sale agreement. Though
not required by law, a sale deed is usually attested by two
witnesses.

Stamp Duty:

The sale deed is drafted on a non-judicial stamp paper of value

as set by the State Government in which the property
transaction is taking place. Every state has predetermined
value of stamp paper that are used for drafting
immoveable property. Stamp duty in a sale deed is chargeable
under section 23 schedule of the Stamp Act.
Also, an outstanding amount can be paid through challan or
stamping for legalizing the sale deed.
Registration of a Sale Deed:

A sale deed is registered in accordance with the Registration

Act, 1908. Both the parties have to be present in person along
with two witnesses with all the relevant documents in the sub
registrar‟s office to sign the sale deed and close the deal.
The certified copy of the registered deed with the name of the
buyer can be obtained from the registrar‟s office. The original
documents have to be produced within four months from the
date of registration of the deed. It is the buyer who pays the
stamp duty and the registration charges while seller needs to
clear all other payments related to the property such as
property tax, cess, and water and electricity charges before the
deed is signed

It is also necessary for the vendor/seller to have clarity in mind

regarding the Sale deed and Agreement for sale.

Agreement for sale:

It is an agreement to sell a property in future. This

agreement specifies the terms and conditions under which
the property in question will be
transferred. The sale of such property shall take place on the
terms settled between the parties. Thus, it does not, of itself,
create any interest in or charge on such property.
What the sale agreement creates, is a right for the purchaser to
purchase the property in question on satisfaction of certain
conditions. Likewise the seller also gets the right to receive the
consideration from the buyer on complying with his part of
the terms and conditions. In case of failure of the seller to sell
or hand over the possession of the property to the buyer, the
buyer gets a right of specific performance, under the
provisions of the Specific Relief Act, 1963. A similar right is
available to the seller under the agreement, for seeking specific
performance from the buyer.
According to sec 54 of the Transfer of Property Act, an
agreement for sale whether with possession or without
possession is not a conveyance. It enacts that the sale of
immoveable property can be made only by a registered
instrument and agreement for sale does not create any interest
or charge on its subject matter. Hence, it very important to
understand that immoveable property can be
transferred/conveyed only by a deed of conveyance (sale deed),
duly stamped and registered as required by law.
So, in the case where you have purchased any property under
a sales agreement and got possession, the title of the property
still remains with the developer, unless a sale deed
subsequently has been executed and registered under the
Indian Registration Act. Thus, it becomes clear that a title in
an immoveable property can only be transferred by a sale
deed.
 CHAPTER 3: MORTGAGE DEED

A mortgage deed is a legal document that gives lender an

interest in a property when you take out a loan backed by
the property. If a borrower does not pay back a loan in
accordance with the agreement, the lender can foreclose and
take possession of the property or have it auctioned. Basically
Mortgage Deed is a paperwork you sign that allows the lender
to put lien on the property until the loan is paid.
Section 58 of the Transfer of Property Act, 1882 defines
mortgage as transfer of interest in specific immoveable
property for the purpose of securing. The transfer of interest
in immoveable property must in order to constitute a mortgage
for one of the purposes like the payment of money advanced or
to be advanced by loan or an existing or future debt or the
performance of an engagement which may give rise to
pecuniary liability.
There is a difference between “transfer of an interest” and
“transfer of ownership” used in definition of sale in section 54.
In a sale all the rights of ownership which the transferor has
pass to the transferee but in mortgage out of the bundle of
rights which constitute ownership, some are transferred to
mortgagee and some remains vested in the mortgagor. The
rights remaining
 with the mortgagor (also called equity of redemption) can
again be transferred.

Generally, many misconceive hypothecation for a mortgage,

however the difference between these two lies in the factor on
which they are created. Hence, it is important to understand
the difference between Mortgage and Hypothecation

Points of Mortgag Hypothecation

comparison e
1.) Meaning Mortgages is wherein the title of Hypothecation is wherein a
real estate property passes from person borrows money
the owner to the lender as a from bank by
collateral for the amount collateralizing an asset
borrowed. without transferring the
title and
possession.
2.)Applicabl Immoveable Asset Moveable Asset
e
to
3.)Defined Transfer of Property Act, 1882 SARFEASI Act, 2002
under
4.)Indicates Transfer of interest in asset Securit for paymen in an
y t
 amount
5.)Loan High Comparatively low
Amount
6.)Tenure Long Comparatively short
In spite of some differences, both the forms of charge
provides security to the loan and the possession of asset
remains with the borrower of the asset, while the lender has
the first right to it until the dues are cleared. Further in both
the cases if the borrower defaults in payment, the lender can
recover the amount by selling the asset.

It is pertinent for the draftsman to study the following provisions

before

incorporating the Mortgage Deed:

 A proper description of the property is necessary to

create a mortgage and for its registration. The word
specific shows that the description of the immoveable
property should not only be free from ambiguity and
uncertainty, but that it should be specific as distinguished
from general. The description should be such that it is
sufficient to identify the property. The rules for
description of property are laid down under section 21
and 22 of the Registration Act.
 Security, generally speaking is anything that makes the
money more assured in its payment or more readily
recoverable. It is the assurance in its payment or ready
recoverability that constitutes a particular
 thing a security for the debt. A mortgage may be executed
for the purpose of providing a security for the repayment
of loan already taken or for a loan to be taken in future.
A mortgage may not only be made for a specific sum but
to secure a current account between the parties up to a
limited name. It is sufficient if the money is left at the
mortgagor‟s disposal in a bank deposit.
 A mortgage may also be used as a security for the
payment of a present debt or for the payment of a debt
that may be incurred in future. A mortgage may be made
to secure the unpaid price of a house purchased. A future
debt may be a contingent liability. E.g. to secure the
payment of the respondent‟s costs in appeal. A security
bond given to an officer of the court to secure an amount
that may be decreed or ordered by the court is a
mortgage to secure a future debt.
 The word “engagement” means a contract and the
qualification “as may give as pecuniary liability” means
the contract of fulfilment or non-fulfilment of which may
result in a liability to pay money. In other words it
contemplates a liability to pay money arising out of a
contract.
 Section 58 of the Transfer of property Act enumerates 6
kinds of mortgages. The classification of mortgage has
been made on the basis of the nature of the interest which
is transferred for securing loan

(1) Simple Mortgage: It is a mortgage deed in which

mortgagor

undertakes personal liability for repayment. Here

possession of mortgaged property is not delivered and on
mortgagor‟s default in making payment, mortgagee is
entitled to cause mortgaged property to be sold. But
power to sell mortgaged property is only obtained on a
decree for sale being obtained. In this type of mortgage,
remedy of foreclosure of the mortgage property is not
available. The simple mortgage must be effected by a
registered deed even if the consideration is below Rs. 100

(2) Mortgage by Conditional Sale: It is a mortgage deed in

which

mortgagor ostensibly sells the mortgaged property on

condition that on default of payment of the mortgage
money on a certain date the sale shall become absolute,
or on condition that on such payment
being made the sale shall become void, or on condition
that on such payment being made the buyer shall transfer
the property to the seller, the transaction is called a
mortgage by conditional sale and the mortgagee is called
a mortgagee by conditional sale. The remedy of the
mortgage is foreclosure and not the sale of the mortgaged
property. The mortgage must be by a registered deed if
the consideration is Rs. 100 or more and if the
consideration is less than Rs. 100 then possession is
necessary. The transaction must be embodied in a single
deed.

