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Property Law
Paper: LB-204 | LL.B. II Term | Faculty of Law, University of Delhi | May 2022
Governing Statute: The Transfer of Property Act, 1882 (as amended)
Sections Covered: Sections 3, 5, 6(a), 10, 11, 13–19, 21, 40, 43, 52, 58–60, 100, 105–106, 109, 122–126 | Indian Easements Act, 1882 – Sections 4 & 52
Introduction: Property Law governs the transfer of both movable and immovable property in India. The Transfer of Property Act, 1882 (TPA), drafted primarily on English Real Property principles but moulded to Indian conditions, lays down the general principles of transfer and specific rules for mortgage, lease, and gift. This course covers key definitions under Section 3, principles of transfer, doctrines of notice, lis pendens, spes successionis, rule against perpetuity, conditional transfer, vested and contingent interests, and specific transfers by mortgage, lease, and gift. Landmark Supreme Court and High Court decisions form the core of the study material.
📋 Table of Contents
- Topic 1 – Movable / Immovable Property (Section 3)
- Topic 2 – Attestation (Section 3)
- Topic 3 – Notice (Section 3)
- Topic 4 – Meaning of Transfer of Property (Section 5)
- Topic 5 – What Kind of Property Can Be Transferred (Section 6(a) and 43)
- Topic 6 – Conditional Transfer (Sections 10, 11, and 40)
- Topic 7 – Transfer for Benefit of Unborn Persons (Sections 13–18)
- Topic 8 – Vested and Contingent Interests (Sections 19 and 21)
- Topic 9 – Transfer During Pendency of Litigation / Lis Pendens (Section 52)
- Topic 10 – Mortgage (Sections 58–60, 100)
- Topic 11 – Lease and Licence (Sections 105, 106, 109; Easements Act Section 52)
- Topic 12 – Gift (Sections 122–126)
- 📝 Important Questions for Exam
- ⚡ Quick Revision Summary
1. Movable / Immovable Property (Section 3)
1.1 Definitions and Distinctions
“Immovable property” does not include standing timber, growing crops or grass.
“Attached to the earth” means:
(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings;
(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached.
“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.”
“Immovable property includes land, buildings, 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.”
The TPA does not define immovable property positively — it only says what it does NOT include. For a positive definition, we look to the General Clauses Act and the Registration Act. The key distinction: things attached to the earth are immovable; standing timber, growing crops, and grass are movable.
| Basis | Movable Property | Immovable Property |
|---|---|---|
| Definition | All property except immovable property (GCA s.3(36)) | Land, benefits from land, things attached to earth |
| Examples | Standing timber, growing crops, grass, vehicles, furniture | Land, buildings, trees (other than standing timber), fisheries, rights of way |
| Registration | Generally not required for transfer | Documents of value ≥ Rs.100 must be registered (s.17, Registration Act) |
| TPA Application | Sale of Goods Act applies to movables | TPA applies to immovables |
| Attachment in execution | Attachment rules differ | Attachment and sale governed by CPC Order XXI |
| Timber | Standing timber = movable | Trees (other than standing timber) = immovable |
1.2 Standing Timber vs Trees — The Key Distinction
This is one of the most examined points in Property Law. The TPA excludes “standing timber” from immovable property but does not exclude trees. The distinction:
- Standing Timber: A tree in a state fit for use as building material (for houses, bridges, ships, etc.) and which is intended to be felled at an early date. It is movable property.
- Tree: A living plant that continues to draw nourishment from the soil for a substantial period. It is immovable property.
Vivian Bose, J.
Facts: Shantabai’s husband executed an unregistered deed giving her the right to enter zamindari forests and cut bamboos, fuel wood, and teak for 12 years (consideration: Rs. 26,000). After the MP Abolition Act vested all proprietary rights in the State, she was stopped from cutting trees.
Issue: Whether the deed related to movable or immovable property; whether it required registration.
Held: Since the grant was for 12 years, trees not yet ready for felling would draw nourishment from the soil and benefit the grantee — making the transaction one of immovable property. Being unregistered, the deed passed no title. Petition dismissed.
Principle: A grant of right to cut trees over a long period is a grant of benefit arising out of land (immovable), requiring registration; a mere right to cut and remove immediately ready timber may be movable property.
Facts: The State of Orissa levied purchase tax on “bamboos agreed to be severed” under the Bamboo Contract between the State and Titaghur Paper Mills — a 14-year contract giving exclusive rights to fell, cut, obtain and remove bamboos.
Issue: Whether the Bamboo Contract was a sale of goods (movable property) or a grant of a profit à prendre (immovable property).
Held: The Bamboo Contract was a grant of a profit à prendre — a benefit to arise out of land — and therefore immovable property. The State could not levy purchase tax on it. Chhotabhai case was overruled.
Principle: A long-term contract giving the right to enter land and take its natural produce (bamboos/timber) is a profit à prendre — an interest in immovable property — not a contract for sale of goods.
1.3 Doctrine of Fixtures — Machinery Attached to Earth
When machinery or equipment is attached to the earth, the question arises whether it remains movable or becomes immovable. The answer depends on:
- Degree of Annexation: How firmly and permanently is the machinery fixed?
- Object/Purpose of Annexation: Was the purpose to benefit the land/building permanently, or merely to enjoy the machinery itself?
Facts: Cinema projector and diesel oil engine were installed in a temporary touring talkies structure (zinc sheets and oil cloth tent) on leased land by a usufructuary mortgagee.
Issue: Whether the cinema equipment was movable or immovable property (affecting limitation period for recovery).
Held: The cinema equipment was movable property. The temporary nature of the structure, the fact that the mortgagee did not own the land, and that the purpose was to exploit the equipment during the lease — all showed the intention was to benefit the equipment, not the land. Suit barred by 3-year limitation.
Principle: Where machinery is installed on leased land by a person who does not own the land, the intention is ordinarily to enjoy the machinery itself (movable); but where installed by the owner of both land and machinery, it becomes part of the land (immovable).
Facts: ICI India sold its fertilizer business to Chand Chhap Fertilizer as a “going concern” for Rs. 70 crores by a conveyance deed. The question was whether plant and machinery embedded in the earth formed part of the conveyance (immovable property) and attracted stamp duty.
Issue: Whether plant and machinery of a fertilizer factory permanently embedded in earth was immovable property.
Held: The plant and machinery were immovable property because they were permanently embedded in the earth to operate the fertilizer factory. The intent was to use them as a factory — not to dismantle and sell. Stamp duty assessed on entire value of Rs. 70 crores.
Principle: Machinery permanently embedded in earth to constitute a factory — with no intention of removal — is immovable property, attracting stamp duty on the full transaction value.
1.4 Profit à Prendre
A profit à prendre is a right to enter another’s land and take some profit of the soil — e.g., fish, timber, bamboo, grass, minerals. It is an interest in immovable property (a benefit arising out of land). Key features:
- Must be capable of ownership
- Grants access to land to take part of its produce
- Is an interest in land — must be in writing; if value ≥ Rs.100, must be registered
- Distinguished from easement: easement benefits a dominant tenement; profit à prendre can exist independently
2. Attestation (Section 3)
“Attested”, in relation to an instrument, means and shall be deemed always to have meant attested by two or more witnesses, each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the direction of the executant, or has received from the executant a personal acknowledgment of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shall have been present at the same time, and no particular form of attestation shall be necessary.
Essential Ingredients of Valid Attestation
- Two or more witnesses
- Each witness must have: (a) seen the executant sign, OR (b) received a personal acknowledgment from the executant of his signature
- Each witness must sign the instrument in the presence of the executant
- Each witness must sign animo attestandi — with the intention of attesting
A party to the transaction cannot attest the instrument. Attestation implies “someone who stands by but is not a party to the transaction” (Lord Selborne in Seal v. Claridge). However, a person who is a party to the transaction (as a lender, for example) but NOT named in the deed may validly attest.
