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E-NOTES

Class : B.A.LL.B VI Semester

Paper Code : LLB 306
Subject : Property Law
Faculty Name : Ms. Deepanjali Kashyap

Unit-I
Concept of Property and General Principles Relating to Transfer of
Property

Property: Transfer of Property Act 1882 does not define the term ‘property’ but it has been used
in its widest and most comprehensive sense. A property is a collection of rights.
When a property is transferred, the rights along with the property are also transferred but it is not
necessary to transfer all rights with the property, the arrangement can be made by which some of
the rights may be transferred. For example, when gift of a house is made by the transferor to
transferee, there is a transfer of absolute right but in case of a lease agreement only partial
interest i.e. right of enjoyment of the house is transferred.
Property is divided into two broad category i.e. Movable and immovable property.

Immovable Property
The transfer of property Act 1882 has not defined the term but Section 3 of the act merely lay
down that "immoveable property" does not include standing timber, growing crops or grass.
Section 3(26) of the general clause Act 1897 defined immovable property as “it shall include
land, benefits to arise out of land and things attached to the earth, or permanently fastened to
anything to the earth.’’ According to Indian Registration Act, Immovable Property includes land,
building, hereditary allowances, right to ways, lights, ferries, fisheries, or any other benefits to
arise out of land and things attached to earth, but not standing timber, growing crops or grass.
Immovable Property means lands, benefits arising of the lands and the things attached to the
earth or permanently fastened to anything attached to the earth. Other than the physical aspect,
every benefit arising from and every interest in the property is also included in the definition. It

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excludes three things, namely, standing timber, growing crops and grass. After analysis of the
above definitions it may be concluded that the following objects and things are included in
‘Immovable property’:

1. Land – Land includes earth’s surface, column of space above the surface, the ground beneath
the surface, all objects which are on or under the surface in its natural state e.g. minerals,
land covered by water e.g. lakes, river and ponds, object placed by human agency with the
intention of permanent annexation e.g. buildings, walls and fences.
2. Benefits arising out of land – The benefits arising out of land are also known as ‘profit a
prendre’. All benefits arising out of immovable property and every interest in such property
are also regarded as immovable property as such benefits cannot be severed from the land
e.g. hereditary allowances, rights of ways, right to collect fish from ponds etc.
3. Things attached to earth – Section 3 of Transfer of property Act defines the expression
“attached to earth” as including – (a) things rooted in the earth as in the case of trees and
shrubs (b) things imbedded in the earth, as in the case of wall or buildings (c) things attached
to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
The following have been judicially interpreted as included in immovable property:- (i) A
right of way (ii) A right of ferry (iii) Right to collect rent of immovable property (iv) A right
to catch and carry away fish (v) Hereditary rights (vi) Rights of collect lac from trees etc.

Movable Property
The definition of movable property is not given in transfer of property Act 1882. According to
General Clause Act, “movable property means property of every description except immovable
property”. The following are held to be not immovable property so these properties may be
considered as movable property: (i) Right of worship (ii) A decree for sale of immovable
property (iii) A decree for arrears of rent (iv) Royalty (v) A right to recover maintenance
allowance
(vi) Standing timber, growing crops and grass (vii) Machinery which is not permanently attached
to earth etc

Distinguish between Movable and Immovable Property

1. It includes land, benefits to arise out of land, and things attached to the earth (sec. 3 of
General Clauses Act). It includes stocks and shares, growing crops, grass, and things attached
to or forming part of the land, and which are agreed to be severed before sale, or under the
contract of sale (Sec.2 of Sale of Good Act).
2. If the thing is fixed to the land even slightly of it is caused to go deeper in the earth by

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external agency, then it is deemed to be immovable property. If the thing is resting on the
land merely on its own weight, the presumption is that it is movable property, unless contrary
is proved.
3. If the propose of annexation of a thing is to confer a permanent benefit to the land to which it
is attached, then it is immovable property. If the purpose was only to enjoy the thing itself,
then it is movable property even though it is fixed in the land.
4. Examples Benefits to arise out of land such as hereditary allowances, right of way, ferries
and fisheries, right to collect rent and profits of immovable property; a mortgage-debt; right
to cut grass of one year, a factory; etc. Examples Right of worship; royalty; a decree of sale
of immovable property; a decree for arrears of rent; Government promissory notes; standing
timber, growing corps and grass.
5. Transfer of immovable property requires registration of the document No registration is
required to transfer a movable property.

