Movable and Immovable Property

Property has a wide degree and, along these lines, no thorough definition. The
court completely expressed in Raichand v. Dattarya [1] that property incorporates
all rights of a person except his personal rights, which determine his status in
society.

Property’s significance is not static; it changes with the reason, idea of an act, and
new laws. Along these lines, as to guarantee that different choices, proposals, and
any suggestions identified with property are appropriately made, first the
property is classified into movable and immovable properties, and afterward, as
per their separate laws, the related activity is attempted.

The question now is, “What is the difference between movable and immovable
property?”

Definition of Movable Property

Section 3 (36) of the General Clauses Act defines movable property as:

‘Movable property shall mean property of every description, except immovable

property.” [2]

Section 2 (9) of the Registration Act, 1908 defines property as:

‘Moveable property’ includes standing timber, growing crops and grass, fruit
upon and juice in trees, and property of every other description, except
immovable property.” [3]

In this manner, crops remain in the field and incorporate all the vegetables and
natural products. They are considered as movable property since they must be
utilized once they are served from the land. Additionally, the grass is by and large
nourishment for dairy cattle, and consequently it is likewise considered as
movable property.
Also, Timber is helpful for development of houses, yet for that, it must be cut and
served from the land and afterward no one but it very well may be utilized, that is
the reason it is considered as movable property. Then again, trees bearing natural
products are helpful when they are established in the earth, and that is the reason
they are viewed as immovable property.

Section 22 of IPC defines property as:

The words “moveable property” is intended to include corporeal property of

every description, except land and things attached to the earth or permanently
fastened to anything, which is attached to the earth. But things attached to the
land may become moveable property by severance from the earth. [4]

Transfer of Property Act does not define movable property, since it regulates
transfer of immovable property by sale, mortgage, lease, gifts or through
actionable claims.

Definition of Immovable Property

Section 3 of Transfer of Property Act defines “Immovable Property” does not
include standing timber, growing crops or grass.[5]Moving property includes
standing timber, growing crops, and grass, according to this definition.

Section 3(26) of the General Clauses Act 1897, “immovable property” “shall
include land, benefits to arise out of land and things attached to the earth, or
permanently fastened to anything attached to the earth”. [6]

Section 2(6) of The Registration Act,1908 defines “Immovable Property” as under:

“Immovable Property includes land, building, hereditary allowances, rights to
ways, lights, ferries, fisheries or any other benefit to arise out of land, and things
attached to the earth or permanently fastened to anything which is attached to
the earth but not standing timber, growing crops nor grass”. [7]

Joining all the 3 definitions, immovable property can be summed as :-

i. Land
ii. Advantages emerging out of the land
iii. Things connected to the earth
iv. Things Embedded in earth
v. Things attached to what is embedded in the earth
vi. Things established in the earth, with the exception of:-
a. Standing timber,
b. Developing harvest
c. Grass.

Following on from the preceding points, it is commonly assumed that things

found on the earth, as well as deep within the earth, such as minerals, are also
immovable in nature.

Important Case Laws dealing with Movable and Immovable Property

Since, the definitions of with movable and immovable property are not exact and
have room for interpretation, thus various issues have arisen in past years
regarding the kind of property. Profit prying is the right to take something from
someone else’s territory.

It is right to enter another person’s property and to make some benefit from the
soil. There are different points of reference that have been set by the court in
acknowledging this concept. Some landmark cases that have been decided are :-

The court held in Smt. Shantabai v. State of Bombay [8] that the right to enter the
land, cut and carry away wood for a period of 12 years is a benefit arising from
land and thus immovable property.

For the situation in Anand Bahera v. Province of Orissa [9], it was held that profit
arising from land is movable property. The option to stroll on the land and to
draw fish from the lake and remove them is immovable property, as it is the
benefit emerging from the land. Grazing of cattle on the land is additionally
immovable property as it is profit emerging from the land.
Idea of Annexation turns into an establishment for choosing an issue in cases
including question of characterizing the property, If property lies on the land on
its own weight, it is movable; however, if a thing cannot be expelled without
causing significant harm to the land, it is viewed as having been implanted in
interminability and must be treated as immovable property. The level of
annexation is known by the intention and the timeframe for its use.

As an example, while staying on a boat is movable property, the use of any nails
and jolts is immovable property because they will most likely be used for a long
time and will cause damage if severed.

The above-mentioned concept is further elaborated in the case of Bamdev v.

Manorma [10] where it was held that the pieces of equipment are movable
property and they simply don’t become immovable just because they are
embedded in the earth. They are embedded in the gear for their enjoyment
rather than the land. The cinema built is a temporary cinema, and the supplies
and other supporting equipment will be fixed only until the mortgage exists.

In Duncans Industries Ltd. v. State of UP [11] , light was thrown on the intention
of fixing equipment. It stated that a property is movable, or immovable based on
the intention of the owner, whether they wanted to have the equipment
permanently or temporarily. In this case, Company A decided to sell its fertilizers
business to Company B. It included land and apparatus. The hardware that is
installed in the earth is implanted there for long-term use. It is beyond the realm
of imagination to expect to expel them without causing extreme harm to the
land. Subsequently, it ought to be considered as unflinching property.

Following various judicial pronouncements, some of the judicially recognized

immovable properties include :- Right to collect rent for immovable property,
hereditary office, , right to ferry, right of fishery, equity of redemption, factory,
building, walls, interest of mortgage in immovable property etc.
Judicially recognized movable properties include :- Government promissory
notes, royalty, right of warship, decree of sale of a mortgaged property, standing
timber, grass, growing crops etc.

Apart from the above-mentioned items, with time and development and
changing perspectives on the bar and the bench, various items are included and
excluded as needs be from the rundown of versatile and steadfast things.

In the end, according to the need, circumstances, and purpose of the item, it is
classified, and using the statute, an action is taken. However, to venture out
characterization of movable and immovable property, the idea becomes one of
extreme importance because, in the current times, it is only property, whether
personal or proprietary, tangible or intangible, movable or immovable, that
defines a person and his status.

End notes
[1] AIR 1964 Bom 344.
[2] Section 3 (36) , General Clauses Act, 1897.
[3] Section 2 (9) , Registration Act, 1908.
[4] Section 22 , Indian Penal Code, 1860.
[5] Section 3 , Transfer of Property Act, 1882.
[6] Section 3(26) , General Clauses Act,1897.
[7] Section 2(6) , Registration Act,1908.
[8] AIR 1958 SC 532.
[9] 1955 SCR (2) 919.
[10] AIR 1974 AP 226.
[11] (2000) 1 SCC 633.

Transfer of property
Transfer of property is an “ act by which a living person can conveys property”.
The transfer of property act 1882 is an the Indian legislation that governs and
regulates the transfer of property in the Indian subcontinent. The act covers
movable, immovable, tangible and intangible property. The Act deals with Sale,
Mortgage , Lease, Exchange, and gift.

Introduction to Concept of Transfer of Property

Transfer of property is an “ act by which a living person can conveys property, in

present or in future, to one or more other living persons, or to himself, or to
himself and one or more or other living persons, and to transfer property is to
perform such act.”

The transfer of property act 1882 is an the Indian legislation that governs and
regulates the transfer of property in the Indian subcontinent. It was enacted on
the 17th of February 1882 and officially came into force on the 1st of July 1882.
The act covers movable and immovable, tangible and intangible assets
(copyrights, trademarks and patents). The Act deals with the following kinds of
transfers:

(1) Sale,
(2) Mortgage,
(3) Lease
(4) Exchange, and
(5) Gift.

Essentials of a valid transfer

1.It must be inter-vivos

Section 5 of the act stipulates that the transfer must be inter vivos. That is to say
that the transfer must be made between living persons. Both the transferrer and
the transferee must be living at the time of transfer. Living persons also include
company, corporate or association.

2. The property must be transferable

Sections 6 lays down that the following transfers invalid.

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. Thus if A is an heir to the estate of B ,then, the
estate thus becomes incapable of transfer.

A mere right of a re-entry for breach of a condition subsequent cannot be

transferred to anyone except the owner of the property affected thereby. X grants
the lease of a plot to Y for a period of 5 years. On the expiry of 5 years, X grants
the right of re-entry along with the property to Z. The transfer is valid.

An easement cannot be transferred apart from the dominant heritage.” Dominant

Heritage means inheriting a right over another’s property without owning it. Thus
if M owns a piece of land and N has right of way over it. N has dominant heritage
over M’s land and his land can’t be transferred apart from the dominant heritage.

An interest in property restricted in its enjoyment to the owner personally cannot

be transferred by him. If A is a tenant at B’s house, he cannot transfer to C his
right of enjoyment over B’s house.

A right to future maintenance, in whatsoever manner arising secured or

determined, cannot be transferred. If A is entitled to future maintenance by B,
she/he cannot transfer this entitlement ot another, C.

A mere right to sue cannot be transferred. If H has the right to sue G over a
contract, he may not transfer his right to sue to anybody else.

A public office cannot be transferred, nor can the salary of a public officer,
whether before or after it has become payable.

Stipends allowed to military, naval, air force and civil pensioners of the
government and political pensions cannot be transferred, pension means a
periodical allowances or stipend granted not in respect of any right of office but
on account of part services of particular merits. Section 60 of CPC also exempts a
pension from attachment in execution of degree against the pension holder.
No transfer can be made (1) in so far as it opposed to the nature of the interest
affected thereby, or (2) for an in so far unlawful object or consideration within the
meaning of Section 23 of the Indian Contract Act, 1872, or (3) to a person legally
disqualified to be a transferee.

Nothing in this section shall be deemed to authorise a tenant having an un

transferable right of occupancy, the farmer of an estate in respect of which
default has been made in paying revenue, on the lessee of an estate, under the
management of a court of wards to assign his interest such as such tenant farmer
or lessee.