Facts: A mortgage deed was attested by only one witness (Respondent 1 — the lender). The lender claimed the money was his even though the deed named another person. Question: Was the lender qualified to attest?
Held: The lender was NOT a party to the mortgage deed (though he was a party to the transaction). There is no prohibition on a party to the underlying transaction (as distinct from a party to the instrument) attesting the document. Since the lender was not named in the deed, he could validly attest it.
Principle: A party to the underlying transaction (as opposed to a party to the deed) may validly attest a mortgage deed; only a party to the instrument itself is disqualified from attesting.
Facts: A security bond was signed by a sub-registrar and identifying witnesses, but only one attesting witness signed animo attestandi. Question: Could the registering officer and identifying witnesses be considered attesting witnesses?
Held: A registering officer signs in discharge of statutory duty under the Registration Act — not animo attestandi. Identifying witnesses sign to certify identification — also not animo attestandi. The bond was attested by only one witness and therefore was not validly attested as required for a mortgage deed.
Principle: The sub-registrar and identifying witnesses do not automatically become attesting witnesses; each must have signed animo attestandi — with the intention to attest — which must be proved by evidence.
Facts: The mortgagors were two pardanashin women who could not show their faces. The attesting witnesses identified them by their voices through a chick (curtain) hanging in the doorway and saw them execute the deed — but could not see their faces.
Issue: Whether the attestation was valid when witnesses could not see the face of the executants (purdanashin women).
Held: Valid attestation. The witnesses identified the women by voice, saw them execute the deed through the chick, and signed in the executants’ presence. No requirement that the witnesses must see the face of the executant.
Principle: For valid attestation by a pardanashin woman, it suffices that the attesting witnesses identified her (even by voice) and saw her execute the document; visual identification of her face is not required.
3. Notice (Section 3)
A person is said to have notice of a fact when he actually knows that fact, or when but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it.
Explanation I: Registration constitutes constructive notice to all persons of the document’s existence.
Explanation II: A person acquiring immovable property is deemed to have notice of the title of any person who is for the time being in actual possession thereof.
Explanation III: Notice to an agent in the course of business is notice to the principal.
Three Types of Notice
- Actual Notice: Direct, personal knowledge of the fact.
- Constructive Notice: Deemed knowledge — what the person would have known but for wilful abstention or gross negligence. Examples: registered documents, actual possession by a third party.
- Imputed Notice: Notice to an agent in the course of business is imputed to the principal.
Facts: A purchaser bought property at a court auction. Municipal taxes had accumulated (owed by receivers in insolvency) for years 1949–1954. The municipal corporation tried to enforce its statutory charge for arrears against the auction purchaser.
Issue: Whether the auction purchaser had constructive notice of municipal tax arrears and was bound by the statutory charge.
Held: The purchaser did not have constructive notice. Given that the property was in the hands of receivers (who had priority obligations), the purchaser could reasonably assume taxes had been paid. The question of constructive notice is a question of fact; no blanket rule imputes knowledge of municipal tax arrears to all purchasers in municipal areas.
Principle: Constructive notice of statutory charges (like municipal taxes) is not automatically imputed to all purchasers; it depends on the facts and circumstances — the purchaser must have had reason to inquire about the arrears.
Facts: A tenant had an agreement to purchase a shop. He was in actual possession of 1/7th of the building (one of seven units). A subsequent purchaser bought the property without inquiring from the tenant about his rights.
Issue: Whether Explanation II to Section 3 (notice from actual possession) applied where the possessor occupied only a small fraction of the property.
Held: Explanation II applies when someone is in actual possession. But where the possessor occupies only a small fraction (1/7th here), the subsequent purchaser is not bound to inquire from every tenant. The scope of “deemed notice” under Explanation II is limited by the extent and nature of possession.
Principle: Actual possession giving rise to constructive notice applies when the possessor has substantial possession that would prompt a prudent purchaser to inquire; possession of a small fraction of the property may not trigger this duty.
4. Meaning of Transfer of Property (Section 5)
In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, or to himself and one or more other living persons; and “to transfer property” is to perform such act. In this section “living person” includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.
Essential Elements of Transfer Under Section 5
- Inter Vivos Transfer: By a living person — excludes testamentary transfers (wills operate after death)
- Conveyance of Property: Actual transfer of ownership or interest
- Present or Future: Transfer may be of present interest or may operate in the future
- To One or More Living Persons: Transferee must be a living person (includes companies/associations)
- To Himself: A person can transfer to himself (e.g., as trustee)
- Testamentary disposition (will) — operates after death, not inter vivos
- Partition of joint Hindu family property — each coparcener has a pre-existing right; partition only defines it
- Court decree — operation of law, not voluntary transfer
- Statutory vesting — property vesting in State by law is not a transfer
- Mortgage by deposit of title deeds — some courts hold it is not a “transfer” in the strict sense
Facts: Property of a Hindu Undivided Family (HUF) was partitioned among coparceners. Respondent 1 received a property that had been let to Appellant (tenant). Respondent 1 sought eviction under Delhi Rent Control Act — but Section 14(6) barred eviction applications for 5 years after “acquiring by transfer.” Question: Was partition a “transfer”?
Held: Partition is NOT a transfer within the meaning of Section 14(6) of the Rent Control Act. Each coparcener has a pre-existing title to the coparcenary property; partition merely defines the specific share. The policy of Section 14(6) is to prevent landlords from buying property as a device to evict tenants — which does not arise in partition.
Principle: Partition of Hindu coparcenary property is not a “transfer” — it is the crystallisation of a pre-existing right; the transferee in a partition cannot be said to have “acquired by transfer” for the purpose of rent control provisions.
Facts: A court order directed a party to maintain status quo regarding property. During the pendency of proceedings, Anjanamma (party to the proceedings) executed a Will bequeathing the property. The respondent contended that making a Will violated the status quo order.
Issue: Whether executing a Will constitutes a “transfer of property” under Section 5 of TPA and whether it violated the status quo order.
Held: Making a Will is NOT a transfer of property under Section 5 of TPA. A Will is a testamentary document that operates only after death; it does not create any right or interest during the testator’s lifetime and is revocable at any time. Executing a Will does not violate a status quo order.
Principle: A Will is not a “transfer of property” within Section 5 of TPA — it is a testamentary declaration that takes effect only after the testator’s death; it does not create rights or alter possession during the testator’s lifetime.
5. What Kind of Property Can Be Transferred (Sections 6(a) and 43)
5.1 Spes Successionis — Section 6(a)
“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.”
Spes Successionis (Latin: “hope of succession”) is a mere expectancy — the chance of inheriting property in the future. It is not a present legal right and therefore cannot be transferred. Examples:
- A Hindu son’s chance of inheriting ancestral property on the father’s death
- A nephew’s chance of getting a legacy from his uncle
- A reversioner’s chance of inheriting from a widow’s estate
- The person with spes successionis makes an erroneous representation that he has a present interest (Section 43 may then apply)
- Transfer is after the death of the person from whom one was to inherit (the right has then vested)
- Compromise of a genuine dispute — courts may uphold even a reversioner’s right as part of a family settlement
5.2 Doctrine of Feeding the Grant by Estoppel (Section 43)
Where a person fraudulently or erroneously represents that he is authorised to transfer certain immovable property and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists.
Exception: This section does not impair the rights of a transferee for consideration in good faith and without notice.