(3) Usufructuary Mortgage: It is a mortgage deed where

the

mortgagor gives possession of the property to the

mortgagee. Since the possession is with the mortgagee, he
enjoys the fruits of the property i.e. produce, benefits,
rents or profits of the mortgaged property in lieu of
interest on the principal money advanced by him.
Therefore on payment of debt, the mortgagee has no right
over possession. In this mortgage there is no personal
liability of the mortgagor. The mortgagee also cannot
foreclose or sue for sale of the
mortgaged property. Moreover, there is no time limit
fixed for the payment in this mortgage deed. The
mortgage must be affected by a registered deed if the
consideration is Rs. 100; registration is optional but
delivery of possession is essential.

(4) English Mortgage: It is a mortgage deed where the

mortgagor

binds himself to repay the mortgage money on a certain

date and transfers the mortgaged property absolutely to
the mortgagee but subject to the proviso that he will re-
transfer it to the mortgagor upon payment of the
mortgage money as agreed. Here the mortgagee is entitled
to the possession of the property and to the enjoyment of
the profits arising therefrom. The remedy available to
the mortgagee is the sale of the property and not by
foreclosure.

(5) Mortgage by deposit of title deeds: It is mortgage deed

where a

person in any of the following towns viz. Calcutta,

Madras, and Bombay and in any other town which the
State Government concerned may by notification in the
official gazette, specify in this
behalf, delivers to a creditor or his agent documents of
title to immoveable property, with intent to create a
security thereon. Mortgage by deposit of title deeds is a
peculiar kind of mortgage because execution of
mortgage deed by mortgagor is not necessary and mere
deposit of title deeds of immoveable property by a
mortgagor to mortgagee is sufficient. The object of this
kind of mortgage is to provide easy mode of taking loans
in urgent need particularly by trading community. This is
called Equitable Mortgage in English Law. Bankers, in
most of the cases, adopt the mortgage by deposit of title
deeds since it is simple, inexpensive and non-time
consuming. The remedy of this mortgagee lies in filing a
suit for sale of the mortgaged property. Title deeds may
also be deposited with the banks to secure an overdraft
account. Basically, all the provisions applicable to simple
mortgage apply to equitable mortgage.

(6) Anamalous Mortgage: A mortgage is an anomalous

mortgage if

it is not a simple mortgage, a mortgage by conditional

sale, a usufructuary mortgage, an English mortgage or
a mortgage by
 deposits of title deeds. When a transaction is a mortgage
in all respects but the agreement between the debtor and
creditor is of such nature that it cannot be included in
any specific category of mortgage, the transaction is
called an anomalous mortgage. It may be a combination
of 2 or more kinds of mortgages. The remedy available
to mortgagee is by sale or by foreclosure depending on
the terms of the deed. If the mortgage is for a
consideration of Rs 100 or more then the deed must be
registered but if below Rs.100 delivery of possession is
essential and registration is optional.

Contents of Mortgage Deed:

Amongst other information, the mortgage deed includes the

following details:
1. Names of the parties with their full address.

2. Details of the mortgaged property

3. Details of sum advanced and its repayment terms

4. Habendum clause

5. Insolvency clause
6. Mortgage clause

7. Clause on Possession and Title Deeds

8. Redemption Clause

Registration of Mortgage Deed:

Registration of mortgage deed is essential to give legal validity

to the document.
1. Execute a mortgage deed.

2. Affidavit to be sworn by 2 witnesses in the deed.

3. The deed should be notarised by the notary public.

4. Pay for the stamp duty as chargeable under Article 40

schedule 1 of Stamp Act and registration charges at the
Registrar of Deed office.
5. Obtain the title for mortgage.
A simple mortgage whatever may be the amount secured,
only be made by a written instrument signed by the
mortgagor and attested by at least 2 witnesses should be
registered.
For a mortgage by deposit of title deeds, no formalities are
prescribed. It can be either oral or written. When such a
mortgage so reduced in writing, it must be attested by at least
2 witnesses and registered if the money secured is Rs 100 or
more. But a mere memorandum of an oral mortgage does not
require registration.

In other 4 kinds of mortgages, if the amount secured is Rs

100 or above can only be effected by written instrument
signed by mortgagor and attested by at least 2 witnesses and
should be registered. If the amount secured is less than Rs
100, the mortgages can be either effected by written
instrument signed by the mortgagor and attested by 2
witnesses and registered or by delivery of possession.

Right of Redemption:

The right of redemption is regulated by section 60 of the

Transfer of Property Act.
The right of redemption is the right which every
mortgagor possesses, which is created by virtue of the
mortgage deed. This right is considered to
be inalienable and cannot be taken away from a mortgagor by
means of any contract to the contrary. The right of
redemption allows mortgagor to become the owner of the
property mortgaged and makes him able to get his property
back from the mortgagee on paying the amount borrowed
from him.
Law does not allow any person to alienate a mortgagor of his
“right of redemption”. Such right would remain effective
unless the property has been sold off or under any statutory
provision. Even if the mortgagee has gone to the court for the
foreclosure of the property mortgaged, mortgagor can redeem
his property by paying off the full amount in the court. Time
period is not the essence in case of right of redemption.

Right of Foreclosure:

The right of foreclosure is regulated under section 67 of the

Transfer of property Act.

The right of foreclosure is a right available to a mortgagee to

recover his outstanding money. The result of passing the decree of
foreclosure is that
the mortgaged property vests with the mortgagee and the
mortgagor cannot recover it. But this right can only be
exercised in the case of a mortgage by conditional sale and in
an anomalous mortgage.
The right to foreclosure is a counter part of the right of
redemption. Mortgagor gets a right of redeeming his security
after payment of debt amount; similarly mortgagee has a
right of foreclosure or sale in default of redemption by the
mortgagor. The right of foreclosure of mortgagee is co-
extensive to the right of redemption of the mortgagor.

Though it is common to hear mortgage and deed of trust used

interchangeably, yet they are two different types of contracts.
A mortgage is a direct contract between 2 parties- the
borrower and the lender. The borrower owns title to the
property and pledges it to the lender as security for the loan.
With a deed of trust, the borrower does not own the title to
the property. Instead, a third party known as trustee, has a
temporary hold on the title and will only hand over the title to
borrower, known as trust or when the loan is repaid in full.
Point of Deed of Trust Mortgage
Comparis
on
Ownership A third party known as The borrower owns
trustee holds title to the title to the property but
property until borrower pledges it to the lender
has paid off the loan. as security for the loan.
Foreclosu Allows non judicial The lender must go to
re foreclosure the court before
process foreclosing on the
property.
Favoured Lenders Borrowers
by
 CHAPTER 4: LEASE DEED

When a property is used and enjoyed by the person in

possession of it in exchange for a consideration to the actual
owner, the property is said to be leased or rented. When a
property is given on a lease, it means that the lessee or the
tenant can use the property for a definite period of time for
which he/she would be required to pay a certain fixed amount
of rent. When this period extends to more than a year, a lease
deed must be prepared.