3. No transfer can be made

(1) in so far as it is opposed to the nature of the interest affected thereby, or

(2) for an unlawful object or consideration within the meaning of section 23 of

the Indian Contract Act, 1872 (9 of 1872)], or

(3) to a person legally disqualified to be transferee; 7[(i) Nothing in this section

shall be deemed to authorise 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, under the management of a Court of
Wards, to assign his interest as such tenant, farmer or lessee.]

4.Section 7 deals with persons competent to transfer:

Every person competent to contract under section 11 of the Indian contract

act(i.e he must be of sound mind, must not be disqualified in other words
insolvent and alien enemy.

Sadiq Ali Khan Vs. Jai kishore,1928. [1]

Privy Council observed that a deed executed by a minor was nullity. Principle of
estoppel cannot be applied to a minor. A minor is not competent to transfer yet a
transfer to a minor is valid .

Amina Bibi vs Saiyid Yousuf 1922.All. 449. [2]

In this case it was held that a contract made by lunatic is void under section 11 of
the Indian Contract Act, and so also, transfer by him of his property is void.

K Kamama Vs. Appana [3]

U/s. 11 of Hindu minority and guardianship Act, 1956 a defacto guardian is

merely a manager and cannot dispose off minor’s property. In this case a defacto
guardian sold property of a minor, the court declared the sale invalid.

Entitled to transferable property (a person who is the absolute owner of the

property and is free from encumbrances can transfer the same) or

Authorized to dispose of transferable property not his own, is competent to

transfer such property either wholly or in part, and either absolutely or
conditionally, in the circumstances, to the extent and in the manner, allowed and
prescribed by any law for the time being in force.

Hussiaa Banu v. Shivanarayan[4],

it was held that where one of the parties to a settlement gives up a claim to
receive a certain sum of money from the other, in consideration of the latter’s
given up the right to certain property claimed by him, it would amount to a
transfer.

A transfer of property passes to the transferee all the interest which the transferor
is then capable of passing in the property unless a different intention is expressed
or implied. The transfer of a property creates a new interest for the transferee. If
the transfer falls short of this criterion it may not be deemed to a valid transfer
under the transfer of property act 1882.

References

[1] (1928) 30 BOMLR 1346

[2] 70 Ind Cas 968

[3] AIR 1973 AP 201

 Intangible Property
Introduction to Intangible Property

John Locke believed that a person has a natural right to hold his property,
especially the one which he got through his own labor[1]. “Property” brings the
concept of ownership in mind which is a relation that a person shares with an
object. Ownership is bunched with a lot of complex rights, duties as well as
obligations. This concept has been intervened in our life and we cannot imagine
our world without it. Our society has been deeply influenced by the concept of
ownership. Now this ownership is not only of tangible objects but it also revolves
around intangible objects. It holds no physical presence .It helps a person to hold
ownership on the basis of their creativity like brands, identity, copyright,
trademark or patent etc.

Let us consider an example a pharmaceutical company invents a medicine which

is very effective to cure cancer. Now he can use his right that no other scientist
may copy the medicine without the permission of original creator[2].This is right
is known as intellectual property right. Due to industrial revolution and rapid
development there is an increased demand or knowledge of intellectual property
rights regimes across countries. They deal with the artistic or scientific work which
can be protected by providing us with 20 years patent or 10 year trade mark, 60
year copyright etc.

Is Intangible Property Also Human Rights?

At the end of 19th century, the desirability of intellectual property right was not
considered important but today in contrast they have created their own value in
the market which comes with a lot of obligations .Thus various new acts and
bodies were formed such as “TRIPS”(trade related intellectual property ,1995) or
“WIPO”(world intellectual property organization ). Now with the growing
technology awareness, human rights have also grown. Widespread recognition
between human rights and IPR has gained a lot of importance.

After World War – II there has been a great upsurge for human rights treaties.
These have brought a new age “age of rights”[3] and “an era of
humanitarians”[4], through UN intervention which play a significant role through”
universal declaration of human rights”. This has given birth to international
covenant on civil and political rights and international covenant on economics,
social and cultural rights (article 17, UDHR). Thus both human rights and IPR
regimes have grown significantly and the intersection between them have
expanded.

An example can be of an Australian man, where a manufacturer copied aboriginal

designs of a carpet, without the permission of artist. The art work copied was very
sacred and something that could only be witnessed during a special occasion and
thus the court considered it as a violation of rights and thus asked the
manufacture to compensate the artist and the court also stated that copying a
design was something that could be compensated with money but copying a
sacred design that has also hurt the religious sentiments of the community and
thus should be viewed from frame work of human rights because it is something
very important for the survival of individual community.

How Does Intangible Property Affect the Economic Aspect?

Intellectual property such as patent has always been a topic of controversy. There
have been may doubts regarding it’s growth in country. But the only difference
that prevails is it’s immobility and that even does not affect its management for
development and this can be the reason it is called “the currency of knowledge
economy”. When we try to analyze innovations through economic point of view
it’s then we can justify the primary creation of IPR laws[5]. IPR deals with the
innovation, which allows people to explore more with the available resources,
thus making innovation an important component through which economy can
flourish.

During 1970, there was the creation of patent act which lead to the promotion of
industrial sector .The main aim behind this act was just not availability of rights to
the inventors but also for the speedy development of technology in the country
which could enhance the economic condition of the country. Before the TRIPS,
Indian market was not able to flourish much due to lack of availability of such
rights on various products like medicine. In India the major drug development
was basically started by central drug research institute. They were suppose to get
recognized by R&D but were not provided with the same because Indian markets
lacked in reserving engineers and invent new drugs but when the TRIPS came
into existence there came number of opportunities which enhanced the Indian
economy by providing new market opportunities to invent. A survey was
organized which proved Indian markets were flourishing by promoting IPR. In
order to analyze IPR system that how the economy has been effected by it’s
intervention,

Let us look at one of the company “Ranbaxy”. Ranbaxy is an Indian company that
started in 1961 in gurgaon, after IPR came into existence it has total sale of $1.03
billion[6] and it has become the largest market in U.S., Brazil, Russia as well as
China .Thus the harmonization of IPR laws has opened new windows for
innovation in developing countries like India.

How Is It Emerging in India?

It is a limitation as well as an exception in fair dealing to the authors who create

new things .This fair dealing helps to copy the available material but also leads to
the infringement of rights .That is why fair dealing has been kept out of this
intellectual property rights concept .Now this defense was made available
through the doctrine of equity which has allowed people to copy new creations
and one of the main reason to follow this copyright was just because of the
promotion of new work created by any inventor so that his work does not remain
stagnant. It was just because of this doctrine that people could differentiate
between moral intention of copying a work and dishonest intention of copying a
work. That is the reason that this doctrine was added in TRIPS and all the member
countries have to follow it.

The Indian and UK laws regarding copyright are considered to be limited and
very strict because they do not allow much interruption where as the laws in US
are very open as they do allow easy additions in any work. Although India has
developed a lot but it has still not been able to progress in the field of fair
dealings. India as said has always been very strict towards the rules and thus even
a single step of violation of law leads to infringement.

The best example of this is “Independent News Services Pvt. Ltd. v. Yashraj
Filmsprivate Limited and Supercassetes Ltd.[7] This whole case was about the
defendant, “INDIA TV” which has shown a documentary regarding the life of a
singer, his performance, his songs and clipping of his movies. As a result the
prosecutor filed a case of copyright infringement. However the defendant party
claimed that it was the fair use of their rights as they worked according to the fair
dealings. So the judges gave the judgment in the favor of plaintiff and defendant
was restrained from using any music or any song or any movie clips as it would
lead to infringement of law. This judgment signifies that there is a lot of need to
look upon this concept of fair dealing to improve our system and loosen it up a
little bit and understand the difference between good and wrong use of stuff to
avoid let our country develop.

Conclusion

Intellectual property rights have gained a lot of importance in the growing

technology due to increased awareness. People are becoming aware by its
benefits for the society as well as new ways of earning .This 21st century has
brought with itself new technologies as well as new challenges. Each coin has two
sides of story so with the increasing benefits of technology; the increase in
burden to match the technology has also started peeping. This modern way of
possessing any intangible property is a boon for new inventors to invent more by
learning more and thus earning more. This not only helps the artistic world to
grow but also give a great push to the imaginary world to prove its existence and
shine in this world.

Actionable claim means a debt or a claim on which action can be started in a

Court of law for comfort or relief. The actionable claim is defined under section 3
of the Transfer of Property Act, 1882.

Actionable claim
Introduction

Actionable claim means a debt or a claim on which action can be started in a

Court of law for comfort or relief. The civil Courts recognized as giving the
grounds for relief whether such claims are conditional, accruing and other. The
actionable claim is defined under section 3 of the Transfer of Property Act, 1882.
In general terms, an actionable claim is a debt or claim for which the person can
take an action and also approach the Court for recovery his debt or claim.

Tangible or touchable movables such as chairs or bikes and many have physical
existence and can be possessed. Some movable property is an actionable claim. It
is also a claim for unsecured debt and any beneficial interest in the moveable
property and the property is not in any kind of possession.

Like example- X is a person who needs a loan or money from Y. Then X takes loan
50,000/- from Y. And Y does not take any security. It means X takes loan 50,000/-
from Y without any security. So the debt or claim given by Y is an actionable
claim. And if the X failure on his part or not repay the money then Y can
approach the Court.
Definition

According to section 3 of the Transfer of Property Act, the actionable claim is a

claim to any debt which is not secured by a mortgage, pledge, and
hypothecation. The mortgage of immovable property does not come under
section 3 of Transfer of Property Actand also the pledge OR hypothecation of
moveable property is not an actionable claim. An actionable claim is transferable
under the Transfer of Property Act. The transfer of actionable claim is given under
chapter eight of the Transfer of Property Act. Chapter eight of the Transfer of
Property Actis the last chapter of the Transfer of Property Act and it covers
section 130 to 137.