Definition of Transfer of Property

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

1. Act of Conveyance- Transfer of property is an act in which the property must be conveyed.
It is not necessary that all rights or interest in property must be conveyed to another person. The
person conveying the property is entitled to the property wanted to be conveyed and it is
conveyed to that person who has no prior title in it.
2. In present or in future – Section 5 allows that the transferor may transfer the property either
with immediate effect or to be effective from a future date. It must be remember that whether the
transfer of property will take effect from present or from future but property must exist at the
time of transfer. It means that at the time of transfer, the property must be in existence; hence no
transfer shall take effect in case of future property.
3. Living Persons - The property must be conveyed by one living person to another living

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person, it means the transfer must be ‘Inter Vivos’ transfer. In this section “living person”
includes a human being, a company or association or body of individuals, whether incorporated
or not.
4. To himself or himself with on or more other persons – A living person conveys property
to one or more other living persons, or to himself, or to himself and one or more other living
persons.

Transferable and Non-Transferable Property Ingredients of Section-6

Spes Successionis [sec 6(a)) – ‘Spes successionis’ means expectation of succession. It is a

possibility of getting the property in future through succession. Section 6(a) of TP Act includes
the following:

The chance of an heir-apparent succeeding to an estate- The term ‘heir apparent’ implies that
a living person does not have any heir. An heir is a person who succeeds to the property of
another on the death of the later if such person dies intestate or wills his property to him.
Intestate means if a person dies leaving behind property without a valid will. Therefore, who will
be the heir can only be determined only at the time of the death of a person. A mere chance or
possibility or expectancy of an heir succeeding to an estate is not a transferable property. If a
person transfers spes successionis, the transfer in law is void ab-initio. It does not convey any
right in favor of the transferee, even if the transferor who transfers a chance may, in fact, become
the owner of the same property in future.

Chance of legacy – The chance of a relation obtaining a legacy is also mere possibility and
therefore cannot be transferred. This is so even if the testator has agreed with the relation that
would give him a legacy. A will or legacy becomes operative only after the death of the testator.
If a testator has made two or more wills, then only the last will made by him be operative.
Expectancy to receive legacy is uncertain because the legatee may or may not survive the testator
and the testator may have changed the name of legatee in his last will. That is why; the chance of
a legacy has been made non-transferable.

Any other possibility of like nature- Any other possibility is similar to spes successionis or the
chance of a relation obtaining a legacy cannot be transferred. Any property which is merely a
future uncertain possible interest should not be made a transferable property. For example: future
wages of a servant before they are earned, possibility of winning lottery or a prize in a

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competition cannot be transferred.

Right of Re-entry [Sec6 (b)] – A right of re-entry for a breach of a condition subsequent cannot
be transferred to any one except the owner of the property affected thereby.

Easement [Sec6 (c)] - An easement is a right to use, or restrict the use of land of another in some
way, e.g. right of way, right of light and water etc. An easement cannot be transferred without
the property which has the benefit of it. It means if anybody wants to transfer an easement, it can
be transferred only with along the property.

Restricted interest [Sec6 (d)] - A person having right to a property can transfer the same either
subject to a restriction or without restriction. Where property is transferred subject to a
restriction the transferee is supposed not to act contrary to the restriction. Thus, if property is
transferred to the transferee with a restriction that it is to be enjoyed him personally, he shall
have no right to transfer such a property and if he transfers the property in violation of the
restriction,the transfer shall be void under this clause. Under this clause, a trustee cannot alienate
his office because his office is based on personal confidence.