Lease dead is a legal document which lays out the prescribed

terms and conditions under which the property is leased out.
Lease deed must contain information about the lessee, lessor,
tenure of lease, lease payments payable and other terms to be
followed by the lessee and lessor during the lease term. A lease
deed is generally required when the property is leased for a
long period of time, ranging between 1.5 years or even
longer. In such cases, a lease deed plays an important role to
govern the relationship between the landlord and tenant and
lays down the provisions legally binding over them. A lease of
immoveable property is defined in section 105 of Transfer of
Property Act and it consists of following elements:
(i) There must be a transferor (lessor) and a transferee
(lessee) who both agree to the transaction.
(ii) The lease must be for a certain time, express or implied, or
in perpetuity (period or duration)
(iii)There must be transfer of the right to enjoy the
immoveable property (iv)The transaction must be in
consideration of price paid or promised
(v) In consideration of money a share of crops, service or any
other thing of value to be rendered periodically or on
specified occasion to the transferor by the transferee

Essentials of Lease:

The essential elements of a lease are:-

(1) Parties: The parties to the lease are the lessor and the lessee. The
lessor

is the landlord and lessee is the tenant. The lessor must have
the capacity and the right to grant lease. Though a minor
cannot but his guardian can grant a lease. The manager of
lunatic, the Karta of a joint Hindu family, can grant a lease.
(2) Subject matter of lease: Subject matter of lease must be
immoveable

property. The word immoveable property may not be only

house, land but also benefits to arise out of land, right to collect
fruit of garden, right to extract coal of minerals, rights of
ferries, fisheries or market dues. The contract for right for
grazing is not lease. A mining lease is lease and not a sale of
minerals
(3) Consideration: The consideration for lease is either premium or
rent,

which is the price paid or promised in consideration of the

demise. The premium is the consideration paid of being let in
possession, such as Salami, even it is to be paid in installments.
(4) 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. The lessee
can create sub-lease for different parts of the demised
premises. The sub-lessee gets the rights, subject to the
covenants, terms and conditions in the lease deed.
It is pertinent for the draftsman to study the following provisions
before

incorporating the Lease Deed:

 The commencement of a lease must be certain in the first

instance, or capable of being ascertained with certain
afterwards, so that both the time when it begins and the
time when it ends is fixed. It is open to the parties to fix
the duration or period of the lease. They can even make a
perpetual lease. Where a land is let out for building
purpose and no period is fixed the presumption is that it
was intended to create a permanent tenancy.
 Section 106 of Transfer of Property Act provides that in
the absence of a contract or local law or usage to the
contrary for agriculture or manufacturing process shall
be deemed to lease from year to year and a lease for any
other purpose shall be deemed to be a lease from month
to month. Sometimes lease contains a renewal clause. The
renewal may be at the option of the lessor or the lessee or
both. The option does not affect the duration of the lessee
or both because until it exercises, it creates no interest in
the added form.
 A lease may be granted on payment of premium alone or
rent alone or on payment of both premium and rent. A
“Zuripeshgi lease” is a lease for a premium which is not
a mere contract for the cultivation of land at a rent, but is
a security to the tenant for the money advanced. It follows
that he may grant lease not extending beyond the period
of the mortgage; any leases granted by him must come to
an end at redemption. In some cases premium in the form
of pugree, salami or nazrana is also taken in additional to
rent. Most of the lease is for rent only. Premium can also
be paid in instalments. In a month to month tenancy rent
is usually paid monthly but even in yearly tenancy the
parties may stipulate payment of rent monthly. This can
be done even in cases of tenancies for fixed periods.
 In the absence of a contract or local usage to the contrary,
the lessor possesses and is subject to the liabilities
mentioned below:

(1) The lessor is bound to disclose to the property, with

reference to its intended use, of which the former is and
latter is not aware and which the latter could not with
ordinary care discover.
 (2) The lessor is bound on lessee‟s request to put him in
possession of the property.
(3) The lessor shall be deemed to contract with the lessee
that if the latter pays the rent reserved by the lease and
performs the contract binding on the lessee, he may hold
the property during that time without interruption. The
benefit of such contract shall be annexed to and go with
lessee‟s interest as such and may be enforced by every
person in whom that interest is for the whole or any part
thereof from time to time vested.
These liabilities of the lessor will be implied in every lease
unless provided otherwise and it is not necessary to set
them out in the lease deed.
 In the absence of a contract or local usage to the contrary,
the lessor possesses and is subject to the liabilities
mentioned below:
(1) If during the lease, any accession is made to the
property such accession shall be compromised in the
lease.
(2) If by fire, tempest or flood, or violence of any army
or of a mob, or other irresistible force, any material part
of the property be wholly
destroyed or rendered substantially and permanently
unfit for the purpose for which it was let, the lease shall at
the option of the lessee be void. Provided that if the injury
be occasioned by the wrongful act or default of the lessee,
he shall not be entitled to avail himself of the benefit of
this provision.
(3) If the lessor neglects to make within a reasonable time
after notice, any repairs which he is bound to make to the
property, the lessee may make the same himself and
deduct the expense of such repairs with interest from the
rent or otherwise recover it from the lessor.
(4) The lessee may even after the determination of the
lease remove at any time whilst he is in possession of the
property leased, but not afterwards, all things which he
has attached to the earth; provided he leaves the property
in a state in which he received it.
(5) When a lessee or his legal representative is entitled to
all the crops planted or sown by the lessee and growing
upon the property when the lease determines and to free
ingress and egress together carry them.
(6) The lessee may transfer absolutely by way of mortgage
or sublease the whole or any part of his interesting the
property, and any
transferee of such interest or part may again transfer it.
The lessee shall not by reason only of such transfer, cease
to be subject to any of the liabilities attaching to the lease.
(7) The lessee is bound to disclose to the lessor any facts
as to the nature or extent of title interest which the lessee
is about to take of which the lessee is and the lessor is not
aware and which materially increased the value of such
interest.
(8) The lessee is bound to pay or tender at the proper time
and place, the premium on rent to the lessor or his agent
on this behalf.
(9) The lessee is bound to keep, and on the termination of
the lease to restore, the property in as good a condition as
it was at the time when he was put in possession, subject
only to the changes caused by reasonable wear and tear
or irresistible force, and to allow the lessor and his agent
at all reasonable times during the term to enter upon the
property and to allow the lessor and his agents, at all
reasonable times during the term, to enter upon the
property and inspect the condition there of and give or
leave notice of any defect in such condition, and when
such defect has been caused by any act or default on the
part of
the lessee, his servant or agents, he is bound to take it
good within three months after such notice has been given
or left.
(10) If the lessee becomes aware of any proceeding to
recover the property or any part thereof or of any
encroachment made upon, or any interference with the
lessor's rights concerning such property he is bound to
give, with reasonable diligence, notice thereof to the
lessor.
(11) The lessee may use the property and its products (if
any) as a person of ordinary prudence would use them if
they were his own, but he must not use, or permit another
to use, the property for a purpose other than that for
which it was leased, or fell or sell timber, pull down or
damage buildings belonging to the lessor, or work mines
or quarries not open when the lease was granted or
commit any other act which is destructive or permanently
injurious thereto.
(12) He must not without the lessor's consent, erect on the
property any permanent structure, except for agriculture
purposes.
(13) On the determination of the lease, the lessee is bound
to put the lessor into possession of the property.
Contents of a Lease Deed:

The key contents to be included in lease deed are as follows:

(1) Name of the parties to the lease deed and their full address

(2) Description of the lease property

(3) Duration for lease period

(4) Rent, Maintenance and Security

(5) Clauses for termination of lease

(6) Subletting of the lease property

(7) Dispute Resolution

(8) Applicable law

Registration of a Lease Deed:

A lease of immoveable property either from year to year or
for any term exceeding 1 year or reserving a yearly rent can
be made only by a registered instrument . All other leases of
immoveable property may be made by a registered
instrument or by oral agreement accompanied by delivery of
possession. The lease deed is to be executed both by the lessor
(landlord) and lessee (Tenant).
Once the lease deed is drafted, it must be registered with the
Registrar or Sub Registrar of the district in which it is
located. A lease deed is registered after paying the requisite
stamp duty which differs from state to state.
For registration of a residential lease deed basic documents
required are as follows:
1. Lease Deed

2. Stamp Paper

3. Receipt of registration fees

For registration of a commercial lease deed, the following

documents are required:
1. Power of Attorney/ Board Resolution on Company letterhead

2. ID proof like Aadhar Card, Driving license, Passport etc.

3. Address proof of the authorised signatory

4. Passport sized coloured photographs of the authorised signatory

5. Company Pan Card

6. Company Seal/stamp of authorised signatory.
Execution and Stamp Duty:

Leases can either be oral or written and registered. A lease

which is permitted to be made by oral agreement will be valid
only if accompanied by delivery of possession. If such a lease
is reduced to writing it must be registered and delivery of
possession will not validate it. An unregistered written lease is
a not valid.

A written registered lease should be attested by at least to

witnesses. Stamp duty on a deed of lease is chargeable under
Art. 35, schedule I of the Stamp Act. The amendments made
by the relevant state legislation may be studied to find out the
actual amount of stamp duty payable.

Lessee Holding Over:

Where a person who has been in possession under a lawful

lease continues to be in possession after the lease has been
determined without the consent of the lessor he is said to be a
tenant at sufferance. In such a case the possession was
rightful in its inception but wrongful in its continuance;
whist the possession of a trespasser is wrongful both in its
inception and in its continuance. Such a tenant can be evicted
without giving notice to quit.

If a lessee remains in possession after determination of the

lease and the lessor accepts rent from him or otherwise
assents to his continuing on possession the lease is renewed
from year to year or from month to month according to the
purpose for which the property was leased. The tenant is
called tenant holding over.
A tenancy at will is one which is terminable at the will either
of the landlord or the tenant. It can be created by express
agreement.

Determination of lease:

A lease of immoveable property determines:

(1) By efflux of the time limited thereby.

(2) Where such time is limited conditionally on the

happening of some event, by the happening of such event.
(3) 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.

(4) 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
(5) 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.
(6) By implied surrender

(7) By forfeiture, that is to say;

(i) In case the lessee breaks an express condition which

provides that on breach there of the lessor may re-
enter;
(ii) In case the lessee renounces his character as such
by setting up title in a third person or by claiming title
in himself;
(iii) The lessee is adjudicated an insolvent and the lease
provides that the lessor may re-enter on the happening of
such event, and in any of these gives notice in writing to
the lessee of his intention to determine the lease.
(8) on the expiration of notice to determine the lease, or to
quit, the property leased, duly given by one party to the other.
Notice to Quit:

A lease from year to year can be terminated either by the

lessor or the lessee by giving to the other six month notice
expiring with the end of the year of the tenancy. And a lease
from month to month can be terminated either by the lessor
or the lessee by giving to the other fifteen day notice expiring
with the end of the month of tenancy. Simple notice to quit or
the expiry of six months in the case of tenancies from year to
year and 30 days in the case of tenancies from month to
month, from the date of the receipt of the notice is sufficient.

The notice must be in writing, signed by or on behalf of the

person giving it, and either be sent by post to the party who is
intended to be bound by it or be tendered or delivered
personally to such party or to one or his family or servants at
his residence, or (if such tender or delivery is not practicable)
affixed to a conspicuous part of the property.

A notice to quit is waived, with the express or implied

consent of the person to whom it is given, by any act on the
part of the person giving it
showing an intention to treat the lease as subsisting. A
typical case of waiver is acceptance of rent for a period after
the expiry of the notice.

Effects of Rent and Eviction control legislation:

In every state there is legislation affecting the rights of

lessors and lessees of residential and commercial buildings.
They override the provisions of the Transfer of Property Act.
Legislation in one state differs from that in another, but all
such legislations control and restrict the rent payable and
the grounds on which a tenant may evicted. Some enactments
regulated duration of a lease, some forbid the payment of
premium and some even control the letting out to the extent
that this function is exercised by the authorities. Hence, it is
desirable to study the local rent control and eviction
legislation before entering into a transaction of lease and
before taking any legal action on the basis of a lease.
A lease agreement or a rental agreement is a vital legal
document that should be completed prior to a landlord
renting property to a tenant. While both agreements are
similar in nature, they are not the same and it is important to
understand the differences.
Lease Agreement:

The length of the lease and the amount of monthly rent are
documented and cannot be changed. This ensures that the
landlord cannot arbitrarily just raise the rent and the tenant
cannot just leave the property whenever they want without
repercussions. The lease agreement is effective for the specific
time period stated in the agreement and is then considered
ended. If the tenants wish to remain in the property, both
parties must enter into a new lease agreement.

Versus

Rental Agreement:

A rental agreement differs from a lease agreement in that it is

not a long term contract and usually occurs on a month to
month basis. This month to month lease agreement expires
and then renews each month upon agreement of the parties
involved. Here the landlord has the option to raise the rent or
request the tenant to quit the premises without violating the
rental agreement.
 CHAPTER 5: GIFT DEED

A deed of gift is a signed legal document that voluntarily and

without recompense transfers ownership of real, personal or
intellectual property such as a gift of materials from one
person or institution to another.
Gift Deed is a legal document that describes the voluntary
transfer of gift from a donor (owner of the property) to done
(receiver of gift) without any exchange of money. The donor
should be solvent and should not use this as a tool for tax
evasion and illegal gains.

As per section 122 of the Transfer of Property Act, 1882 Gift means;

(i) Gift is the transfer of certain existing moveable or

immoveable property and not a future property
(ii) It must be voluntary i.e. it should not be induced by
coercion, undue influence, fraud or misrepresentation.
(iii) It should be without consideration i.e. it can be out of
natural love and affection or for past consideration.
(iv)It must be accepted by the donee.
It is pertinent for the draftsman to study the following provisions
before

incorporating the Gift Deed:

 A person who is competent to make a contract can make a

valid gift.

A minor or a lunatic cannot make a gift. The donor must also

have a disposing power over the property sought to be gifted.
 Anything that qualifies as gift must have following properties:

(1) It must be well-defined existing moveable and

immoveable property.
(2) It must be transferrable

(3) It should exist today and not be a future property

(4) It should be tangible

 The donee to whom the gift is made must be an existing

person. He must be an ascertainable person. A gift can be
made in favour of minor or a Hindu idol. But a gift in
favour of the public, to dharma or for worship of God is
void for vagueness of done. A gift can be made in favour
of a legal person and also can be made in favour of
Government.
 Acceptance of a gift be on behalf of the donee is essential
for the validity of a gift. The acceptance must be made
during the lifetime of the donor and while he is still
capable of giving. If either the donee dies before the
acceptance, the gift is void. The best and the safest course
to join the donee as a party to the deed and to state the
acceptance of the gift in the deed itself or a separate
endorsement may be made by the donee on the deed
accepting and signed by him.
 Minors are not eligible to contract, therefore they cannot
transfer property as a gift. Hence a gift deed in case of
donor being minor is legally not valid but gift may be
accepted on behalf of a minor by his guardian and on
behalf of an idol by its manager. The donee receiving the
gift deed from the donor after execution thereof, and
presenting it for registration and getting it registered
amounts to acceptance of gift.
 Section 123 of Transfer of Property Act, 1882 provides
separation provisions for the gifts of immoveable and
moveable properties. Immoveable Property: With regard
to gifts of immoveable 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.
Registration is compulsory in case of a gift of immoveable
property, whatever may be the value of the property. One
of the prerequisites for registration is the transfer must
be in writing and cannot be done orally.
In Sahadev v/s. Shekh Papa case, the court held that gift
of immoveable property are compulsorily registrable and
it amounts to notice for subsequent transfer and not for
earlier transactions prior to registration.
In D.N.Dawar v/s.Ganga Ram Saran Dhama case, the
court held that in case of immoveable property if the
document is not registered, mere delivery of possession
cannot pass a title to the donee.
Moveable Property: With regard to the moveable property,
the gifts

can be effected either by registered instrument signed

either by the donor himself or on his behalf or by
delivery. Even in the case of moveable property,
registration is made optional when delivery of possession
takes place and no delivery is required when it is made
through registered document. Section 123 provides that
delivery may be made in the same manner as goods sold
are mad
 Certain gifts are declared void by the Act which are as follows:

(1) Gifts for an unlawful person which is unlawful as per the law

(2) Gifts which are made subject to a condition which is

impossible to fulfil or re forbidden
(3) When donee dies without acceptance of such gift

(4) A gift made by a person who is incompetent in law,

like idiot, lunatic, minor
(5) Gift comprising of existing and the future property is void

(6) A gift of a thing to two or more donees, of whom one

does not accept, it becomes void to the interest which he
would have taken, had he accepted.
(7) A gift which is under the agreement between the
parties is revocable wholly or in parts at the mere will of
the donor, is void wholly or in part as the case may be
 A gift may not always be beneficial but may at times
burdened with an obligation and that gift is called
onerous gift. Section 127 of transfer of Property Act
states about the onerous gift. It says that when a gift is in
the form of single transfer of several things to the same
 person of which one is burdened by an obligation, and the
others are not, donee can take nothing by the gift unless
he fully accepts it. Hence in this situation, either the
whole thing is to accepted or the whole transfer should be
rejected

Gifts under Hindu Law:

Section 123 of the Transfer of Property Act governs the

manner prescribed to make gifts under Hindu Law a gift. A
gift in Hindu Law is not mandatory to be in writing. For a
valid gift, it is required that there must be the delivery of
physical possession from the donor to the donee.
(1) A Hindu person may dispose of his separate or self-
acquired property by way of gift, subject in certain cases to
the claim for maintenance of those who are legally bound to
be maintained.
(2) A coparcener may dispose of his coparcenary interest by
way of gift subject to the claims of those who are legally
bound to be maintained.
(3) A father may by way of gift dispose of the whole of his
property, whether ancestral or self-acquired, subject to the
claims of those who are legally bound to be maintained.
(4) A female may dispose of her stridhana by way of gift,
subject to the consent of her husband.
(5) A widow may in certain cases dispose of by way of gift
small portion of the property inherited by her from her
husband, but she cannot do so by will.
(6) The owner of the joint property may dispose of that by
way of gift unless there is a special custom prohibiting
alienation or tenure is of such nature that it cannot be
alienated.
(7) In Hindu law it is not allowed to make gift in favour of an
unborn persons.

Gifts under Mohammedan Law:

The concept of gift is different in Muslim Law than that given

in the Transfer of Property Act. Here it is a transfer of
property or right by one individual to another according to
Muslim law and it also includes
(1) A hiba, which is an immediate and unconditional transfer
of ownership of some property or some right without
consideration
(2) An ariat which means giving of some limited interest to
someone in respect of the use or usufruct of some property or
right
(3) If gift of any property or right is made without
consideration and the object of such gift is to get religious
merit is called sadaqah
Under the Mohammedan Law, the essentials of gift are:
(i) a declaration of gift by the donar

(ii) acceptance of the gift by the donee

(iii) if possible, delivery of possession

The registered instrument is not necessary to validate the gift

of immoveable property. In Muslim Law gift in favour of
child in womb of the mother is valid if the child is born within
6 months from the date of the gift because in that case it is
presumed that the child existed.

Contents of a Gift Deed:

Being a very important legal document, there are certain
things that you are required to mention in gift deed
1.) Date and place where the deed is to be executed
2.) Information about donar and donee like name, residential
address, relationship
3.) Details about the
property 4.)
Consideration clause
5.) Free will of donar

6.) Rights and liabilities of donee

7.) Delivery of the possession of the

property 8.) Revocation clause

Gifting process:

It can be divided into 3 parts as described below:

1.) Drafting of the Gift Deed- A gift deed describes what is

transferred and

to whom. Gift deed is a contract between donar and donee

which defines simultaneous and reciprocal act of giving and
taking. A gift to be valid must be made by a person
voluntary and not under compulsion without any exchange of
money.
2.) Acceptance: Acceptance of the gift after its execution is a
legal

requirement and donee must accept the gift during the

lifetime of donor. In case the donee fails to accept the gift, it is
rendered invalid. The acceptance may be validated by acts
such as taking possession of the property.
3.) Registration: As per section 123 of Transfer of Property Act, a
gift of

immoveable property cannot pass any title to the donee unless

it is registered. Attestation by two witnesses is required
during registration and post registration, title transfer is
possible.

Registration of Gift Deed:

Registration of gift deed is done as per the provisions of the

Registration Act, 1908
Common steps for the registration process are:
1. Gift deed should be signed by both the donar and donee and
attested by 2 witnesses.
2. Valuation of property being gifted by an approved valuation
expert.

3. Payment of stamp duty and transfer duty- stamp duty

varies for women and men (slightly lower for women). Stamp
duty also varies from state to state and is chargeable under
article 33 of schedule I of the stamp act. The
duty payable is same as payable on conveyance which is for
consideration equal to the value of the gifted property.
4. The Gift deed should get registered at registrar or Sub Registrar
office.

Revocation of Gift Deed:

A gift once made and registered with due process of law

cannot be revoked. After the acceptance, it becomes the
property of the donee. The donor cannot independently
revoke the deed. Also, in a deed where the parties have agreed
that the deed shall be revocable in part or whole, by the mere
will of the donor, is not a valid Gift Deed.
However, under Section 126 of the Transfer of Property Act,
1882 there are certain grounds when gifts can be revoked.
The revocation in itself incorporates the cancellation of the
Gift Deed and the possession of the property is returned to the
donor. The grounds are –
(1) If there is an agreement between the donor and donee, that
if certain specified events happen or do not happen, the
gift shall be revoked. The point to note here is that the
occurrence of such an event should not be
 controlled by the donor. And both parties must have
agreed to such a condition in terms of the Gift Deed.
(2) The conditions stipulated should not be immoral, illegal or
reprehensibleto the party
(3) In case of Thakur Raghunathjee Maharaj v. Ramesh
Chandra, Hon‟ble Supreme Court state that “even though
a condition is not laid down in the gift deed itself, and has
been provided under a mutual agreement separately but
forms part of the transaction of the gift, the condition
would be valid and enforceable”.
(4) Another instance, when a gift can be revoked is, if they
violate Section 19 of the Indian Contract Act, 1872 which
says “Where consent to an agreement is caused by
coercion, undue influence, fraud or misrepresentation, the
agreement is a contract voidable at the option of the party
whose consent was so obtained”.
So if the gift was made by obtaining consent on the above
grounds it can be revoked. And in case, the donor dies, his
heirs have the right to file for revocation of the deed.
 Gift Deed over will:

Gift Deed and Will are used for the same purpose but in a
different way. Will operates only after the death of the
testator and within his/her lifetime, it can be revoked or
changed multiple times. Also, Will doesn‟t need to be
registered; only the testator signature is sufficient.
Whereas Gift Deed once registered cannot be revoked. It is
more beneficial in cases, where one fears that after his/her
demise there will be tension among family members regarding
property ownership. It is much better to transfer property
through Gift Deeds so as to avoid any future legal dispute or
family troubles. Also, since Gift Deeds are registered
documents, they serve as valid legal proof in case any dispute
arises at a later stage.
 CHAPTER 6: POWER OF ATTORNEY

A Power of Attorney (POA) or letter of attorney is a written

authorization to represent or act on another‟s behalf in private
affairs, business, or some other legal matter. The person
authorizing the other to act is the principal, grantor, or donor
(of the power). The one authorized to act is the agent, attorney
or in some common law jurisdiction called the attorney-in-fact.
Formerly, the term “power” referred to an instrument signed
under seal while a “letter” was an instrument under hand,
meaning that it was simply signed by the parties. But today
some jurisdiction requires that powers of attorney be notarized
or witnessed.
A power of attorney is a document whereby one or more
persons give authority to one or more persons to act in his or
their place. It is delegation of authority in writing by which
one person empowers another to act on his behalf. The giver of
the authority is called the „donor‟ and the recipient is called
„donee‟. If the appointment is made for specified act or acts
the deed is called “special power of attorney” and if it is made
generally for certain acts then it is called “general power of
attorney”.
It is important to understand the difference between a general
and a special power of attorney.
General Power of Attorney: It gives a broad authorization to the
agent. The

agent may be able to make medical decisions, legal choices or

financial or business decisions.
Special Power of Attorney: It narrows what choices the agent can
make. In

other words, special power of attorney allows you to be more

specific. Several different POAs can be made with different
agents for each.

It is pertinent for the draftsman to study the following provisions

before

incorporating the Power of Attorney:

 The law relating to power of attorney is governed by the

provisions of the Power of Attorney Act, 1882. It is well
settled therein that an agent acting under a power of
attorney always acts, as a general rule, in the name of his
principal. Any document executed or thing done by an
agent on the strength of power of attorney is as effective
as if executed or done in the name of principal i.e. by the
principal himself. Therefore an agent always acts on
behalf of the principal and
 exercises only those powers which are given to him in the
power of attorney by the principal.
 An agent never gets any personal benefit of any nature.
The aforesaid principle is applied in the case of Suraj
Lamp and Industries Private Limited v/s. State of
Haryana & Anr. and held that “ A power of attorney is
not an instrument of transfer in regard to any right, title
or interest in an immoveable property. The power of
attorney is creation of an agency whereby the grantor
authorises the grantee to do the acts specified therein, on
behalf of grantor which when executed will be binding on
the grantor as if done by him. It is revocable or
terminable at any time unless it is made irrevocable in a
manner known to law.
 An attorney holder may however execute a deed of
conveyance in exercise of the power granted under the
power of attorney and convey title on behalf of the
grantor.
 A power of attorney can be either durable or non-durable
and is generally used to manage the personal affairs of
the principal when they cannot effectively do so for
themselves, such as upon
 incapacitation or if they are out of the country when a
specific event occurs. The main difference between a
durable and non-durable power of attorney is that a
durable power of attorney continues to be effective upon
the incapacitation of the principal while the non- durable
power of attorney does not. There is also a springing
power of attorney which takes effect immediately upon
the signature of the principal or it can be triggered at a
later time by certain events.
 A power of attorney can be executed by or in favour of
two or more persons. When executed in favour of more
than one person it is desirable to state that whether the
donee‟s will act only jointly or severally and jointly.
 There are some precautions we need to take while
signing the power of attorney agreement and ensure that
our interests are fully protected. There are some basic
rules which should be followed irrespective of whether
power of attorney is made in favour of a family member
or a trusted friend

(1) First and foremost it is important to understand the

difference between Letter of Authority and Power of
Attorney. The LOA is good
for small tasks but for more important tasks that involve
larger amounts of money or asset values, it is always
better to execute a power of attorney as the rights and
duties are more enforceable in case of POA.
(2) Ensure that the Power of Attorney is duly registered
and stamp duty prescribed by the state where the POA is
executed has been paid. The legal jurisdiction should be
the place where the POA is executed and the stamp duty
is paid. An unregistered POA is like an LOA and is not
enforceable in a court of law.
(3) Signatures and photographs of the principal and
power agent must be affixed. This can be a useful source
of information in case any of the transactions are
disputed at a future date or if the POA goes to a legal
recourse.
(4) The holder of the POA should first check whether the
principal or the donar of the POA has a valid title to the
property and that his/her name is reflected as owner in
government revenue records. Also, before accepting the
POA he must check that the no encumbrances certificate
is obtained.
(5) The rights and obligations of the principal and the
POA holder should be clearly laid out including decisions
like leasing the property, hypothecating the property,
selling the property etc. For availing loans based on POA,
check whether power agent has the authority to sign the
loan documents and creates an equitable mortgage in
favour of banks/financial institutions on behalf of the
principal.
(6) Ensure that as on the date of execution of any
document based on the POA, the POA is in force and the
principal is alive. Otherwise the POA is void ab initio.
Normally, POAs that are pre dated or post- dated are not
acceptable at the time of registration of POA with
concerned authorities.
(7) If the POA is being executed abroad, ensure that it is
either notarised or signed before Indian Consulate
officials and then duly adjudicated within 120 days from
the date of execution of the said POA. This is important
since NRIs are those who normally give POAs to operate
their local bank account and demat cum online trading
accounts.
 (8) Last but not the least, make it a point to verify the
availability of the original duly registered General Power
of Attorney. The rights should be clear and unfettered.

Authority of Donee:

Section. 2 of the power of attorney Act, 1882 (as

amended in 1982) provides;
The donee of a power of attorney may, if he thinks fit, execute
or do any instrument or thing in and with his own name and
signature, and his own seal, where sealing is required, by the
authority of the donor of the power and every instrument and
thing so executed and done, shall be as effectual in law as if it
had been exacted or done by the donee of the power in the
name, and with the signature and seal, of the donor thereof.
Normally after the revocation of the power of attorney, the
donee ceases to be an agent of the donor. But Section. 3
protects persons making payment
 and doing acts in pursuance of the power of attorney even
after the death etc. of the donor in certain circumstances.
This section reads:
“Any person making or doing any payment or act in good
faith in pursuance of a power of attorney, shall not be liable
on respect of the payment or act, by reasons that before the
payment or act, the donor of the power had died, or become
of unsound mind, or bankrupt or insolvent, or had revoked
the power, if the fact of death, unsoundness of mind,
bankruptcy, insolvency or revocation was not at the time of
the payment or act, known to the person making or doing the
same”.