Important Provisions dealing with Actionable Claim under Transfer of Property

Act

Under Section 130 of the Transfer of Property Act, the mode of transfer of
actionable claim is described. According to Section 130,

· The transfer can be done by only a written instrument;

· And signed by the transferor or his legal agent; and

· The transfer will be complete.

Exceptions of the Sec 130-Sec 130 does not apply on the transfer of marine and
insurance of fire policy.

In the case of Simon Thomas vs. State Bank of Travancore[1], in this case, there
should be an intention to transfer the debt represented by the written receipts.
Under Section 132 of the Transfer of Property Act, defines the liability of the
transferee of actionable claim. The liabilities and equities of the transferor are
transferred to the transferee.

Some examples of actionable claim, these following claims are the actionable
claim-:

1. Claim for arrear rent.

2. Claim for rent to fall due in future.
3. A choice offered to repurchase the property once again.
4. Book debts or claims
5. The right to claims maintenance.
6. Claim the benefit of the contract.
7. Deposit receipt.
The following claims are not the actionable claim-:
1. A claim which is decreed.
2. “Right to sue”, it is a right but it is not an actionable claim.
3. The claim for the main profits.

In the case of the Jugalkishore Saraf Vs Raw Cotton Co. Ltd[2]., the Supreme
Court held that a judgment debt or decree is not an actionable claim for action is
necessary.

In the leading case Lachmi Koeri Vs the State of Bihar[3], the Court has been
pointed out the transfer of arrears of rent is a type of a transfer of actionable
claim. And the transfer of arrears of rent could be transferred in accordance with
the provisions of the Transfer of Property Act.

In the case of Rekhath Koeri[4], where the Court said that the transfer of arrears
of rent is really a transfer of actionable claim and it could be transferred in
accordance with the rules and regulations of Transfer of Property Act.
Section 133 of the Transfer of Property Act described the warranty of solvency of
the debtor. In this section when a claim is transferred the transferee may run the
chance or risk of losing the debt, in this case, the debtor is insolvent. So as a
precautionary measure, the transferee should be assured that the debtor is
solvent.

Section 134 of the Transfer of Property Act is deals with the mortgaged debt. And
section 135 of the Transfer of Property Act deals with the assignment of rights
under the policy of insurance against fire. Section 136 deals with the incapacity of
officers connected with the Court of justice. The person who includes in section
136 are:-

· Legal practitioner;

· Judges of the Court; and

· The legal or officer who concerned with the justice of the Court.

And the last Section 137 describes the saving of negotiable instruments and etc.

In the case, State of Kerala and Ors. Vs. Mini Shamsudin and Ors[5]., the Court
said that actionable claims are ‘goods’ and movable property but it is not for the
purpose of the sales tax acts.

CONCLUSION

The term ‘Actionable Claim’ is that every type of debt in a movable property
which would be enforced by the Court. Under this meaning any kind claim of
money whether the amount was fixed or the amount was also uncertain, it’s an
actionable claim. Sometimes, these were made confusions and there also used to
be conflict decisions; and the law was not uniform or not clear. In the Transfer of
Property Act, the law should be amended to provide the rights and liabilities of
both the parties in transactions.

[1] Simon Thomas vs. State Bank of Travencore, (1976) KLT 554.
[2] Jugalkishore Saraf vs Raw Cotton Co. Ltd, AIR1955 Bom 77,(1954) 56 BOMLR
905, ILR 1954 Bom 1004.
[3] Lachmi koeri vs State of Bihar, AIR 1960, pat 62, 1960 crilj 271.
[4] Rekhath Koeri, AIR 1923 pat. 165.
[5] State of Kerala and ors. Vs. Mini Shamsudin and ors, (2009) insc 1 (2 jan 2009).

Vested and Contingent Interest

introduction to Vested and Contingent Interest
Transfer of Property Act deals with vested and contingent interest. Vested
Interest is created where there is a condition of the happening of a specified
certain event. While Contingent Interest is created on fulfilling a condition of
happening of a specified uncertain event.

Vested Interest
Section 19 of the Transfer of Property Act, 1882 talks about Vested Interest. It is
an interest which is created in favour of a person where there is a condition of the
happening of a specified certain event and time is not specified. The person
having the vested interest does not obtain the possession of that property but
expects to receive it upon happening of a specified certain event.

Example- A promises to transfer his property to B on him attaining the age of 21.
B will have vested interest in A’s property till the time he does not become 21
years old and gets the possession of it.

After death, the person (promise) who is having this interest will not have any
right over that property and the interest will vest in his legal heirs.

In the above example, if B dies at the age of 20, then the interest vested in B will
pass on to the legal successors of B and they will get the charge over the
property in the mentioned time period.
All the aforementioned important aspects of a vested interest are written in detail
below:

1. Interest should be vested: This basic postulate lays down that interest should
be created in favour of a person where time is not specified or a condition of the
happening of a specified certain event is provided. A person should proclaim to
transfer a particular property in order for this interest to be created.

2. Right to enjoy property is postponed: When interest is vested in a person, he

does not immediately get the possession of that property and hence cannot
enjoy that property.

But any person who is not a major and has a guardian is only entitled to the
vested interest after he attains majority.

Example- X agrees to transfer the property ‘O’ to Y and commands his guardian Z
to give him the property when he attains the age of 20. Y gets vested interest
once he attains the age of 18, the age of majority.

Other important point to remember:-

1. Contrary Intention: The transferor can specify a time slot as to vest the interest
in the person who will receive the property.

2. Death of the transferee: If the transferee dies before getting the property in his
possession, the interest vested in him will be vested in his legal heirs and they will
get the possession of that property after the condition is fulfilled.

3. Time of vesting: The interest is vested right after the moment when the transfer
is initiated.

In the case of Lachman v. Baldeo (1)[i], a person transferred a deed of gift in

favour of another person but directed him that he will get the possession of that
property only when the transferor himself dies. The transferee will have a vested
interest even though his right of enjoyment is postponed till the death event.
Characteristics
1) Vested interest creates a current right that comes in effect immediately,
although the enjoyment is postponed to the time prescribed in the transfer. It
does not entirely dependent on the condition as the condition involves a certain
event.

2) Vested interest is a Transferable and heritable right.

3) Death of transferee will not make the transfer invalid as the interest will pass
on to his legal heirs.

Section 20 of the Transfer of Property Act, 1882 talks about vested interest to an
unborn child. The interest in the property will be vested in him once he is born.
The unborn child might not get the right of enjoyment of the property
immediately after having vested interest.

Contingent Interest
Section 21 of the Transfer of Property Act, 1882 states about Contingent Interest.
It is an interest which is created in favour of a person on fulfilling a condition of
happening of a specified uncertain event. The person having the contingent
interest does not get the possession of the property but receives it upon
happening of that event but will not receive the property if the event does not
happen. Contingent interest is entirely dependent on the condition imposed on
the transfer.

Example- A agrees to transfer the car ‘X’ to B on the condition that he shall
secure 80 % in his exams. This condition is uncertain on the happening of the
event or not happening and therefore B here acquires a contingent interest in the
car ‘X’. He shall get the property only if he gets 80 % and when the condition is
fulfilled.

In the case of Leake v. Robinson (2)[ii], the court upheld that when a condition
involves an event that is to be given ‘at’ a particular age or ‘upon attaining’ a
particular age or ‘after’ attaining this particular age, then it can be derived that
the transfer involves a contingent interest.

Characteristics
1. This interest only happens when the condition is fulfilled.

2. Contingent interest is a transferable right, but the condition of heritability

depends upon the nature of such any transfer and the condition.

3. Death of the transferee before getting the possession of the property will result
in the failure of continent interest and the property will remain with the
transferor.

Some important aspects of contingent interest are explained in detail below:

1. Interest: In a transfer if a condition is such that the transfer will take effect only
upon the fulfillment of that condition and till that time, the interest is contingent.

2. Exception: When a person who has an expectancy in the rights of ownership of

a specific property, and he for the time being till the happening of the event, gets
any sort of income that arises from that property. This interest in the property
does not come under the aspect of contingent interest.

The following sections of Transfer of Property Act lay down the conditions for
contingent interest.

Section 22 talks about the transfer to a group or class of members with a

contingent interest. Example:- there is a transfer to a group of 4 people, and the
condition is that the property will be vested in persons who attain the age of 40
years on a particular date. The persons who have attained that age will get an
interest in the property and people who have not attained, will not get an interest
in that property.
Section 23 talks about a transfer which happens after happening of an event that
was mentioned in the transfer which involves contingent interest. This section
writes about what happens after the happening of the specified uncertain event.

Section 24 states about a transfer to a group or class of members who will get
the property on a condition that they shall be living at the specified date. This is
also a contingent interest as an uncertain event. The transfer will only take place
for those people who satisfy the condition of surviving at a particular date. The
legal heirs of the deceased cannot claim an interest in that property as a transfer
involving a contingent interest solely depends upon the fulfillment of the
condition.(3)[iii]

Conclusion for Vested and Contingent Interest

The Transfer of Property Act, 1882 deals with vested interest and contingent
interest.

The concepts of vested interest and contingent interest are very important to
understand as there are many sections relating to these concepts.

The transfer of property involving Contingent interest takes effect only after the
condition is fulfilled, if the condition is not fulfilled then the transfer will not take
effect. The conditions are required to be fulfilled and they have to mandatorily
synchronize with the preamble rules that talk about justice, equity and good
conscience, the three major principles of the natural law on which this whole act
is based upon.

[i] (1919) 21 OC 312.

[ii] (1817) 2 Mer 363
[iii] The Transfer of Property Act, 1882 by Mulla.