Conditions for Section 43 to Apply
- The transferor fraudulently or erroneously represented that he was authorised to transfer
- He professed to transfer property in the exercise of that authority
- The transfer was for consideration
- The transferee did not know that the transferor lacked title (acted on the representation)
- The transferor subsequently acquires an interest in the property
- The contract of transfer was still subsisting when the interest was acquired
Facts: Three reversioners (Santhappa, Mallappa, Basappa) sold suit properties in 1920 representing they had become entitled to them as reversioners after Ammakka’s death (1910). In fact, the self-acquisition nature was in dispute. On the death of Gangamma (another widow) in 1933, Santhappa acquired title. The Jumma Masjid claimed through a release deed of 1933 by Santhappa.
Issue: Whether Section 43 applied to protect the 1920 purchaser (Ganapathi) even though Santhappa had only spes successionis at the time of the 1920 sale.
Held: Section 43 applies where the transferor represents he has a present interest (as opposed to openly transferring his spes successionis). The sale of 1920 operated on the interest acquired by Santhappa in 1933. The Jumma Masjid’s release deed of 1933 could not prevail against the prior transferee.
Principle: Section 43 applies even where the transferor had only spes successionis at the time of transfer, provided he represented having a present interest; the section embodies a rule of estoppel — the transferor cannot deny his own representation.
Facts: Harbans Kaur sold property of her minor son as guardian without court permission. The sale was declared void against the minor. After the minor (Kulwant Singh) died, Harbans Kaur inherited his property as Class-I heir. The purchaser claimed benefit of Section 43.
Issue: Whether Section 43 applied when the transferor (mother as guardian) had no authority to sell the minor’s share and when the original contract was void.
Held: Section 43 did not apply. Two limbs must be satisfied: (1) the transferee was misled by an erroneous representation — but the sale deed itself disclosed the limited authority (mother as guardian), putting the purchaser on notice; (2) the contract of transfer must be subsisting — but a void contract is no contract, so the second limb was also not satisfied.
Principle: Section 43 does not apply where: (a) the transferee was put on notice of the transferor’s limited authority (no misleading representation), or (b) the underlying contract was void from inception (no “subsisting contract”).
6. Conditional Transfer (Sections 10, 11, and 40)
Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: Provided that property may be transferred to or for the benefit of a woman (not being a Hindu, Mohammedan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.
Where, on a transfer of property, an interest in immovable property is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.
Where a third person has a right to restrain the enjoyment of immovable property in a particular manner (independently of any easement), or is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immovable property, such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee; but NOT against a transferee for consideration and without notice.
Facts: A testator devised his estate to his son in fee simple with a condition: if the son wished to sell during the mother’s lifetime, the mother had the option to buy the entire estate at £3,600 (actual value: £15,000 — one-fifth of real value).
Issue: Whether this condition was a valid restraint on alienation.
Held: The condition was an absolute restraint on alienation — equivalent to saying “you shall not sell during the widow’s lifetime.” To compel a person to sell at one-fifth of value is effectively to prohibit sale altogether. Condition void.
Principle: A condition requiring sale at a grossly inadequate price is equivalent to an absolute restraint on alienation and is therefore void as a clog on the right to alienate.
Facts: Under a compromise decree, two wives took property as “permanent owners” but with a condition that they “shall not have power to transfer this property to a stranger.” Sughra Bibi (one wife) sold her share to strangers (the appellants).
Issue: Whether the condition restraining alienation only to strangers (partial restraint) was valid.
Held: A partial restraint on alienation (allowing transfer within family but not to strangers) is valid in law. Section 10 of TPA only prohibits absolute restraints. Since this was a family arrangement, the restriction was equitable, fair and binding on Sughra Bibi. The appellants who took through a breach of the restriction took with notice and are bound.
Principle: A partial restraint on alienation — prohibiting only sale to strangers while permitting transfers within the family — is valid under Indian law and is not void under Section 10 TPA.
Facts: Elms purchased Leicester Square garden from Tulk with a covenant to keep it as a pleasure garden. Elms sold it through several hands to Moxhay, who had notice of the covenant but wished to build on the land.
Issue: Whether a restrictive covenant could be enforced against a purchaser with notice even though the covenant did not “run with the land” at common law.
Held: A person who purchases property with notice of a covenant cannot act in a manner inconsistent with that covenant — it would be inequitable. Injunction granted.
Principle: A restrictive covenant against use of land is enforceable against a subsequent purchaser with notice (embodied in Indian law under Section 40 TPA — obligations running with land).
Facts: The Zoroastrian Cooperative Housing Society restricted membership only to Parsis. Respondent 2 (a Parsi member) sought to sell his plot to Respondent 3 (non-Parsi builders). The Society refused. The Registrar and High Court held the bye-law restriction was an absolute restraint on alienation void under Section 10 TPA.
Issue: Whether a cooperative society’s bye-law restricting membership to Parsis was an absolute restraint on alienation void under Section 10 TPA.
Held: The Supreme Court reversed. Section 10 requires a condition absolutely restraining alienation. This was a partial restraint — Respondent 2 could transfer to any qualifying Parsi member. The bye-law reflected the voluntary compact of the society. Not void under Section 10.
Principle: A cooperative society’s bye-law restricting transfer of property only to members of a particular community is a partial restraint on alienation — valid under Section 10 TPA; it does not amount to an absolute restraint.
7. Transfer for Benefit of Unborn Persons (Sections 13–18) and Rule Against Perpetuity
Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.
No transfer of property can operate to create an interest which is to take effect after the lifetime of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.
7.1 Rule Against Perpetuity — Analysis
The rule against perpetuity ensures that property does not remain inalienable indefinitely. Under Indian law (Section 14), the maximum period for which a future interest can be postponed is:
- The lifetime of one or more persons living at the date of the transfer, PLUS
- The minority of the ultimate beneficiary (if alive at the expiration of the above period)
| Basis | Indian Law (Section 14 TPA) | English Law |
|---|---|---|
| Period | Life in being + minority of ultimate beneficiary | Life in being + 21 years |
| Standard | Actual events (what actually happened) | Possible events (any possibility of exceeding the period) |
| Contracts | Rule does not apply to personal contracts (even if relating to land) | Applies to equitable interests in land |
| Covenant for pre-emption | Not hit by rule (no interest in land created) | May be hit by rule if creates equitable interest |
| Covenant for renewal of lease | Not hit by rule | Debate; generally not hit |
| Options to purchase | Generally not treated as creating interest in land | Creates equitable interest — may be hit |
Facts: In a sale deed of 1884, the vendor excluded 2 bighas of land with a clause that they would remain with vendor’s “lineal descendants” in perpetuity, and only if no lineal descendant survived would they go to the vendee.
Issue: Whether the clause violates the rule against perpetuity.
Held: The clause violated the rule against perpetuity. The 2 bighas might remain with lineal descendants for 100 or 200 years — well beyond the permissible period of a life in being and minority. The condition was void.
Principle: Under Indian law, the test for perpetuity is whether the interest might possibly vest beyond the permitted period — if so, the condition is void, even if in actual facts it vested within the period.
Facts: An arbitration award of 1940 between two brothers contained a pre-emption clause: each party shall have the right of pre-emption over the other’s property if the latter wished to sell. The successor to one brother’s property sought pre-emption against the other’s successor.
Issue: (1) Was the pre-emption covenant binding on successors? (2) Did it violate the rule against perpetuity?
Held: (1) The covenant was binding on successors — its language showed it was intended to bind heirs. (2) It did not violate the rule against perpetuity because a covenant for pre-emption does not create an interest in land under Indian law (Section 40) — it is only enforceable against a transferee with notice. Since no interest in land is created, the rule against perpetuity does not apply.