Contents of Power of Attorney:

The Power of attorney Law provides that any “natural person

having the capacity to contract may execute a power of
attorney”. Legal document of power of attorney includes:
1. It must contain name, age and address of Principal and agent
(attorney)

2. It must contain the date and place of execution of Power of

Attorney

3. Details of the powers that the principal wishes to delegate

and be administered by the attorney-in-fact
4. The power of attorney must be signed by the principal or by
another adult in the principal‟s presence and under his
direction
5. The power of attorney is signed and acknowledged before a
notary public or is signed by two witnesses.
A power of attorney has to be in writing and signed by donor.
It is executed in the form of a deed poll, a unilateral document,
usually in the first person. Moreover no law requires a power
of attorney to be attested but it is useful to have it attested by
witnesses.
Though no law requires a power of attorney to be
authenticated it is desirable to have this done so as to avail of
the presumption under section 85 of the Evidence Act. The
section provides:

“The court shall presume that every document purporting to

be a power of attorney, and to have been executed before, and
authenticated by a Notary Public, or any Court, Judge,
Magistrate Indian Counsel or Vice Counsel or representative
of government was so executed and authenticated”.
Registration and stamp duty of Power of Attorney:

Any person who is above 18 years of age and of sound mind

can appoint an attorney. A minor cannot be appointed as an
attorney holder.
To make power of attorney legally valid, it needs to be signed
by both the principal and attorney along with 2 witnesses. The
deed shall then be executed on a stamp paper of appropriate
value depending upon the state in which it is made. Stamp
duty on power of attorney is payable under article 48 of the
Stamp Act. It is not necessary to register the power of
attorney deed unless it involves transfer of property
rights/titles.
Both the parties to the power of attorney deed must fully
understand what their rights and obligations are under the
deed and should act accordingly. The principal shall ratify i.e.
consent to the acts of the attorney which he has done in his
course of duty as an attorney.
 CHAPTER 7: WILL

A Will or Testament is a legal document that expresses a

person‟s (testator) wishes as to how their property is to be
distributed after their death and as to which person (executor)
is to manage the property until its final distribution.
Though it has at times been thought that a “will” historically
applied only to real property while “testament” applied only to
personal property, but the historical records show that the
terms have been used interchangeably. Thus the word “will”
validly applies to both personal and real property.
The law relating to wills is contained in part VI of the Indian
Succession Act, 1925. But this is not applicable to wills made
by Mohammedans. They are governed by the Mohammedans
Law under which wills maybe made orally or in writing and
formalities of signatures, attesting witnesses etc. are not
required to be followed. There is however, nothing to prevent
Mohammedans from execution a written will duly singed and
attested as required by the Act. All the provisions of part VI do
not apply to Hindus, Buddhists, Sikhs and Jains. The
provisions of this part which apply to Hindus, Buddhists,
Sikhs and Jains are enumerated in schedule III to the
Act. But by virtue of Sec. 30 of the Hindu Succession Act, 1956,
a Hindu, Buddhist, Sikh or Jain may execute a will in
accordance with the provisions of the Indian Succession Act.

"Will" defined in Sec. 2 (h) of the Act mean the legal

declaration of the intention of the testator with respect to his
property which he desires to be carried into effect after his
death. The fundamental idea of a will is that the testator should
thereby dispose of his property or such part of it as his
personal law permits him to bequeath by will, in such a
manner as seems to him best. The two essential characteristics
of a will are that:

(1) It must be intended to come into effect after the death of the
testator, and

(2) It must be revocable by the testator at any time.

Though usually wills are made for disposing property they can
also be made for appointing executors, for creating trusts and
for appointing testamentary guardians of minor children.
It is pertinent for the draftsman to study the following provisions
before

incorporating a Will:

 Will is a legal document through which a person decides

how his/her property would be distributed, allocated and
spent after his death. A person who dies without creating
a will is called dying intestate. Dying intestate forces the
relatives of the deceased to spend additional time and
money for acquiring the estate of the deceased, which
could have been easily done by creating a will. Dying
intestate does not distribute the assets of the deceased
according to his wish and will rather its done according to
the law. As it is only logical to distribute your hard
earned money according to your wish and the way you
want it and this can be easily done by creating a will.
 Section 59 says that every person of sound mind not being
a minor may dispose of his property by will. Even a
married woman may dispose by will any property which
she could alienate by her own act during her life. Person
who are deaf or dumb or blind are not thereby
incapacitated for making a will if they are able to know
what they are doing. A person who is ordinarily insane
may make a will during an
 interval in which he is of sound mind. No person can
make a will while he is in such state of mind, whether
arising from intoxication or from illness or from any
other cause that he does not know what he is doing.
 All property, moveable or immoveable of which testator
is owner and which can be transferable can be disposed
by a will. Property which is legally non-transferable
cannot be bequeathed. If a person has only a life interest
in a property, he cannot make a will in respect of it.
Section 30 of Hindu Succession Act, 1956 provides:
“Any Hindu may dispose by will or other testamentary
disposition of any property, which is capable of being
disposed by him in accordance with the provision of the
Indian Succession Act, 1925 or any other law for the time
being in force and applicable to Hindus.
 Different types of Will that can be incorporated are:

(1) Privileged and Unprivileged Will: Indian Succession

Act, 1925

provides certain privileges to a soldier, an airman and a

mariner at sea employed in an expedition or engaged in
actual warfare. These privileges are enacted keeping in
mind the complicated predicament a
soldier is in during the tenure of his service. Provisions
pertaining to such privileges are mentioned under section
66 of the Act and such wills are called Privileged Wills.
Provisions allowing word of mouth in presence of
witnesses to be considered as valid will and written
instructions to be considered as a valid will after the
death of a soldier are some of the prime examples of such
privileges. A privileged will can be oral or in writing. The
formalities prescribed for unprivileged wills like
signature and attestation do not apply to privileged wills.
Wills created by a testator not being a soldier, an airman
and a mariner at sea employed in an expedition or
engaged in actual warfare are known as Unprivileged
Wills. Unprivileged Wills are governed under section 63
of the Act.
(2) Contingent / Conditional Wills: Execution of these wills
are

dependent on happening of an event and if that event

occurs in the future only then the will is to become
effective. These wills are created for multiple purposes. If
the testator wants to motivate a loved one for doing
something good, like 'my son will get my property only if
he graduates from his law school with a 70% score or
want to make
safe appropriations of his property in case of his death
while touring abroad, he can make a contingency
regarding the same in his will. Any condition which is
contrary to the law or is invalid in nature
cannot be incorporated in a
will.
(3) Joint Wills: When two or more people agree to make a
conjoint

will, such testamentary documents are known as Joint

Wills. These are generally created between married
couples, with an intention to
leave the property to their spouse after one of them dies.
A joint will can also be created with an intention to take
effect after the death of all the testators. In such Joint
will till all the testators are alive, a single testator cannot
revoke the will alone. He /she would require the consent
of other testators to revoke their joint will. Only when all
other testators have died, the sole surviving testator
can revoke the
will alone.

(4) Mutual Wills: Mutual wills are the kind of wills in

which two

people agree to formulate a will on the mutually agreed

terms and conditions. The testator creates the other
person as his/her legatee in these wills. Generally,
married couples who have children from their
first marriage create such wills to ensure the interest of
those children. The terms and conditions of the will
remain binding on the surviving partner after the death
of first partner. Mutual will helps to ensure that
the property passes on to the children of the deceased and not
a new

spouse of the surviving partner in case they remarry.