RULE AGAINST PERPETUITY

 TRANSFER IN PERPETUITY

When a property is being transferred in such a way that it becomes inalienable in

future for an indefinite period of time, this is called transfer in perpetuity. Transfer
in perpetuity may arise in two ways:-

 By taking away from the transferee his power to transfer;

 By creating future improbable interest.
However , section 10 of Transfer of property Act states that a condition restricting
transferee’s power to transfer is void.

RULE AGAINST PERPETUITY

The concept of rule against perpetuity is that according to this rule transfer cannot
be made inalienable for an indefinite period or forever. This rule has been
incorporated in Section 14 of the Act.

THE PERIOD OF THE RULE

1. Lives in being- According to the rule, interest must be conferred within 21 years
of the person’s death.

2. Plus twenty-one years- This is the period in gross.

3. Periods of Gestation- The period of gestation may extend at the beginning and
end of “lives in being” and at the end of 21 year.

OBJECT OF RULE AGAINST PERPETUITY

The purpose of this rule is to enable free circulation of the property for :-

To prevent the property from being tied up forever; Betterment in trade and
commerce; Betterment of the property. Protecting the interest of owner of the
property otherwise he will not be able to dispose of the property even in case of
emergency.

PRINCIPLE BEHIND THE RULE

The basic principle upon which this rule is made is public policy. In absence of this
rule against perpetuity, all the properties in the world would have been static and
of no use to he economy as a whole.

CONDITIONS NECESSARY:-

1. There is an alienation of property.

2. The transfer being made is for the benefit of an unborn child giving him absolute
interest.

3. The transfer of interest to beneficiary is herald by life or limited interest of living

persons.

4. The unborn person in favor of whom the transfer is done must be born before
the death of last preceding living person.

5. Conferring of interest to beneficiary may be postponed only to the life of living

person plus minority of the beneficiary; not beyond that.

EXCEPTIONS TO THE RULE AGAINST PERPETUITY

1. Transfer for the benefit of public-where the property has been transferred for
the benefit of the public in the advancement of religion, knowledge, commerce,
health, safety, etc.

2. On personal agreement- personal agreement which do not create any interest

in property are exempted from the rule against perpetuity as this rule is applicable
only on transfer of property and not on personal agreement or contract.

RELEVANT CASES

Ø Supreme Court observed and held:-

A contract is enforceable by and against the transferees of the original party. The
rule against perpetuity only applies to contract that create rights of property. The
parties of the contract’s rights are assignable. This rule deals only with the aspects
of the law of property and it aims to restrict any creation of future unconditional
interests in property. The Supreme Court therefore, held that the rule cannot be
applied to an agreement of pre-emption though no time limit if there within which
it has to be exercised.[1]

Ø Bombay High Court in this case declared that when the gift was made
of movable property in favor of son with gift of shares in the property to son’s sons
son when the attained the age of 21 ,is void.[2]

CONCLUSION

The rule against perpetuity restricts the period of certain limitations on the use and
transfer of property. This rule provides that bestowing cannot postpone beyond
the lifetime of any person living at the date of transfer. This rule has certain
exceptions and is not absolute. Therefore the basis of the rule is that the liberty of
alienation should not be exercised to its own destruction.

[1] Ram Baran Prasad v Ram Mohit Hazra (1967) SCR 2931
[2] Anand Rao Vinayak Vs Administrator general of Bombay (1896)

Position and Legal Status of Minor

WHO IS A MINOR?
A minor is a person who has no legal rights at a particular age. This means a minor
is a person who does not have some legal rights at a particular age. Minors do not
have a full legal capacity as much as adults have. Generally, minors are not granted
the legal rights of adults until the minors reached the majority age. Generally in
India, the majority age considers of any person at the age of 18 because, before
the age of 18 years, the minors or child are still developing by their nature, health,
knowledge, etc. When minors developed physically and mentally and cross the age
of 18, then they are considered as a mature person. They are considering as adults,
they are capable of handling the same legal rights and duties as mature adults.

Like they can give a vote or they have the right to give a vote, they have the right
to sue and own property and also they are capable of contract. But maturity is not
always depending on age. In Some cases, the minor has enough maturity and
understanding of nature and the majors haven’t. Every child is different in their
way. The child or minor also required some basic needs. Every child is entitled to
the same treatment, no discrimination on the grounds of sex, race, caste disability
and religion. There is a different-different provision in the legal status of the
minors.

POSITION AND LEGAL STATUS OF MINOR:

ACCORDING TO INDIAN CONTRACT ACT, 1872
According to section 3 of the Indian Contract Act, the person who is a citizen of
India and whose age is under the age of 18 years then that person is considered
as the minor. According to this section, the minor agreement is void. A minor is
not a competent person to enter into a contract. Section 2 of the Indian Contract
Act says that the parties must be competent to come in the contract or to make an
agreement; they must not be unsound mind, not disqualified by law and minor.
Section 3 of the Indian Majority Act 1875, explained the term “minor[1]“. The minor
is a person who is not completed his 18 years of age.

In the case of Mohri bibi v. Damodardas Ghosh[2], held that any agreement made
by a minor is completely void. That agreement is void ab initio and the court cannot
allow a specific performance of a contract with the minors because it is completely
void.

POSITION AND LEGAL STATUS OF MINOR:

ACCORDING TO TRANSFER OF PROPERTY ACT, 1882
A minor is a person who is not competent to contract in Transfer of Property Act
but the Transfer of Property Act; a minor can accept the gift of an Immovable
property and also without the intervention of his guardians. According to the
Transfer of Property Act, the property can be transferable to the unborn child as
per Section 13; the Transfer of Property Act 1882 defines the unborn child or a
child who is in mother womb. The property can be transferred to the unborn child,
for this transfer a life interest or a life holder is created. A person who is a life
interest he can enjoy the property behalf the unborn child but he cannot transfer
the property. A minor can acquire the immovable property out of his funds.

POSITION AND LEGAL STATUS

OF MINOR: ACCORDING TO INDIAN SUCCESSION ACT,
1925
Section 144 of the Indian succession act, 1925 provides for the creation of prior
interest before the unborn person may be made the owner of the property. The
person can create an interest in the name of the unborn child in a property. But
that created interest of the property can only be vested after the unborn child is
born alive.

POSITION AND LEGAL STATUS

OF MINOR: ACCORDING TO INDIAN PENAL CODE
According to section 82 of the Indian Penal Code, a child below the age of 7 years
old get a complete defence from any kind of criminal liability. A child below the
age of 7 years old the child cannot be guilty of any offence. Because this age of a
child cannot distinction between what is good or wrong. It works under the
assumption that a child below the age of 7 years lacks the ability of understanding
and unable to understand the nature and consequences of the act that he or she
has done and the mens rea is not present in this case.

According to section 83 of the Indian Penal Code, there is a partial defence from
the criminal liability conferred on child above the age of 7 years and below the age
of 12 years. Age between the 7 years and 12 years is capable to understand the
nature and consequences of the offence that he or she is done.
MATURITY OF UNDERSTANDING
The child is whose age is between the 7 years and below the 12 years; the liability
depends upon the maturity level of the child.

Example: A is a child whose age is 10 years and he is unable to understand the

nature and consequences of the things or his act. His act can be absolved from the
liability. But B is another child whose age is 9 years and he has enough maturity
and he can understand the nature and consequences of the act he does, can be
held liable. The maturity and understanding of the child can be inferred from the
circumstances that involve in the crime. And it is different in different cases.

In The Indian penal code, the child is 7 years and below the age of 12 years, it has
to prove that the child has not attained enough maturity or understanding of the
nature and consequences of the offence he does.

In the case of Krishna Bhagwan v. State of Bihar[3]held that if the accused of the
offence or act during the trial, he has attained the age of 7 years or at the time of
decision that child attained the age of 7 years can be convicted if he can
understand the nature and consequences of the offence.

In the case of Marsh v. Loader[4] held the A child was caught stealing a piece of
wood from the premises of the defendant. But the child was not liable, he was
discharged on the ground that he was under the below age of 7 years.

CONCLUSION
In India, generally, the minor’s age is below the 18 years, because below the 18
years the person unable to understand the nature and consequences of the act.
The person is not enough mature. The minors are not enough mature, so he cannot
participate in the legal rights like the right to vote is not for the minors. But maturity
is not always depending on age.

In Some cases, the minor has enough maturity and understanding of nature and
the majors haven’t. Although every child grows and matures at different rates,
there are some rights that every child is born with it. Right to life, article 21 of the
Indian constitution is also a right of minors and for instance, children are also
entitled to a safe environment, good nutrition, healthcare, education. Every child is
entitled to the same treatment, no discrimination on the grounds of sex, race, caste
disability and religion.

[1] The minor is a person who is not completed his 18 years age.

[2] Mohri bibi vs. Damodardas ghosh 1903, (1903) 30 cal. 539.

[3] Krishna Bhagwan v. State of Bihar, AIR 1989 PAT 217.

[4] Marsh v. Loader, (1863) 14 CBNS 535,

Doctrine of Lis Pendens and

Section 52 of Transfer of Property
Act
“Lis Pendens,” when translated, means “pending suit or cause.” In this context, “Lis”
signifies an action or lawsuit, while “Pendens” indicates that the matter is still
awaiting resolution.

This concept finds its roots in the Latin proverb “Ut pendent nihil innovetur,” which
emphasizes that nothing should undergo changes or alterations while a legal case
is ongoing.

Section 52 of the Transfer of Property Act deals with doctrine of lis pendens.

Contents hide

1. What is Doctrine of Lis Pendens?

2. Section 52 of Transfer of Property Act

3. The Purpose of the Doctrine of Lis Pendens

4. Essential Conditions for Doctrine of Lis Pendens under Section 52 of Transfer of Property
Act, 1882
5. Exceptions to Doctrine of Lis Pendens under Section 52 of Transfer of Property Act

6. Effect of Doctrine of Lis Pendens

7. Cases on Doctrine of Lis Pendens

8. Conclusion

What is Doctrine of Lis Pendens?