Maintenance [Sec6 (dd)] - “A right to future maintenance, in whatsoever manner arising

secured or determined, cannot be transferred”. A right to receive maintenance is a personal right,
although any particular property or the income thereof may be charged with it. The right of
maintenance is a personal right and it is not transferable. But this right can be transfer in case of
any arrears of maintenance but as to future maintenance it is not valid.

Mere right to sue [Sec6 (e)] - A mere right to sue cannot be transferred. To sue means to make a
legal claim or to take legal proceedings against any person. Claims for damages for breach of
contract or for tort, for suing an agent for accounts are all mere rights to sue and cannot be
transferred. But if right to sue has merged in a decree, the right can be transferable.

Public Office [Sec6 (f)] – A public office cannot be transferred, nor can the salary of a public
officer, whether before or after it has become payable. The prohibition on transfer of public
office and on transfer of the salary of a public officer is imposed on ground of public policy. A
person is chosen to hold a public office for qualities personal to him and if he were allowed to
transfer it, there is likelihood that the public duties may not be duly discharged and as well salary
is given to him for purpose of upholding its dignity and proper performance of its duties, it
cannot be transferable.

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Pensions [Sec6 (g)] – Under this clause, stipend allowed to military and civil pensioners of
Government and political pensions cannot be transferred. Here pension means a stipend granted
not in respect of any right of office but on account of past services of particulars merit.

Nature of Interest [Sec6 (h)] – This clause deals with three classes of cases:

Opposed to the nature of business – there are things which from their very nature are not
transferable. It includes, res communes, i.e. things of which no one in particular is the owner or
also known as res nullius i.e. thing without an owner) such as air, water of rivers etc. These
things from their very nature are not transferable. Similarly, res extra commericum (i.e. things
which cannot be the subject of commerce) e.g. property dedicated to a idol cannot be transferred.
Unlawful object or consideration – A property otherwise transferable become non transferable
when the object or the consideration of the transfer is unlawful. Thus a house given on rent for
the purpose of gambling or prostitution being immoral or opposed the public policy is invalid.
A person legally disqualified to be a transferee – A transfer cannot be made in favor of a person
who is disqualified to be transferee. U/S 36 of Transfer of property act, a judge, a legal
practitioner or an officer connected with courts of justice are disqualified for purchasing any
actionable claims.

Untransferable Interest [Sec6 (i)] – The general rule is that leasehold are transferable but this
clause makes an exception to this rule and declares certain interest untransferable. A tenant
having an untransferable right of occupancy, the farmer of an estate in respect of which default
has been made in paying revenue, or the lessee of an estate cannot assign or transfer their interest
in the holding.

Rule against perpetuity (Section 14)

No transfer of property can operate to create an interest which is to take effect after the life-time
of one or more persons living at the date of such transfer, and the minority of some person who
shall be in existence at the expiration of that period, and to whom, if he attains full age, the
interest created is to belong.

Analysis of Section 14
The vesting of property absolutely cannot be postponed beyond the life-time of any one or more
persons living at the date of transfer, i.e. there must be no internal between the termination of the
precedent interest of a living person and the vesting of the interest in the unborn person.
The unborn person takes a vested interest at birth, immediately on the termination of prior

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interest, however the vesting of interest in favor of him may be postponed until he attains full age
i.e. the age of majority. Sec 14 allows the delaying of the vesting during the minority period of a
person who is not born at the date of the transfer.
Perpetuity Period
It is maximum period during which the property may be rendered inalienable. The extent of
perpetuity period is the life of any person who is alive at the movement when the deed which
creates the interest begins to operate, plus period of 18 years from the time when such designated
person dies.

While examining the transfer of property under sec 14, the court looks at the possible events
according to the terms of the deed, and not the actual events on the date of transfer.