Principle: A covenant for pre-emption under Indian law does not create an interest in land — it creates a personal obligation enforceable against transferees with notice; therefore, the rule against perpetuity has no application to covenants of pre-emption.
Facts: A lease for 10 years contained a clause giving the lessee the option to renew “as long as desired” — i.e., for perpetual renewal every 10 years. The lessor refused renewal, contending the clause was void under the rule against perpetuity (Section 14).
Issue: Whether a covenant for perpetual renewal of a lease violated Section 14 TPA (rule against perpetuity).
Held: The rule against perpetuity in Section 14 applies only where a “transfer of property” creates an interest. A covenant for renewal is not a transfer of property — it is a covenant running with the land (under Section 40). It does not create an interest in property. The rule against perpetuity does not apply to such covenants.
Principle: A covenant for perpetual renewal of a lease does not create a “transfer of property” under Section 5 — it is a contractual obligation running with the land; hence, the rule against perpetuity under Section 14 does not apply to it.
8. Vested and Contingent Interests (Sections 19 and 21)
Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested, unless a contrary intention appears from the terms of the transfer.
Explanation: An interest is not contingent merely because the enjoyment is to be postponed.
Where, on a transfer of property, an interest therein is created in favour of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property. Such interest becomes a vested interest, in the former case, on the happening of the event, and in the latter, when the happening of the event becomes impossible.
| Basis | Vested Interest | Contingent Interest |
|---|---|---|
| Nature | Present right to future enjoyment | No present right; right depends on uncertain event |
| Certainty | Will certainly come into possession | May or may not vest depending on event |
| Alienability | Transferable inter vivos | Transferable inter vivos (Section 6(f)) |
| Attachment | Attachable in execution proceedings | NOT attachable in execution proceedings |
| Testamentary | Passes to heirs on death | Does NOT pass to heirs on death (unless event is not impossible) |
| Postponed enjoyment | Postponement of enjoyment does NOT make it contingent | Uncertainty of the event itself makes it contingent |
Facts: A trust deed provided that certain lots (including a specific building) would devolve on Rajes (the trustee) absolutely after the trust came to an end (i.e., after all debts were paid and the settlor died). Execution proceedings were initiated against Rajes’s interest in the property. Rajes contended his interest was contingent (on discharge of debts) and therefore not attachable.
Issue: Whether Rajes’s interest in the trust property was vested or contingent.
Held: The interest was vested. A portion of the income was being applied for the benefit of the sons during the trust; the discharge of debts was not an uncertain event but the object of the entire scheme; on death of either son, his interest passed to his heirs — showing that the interest was vested in title, though restricted in enjoyment. Attachable.
Principle: Postponement of enjoyment does not make an interest contingent; if the interest vests in title presently and only enjoyment is deferred (to facilitate discharge of debts), the interest is vested and attachable.
9. Transfer During Pendency of Litigation — Lis Pendens (Section 52)
During the pendency in any Court having authority within the limits of India (excluding J&K) of any suit or proceeding which is not collusive and in which any right to immovable 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.
Explanation: Pendency commences from the date of presentation of the plaint or institution of the proceeding in a Court of competent jurisdiction and continues until the suit is disposed of by final decree/order and complete satisfaction or discharge of such decree/order has been obtained, or has become unobtainable.
Essentials of Lis Pendens
- Pendency of a suit in a Court of competent jurisdiction
- The suit must not be collusive
- A right to immovable property must be directly and specifically in question
- The property must be transferred or dealt with during pendency
- The transfer must be by a party to the suit
- The transfer must affect the rights of another party
The suit must be in a Court of competent jurisdiction. If the plaint is filed in a wrong court and returned, lis pendens does not operate from the date of the first (wrong court) filing — only from when the plaint is presented to the competent court.
Facts: The plaintiff (Maharaja) had a mortgage over Plaza Theatre and had pending suits for recovery. While suits were pending with properties attached, the owner (Bhatias) executed a new 8-year lease to Supreme General Films in 1956. The plaintiff sought a declaration that the 1956 lease was void under Section 52.
Held: The 1956 lease was void under the doctrine of lis pendens. The lease was granted during pendency of the mortgage suit in which the right to the theatre was directly and specifically in question. A transferee pendente lite takes no better title than the transferor had.
Principle: A lease executed during pendency of a mortgage suit relating to the same property is void under Section 52 (lis pendens) — the transferee pendente lite cannot acquire rights that defeat the decree in the pending suit.
Facts: A pre-emption suit was decreed; the decree was affirmed by the District Court and High Court. During the appeal to the Supreme Court, the decree holder (Lachhman) took possession. The Supreme Court reversed. Respondents applied for restitution (Section 144 CPC). The appellants (who had purchased from Lachhman during the appeal) claimed lis pendens did not apply to Supreme Court proceedings under Article 136.
Held: Proceedings before the Supreme Court under Article 136 are a continuation of the original suit. The doctrine of lis pendens applies to all stages of litigation, including Supreme Court proceedings. Purchasers from the decree holder during the appeal are bound by the outcome.
Principle: Lis pendens applies throughout the entire chain of litigation including Supreme Court proceedings under Article 136; a transfer during any stage of pending proceedings takes subject to the final outcome.
10. Mortgage (Sections 58–60, 100)
10.1 Definition and Kinds of Mortgage
A mortgage is the transfer of an interest in specific immovable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
Six Kinds of Mortgages (Section 58)
| Kind | Section | Key Feature | Possession | Registration |
|---|---|---|---|---|
| Simple Mortgage | 58(b) | Personal liability + power of sale without delivery of possession | With mortgagor | Required (principal ≥ Rs.100) |
| Mortgage by Conditional Sale | 58(c) | Ostensible sale with condition: on default, sale becomes absolute; on payment, void | With mortgagee | Required |
| Usufructuary Mortgage | 58(d) | Delivery of possession; mortgagee appropriates rents in lieu of interest/principal | With mortgagee | Required |
| English Mortgage | 58(e) | Absolute transfer to mortgagee with personal covenant to repay and re-transfer | With mortgagee | Required |
| Mortgage by Deposit of Title Deeds (Equitable Mortgage) | 58(f) | Deposit of documents in specified towns for purposes of creating security | With mortgagor | NOT required |
| Anomalous Mortgage | 58(g) | Any other form of mortgage | Varies | Varies |
10.2 Redemption and Foreclosure
At any time after the principal money has become due, the mortgagor has a right, on payment or tender at a proper time and place of the mortgage-money, to require the mortgagee (i) to deliver the mortgage deed, (ii) to deliver documents relating to the mortgaged property which are in the mortgagee’s possession or power, and (iii) where the mortgagee is in possession, to deliver such possession; and in the appropriate case to retransfer the mortgaged property to him or to such third person as he may direct. This right is called the right to redeem.
Key Principles:
- “Once a mortgage, always a mortgage” — a mortgage is always redeemable; the mortgagor cannot be absolutely deprived of his right to redeem
- The right to redeem cannot be waived by any agreement at the time of mortgage
- The mortgagee’s rights and the mortgagor’s right to redeem are coextensive
10.3 Clog on Equity of Redemption
A “clog” is any provision in the mortgage transaction that impairs or curtails the mortgagor’s right to redeem. The rule against clogs on the equity of redemption states: any provision inserted to prevent, evade or hamper redemption is void.