The Doctrine of Lis Pendens, derived from Latin, translates to “pending litigation.”
It is a legal principle that pertains to immovable property and is dealt with in
Section 52 of the Transfer of Property Act, 1882, in India. This doctrine serves to
protect the rights and interests of parties involved in a pending lawsuit concerning
a specific property.

The doctrine of lis pendens can be defined as the legal authority, control, or
jurisdiction that a court holds over the property in question during the entire
duration of a lawsuit, extending until a final judgment is reached. It encompasses
the set of laws, norms, and principles that govern and restrict the application of
the common law maxim, which stipulates that no modifications regarding the
subject of a lawsuit can be made while it remains unresolved.

The underlying rationale behind doctrine of lis pendens is to prevent the subject
matter of a lawsuit from being transferred to a third party while the case is still
pending. In situations involving immovable property, any transfer of ownership
must comply with the court’s decision, and the transferee is bound by the court’s
judgment.

Section 52 of Transfer of Property Act

One of the most fundamental rights of a property owner is the freedom to transfer
or dispose of their property as they see fit. However, certain circumstances, such
as when a legal dispute or action involving the property is ongoing, may restrict or
prohibit the owner from selling or otherwise disposing of the property for a
specified period.

The legal framework governing such situations is encapsulated in Section 52 of the

Transfer of Property Act of 1882.
Section 52 of Transfer of Property Act, 1882 reads as:

“52. Transfer of property pending suit relating thereto.—During the 1[pendency] in

any Court having authority 2[3[within the limits of India excluding the State of
Jammu and Kashmir] or established beyond such limits] by 4[the Central
Government 5***] of 6[any] suit or proceeding 7[which is not collusive and] in. which
any right to immoveable property is directly and specifically in question, the property
cannot be transferred or otherwise dealt with by any party to the suit or proceeding
so as to affect the rights of any other party thereto under any decree or order which
may be made therein, except under the authority of the Court and on such terms as
it may impose.”

Section 52 of Transfer of Property Act of 1882 delineates conditions under which

property transfers are permissible. These conditions may include instances where
the court grants explicit permission or when the lawsuit itself has an element of
collusion. Exceptions to the doctrine encompass lawsuits primarily seeking
monetary compensation for debts or damages, as well as those aimed at the
recovery of personal property.

The Transfer of Property Act, 1882 is a crucial piece of legislation in India that
governs the transfer of immovable property. It provides a comprehensive set of
rules and regulations for various aspects related to the transfer of property, such
as sale, lease, mortgage, exchange, and gift. The Act also deals with the rights and
obligations of parties involved in property transactions.

Over time, courts have established specific scenarios in which doctrine of lis
pendens does not apply, such as when only the transferor is affected, when the
litigation is of a collusive or amicable nature, or when a transfer is executed by an
individual who is not a party to the lawsuit, among others. Furthermore, it has been
clarified by the courts that the doctrine is applicable in cases involving disputes
over immovable property rights, including partition proceedings, mortgage cases,
easements, and similar matters.

The Purpose of the Doctrine of Lis Pendens

The doctrine of lis pendens is essential as it prevents Transfer of the title of any
disputed property without the Court’s consent, there can be endless litigation, and
it will become impossible to bring a lawsuit to a successful termination if
alienations are permitted to prevail, and covenants are not imposed.

The ‘Transferee pendente lite’ is bound by the verdict just as if he were a party to
the suit and the transfer shall be subservient to the result of the pending lawsuit.

Essential Conditions for Doctrine of Lis Pendens under

Section 52 of Transfer of Property Act, 1882
Section 52 serves the purpose of preventing the parties involved in a lawsuit from
being deprived of their interests by the opposing party while the case is still
unresolved, and it is rooted in principles of equity and fairness. However, it’s
important to note that merely mentioning an immovable property in the lawsuit is
insufficient to trigger the application of this section. What activates Section 52 is
the explicit and immediate involvement of property rights in the dispute. As a
result, the transfer of an immovable property is restricted only when the rights
related to the property are directly and substantially contested during the ongoing
lawsuit.

Furthermore, for the doctrine of Lis Pendens to apply, the lawsuit must be pursued
in good faith, devoid of collusion or malicious intent. If the lawsuit is found to be
tainted by collusion or ill-intent, the doctrine will not be applicable. Additionally,
the lawsuit must be filed in a court with the requisite jurisdiction, whether it
pertains to pecuniary or territorial jurisdiction. If the lawsuit is initiated in a court
lacking the necessary jurisdiction, the principles of Lis Pendens would not come
into play.

The application of the doctrine of Lis Pendens is not automatic when a lawsuit
involving immovable property is initiated. Certain specific requirements must be
met for this doctrine to take effect. These conditions were elucidated by the
Hon’ble Justice A.N. Sen in the case of Dev Raj Dogra v. Gyan Chand Jain, and
they consist of the following key elements:

A lawsuit or legal proceeding concerning a right to immovable property must be

actively pending.

The lawsuit or proceeding should not be the result of collusion between the
involved parties.
 During the pendency of such a suit or proceeding, no party to the case can transfer
or deal with the property in question in a way that would affect the rights of any
other party involved, except with the authorization of the court. In essence, any
transfer or action related to the property during the lawsuit’s pendency requires
court approval if it has the potential to impact the rights established by any decree
or order that may be issued as part of the lawsuit.

From these guidelines and the language of the section 52 itself, it can be inferred
that the necessary conditions for the application of the doctrine of lis pendens are
as follows:

 There must be a pending suit or proceeding.

 The suit or proceeding must be within the jurisdiction of a competent court.
 The suit must directly and explicitly involve a right to immovable property.
 The suit or proceeding must not be collusive.
 Any transfer or action related to the property in dispute must involve a party to
the suit.
 Such a transfer or action must impact the rights of the other party involved in the
litigation.
In the case of Balwant Singh v. Buta Ram, the court held that when a situation
meets all of the aforementioned requirements, the doctrine comes into effect.
During a legitimate lawsuit in a court with appropriate jurisdiction, where
ownership of immovable property is directly and substantially contested, the
property cannot be transferred without the court’s permission. If such a transfer
occurs, the buyer of the immovable property will be bound by the court’s ruling.

In summary, the rule of Lis Pendens under Section 52 of Transfer of Property Act
applies to property transfers that pertain to a pending suit or proceeding. This
includes transfers made after the initiation of the suit or proceeding and before its
resolution by a party to the case as well as to third parties. If these essential
conditions are not met, the rule of Lis Pendens does not apply.

Exceptions to Doctrine of Lis Pendens under Section 52

of Transfer of Property Act
While the specified conditions must generally be met for the doctrine of Lis
Pendens to be applicable, there are exceptions, one of which is when a transfer is
made with the court’s consent. Section 52 of Transfer of Property Act, 1882,
explicitly states, “except under the authority of the Court and on such terms as it
may impose.”

Consequently, in a lawsuit directly and explicitly involving issues related to the

rights of immovable property, the court has the discretion to permit any party to
dispose of the property while the case is ongoing, subject to any conditions
imposed by the court. This aspect sets apart the Lis Pendens principle.

In certain situations, the court meticulously examines the facts and circumstances
of each case to ensure that the rights of any parties involved are not jeopardized
by such an authorized transfer. For instance, in the case of Vinod Seth v. Devinder
Bajaj, the court, after a thorough examination of the case’s facts and
circumstances, determined that it was appropriate to exempt the case from the Lis
Pendens doctrine, provided that security was provided. In this specific instance,
upon providing a security deposit of Rs. 3,000,000, the court allowed the
defendants to sell the property even while the case was still pending.

Effect of Doctrine of Lis Pendens

A transfer or action taken by a party to a lawsuit during the pendency of the suit
or proceeding is not automatically void. Instead, it is only considered voidable if it
has the potential to impact the rights of any other party to the suit under any
decree or order that may be issued as part of the lawsuit. Section 52 of Transfer of
Property Act creates a right that can be enforced to set aside a transfer made
during the pendency of the suit, as these transfers are not inherently void but
rather voidable. Importantly, this voidability depends on the choice of the party
affected by the ongoing proceeding, during which the transfer occurred.

In essence, the rule of lis pendens does not aim to invalidate or automatically void
the transfer but rather places it under the purview of the litigation’s outcome.
According to this rule, anyone who acquires a property during the pendency of a
lawsuit is bound by the judgment that may be rendered against the person from
whom they acquired the title, even if such a purchaser was not a party to the lawsuit
or had no prior notice of the ongoing litigation.

Cases on Doctrine of Lis Pendens

In the case of Faiyaz Hussain v. Munshi Prag Narrain, the Privy Council followed
the theory established in the case of Bellamy v. Sabine. They emphasized the
importance of reaching a final adjudication in legal matters and observed that
failing to do so would result in endless litigation.

In the case of Iqbal Singh v. Mahendar Singh, the High Court of Delhi held that
once arbitration proceedings commence, the suit property becomes sub-judice,
and any transfer made during the pendency of arbitration proceedings would be
subject to Section 52 of Transfer of Property Act.

The High Court of Punjab and Haryana, in the case of Swaran Singh v. Arjun
Singh and Ors., stated that the doctrine of lis pendens will apply to arbitral
proceedings if the award holds the status of a decree enforceable in a court of law.

The impact of a judgment on parties involved in property transfers during a

pending suit was addressed in the case of Simla Banking Industrial Co. Ltd. v.
Firm Luddar Mal, Tek Chand. It was explained that the lis pendens rule binds the
person who acquires property during the pendency of a suit to the judgment that
might be rendered against the individual from whom they derived their title, even
if such a buyer was not directly involved in the lawsuit or had no prior notice of the
pending litigation. The primary aim of this doctrine is to provide the court with
broad oversight over property transfers in ongoing lawsuits.