Exceptions to the rule against perpetuity

Vested interests are not affected by the rule, for when an interest has once existed, it cannot be
bad for remoteness.
Gifts to charities do not fall within the rule, thus, in case of a transfer for the benefit of the public
in advancement of religion, knowledge, health, commerce etc., the rule does not apply.
Perpetuity is not repugnant in cases of religious or charitable endowments.
Property settled upon individuals for memorable public services may be exempted from the
operation of this rule.
The rule against perpetuity applies when interest in property is created and has no application to
personal contracts. A contract for sale of property does not of itself create any interest in such
property. Thus, a contract to pay money to a person, his heirs or legal representatives upon a
future contingency, which may happen beyond the period prescribed would be perfectly valid.
The rule also does not apply to contracts for perpetual renewal of leases.
The rule also does not apply where only a charge is created, which does not amount to a transfer
of any interest e.g. when property is made merely security for payment of money.
A covenant of redemption in a mortgage does not offend the rule

Vested and Contingent interest

Vested interest: A vested interest is created in favour of a person – without specifying the time
when it is to take effect, or specifying that it is to take effect forthwith, or on the happening of a
certain event. It is ownership. It does not depend upon the fulfilment of any condition. It creates
an immediate right, though the enjoyment may be postponed to a future date. Thus, owner’s title

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is already perfect. It is not defeated by death of transferee before he obtains possession. It is both
transferable as well as heritable. If the transferee of a vested interest dies before actual
enjoyment, it passes on to his heirs.
Example: A makes a gift to B of Rs. 100 to be paid to him on the death of C. B gets a vested
interest, as the event, namely, C’s death is certain

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

Rule of Election

The Doctrine Of Election u/s 35 of The Transfer of Property Act, 1882

The Doctrine of Election is one of the most important areas of the law relating to transfer of
property. Section 35 of the Transfer of Property Act deals with this doctrine. The primary
element in the doctrine of election is the presence of choice. The foundation of Election is that a
person taking the benefit of an instrument must also bear the burden.
Generally, Election means choosing between two inconsistent or alternative rights. Under any
instrument if two rights are conferred on a person in such a manner that one right is in lieu of the
other, he is bound to elect only one of them. In Beepathummav/s Kadambolithaya, SC held that-
A person cannot take a benefit under and against the same instrument. This means he cannot
approbate and reprobate at the same time. Example-Abu Bakar offer 1,00,000 to Joy in lieu of
transfer his house, So, Joy can elect only one, either he can retain the money and transfer his
house or deny the money, he cannot enjoy the both.
Election is an obligation, to choose between two rights in a case where there is a clear intention
of the grantor that the grantee should not enjoy both. The foundation of the doctrine of election
is that the person taking a benefit under an instrument must also bear the burden.

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The doctrine of election may be stated in the classic words of Maitland as follows-

‘He who accepts a benefit under a deed or will or other instrument, must-
Adopt the whole contents of that instrument,

Conform to all its provisions and

Renounce all rights that are inconsistent with it'.

The doctrine of election is based on the principle of equity that one cannot take what is beneficial
to him and disapprove that which is against him under the same instrument. He cannot approbate
and reprobate at the same time. In simple words, where a person takes some benefit under a deed
or instrument, he must also bear its burden.
Section 35 of the Transfer of Property Act embodied the doctrine of election.According to
section35:
Where a person ---
Professes to transfer property which he has no right to transfer, and as part of the same
transaction, confers any benefit on the owner of the property, such owner must elect either to
confirm the transfer or to dissent from it. If he dissents from it he must relinquish the benefit so
conferred, and the benefit so relinquished reverts to the transferor or his representative as if it
had not been disposed of.. However, when such benefit reverts back to the transferor, it is subject
to the charge of making good to the disappointed transferee the amount or value of the property
attempted to be transferred in two cases, namely where the transfer is gratuitous, and the
transferor has, before election, died or otherwise become incapable of making a fresh transfer;
and where the transfer is for consideration.