(5)Duplicate Wills: As the name suggests, when there are two

copies

of a will, then those wills are called Duplicate Wills. There

are two copies of the will although it is considered as a
single will. It is very simple to create a duplicate of the
will. The testator has to make a second copy of the will
and shall sign it and get it attested in the way that he did
for the original will as per Section 63 of the Indian
Succession Act, 1925. One copy can be kept with the
testator and the other might be kept in safe custody
somewhere like in a bank locker, with a trustee, the
drafting attorney or with the executor. The testator with
an intention to protect the execution of the will after his
death makes a copy of the will. If the testator destroys the
copy of the will that he has in his custody then, that would
automatically revoke the other will.
Duplicate wills are strong and valid proof of the
testamentary objectives until the original will is not on
record. Otherwise, the authenticity of the duplicate will
remains questionable. Presumption that the original will
stands revoked will prevail in case original will is not filed
with the duplicate copy in petition for probate.

(6) Holograph Wills: Wills which are handwritten by the

testator

himself are known as Holographic Wills. These kinds of will

have

their own merit. Due to the fact that they are completely
handwritten

by the testator himself, raises a strong presumption pertaining

to their regularity and execution
(7) Concurrent Wills: Normally a testator prepares a single
will for

his/her testamentary declarations. The testator according

to his wish or for the sake of convenience can make
different wills for the property located in different
geographical locations. Hence, co-existing wills, dealing
with testamentary declarations of a single testator are
known as Concurrent Wills.
 (8)Sham Wills: These wills are created for an ulterior motive
which

is not the testamentary operation and execution of the

will. Rather in most cases, these wills are created for an
immoral purpose like acquiring a property that does not
belong to the claimant, deceiving someone etc. One of the
essential features of a valid will is the intention of the
testator. These wills are supplemented with all the
necessary documents to duly execute the collateral
purpose and not to execute the will according to the
testamentary operations.
 The following are the conditions and requirements which
have to be complied with in executing a valid will as per
section 63 of Indian Succession Act.

(1) The testator should sign or affix his mark (e.g. Thumb
or signature)
(2)The will must be attested by 2 or more witnesses

(3)The witnesses must have seen the testator sign or affix

his mark to the will
(4)Each witness shall sign the will in the presence of the testator
 (5)The witness should not be beneficiary under the will

No particular form of will is prescribed by law. It is not

necessary that any technical words or terms of arts be
used in a will, but only that the wording be such that the
intention of the testator can be known there from. A will
or bequest not expressive of any definite intention is void
for uncertainty.
 “Codicil” is defined under section 2(b) of the Indian
Succession Act which is an instrument made in relation to
will and explaining altering its dispositions and shall be
deemed to form part of the will. When the alteration and
additions are minor, codicil is the proper thing but if
substantial changes are to be made in the will it is
desirable to execute a fresh will and to revoke the earlier
one. If there is inconsistency between the will and the
codicil, the codicil will prevail. A codicil requires the same
formalities as a will.
Contents of Will:

Any person over the age of majority and having „testamentary

capacity‟ can make a will with or without the aid of lawyer.
Preparation of will does not require any specific legal
language. Any form of writing or writing or printing may be
employed. However the language should be simple as possible
and free from technical words and easily intelligible to layman.
But he should carefully study laws relating to Real Properties
and the provisions of Part VI section 57 to 120 of the Indian
Succession Act.

Required content varies, depending on the jurisdiction but

generally includes the following:
(1) Mention the name and address of the Testator

(2) The Testator must clearly identify themselves as the maker of

the will.

The will should be typically satisfied by the words “last will

and testament” on the face of the document.
(3) The testator should clearly declare that he or she revokes
all previous wills and codicils
(4) The testator may demonstrate that he or she has the
capacity to dispose of their property and does so freely and
willingly.
(5) Details of procedure of making bequests

(6) Appointment of executor

(7) The testator must sign and date the will, usually in the
presence of at least two disinterested witnesses (persons who
are not beneficiaries). The testator‟s signature must be placed
at the end of the will.

Signature and Attestation:

The testimonial Clause (signature) and the attestation clause

(witnesses) are the most important parts of a will. If these are
not made strictly in accordance with the requirements of law it
will not be a valid will.

The testator and all the attesting witnesses must sign on every
page of the will in presence of the testator. The attesting
witnesses need not know the contents of the will. Each of them
must have seen the testator sign or affix his mark to the will
or has seen some other person sign the will, in the presence and
by the direction of the testator. An executor is charged with the
duty and conferred with the power to carry out the
directions contained in
the will. He has to collect and realise the estate of the deceased
pay his debts and distribute the legacies.

Registration and Stamp Duty on Will:

No stamp duty is chargeable on will and registration of Will is

not mandatory. It is optional (Section 18(c), Registration Act,
1908). However a registered will has certain advantages. Any
testator may either personally or by duly authorized agent
deposit with any registrar his will in a sealed cover super
scribed with name of testator and that of his agent if any and
with the statement of the nature of the document as per section
42 of Registration Act, 1908. The testator or after his death any
person claiming as executor or otherwise under a will, may
present it to any Registrar or Sub Registrar for registration
under section 40 of the Registration Act, 1908.

Revocation of Will:

Section 62 of the Indian Succession Act provides that a will is

liable to be revoked or altered by the maker of it at any time
when he is competent to dispose of his property by will.
Section 69 enacts that every will shall be
revoked by the marriage of the testator. A will may also be
revoked by the execution of a new will. The mode of revocation
of unprivileged wills or codicils is laid down in section 70 and
that of privileged will in section 72.

Probate and Letter of Administration:

Section 213 of the Indian Succession Act enacts that no right as

executor or legatee can be established in any court of justice
unless a court of competent jurisdiction in India has granted
probate of the will under which the right is claimed or has
granted letters of administration with the will or with the copy
of an authenticated copy of the will annexed.

Probate is a certificate granted under the seal of competent court

certifying

the will as the will of the testator and granting the

administration of the estate of the deceased in accordance with
that will to the executor named under the will.

Letter of Administration can be obtained from the court of

competent

jurisdiction in cases where the testator has failed to appoint

an executor under will or where executor appointed under a
will refuses to act or where
he has died before or after proving the will but before
administration of the estate. A Letter of Administration is
always necessary where a person governed by the Indian
Succession Act dies intestate.
 CHAPTER 8: CONCLUSION

Technically speaking, conveyancing is the art of drafting of

deeds and documents whereby land or interest in land i.e.
immoveable property is transferred by one person to another.
Conveyance is an act of conveyancing or transferring any
property whether moveable or immoveable from one person
to another permitted by customs, conventions and law within
the legal structure of the country.
Both the terms „drafting and conveyancing‟ provides the
same meaning although these terms are not interchangeable.
Conveyancing gives more stress on documentation much
concerned with transfer of property from one person to
another whereas drafting gives general meaning synonyms to
preparation of drafting of documents.
Hence it becomes very important for the draftsman to be
aware of all relevant provisions and procedures to be followed
for drafting any deed or document. Apart from that he/she
should have good command over language to prepare a decent
deed or document. It should be supported by the schedules,
enclosures or annexures in case any reference to such material
has been made in that.
Disclaimer:

This information is obtained from following sources:

(1) https://www.academia.edu/36562375/Drafting_Pleading_and_Conveyance

[[[

(2) LexisNexis text book on Drafting, Pleading and Conveyancing

(3) ) https://blog.ipleaders.in/essential-elements-of-mortgage-deed/