The meaning of lis pendens was further clarified in the case of Kn.
Aswathnarayana Setty v. State of Karnataka & Ors., where it was noted that this
principle is grounded in justice, equity, and good conscience. It is based on a fair
and equitable foundation, as allowing property transfers to prevail during litigation
would make it impossible to bring a legal action to a successful conclusion. Parties
involved in litigation are not expected to take notice of titles acquired during the
pendency of the lawsuit.

The Supreme Court, in the case of Hardev Singh v. Gurmail Singh, clarified that
Section 52 does not declare a transfer made by a party to a pending suit as void
or illegal but rather makes that party bound by the judgment that may be issued.

The High Court of Madhya Pradesh, in the case of Gouri Datt Maharaj v. Sheikh
Sukur Mohammed & Ors., highlighted the underlying principle of Section 52 of
Transfer of Property Act. This section is intended to maintain the status quo,
ensuring that it remains unaffected by the actions of any party involved in the
pending litigation.

Conclusion
The Doctrine of Lis Pendens is a legal safeguard to prevent parties from disposing
of property in a manner that might undermine the outcome of a pending lawsuit.

It is designed to maintain the status quo of the property until the legal dispute is
resolved, thereby ensuring fairness and protecting the rights of all parties involved
in the litigation.

Doctrine of Election
Introduction to Doctrine of Election
Election means choosing between two alternative rights. If two rights are endowed
on a person under any instrument in such a manner that one right is more
preferable than the other, he is bound to elect or choose only one of them. Section
35 of the Transfer of Property Act, 1882 deals with Doctrine of election. It
subsumes the Doctrine of election alongwith Sections 180-190 of the Indian
Succession Act 1925.

Theme behind Section 35-

Allegans contraria non est audiendus : he is not to be heard who alleges things
contradictory to each other.

Section 35 of Transfer of Property Act, 1882 reads:

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 such transfer or to dissent from
it; and in the latter case he shall relinquish benefit so conferred, and the benefit so
relinquished shall revert to the transferor or his representative as if it had not been
disposed of, subject nevertheless, where the transfer is gratuitous, and the
transferor has, before the election, died or otherwise become incapable of making
a fresh transfer, and in all cases where the transfer is for consideration, to the
charge of making good to the disappointed transferee the amount or value of the
property attempted to be transferred to him. The rule in the first paragraph of this
section applies whether the transferor does or does not believe that which he
professes to transfer to be his own. A person taking no benefit directly under a
transaction, but deriving a benefit under it indirectly, need not elect. A person who
in his own capacity takes a benefit under the transaction may in another dissent
there from. [i]

Understanding the Doctrine of Election

This doctrine is universal in nature and is applicable to Hindus, Muslims, Christians.
This doctrine consists of the principle of a person exercising a choice out of his
own free will to do one thing and is founded on the equitable doctrine that he who
accepts the benefit under an instrument or transaction of its choice must adopt
the whole of it or renounce everything. [ii]

This principle was determined in the case of Codrington v Codrington (1857) 7 HL

854, 861.

Essential Conditions for application of the Doctrine of

Election
From the case of Dhanpati v. Devi Prasad and others (1970) (3) SCC 776 (778), it
was determined that before election following conditions must be fulfilled-

1. A person having no right to transfer, transferring property

2. He must transfer some benefit on the owner of the property, as part of the same
transaction

3. The owner must elect either to confirm the transfer or to dissent from it.[iii]

Effect of election against the transfer-

Where the owner dissents from the transfer of his property –

1. He must forgo the benefit

2. The benefit contemplated for him would then go back to the transferor.

Exceptions to Doctrine of Election

Where a particular benefit is expressed to be conferred on the owner of the
property which the transferor possesses to transfer, and such benefit is in lieu of
that property, if such owner claims the property, he is not bound to relinquish any
other benefit that he achieves through the same transaction.

The acceptance of the benefit by the original owner will be considered to be an

election by him to confirm the transfer, if he is aware of his duties and
responsibilities and of the circumstances that might influence a prudent
(reasonable) man into making an election.

This knowledge of the circumstances can be assumed if the person who gets the
benefit enjoys it for a period of more than two years without doing any act to
express dissent.

The transferor would ask him to elect his choice, if the original owner does not
elect his option within a year of the transfer of property. Even after the reasonable
time, if he still does not elect, the original owner shall be presumed to have elected
the validation of the property transfer as his choice.[iv]

In context of a minor, the period of election shall be adjourned till the individual
attains majority unless he is represented by a guardian.

Modes of Election
The election by the owner can either be direct or indirect.

In direct election, one just needs to simply communicate about the elected choice
or option. Though, in case of an indirect election, the acceptance of the benefit by
the owner is subject to two conditions:

1. He has to have the knowledge of his responsibility to elect.

2. There must be proof of knowledge of circumstances which would influence the

judgment of a prudent man to make an election. [v]
The election shall be presumed when the donee acts in such a manner with the
property gifted to him that it becomes impossible to return it to the original owner
in its original state.

Difference between English Law and the Indian Law Perspective-

The English law depends upon the principle of compensation which states that if
the original owner does not validate the transfer, he will be able to retain the
property and also the benefit accrued, subject to compensation provided to the
donee, to the extent to which he had suffered a loss.

But in the Indian law, this doctrine is affected by the principle of forfeiture which
says that if the real owner does not confirm the transfer, the donee incurs a
forfeiture of the granted benefit which goes back to the transferor.[vi]

Compensation
The estimated cost of the property which is to be transferred to the transferee is
the approximate value of the compensation that he will receive. But in case of
immovable properties, the issue of changing value of the properties according to
the lapse of time arises. Thus, this valuation needs to take place at the time of the
instrument coming into force rather than at the time of election [vii].

Conclusion
Section 35 of the Transfer of Property Ac, 1882 explains the concept of the Doctrine
of Election. This article deals with the various gradations involved in the doctrine
through the usage of various landmark judgments. A special emphasis has been
conferred upon the conditions necessary for the election by the original owner.
The differences between the Indian Law perspective as well as the English Law
perspective are mentioned here to critically analyze the provisions i.e. Principle of
forfeiture and Principle of compensation. The foundation of the doctrine of
election is that the person taking a benefit under an instrument must also bear the
burden. In simple words, a person cannot take under and against one and the same
instrument.

[i] Section 35, The Transfer of Property Act, 1882

[ii] Darashaw J. Vakil, The Transfer of Property Act ( 2nd Edn. Wadhwa Nagpur 2004)
334.
[iii] Shukla S.N, Transfer of Property Act, 29th Edition 2015.
[iv] Salil Paul, Mulla the Transfer of Property Act ( 9th Edn. Butterworths 2005)
[v] B.B Mitra, Transfer of Property Act (18th edn, Kamal Law House 2007) 206.
[vi] G.C.V SubbaRao, Law of Transfer of Property (4th edn, Universal Law Publishing
2010) 740.
[vii] Re Hancock. Hancock v. Pawson (1905) 1 Ch. 16

Fraudulent Transfer of Property

section 53 of the Transfer of the Property Act, 1882 deals with the requirement of
the fraudulent transfer of the Property. A transfer is a fraudulent transfer of
Property if it is made to defeat or delay the creditors of the transferor or without
consideration with intent to defraud a subsequent transferee.

Section 53 of the Transfer of Property Act can be defined as:

(1) Every transfer of immoveable property made with intent to defeat or delay the
creditors of the transferor shall be voidable at the option of any creditor so defeated
or delayed. Nothing in this sub-section shall impair the rights of a transferee in good
faith and for consideration.

Nothing in this sub-section shall affect any law for the time being in force relating to
insolvency. A suit instituted by a creditor (which term includes a decree-holder
whether he has or has not applied for execution of his decree) to avoid a transfer on
the ground that it has been made with intent to defeat or delay the creditors of the
transferor shall be instituted on behalf of, or for the benefit of, all the creditors.

(2) Every transfer of immoveable property made without consideration with intent to
defraud a subsequent transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, no transfer made without consideration shall be
deemed to have been made with intent to defraud by reason only that a subsequent
transfer for consideration was made.
Section 53 of the Transfer of the Property Act
and Fraudulent Transfer of Property
1. Object- in Thakurji vs. Narsinghji (1928), the Patna High Court observed that
the primary object of sub-section (1) of Section 53 of the Act is to make assets of
the Transferor available to the general body of the creditors.

2. Scope- The application of the section will be in force even if the transfer doesn’t
“defeat” but only “delays” the creditors. In the case of C. Abdul Shukoor Saheb vs.
Arji Papa Rao (1963), the fact that the entire debtor’s property was not sold
cannot by itself negative the applicability of the section unless there is cogent proof
that there is another property left, sufficient in value and of easy availability to
render the alienation in question immaterial for the creditors.

3. Requirement-The requirement of the section is to avoid the possibility of the

retention of all the benefits by the debtor. In case of Chogmal Bhandari vs. Dy.
CTO (1976), it was held that, if a person proves challenges the validity of a
transaction under Section 53 of the Act, he has to prove that the document in
question was executed with a clear intention to defraud or delay the creditors.

4. Wide Extent- In the case of Sushila vs. Anandilal (1983), the court stated that,
even though the section may not apply in terms, its principle would apply in cases
of fraudulent transfers.

5. Applicability-In the case of Mahendra vs. Suraj Prasad (1957), the court held
that the provisions of Section 53 of the Act come into operation only where the
document is fraudulent in the sense that, though the transfer is real, the object was
to defraud the creditors of the transferor. In the case of V.S. Murthy vs. Laksho
Narayana (1960), the court held that if a father transfers the property to his son
for a sum of Rs. 5000, while the debt due from the father to the son did not amount
to even Rs. 4000, there is evidence of an intent to defraud creditors generally and
the transfer will be hit by the section.