- A condition that on failure to redeem within a time, the mortgage becomes an absolute sale
- A condition that the mortgage is irredeemable
- A condition that makes redemption illusory (e.g., interest on principal compounded over 99 years payable at redemption)
- A provision permitting reconstruction of the mortgage property at any cost, to be paid by mortgagor at redemption, imposed in circumstances of pressure
A long term (e.g., 85 years) in a mortgage does not by itself constitute a clog on equity of redemption. It depends on whether, in the circumstances, the term was imposed by taking advantage of the mortgagor’s financial difficulty and was unconscionable. The test is: was the bargain oppressive? Was the mortgagor forced into it by necessity?
Facts: A mortgage of 1899 stipulated: (1) no right of redemption for 85 years, and (2) if not redeemed within 6 months after 85 years, the mortgage deed becomes a sale deed. Suit for redemption was brought in 1947 (before the 85-year term expired).
Held: (1) The 85-year term was NOT a clog — the parties dealt on equal footing, the mortgagor derived advantages, no evidence of oppression. (2) The clause converting the deed to a sale on failure to redeem within 6 months WAS a clog — void, as it took away the right to redeem. The 85-year term stood; the suit was premature.
Principle: A long-term mortgage is not per se a clog on equity of redemption; the test is whether the term was unconscionably imposed by taking advantage of the mortgagor’s distress. But any term that entirely takes away the right to redeem is a void clog.
Facts: Multiple cases from Kutch district involving 99-year usufructuary mortgages with conditions: (i) interest on part of the principal payable at redemption (not periodically), (ii) permission to demolish and rebuild at any cost, to be reimbursed by mortgagor at redemption. Mortgagors sought redemption before expiry of 99 years on grounds of clog on equity.
Held: In the inflationary modern era, a 99-year term combined with (a) interest accumulation for decades payable at redemption, and (b) power to reconstruct at any cost — when the mortgagor was financially pressed at the time — constitutes a clog on equity of redemption. The “doctrine of clog” must be moulded to modern conditions.
Principle: In the modern inflationary context, very long-term mortgages combined with clauses making redemption practically impossible (accumulated interest, reconstruction costs) — imposed in circumstances of financial distress — constitute a clog on equity of redemption.
Facts: A 99-year usufructuary mortgage of 1968 over agricultural land of Rs.7,000. The mortgagor was financially pressed. A subsequent purchaser from the mortgagor sought redemption before expiry of the 99-year term. Courts below held the 99-year term was a clog.
Held: Affirmed. On facts, the mortgagee was in an advantageous position; the mortgagor was financially pressed; the mortgagee derived usufructs for 26 years on a meagre Rs. 7,000. The 99-year term was a clog on the equity of redemption. Redemption allowed.
Principle: Whether a long mortgage term constitutes a clog depends on the totality of circumstances — the period, financial condition of the mortgagor, the mortgagee’s advantage, and the impossibility of actual redemption; courts look at the substance, not the label.
10.4 Charge — Section 100
Where immovable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained which apply to a simple mortgage shall, so far as may be, apply to such charge. Nothing in this section applies to the charge of a trustee on the trust property for expenses properly incurred in the execution of his trust; and save as otherwise expressly provided by any law for the time being in force, no charge shall be enforced against any property in the hands of a transferee for consideration who has no notice of the charge.
| Basis | Mortgage | Charge |
|---|---|---|
| Definition | Transfer of interest in property as security | Property made security without transfer of interest |
| Interest in Property | Mortgagee gets an interest in the property | Charge-holder gets no interest; only right to proceed against property |
| Personal Liability | Personal liability may exist | Generally no personal liability |
| Enforcement | Against the property and the mortgagor personally | Only against the property charged |
| Transferee | Not enforceable against bona fide purchaser for value without notice (s.100) | Not enforceable against bona fide purchaser for value without notice |
| Attestation | Required (s.59) | NOT required |
11. Lease and Licence (Sections 105, 106, 109; Indian Easements Act, Section 52)
A lease of immovable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.
Where one person grants to another, or to a definite number of other persons, a right to do, or continue to do, in or upon the immovable property of the grantor, something which would, in the absence of such right, be unlawful, and such right does not amount to an easement or an interest in the property, the right is called a licence.
| Basis | Lease | Licence |
|---|---|---|
| Nature | Transfer of right to enjoy — creates interest in property | Permission to use — no interest in property created |
| Possession | Lessee gets exclusive possession (prima facie) | Licensor retains legal possession |
| Revocability | Not revocable at will of lessor (term must expire) | Generally revocable at will of licensor |
| Assignability | Lessee’s interest is assignable (unless prohibited) | Licence is personal and non-assignable |
| Rent Act Protection | Tenant protected by rent control legislation | Licensee NOT protected |
| Survivability | Lease survives change of landlord | Licence terminates on death/transfer by licensor |
| Test | Intent to create interest in property; exclusive possession | Mere permission to use; legal possession with licensor |
- Substance preferred to form
- Intention of parties is the real test
- If the document creates an interest in the property → lease; if only permission to use → licence
- Exclusive possession creates a prima facie presumption of lease; but it is not conclusive
Facts: A hair-dresser occupied spaces in the cloak rooms of Imperial Hotel, New Delhi under a “Leave and Licence” agreement. He applied for fixation of fair rent under the Delhi Rent Control Act. The hotel argued: (1) the spaces were rooms in a hotel (exempt from the Act), and (2) the agreement created a licence, not a lease.
Held: (Majority) The spaces were rooms in a hotel within Section 2(b), so the Rent Control Act did not apply. (Subba Rao J., dissent) The document was in substance a lease, not a licence — exclusive possession given to the respondent for conducting his business, with covenants characteristic of a lease.
Principle: Whether a document creates a lease or licence depends on the substance and the intention of the parties; exclusive possession gives a prima facie presumption of tenancy, though it is not conclusive.
Facts: A building owner gave possession to D’Souza under a document labelled “Leave and Licence Agreement” for a monthly “compensation” of Rs.350. The agreement included covenants of subletting, renewal, and transfer — typically found in a lease. On expiry, the owner sued for eviction in the civil court, contending D’Souza was a licensee.
Held: Despite the label, the document created a lease. The right of renewal “at the will of the licensee,” prohibition on subletting, and exclusive possession all showed the intention to create a lease. The Goa Rent Control Act applied; the civil suit was not maintainable.
Principle: Labels in a document are not conclusive; the court examines the substance — if exclusive possession and interest in the property are created, the document is a lease regardless of how it is labelled.
Facts: Delta (as tenant) granted ESSO a “Leave and Licence” to run a petrol service station. The document contained Clause 12 expressly stating it was not a lease and did not create landlord-tenant relationship. The question: was this truly a licence or a lease?
Held: The document was a licence. The parties were sophisticated companies who understood their rights. Clause 12 clearly expressed the intent that no tenancy was created. The document also provided for a future sub-lease if consent from the paramount landlord was obtained — showing the parties intended only a licence, not a lease, at this stage.
Principle: Where parties are sophisticated and the document expressly and unambiguously states it is a licence and not a lease, the court should give effect to that intention; exclusive possession loses significance when the parties have made their intent crystal clear.
Facts: Two shops were originally leased to a tenant under one lease by two co-owners. After transfers and a partition decree, the appellant became the exclusive owner of one shop. He sought eviction of the tenant under UP Rent Control Act.
Issue: Whether an assignee of part of the reversion (one shop) could seek eviction of the tenant for only that portion without the other lessor joining.
Held: Section 109 TPA enables the assignee of part of the reversion to exercise all the rights of the lessor in respect of the portion assigned. No consent of the tenant is required for severance of the reversion. The assignee can seek eviction from his portion without splitting the tenancy unlawfully.
Principle: Section 109 TPA confers on an assignee of part of the reversion all the rights of the lessor as to that part; neither consent of the tenant nor joining of the original lessor is required for the assignee to seek eviction from his portion.