Essential ingredients for the Doctrine of Election

Those are the essential ingredients for this doctrine:

The transferor must not be owner of the property which he transfers.

The transferor must at the same time grant some property, in the same instrument, out of his
own, to the owner of property.
The two transfers i.e. transfer of the property of owner to the transferee and conferment
of benefit on the owner of property must be made in the same transaction. Question of election
does not arise if the two transfers are made by virtue of two separate instruments.
The owner must have proprietary interest in the property, a creditor is not put to election as he
has only a personal right to be paid by the debtor.

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The owner taking no benefit under a transaction directly, but diverting a benefit under it
indirectly, is not put to election.
Question of election does not arise when benefit is given to a person in a different capacity.

The conditions necessary for the application of the doctrine of election:

When a person professes to transfer a property not his own

Professes means to purports or make contract, for a property which is not his own but he can
make contract for the same.

Part of the same transition

This Doctrine is only applicable when transfer and benefit form part of the same transaction.

Benefit directly confer to the owner of the property

The Doctrine is only applicable when the real owners of the property directly accept the benefit.
But if the owner taking no benefit under a transaction directly, diverting a benefit under it
indirectly, is not put to election.

Doctrine of election section 35 first part always applicable for transferor: Whether transferor
believe him as a real owner or not of transfer property the first part of this section always
applicable for him.

Application of Doctrine of Election:

Indian Law:
The principle underlying this section has always been applied to Hindus. In the case of
Rungamma v. Atchamma, the Privy Council referred to the rule that a party shall not at the same
time affirm and disaffirm the same transaction- affirm it as far as it is for his benefit and disaffirm
it as far as it is to his prejudice.

Muslim Law:
In the case of Sadik Hussain v. Hashim Ali, the Privy Council applied this doctrine to Muslims
also.

English Law:

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Under English Law, a transferee by electing against the transfer does not lose his benefit but he
becomes bound to make compensation out of it to the disappointed person.

Exception to the Rule of Election under Section 35:

Section 35 provides that,

Where a particular benefit is expressed to be conferred on the owner of the property which the
transferor professes to transfer, and such benefit is expressed to be inlieu of that property, if such
owner claims the property, he mustrelinquish the particular benefit. But he is not bound to
relinquish any other benefit conferred upon him by the same transaction.

Real owner is not bound to confer any other benefit of a particular transaction:
Where a particular benefit is expressed to be conferred on the owner of the property which the
transferor professes to transfer, and such benefit is expressed to be in lieu of that property, if such
owner claims the property, he must relinquish the particular benefit, but he is not bound to
relinquish any other benefit conferred upon him by the same transaction.

If real owner accepts the benefit before confirm election and waives enquiry into the
circumstances:
Acceptance of the benefit by the person on whom it is conferred constitutes an election by him to
confirm the transfer, if he is aware of his duty to elect and of those circumstances which would
influence the judgment of a reasonable man in making an election, or if he waives enquiry into
the circumstances.

Two years Enjoyment:

Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the
person on whom the benefit has been conferred has enjoyed it for two years without doing any
act to express dissent according to Indian succession act 1925 section 188[1] it was presumed
that he approved the transfer and need not apply the doctrine of election.

Impossible for real owner to back the previous position:

Such knowledge or waiver may be inferred from any act of his which renders it impossible to
place the persons interested in the property professed to be transferred in the same
condition as if such act had not been done.

Warning the real owner after certain period:

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If he does not within one year after the date of the transfer signify to the transferor or his
representatives his intention to confirm or to dissent from the transfer, the transferor or his
representative may, upon the expiration of that period, require him to make his election; and, if
he does not comply with such requisition within a reasonable time after he has received it, he
shall be deemed to have elected to confirm the transfer.

Suspension of election:
In case of disability by reason of infancy, lunacy, and so forth, the election shall be postponed
until the disability ceases, or until the election is made by some competent authority.

Sd/-
Ms. Deepanjali Kashyap

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