In case of Gharbhoya vs. Deodatta (1937), the court held that Section 53 doesn’t
apply where the debtor doesn’t retain any benefit for himself and if it is found that
the transfer was for adequate consideration which was entirely expanded in
satisfaction of genuine debts of the debtor. In the case of Jamnabai vs.
 Dattatraya (1936), the Bombay High Court held that Section 53 would not apply
when to the purchase of the property in the name of another as a bender. In the
case of Union of India vs. Rajeswari (1986), the court held that, the section would
be exempted to the transferor genuinely satisfied the debts by payment of sale
proceeds.

6. Voidable Transfers- Chief Justice Wallis in the case of Rama Swami Chettiar
vs. Mallappa Reddiar, held that, “It is open to the judgement-debtor, property
which has been fraudulently transferred to the claimant with intent to defeat or
delay creditors. If he knows of the transfer when he applies for attachment, the
application is sufficient evidence of his intention to avoid it; if he hears of the
transfer when a claim petition is preferred under Order 21, Rule 58, and still
maintains his right to attach, that again is a sufficient exercise of this option to
avoid.

7. Transfer meaning- In the case of Natha vs. Dhunbaji, it was stated that the
word ‘transfer’ mentioned in the Section includes a settlement by which the settlor
conveys all his interest in the property to trustees or a surrender by a Hindu widow
of her life interest in favour of the reversionary.

8. “Intent” explained- In the case of Bhagwant vs. Kedari Sahu, the court
observed that the term ‘intent’ referred to in the section implies “aim” and
connotes the one object for which the transfer is made. It references the dominant
motive without which it would not have been made.

9. Defeat or Delay- In the case of Mohammad Ali vs. Bisneillah (1930), a person
carrying in business which was certain extent hazardous and with the opportunity
of utilizing the property of another for his own purpose, executed a gift deed in
favour of his wife. It was held that the effect of the deed would delay or defeat any
future acclaims and thus was bad in nature.

10. Factors constituting Fraudulent transfer- In the case of Muniayammal vs.

Thyagaraja (1958), the court laid down the following factors relating to fraudulent
transfer such as:

 Continuance of the transferor in possession of the property he has purported to

transfer when such continuance in possession is not in accordance with the tenor
and object of the transfer
 Insolvency or indebtedness of the transferor
 Lack of consideration for the transfer
 Reservation of benefit to the transferor
 Relationship between the transferor and the transferee
 Pendency or threat of litigation, secrecy or concealment
 Transfer of the debtor’s entire estate, or substantially the whole of the estate
 The fact that the transfer is made after execution has been issued or a writ has
been issued against the transferor

Doctrine of Subrogation: Meaning,

Case laws and Provisions
Subrogation can be defined as a legal doctrine in which one person takes away the
rights of a creditor against his debtor. In India, the right of Subrogation has been
discussed under section 140 and 141 of the Indian Contract Act, 1872.

Definition of Doctrine of Subrogation

Subrogation can be defined as a legal doctrine in which one person takes away the
rights of a creditor against his or her debtor. The right of subrogation usually arises
in 2 conditions that is, either it will arise automatically because of matter of fact or
it will arise due to the law of contract. Most often the doctrine of subrogation arises
in contract which is related to insurance. Subrogation as a matter of law is a wider
part of law and is usually denoted as the unjust enrichment.[1]

Importance
Doctrine of subrogation is most commonly seen in the contracts of insurances and
sureties. So in each case, the main essence is that, when a particular person makes
a payment on an obligation then according to the law it is the prime responsibility
of the other party, the person who is making the payment is subrogated to the
claims of that particular person to whom they made the payment with respect to
claims or remedies which are exercisable against the primarily responsible party.[2]
The term subrogation has been derived from the Latin word sub (under) and
rogare (to ask).
In the case of, Morgan v Seymore, it was held that a surety who has performed the
obligations of the principal which are the subject of his guarantee is entitled to
stand in the shoes of the creditor and to enjoy all the rights that the creditor had
against the principal. Hence, this is an equitable right. It is in fact a right that arises
out of the relationship between of surety and creditor itself.

The doctrine of subrogation confers upon the insurer the right to benefit of such
rights against the third parties which is regard to the loss and which has been
indemnified. Thus, the insurer is entitled to exercise any rights so as to recover the
compensation for the loss, but one thing has to be remembered that, it must be
done in the name if the assured. So, under the Law of Contracts, the right of
subrogation arises when a contract puts an obligation on the person who breaches
the contract to compensate to the other person who has been aggrieved by the
breach of contract.

In India, the right of Subrogation has been discussed under section 140 and 141 of
the Indian Contract Act, 1872. In the case of, State Bank of India v Fravina Dyes[3],
High court of Bombay held that, the guarantor by invoking the doctrine of
subrogation can apply for a temporary injunction against the debtor if he
apprehends that the debtor threatens or is about to remove or dispose of
his property with intent to defraud the creditor.

Whereas, Section 141 of The Indian Contract, 1872 talks about the surety’s right to
benefit out of creditor’s security. In the case of State of M.P v Kaluram[4], Supreme
Court held that, the term ‘security’ in Section 141 of the Indian Contracts, 1872 is
not used in any technical sense, in fact it includes all the rights which the creditor
had against the property of the principal at the date of contract.

Conclusion
In all, while considering the applicability of the equitable principles of subrogation,
it is critical to look carefully at the manner in which the insured party is reimbursed
for the loss suffered. The existence or otherwise of rights of subrogation may
significantly affect the profile of a given exposure, particularly in relation to large
and complex risks involving multiple insured. The party taking control of
proceedings after a loss has occurred has to take care in respect of any settlement
and to ensure that it complies with its duty of good faith. The settlement will need
to be consistent with legal advice so as to the merits of the overall claim.
Where a subrogated claim includes losses, which are not covered under the policy,
there remains some uncertainty as to who is entitled to control the proceedings
and is in how the proceeds of any recovery should be distributed between them.
The rights provided by the law states that, all the securities to the surety so that
they can get their claim in full amount.

Doctrine of Promissory Estoppel

and it’s Applicability in India
he Doctrine of Promissory Estoppel is basically an equitable doctrine. The Doctrine
of Promissory Estoppel means where one party by his words or conduct made to the
other a clear promise which is intended to create legal relations or even affect a legal
relationship.

Background
For the purpose of maintaining a balance between the evolving freedom of
individuals and state authority, the role of Administrative law becomes crucial as it
has to evolve itself to suit the varied demands and expectations of individuals and
their right and duties. Administrative law includes a number of principles which
have been established by the court with the objective of making control over the
exercise of power so that situation of abuse of power or arbitrariness not arises.
Furthermore, such principles protect the interest of individuals against any abuse
of power or misuse of power by any organ, agency, and instrumentalities of the
State.

The Doctrine of Promissory Estoppel

The Doctrine of Promissory Estoppel is basically an equitable doctrine. The
Doctrine of Promissory Estoppel means where one party by his words or conduct
made to the other a clear promise which is intended to create legal relations or
even affect a legal relationship to arise in the future, knowing or intending that it
would be acted upon by the other party to whom the promise is made, and it is
fact so acted upon by the other party, the promise would be binding on the party
making it and he would not be entitled to go back upon it, if it would be inequitable
to allow him to do so. It clearly means that administrative action would be marked
by certainty, predictability and consistency.

In Gujarat State Financial Corp. v Lotus Hotels (AIR 1983 SC 848) it was held by the
Supreme Court that the writ of mandamus can be issued against the government
or its instrumentalities for the enforcement of contractual obligation because here,
the doctrine of promissory estoppel is applicable to against the government. Here,
the lotus hotels entered into the contract with the State Financial Corporation of
Gujarat for a loan for the purpose of construction of a hotel. On this agreed
promise, the petitioner took certain loans and thus incurred liabilities. Furthermore,
the loan was refused on the basis of acting of two pseudonymous letters attacking
the character of the proprietors of loan which was already sanctioned.

Doctrine of Promissory Estoppel is based on obligation or equity and is not based

on vested right. In equity, the court has to strike a balance between individuals’
right as well the interest of public. In Union of India v Ganesh Rice Mills (1998) 9
SCC 630, it was held by the court that the Finance Minister’s statement on the floor
of the House did not meant a promise or any form of representation to the assesse.
Thus, in this case, the government is not estopped from recovering the disputed
cess contrary to such statement.

Doctrine of Promissory Estoppel is available against the exercise of executive

function of the State. In Express Newspapers Pvt. Ltd. Union of India (AIR 1986 SC
872), The Doctrine of Promissory Estoppel was used to prevent the government for
quashing the action of the Minister for approval of a lease as it was within the
scope of his authority to grant such permission. This ultimately resulted in checking
whether there is fraud on the exercise of power or not. Here, the Express
Newspapers were given notices of re-entry upon forfeiture of lease of land granted
to them on which the lessee has raised buildings for the purpose of printing and
publishing the newspapers. Thus, it was held by the Supreme Court that the action
had been politically motivated and there is clear violation of mala fide intention.

Following mentioned are some of the cases wherein the Doctrine of

Promissory Estoppel is not applicable:
1) The administration is not bound to refrain from withdrawal of tax exemption or
tax holiday
2) The administration is no bound to enact a proposed legislation.
3) The administration is not bound to refrain from performance of statutory duty
or discretion.
4) The administration in not bound to create or abolish a civil post, making a
change in the condition of service of persons employed in connection with the
affairs of the State.

Following mentioned are the essential characteristics to make promise

binding on the government:

1) The promise made by the State must be within the scope of law.
2) There must be pure intention to enter into a legal relationship.
3) The other party must act accordance of the promise or will be forbidden to do
anything.

Conclusion
In this modern era, the promise of Government to citizens or for that matter even
the non-citizens is of great importance especially in case where the government
enters into a promise for a contractual or a business transaction. It becomes quite
important to protect the interests of citizens when such persons with their earnest
money invests with the government and later receives dejection or cheating from
the government, thereby not abiding by their promise. In such a situation, the
individual’s investment becomes in a position of danger thereby leaving the person
helpless.