12. Gift (Sections 122–126)
“Gift” is the transfer of certain existing movable or immovable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.
For the purpose of making a valid gift of immovable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses. For movable property, the gift may be effected either by a registered instrument or by delivery.
The donor and donee may agree that on the happening of any specified event which does not depend on the will of the donor, the gift shall be suspended or revoked; such agreement, on the happening of the event, operates, to the extent of the donor’s interest in the property, to revoke the gift. A gift is not revocable merely because the donee fails to comply with a condition contained in the gift deed, unless the deed itself specifically provides for revocation on such failure.
Essentials of a Valid Gift
- Voluntary transfer — no consideration
- Of existing movable or immovable property (cannot gift future property)
- By a competent donor
- To an ascertainable donee
- Accepted by or on behalf of the donee (acceptance is essential)
- For immovable property — by registered instrument attested by two witnesses
- A gift can be revoked only if there is a specific agreement at the time of gift that it can be revoked on a specified event (which must not depend on the donor’s will alone)
- A direction that the donee shall maintain the donor is generally a “pious wish” — NOT a condition for revocation; failure to maintain does NOT entitle the donor to revoke the gift
- If the gift deed says “if donee fails to maintain me, the gift shall be void” — that IS a defeasance clause and revocation is possible
- A gift cannot be revoked on the ground of inadequacy of consideration (since there is no consideration)
Facts: A mother-in-law gifted suit lands to her daughter-in-law (Tila Bewa) by a registered deed. The deed made Tila the “full owner from this date.” Subsequently, a direction was given in the deed that Tila would render seva (service) and maintenance to the donor. The donor executed a deed of cancellation alleging breach of conditions.
Issue: Whether the gift was revocable because the donee failed to maintain the donor.
Held: The operative portion of the deed made Tila the full owner absolutely. The subsequent direction for seva was a “pious wish” — not a condition of the gift. No defeasance clause existed. The gift was irrevocable. The cancellation deed was void.
Principle: A direction in a gift deed for the donee to maintain the donor is a pious wish, not a defeasance clause; failure to maintain does not entitle the donor to revoke the gift under Section 126 in the absence of a specific revocation clause.
Facts: An aged, ailing, illiterate pardanashin woman (Basanti) was taken by defendants (collaterals of her deceased husband) to Una under pretext of medical treatment, and a gift deed was obtained from her of all her properties. She subsequently objected and filed a complaint. She died soon after. Her daughter sued to cancel the deed.
Issue: Whether the gift was obtained under undue influence.
Held: The gift was obtained under undue influence. The defendants were in a position to dominate the will of the old, ailing woman; they took a leading part in execution and registration; the natural beneficiary (daughter) was excluded; the donor herself objected after the gift. Gift deed set aside.
Principle: Where a donor is aged, ailing, and illiterate, and the donee takes a leading role in procuring the execution and registration of the gift deed, excluding the natural heirs, the court scrutinises the transaction vigilantly — the burden is on the donee to show it was the free act of the donor.
📝 Important Questions for Exam
A. Short Answer Questions (2–5 marks)
- Define “immovable property” under the Transfer of Property Act, 1882. How does it differ from the definition under the General Clauses Act?
- What is “standing timber”? Distinguish it from a “tree” under the TPA.
- What is a “profit à prendre”? How is it different from an easement?
- Explain the two tests used to determine whether machinery attached to land is movable or immovable property.
- What are the essential ingredients of valid “attestation” under Section 3 TPA? Can a party to the transaction attest?
- Define “actual notice” and “constructive notice” under Section 3 TPA.
- What is the effect of Explanation II to Section 3 (actual possession as constructive notice)?
- Define “transfer of property” under Section 5 TPA. Is partition a transfer?
- What is “spes successionis”? Why cannot it be transferred under Section 6(a)?
- Explain Section 43 TPA — Doctrine of Feeding the Grant by Estoppel with an example.
- Distinguish between absolute and partial restraints on alienation under Section 10 TPA.
- What is the rule against perpetuity under Section 14 TPA? How does it differ from the English rule?
- Distinguish between vested and contingent interest (Sections 19 and 21 TPA).
- What is lis pendens under Section 52 TPA? What is its legal basis?
- Distinguish between a simple mortgage and a usufructuary mortgage.
- What is a “clog on the equity of redemption”? Give two examples.
- What is the principle “once a mortgage, always a mortgage”?
- Distinguish between a lease and a licence under Indian law.
- Define a “gift” under Section 122 TPA. When can a gift be revoked?
- What is the doctrine of Tulk v. Moxhay? How is it embodied in Indian law?
B. Long Answer / Essay Questions (10–15 marks)
- Discuss the concept of immovable property under the Transfer of Property Act, 1882. Explain the distinction between standing timber and trees with reference to decided cases.
- What is the doctrine of fixtures? Discuss the principles governing whether machinery attached to land constitutes immovable property, with reference to leading cases including Bamadev Panigrahi, Duncans Industries, and English authorities.
- Explain the concept of “notice” under Section 3 TPA. Discuss actual notice, constructive notice, and imputed notice with reference to case law.
- Write a detailed note on “attestation” under Section 3 TPA. Can a party to the transaction or a sub-registrar attest a document? Discuss with reference to decided cases.
- “Section 43 of the TPA embodies a rule of estoppel.” Discuss the doctrine of feeding the grant by estoppel under Section 43 with reference to Jumma Masjid case and Kartar Singh case.
- Discuss the rule against perpetuity under Section 14 TPA. How does it differ from English law? Does it apply to covenants of pre-emption and covenants for renewal of lease?
- Distinguish between vested and contingent interests with reference to Section 19 and 21 of the TPA. When does postponement of enjoyment make an interest contingent?
- Discuss the doctrine of lis pendens under Section 52 TPA. What are its essentials and what is its legal basis?
- What are the kinds of mortgages under Section 58 TPA? Discuss the right of redemption and the doctrine of clog on the equity of redemption with reference to leading cases.
- “The decisive test to distinguish a lease from a licence is the intention of the parties.” Critically examine this statement with reference to the four propositions from Associated Hotels of India case and subsequent decisions.
C. Problem-Based Questions
- Problem: A grants B the right to enter his forests and cut bamboos for 15 years. The grant is by an unregistered document. B claims this is a contract for sale of goods (movable property). A says it requires registration. Who is correct?
Hint: Grant of right over natural produce for a long period = profit à prendre = immovable property = registration required. B’s claim fails. Apply Titaghur Paper Mills and Shantabai. - Problem: A mortgagor’s mortgage deed of 1990 states: “The mortgage is for 99 years and cannot be redeemed before that. If not redeemed within 3 months thereafter, the deed becomes a sale.” The mortgagor is financially distressed. In 2020, the mortgagor seeks redemption. Advise.
Hint: 99-year term may be a clog (Pomal Kanji) depending on circumstances of distress. The clause making it a sale on failure is definitely a clog (Ganga Dhar). Redemption should be allowed. - Problem: A sold property to B in 1990, representing he owned it fully. Actually, A had only spes successionis (his father owned it). In 1995, A’s father died and A inherited the property. In 1996, A sold the same property to C (a bona fide purchaser for value without notice). Who prevails — B or C?
Hint: Section 43 applies as between A and B — B gets the property when A acquires it (1995). But C is protected as a bona fide purchaser for value without notice (exception in Section 43). C prevails. - Problem: A gift deed states: “I gift these lands to my daughter-in-law X absolutely, and as a pious obligation she shall maintain me till my death.” X fails to maintain the donor. Can the donor revoke the gift?
Hint: The direction to maintain is a pious wish, not a defeasance clause. No revocation. Apply Tila Bewa. The gift was absolute; the maintenance clause did not create a condition for revocation. - Problem: During the pendency of a mortgage suit over a property, the defendant mortgagor’s son executes a new 10-year lease of the property to T. T claims he was unaware of the pending suit. Is the lease valid?
Hint: Lis pendens (Section 52) — notice is irrelevant. The lease was made pendente lite by a party to the suit, affecting the rights of the mortgagee plaintiff. Lease void against the plaintiff. - Problem: A property is purchased at a court auction. Prior to the auction, the property had unpaid municipal taxes (a statutory first charge). The auctioneer did not disclose the arrears. Can the municipality recover from the auction purchaser?
Hint: Under Section 100 TPA, a charge is not enforceable against a bona fide purchaser for value without notice. The municipality must show notice. Apply Ahmedabad Municipal Corp. case — if the purchaser made reasonable enquiries and was not informed, no constructive notice. - Problem: A building owner grants a hair-dressing saloon in his hotel premises to X under a document titled “Licence Deed” but gives X exclusive possession, allows renewal at X’s will, and prohibits subletting. Is X a tenant or licensee?
Hint: Apply four tests from Associated Hotels — substance over form. Exclusive possession + right of renewal + subletting covenant = tenancy. X is a tenant. D’Souza case applied. - Problem: A (a Hindu separated from his father) sells field Z to C, representing it is his. In fact, Z was retained by A’s father B on partition. B dies, and A inherits Z. Another person D has also taken a transfer from A (after A acquired Z), for value, without notice of C’s prior transfer. Who gets priority?
Hint: Section 43 — C is entitled to Z when A acquires it (from B’s death). But D is a bona fide transferee for value without notice (protected by Section 43 exception). D wins over C. - Problem: Cinema machinery (projector, sound system) is permanently bolted to the floor of a concrete cinema hall owned by the operator. A creditor wants to attach the machinery as movable property. Is this attachment possible?
Hint: Apply Duncans Industries and Bamadev tests. Owner of land and machinery; permanent intent to use as a cinema hall; immovable property. Cannot be attached as movable. - Problem: A transfers property to B with a condition: “B shall not sell this property during the lifetime of A’s wife.” The wife lives for 30 years after the transfer. Is the condition valid?
Hint: Section 10 — absolute restraint on alienation (for 30 years effectively) = void. But if construed as partial restraint (allowing sale after wife’s death), it might be valid. If the wife’s lifetime is an uncertain, possibly indefinite period, it is likely an absolute restraint — void.
D. MCQ Practice (20 Questions)
- Under the Transfer of Property Act, 1882, which of the following is NOT immovable property?
(a) Fishery rights (b) Hereditary allowances (c) Standing timber (d) A mortgage over land - What is the test to distinguish “standing timber” from a “tree”?
(a) Diameter of trunk (b) Age of the tree (c) Intent to fell soon and fitness for use as timber (d) Height of the tree - A machinery is installed by a tenant in leased premises for running his own factory. It is most likely:
(a) Immovable property (b) Movable property (c) Neither (d) Depends on height - Under Section 3 TPA, which explanation to “notice” deals with actual possession?
(a) Explanation I (b) Explanation II (c) Explanation III (d) Main provision - A gift is completed when:
(a) Registered (b) Delivered by donor (c) Accepted by the donee (d) Attested by witnesses - Spes Successionis is covered under Section:
(a) 5 (b) 10 (c) 6(a) (d) 43 - Section 43 TPA applies when the transferor:
(a) Receives no consideration (b) Transfers personal property (c) Fraudulently or erroneously represents authority to transfer (d) Mortgages property - A partial restraint on alienation in a family arrangement is:
(a) Valid (b) Void (c) Voidable (d) None of the above - Under Indian law, the rule against perpetuity permits vesting up to:
(a) 21 years (b) Life in being only (c) Life in being + minority of ultimate beneficiary (d) 100 years - A contingent interest is NOT:
(a) Transferable (b) Attachable in execution (c) Inheritable (d) Subject to defeasance - Lis pendens under Section 52 is based on:
(a) Notice doctrine (b) Estoppel (c) Public policy (d) Contract law - Which mortgage requires no registration?
(a) Simple mortgage (b) Usufructuary mortgage (c) Mortgage by deposit of title deeds (d) English mortgage - “Once a mortgage, always a mortgage” means:
(a) Mortgages can never be cancelled (b) The right to redeem cannot be absolutely extinguished (c) Mortgagee always retains possession (d) All mortgages are perpetual - A 99-year mortgage with clauses making redemption practically impossible is:
(a) Always valid (b) A clog on equity of redemption — void (c) Valid if registered (d) Voidable at court’s discretion - A “charge” under Section 100 TPA:
(a) Does not require attestation (b) Requires 2 witnesses (c) Creates a personal liability (d) Transfers interest in property - The test that distinguishes lease from licence is primarily:
(a) Duration (b) Amount of rent (c) Intention of parties and whether interest in property is created (d) Whether the document is registered - A Licence under the Indian Easements Act:
(a) Transfers interest in land (b) Is irrevocable (c) Does not amount to an easement or interest in property (d) Must be registered - In Tulk v. Moxhay, the covenant was enforced against the subsequent purchaser because:
(a) It ran with the land at common law (b) The purchaser had notice of the covenant (c) The covenant was registered (d) The covenant was in a deed of sale - A direction in a gift deed that the donee shall maintain the donor is generally:
(a) A condition for revocation (b) A defeasance clause (c) A pious wish — not enforceable as a condition (d) Void - Execution of a Will during pendency of a status quo order is:
(a) A contempt of court (b) A violation of the order (c) Valid — a Will does not transfer property inter vivos (d) Void
⚡ Quick Revision Summary — Property Law
1. Key Definitions
| Term | Section | One-Line Definition |
|---|---|---|
| Immovable Property | S.3 TPA, GCA s.3(26) | Land, benefits from land, things attached to earth (excludes standing timber, growing crops, grass) |
| Standing Timber | S.3 TPA | Tree fit for use as building material, to be felled at an early date — movable property |
| Attestation | S.3 TPA | Two witnesses who saw the executant sign or received personal acknowledgment, each signing animo attestandi in the executant’s presence |
| Notice | S.3 TPA | Actual knowledge, or deemed knowledge (wilful abstention/gross negligence), or imputed through agent |
| Transfer of Property | S.5 TPA | Act by a living person conveying property in present or future to one or more living persons |
| Spes Successionis | S.6(a) TPA | Mere chance of an heir apparent succeeding — not transferable |
| Conditional Transfer | S.10 TPA | Absolute restraint on alienation is void; partial restraint may be valid |
| Rule Against Perpetuity | S.14 TPA | Interest must vest within: life in being + minority of ultimate beneficiary |
| Vested Interest | S.19 TPA | Present right to future enjoyment; postponement of enjoyment ≠ contingent interest |
| Lis Pendens | S.52 TPA | Transfer pendente lite cannot affect rights of other parties to the suit |
| Mortgage | S.58 TPA | Transfer of interest in immovable property as security for money |
| Redemption | S.60 TPA | Right of mortgagor to get back the property on paying the mortgage money (“once a mortgage, always a mortgage”) |