Thus, to deal with such a situation, the Doctrine of Promissory Estoppel came into
function. The Indian Judiciary played a vital role in making the State responsible
for its promise and further made accountable the State to abide by the promise so
made.
 Doctrine of Marshalling and
Contribution
In the Transfer of Property Act, section 56, 81 and 82 deals with the doctrine of
marshalling and contribution. Marshalling means arranging things, systematize, or
regulate things. Contribution means providing money for a common fund.

Introduction to Doctrine of Marshalling and

Contribution
Marshalling means arranging things, systematize, or regulate things which mean
the things arranged in a proper manner or order. In the Transfer of Property Act,
section 56, 81 and 82 deals with the doctrine of marshalling and contribution.
According to section 56 of the transfer of property act, the marshalling applies on
seller and buyer. Section 56, the rule of marshalling by the subsequent purchaser
only deals with the sale not mortgage. Section 56 incorporates the rule of
marshalling by a purchaser. And for a mortgage, section 81 is the rule of
marshalling in which the subsequent mortgagee has the right to claim to marshal.
The right of marshalling securities is not absolute.

The rule of contribution described in section 82 of the transfer of property act. The
meaning of the rule of the contribution means providing money for a common
fund. The doctrine of marshalling and contribution are very vital section (81, 82)
for the transaction of the mortgage.

Doctrine of Marshalling
Marshalling means arranging something. Section 81 of the transfer of property act
says that if the owner of two or more properties mortgages them to one person
and other property mortgages to other people, the new mortgagee is in the
absence of a contract to the contrary, entitled to have the mortgaged debt satisfied
out of the properties not mortgaged to him, so far as the same will extend, but not
to prejudice the rights of the prior mortgagee or persons claiming under him or of
any other person who has for consideration acquired an interest in any of the
properties. The right given to the subsequent mortgagee under this section
contemplates a situation where a mortgagor, mortgages more than two or more
than two properties firstly to a mortgagee and after that mortgages some of these
properties to the other person.

For example-
· X mortgages properties A, B and C to Y for securing a loan of 30,000 rupees.

· After that X mortgages property B to Z for securing another loan of 10,000 rupees.

In this Y is the first mortgagee on properties A, B and C which are securities for a
loan of 30,000 rupees. And property B mortgages to X for loan 10,000 rupees. Here
Y is the prior mortgaged and Z is the subsequent mortgagee. The right is given to
Z (subsequent mortgagee) entitles him to say that the loan of rupees 30,000, it
should be satisfied out of sale proceeds of properties A and B only and it is not
from C which has been mortgaged to him. In the case, A and B could be sold for
less than 30,000 rupees, property C mat be sold to complete the amount. Although
Z is a subsequent mortgagee and his claim is not before the Y but Z has right of
marshalling or in other word he has right to arranging the securities in his favour.

According to this, the subsequent mortgagee under section 81 has right of

marshalling securities.

Here the right of marshalling securities is not absolute, it follows some conditions-
1. The mortgagees may be two or more than two-person and the mortgagor must
be same.
2. Mortgagor mortgages two or more than two properties to another new
mortgagee without prejudice the prior mortgagee.
3. There exists not a contract to the contrary.
4. The new mortgagee entitled to have the mortgage debt satisfied out of the
property.
5. At last new mortgagee must not be prejudiced to the first mortgagee as well as
a third person or other person claiming as the purchaser.

Landmark Cases
In the case of Devatha Pullaya v. Jaldu Manikyala Rao[1], where a puisne
mortgagee has taken the mortgage expressly on condition of discharging certain
amount due on the prior mortgage but fails to fulfil that term, he cannot exercise
the right of marshalling.

In the case of Fiatallis North America, Inc Et Al v. Pigott Construction Limited Et

Al[2]held that there must be a single or common mortgagor or debtor.

In the case of Nova Scotia saving & loan v. O’Hara et al[3], held that the doctrine,
whose object is to achieve fairness, will not be applied to the prejudice of the third
party.

Section 82, Contribution to Mortgage-Debt

Contribution means providing money for the common fund. Section 82 of the
transfer of property act deals with the rules relating to the contribution of money
towards mortgaged debt. It is the right of a person who has discharged a common
liability to recover proportionate share from others. The doctrine of contribution
requires that the persons under common liabilities that liabilities equitable.

Section 82 contemplates a situation in which there are two or more than two
mortgagors who take a common debt by mortgaging different properties in one
property. The nature of the doctrine of contribution is based on the principles of
equity, justice and good faith or good conscience. Each mortgagor or debtor must
be liable to contribute to such common debt. When two or more properties of
different persons are mortgaged to secure a loan, the mortgagee has the right to
recover the debt from the property of any one person.

Rules of Contribution
1. The mortgaged property belongs to two or more persons.
2. One property is mortgaged first and then again mortgaged with another
property.
3. Marshalling supersedes contribution.

Difference Between Doctrine of Marshalling and

Contribution
Doctrine of Marshalling
 The right of marshalling is available to mortgagees.
 It settles right of subsequent mortgagees.
Doctrine of Contribution

 Contribution determines the right of one mortgagor against other mortgagors.

 It rights of mortgagors inter se.

Conclusion
The doctrine of marshalling and doctrine of contribution is a very important section
(81, 82) for the transaction of the mortgage. Marshalling is the right of the
subsequent mortgagee and the contribution to debt and in other words, it is the
right of the co-mortgagors of several shares in one property. This is referred to as
the scheme of ratable distribution. The nature of the doctrine of contribution is
based on the principles of equity. Both the section plays an important role for a
mortgage.

Apportionment of Property in India

‘Apportionment’ means distribution in proper shares. Section 36 and 37 of the
Transfer of Property Act deals with Apportionment of Property in India.

Introduction to Apportionment of Property

This article deals with apportionment of property in India. The legal term
‘apportionment’ means distribution or allotment in proper shares. The expression
‘apportionment’ means division of a common fund between several claimants.

In law this term is used in various senses even various statutes define it in various
ways and as per the laws regulating these apportionment the process of determine
the apportioned amount also changes.

Section 36 & 37 of the Transfer of Property Act lay down the rules regarding the
principle of apportionment. It is classified into two types
 Apportionment of Property by time
Section 36deals with the apportionment of time, which states- “In the absence of
a contract or local usage to the contrary, all rents, annuities, pensions, dividends
and other periodical payments in the nature of income shall, upon the transfer of
the interest of the person entitled to receive such payments, be deemed, as
between the transferor and transferee, to accrue due from day to day and
apportionable accordingly but to be payable on the days appointed for the
payment thereof”.[1]

This principle does not apply on tractions which take place by operation of law but
to those transaction based on equity.

When a property generates certain kind of periodical income, apportionment of

income between the transferor and transferee arises. The general rule in regards
to the transfer of income between the transferor and transferee is dealt in section
8 of the Act and is inapplicable on transaction of periodical nature requiring
apportionment.

Liability of the tenant – section 6 of the Act specifies that the section is applicable
for transaction held between transferor and transferee and does not make tenant
liable.

Concept of Transfer – The Transfer of Property Act, 1882 says that when a
property is lent to several owners, any of those several owners on the basis of being
the co-owner cannot ask for proportion of rent of evection in case of non-payment.
The apportionment created by the Apportionment Act 1870 statute is
“apportionment in respect of time.” The cases to which it applies are mainly cases
of either:

 apportionment of rent due under leases where at a time between the dates fixed
for payment the lessor or lessee dies, or some other alteration in the position of
parties occurs
 apportionment of income between the representatives of a limited owner and the
remainder-man when the limited interest determines at a time between the date
when such income became due.

Apportionment of Property by Estate

Apportionment in respect of estate may result either from the act of the parties or
from the operation of law.

Section 37 deals with this kind of apportionment stating that “ When, in

consequence of a transfer, property is being divided and held in several shares,
and thereupon the benefit of any obligation relating to the property as a whole
passes from one to several owners of the property, the corresponding duty shall,
in the absence of a contract, to the contrary amongst the owners, be performed in
favour of each of such owners in proportion to the value of his share in the
property, provided that the duty can be severed and that the severance does not
substantially increase the burden of the obligation the duty shall be performed for
the benefit of such one of the several owners as they shall jointly designate for that
purpose:

Provided that no person on whom the burden of the obligation lies shall be
answerable for failure to discharge it in manner provided by this section, unless
and until he has had reasonable notice of the severance. Nothing in this section
applies to leases for agricultural purposes unless and until the State Government
by notification in the Official Gazette so directs”.[2]

when the whole of a property is transferred to more than one person, any benefit
arising out of obligation to the property is transferred to the several owners.

Apportionment by estate simply means transferring of property to several person

whereby distribution of benefits and obligation arising out of property between
those several owners takes place.

Section 37 i.e. apportionment by estate highlights a situation where income arising

out of the property is apportionment between owners on the basis of share in the
property. How the payment is to be done whether separately to owner or to single
has to be contemplated. This section basically deals with apportionment in case
tenancy be liable only singly.

Apportionment by act of the parties

Where a lessee is evicted or he forfeits part possession of the leased property he
becomes liable to pay the apportioned value of rent which he retains
Apportionment by Operation of Law
Apportionment by operation of law may be brought about where by due to some
reasons like by the “act of God”, as, for instance, where part of an estate is
submerged by the encroachments of the sea it becomes inoperative as regards to
its subject matter.

Conclusion
In this Article the major discussion was on section 36 and 37 of the transfer of
property Act, 1882 which deals with Apportionment of Property in India. And how
it is read with section 8 of the transfer of property of property Act, 1882. Various
exceptions to these sections to Apportionment of Property in India was discussed.
Theses section are of immense important in the Act as it specifies the rule of
apportionment and how apportionment of income has to be done in case of
transfer or tenancy or lease.