| Lease | S.105 TPA | Transfer of right to enjoy immovable property for consideration for a time or in perpetuity |
| Licence | S.52 Easements Act | Permission to do something on another’s immovable property that would otherwise be unlawful; no interest in property |
| Gift | S.122 TPA | Voluntary transfer without consideration; completed by acceptance |
2. All Sections Covered
| Section | Subject | Key Rule |
|---|---|---|
| 3 | Interpretation (Immovable/Movable, Attestation, Notice) | Trees = immovable; standing timber = movable; animo attestandi for attestation; actual/constructive/imputed notice |
| 5 | Transfer of Property | Act by living person; will is NOT a transfer; partition is NOT a transfer |
| 6(a) | Non-Transferable Property | Spes successionis cannot be transferred |
| 10 | Restraint on Alienation | Absolute restraint = void; partial restraint = valid |
| 11 | Direction Inconsistent with Interest | Absolute owner can disregard direction on how to use the property |
| 13 | Transfer for Unborn Persons | Prior interest + ultimate remainder = entire remaining interest |
| 14 | Rule Against Perpetuity | Life in being + minority; actual events test (Indian rule) |
| 19 | Vested Interest | Postponement of enjoyment ≠ contingent; payable to heirs if beneficiary dies |
| 21 | Contingent Interest | Depends on uncertain event; not attachable; does not pass to heirs on death |
| 40 | Obligation Running with Land | Enforceable against transferee with notice; not against bona fide purchaser without notice |
| 43 | Feeding Grant by Estoppel | Erroneous representation → estops transferor when he acquires title; protected: subsequent bona fide purchaser |
| 52 | Lis Pendens | Transfer pendente lite void against other parties; based on public policy, not notice |
| 58 | Mortgage — Kinds | Six kinds; equitable mortgage by deposit of title deeds needs no registration |
| 60 | Right to Redeem | Once mortgage = always mortgage; clog on equity = void |
| 100 | Charge | Security without transfer of interest; no attestation required; not against bona fide purchaser without notice |
| 105 | Lease | Transfer of right to enjoy; for time/in perpetuity; for consideration |
| 106 | Duration of Lease | Lease for manufacturing/agricultural purposes: 1 year notice; other leases: 15 days notice |
| 109 | Rights of Lessor’s Transferee | Assignee of reversion gets all lessor’s rights as to that part |
| 122 | Gift Defined | Voluntary, without consideration, accepted by donee |
| 123 | How Gift Effected | Immovable: registered instrument + 2 witnesses; movable: delivery or registration |
| 126 | Revocation of Gift | Only on agreed contingency (not donor’s will); pious wish ≠ defeasance clause |
3. Landmark Cases
| Case | Year | Principle |
|---|---|---|
| Shantabai v. State of Bombay | 1958 | Long-term right to cut trees = benefit arising from land = immovable = needs registration |
| State of Orissa v. Titaghur Paper Mills | 1985 | Long bamboo contract = profit à prendre = immovable property |
| Bamadev Panigrahi v. Monorama Raj | 1974 | Cinema machinery in touring talkies on leased land = movable property (beneficial for equipment, not land) |
| Duncans Industries v. State of UP | 2000 | Fertilizer plant machinery permanently embedded = immovable property |
| Kumar Harish Chandra Singh Deo v. Bansidhar Mohanty | 1965 | Lender (party to transaction, not deed) can validly attest mortgage |
| M.L. Abdul Jabbar Sahib v. H. Venkata Sastri | 1969 | Sub-registrar and identifying witnesses do not attest animo attestandi |
| Ahmedabad Municipal Corp. v. Haji Abdul Gafur | 1971 | Constructive notice of municipal tax arrears not automatically imputed to all auction purchasers |
| Ram Niwas v. Bano | 2000 | Notice from actual possession (Exp. II) applies; but possession of small fraction may not trigger duty to inquire |
| V.N. Sarin v. Ajit Kumar Poplai | 1966 | Partition is NOT a transfer; coparcener has pre-existing right |
| N. Ramaiah v. Nagaraj S. | 2001 | Will is NOT a transfer under Section 5; operates only after death; does not violate status quo order |
| Jumma Masjid v. Kodimaniandra Deviah | 1962 | Section 43 applies even where transferor had only spes successionis; rule of estoppel |
| Kartar Singh v. Harbans Kaur | 1994 | Section 43 does not apply if transferee was on notice of limited authority or contract was void |
| Rosher v. Rosher | 1884 | Condition to sell at 1/5th of value = absolute restraint = void |
| Muhammad Raza v. Abbas Bandi Bibi | 1932 | Partial restraint (no sale to strangers) in family arrangement = valid |
| Tulk v. Moxhay | 1848 | Restrictive covenant enforceable against purchaser with notice (Section 40 TPA) |
| Zoroastrian Cooperative Housing Society | 2005 | Bye-law restricting membership to Parsis = partial restraint = valid under Section 10 TPA |
| Ram Newaz v. Nankoo | 1926 | Clause tying land to lineal descendants indefinitely = violates rule against perpetuity |
| Ram Baran Prasad v. Ram Mohit Hazra | 1967 | Pre-emption covenant does not create interest in land — rule against perpetuity inapplicable |
| R. Kempraj v. Burton Son & Co. | 1970 | Covenant for perpetual renewal of lease = covenant, not transfer — perpetuity rule inapplicable |
| Rajesh Kanta Roy v. Shanti Debi | 1957 | Interest vested in title though enjoyment restricted by trust = vested, attachable |
| Supreme General Films Exchange v. Maharaja Brijnath Singhji | 1975 | Lease pendente lite = void under lis pendens (Section 52) |
| Dalip Kaur v. Jeewan Ram | 1996 | Lis pendens applies to Supreme Court proceedings under Article 136 |
| Ganga Dhar v. Shankar Lal | 1958 | 85-year term not per se a clog; clause making deed a sale on non-redemption IS a clog (void) |
| Pomal Kanji Govindji v. Vrajlal Karsandas Purohit | 1989 | 99-year mortgage + oppressive conditions in inflationary age = clog on equity of redemption |
| Shivdev Singh v. Sucha Singh | 2000 | 99-year mortgage with mortgagor in distress = clog on equity; redemption allowed |
| Associated Hotels of India v. R.N. Kapoor | 1959 | Four tests to distinguish lease from licence; intention of parties is paramount |
| B.V. D’Souza v. Antonio Fausto Fernandes | 1989 | Document labelled licence but giving exclusive possession + renewal rights = lease in substance |
| Delta International v. Shyam Sunder Ganeriwalla | 1999 | Where sophisticated parties clearly express intent of licence (not lease), courts give effect to that intent |
| Tila Bewa v. Mana Bewa | 1962 | Direction to maintain donor = pious wish; failure to maintain ≠ revocation of gift |
| Kartari v. Kewal Krishan | 1972 | Gift by aged, ailing, illiterate woman procured by donee taking leading role = undue influence; gift set aside |
4. Golden Rules / Key Principles
- Trees = immovable; Standing timber (ready for use, to be felled soon) = movable
- Machinery: Two tests — degree of annexation + object of annexation
- Attestation requires animo attestandi — intent to attest; registrar signing in official capacity ≠ attestation
- Section 5 TPA: Only inter vivos transfers; Will is NOT a transfer; partition is NOT a transfer
- Spes Successionis = untransferable; but Section 43 creates an exception via estoppel
- Absolute restraint on alienation = void (Section 10); partial restraint = valid
- Indian perpetuity rule: actual events test (not “possible events” as in England)
- Lis pendens = public policy; no need for notice; applies to all courts including Supreme Court
- “Once a mortgage, always a mortgage” — core principle of Section 60
- Lease = interest in land; Licence = personal privilege; intention of parties is decisive
- Gift: voluntary, no consideration, accepted by donee; immovable property must be registered
- Pious wish in gift deed ≠ defeasance clause; failure to carry out pious wish ≠ revocation
5. Memory Aid — SLAM (Kinds of Mortgage)
S — Simple Mortgage | L — (Conditional Sale) | A — Anomalous | M — Mortgage by Deposit | Also: Usufructuary, English