LAW OF PROPERTY SHORT ANSWER

LAW OF PROPERTY Unit-l:

1. Meaning and Concept of Property

The term property in law is a very wide concept. It is not confined merely to physical objects but extends to every possible right and interest which a person can possess. Property means the bundle of rights which a person has over a thing that is enforceable by law. In jurisprudence, property covers both material objects like land, house, and machinery, as well as intangible rights like debts, goodwill, patents, and copyrights. The concept is rooted in ownership, possession, and enjoyment of rights. According to Salmond, property includes all legal rights of a person except his personal rights such as reputation and life. Thus, property signifies both tangible and intangible wealth recognized by law.

2. Kinds of Property

Property can be broadly divided into two main categories:

Movable and Immovable Property – Movable property refers to things which can be moved from one place to another (like goods, vehicles). Immovable property includes land and things permanently attached to it.
Tangible and Intangible Property – Tangible property refers to material objects, whereas intangible property includes rights such as patents, copyrights, and debts.
Private and Public Property – Private property belongs to individuals, while public property is owned by the State.
Corporeal and Incorporeal Property – Corporeal relates to physical things; incorporeal relates to rights and obligations.

This classification helps in understanding rights and transfers under property law.

3. Transfer of Property

The Transfer of Property Act, 1882, governs the transfer of property in India. Transfer of property means an act by which a living person conveys property in present or in future to one or more living persons. The Act deals with transfer of immovable property and lays down rules relating to sale, mortgage, lease, exchange, and gift. The essential requirement is that the transfer must be between living persons (inter vivos). Testamentary succession is excluded as it is governed by succession laws. A valid transfer must comply with legal provisions such as competence of parties, lawful object, and proper mode of transfer.

4. Transferable and Non-Transferable Property

Under Section 6 of the Transfer of Property Act, all properties are transferable except those expressly prohibited by law. Examples of non-transferable property include:

The chance of an heir apparent succeeding to an estate,
A mere right of re-entry for breach of condition,
Easements,
Political pensions,
Public offices and salaries.
Transferable properties include land, houses, machinery, debts, actionable claims, shares, etc. The rule ensures that speculative and uncertain interests are not transferred, and only legally recognized and enforceable rights can be conveyed.

5. Who Can Transfer Property

According to Section 7 of the Transfer of Property Act, a person competent to transfer property must:

Be competent to contract, i.e., be of sound mind and of majority age; and
Be entitled to the property or authorized to dispose of it.
Thus, ownership or authority is essential. A minor or a lunatic cannot transfer property, as they lack contractual capacity. However, guardians, executors, or trustees may transfer property on behalf of others when authorized by law. This provision ensures that transfers are made only by those with legitimate rights over the property.

6. Operation of Transfer

A transfer operates to convey rights from the transferor to the transferee. It may create, modify, or extinguish rights in property. The transfer operates immediately if executed in present, or it may be contingent upon a future event. The transferee acquires all rights that the transferor had in the property, subject to conditions and restrictions. For example, in sale, absolute ownership passes; in mortgage, a limited interest is created. The doctrine of nemo dat quod non habet (no one can give what he does not have) applies here.

7. Mode of Transfer

The Transfer of Property Act recognizes several modes of transfer such as:

Sale – Transfer of ownership in exchange for price.
Mortgage – Transfer of interest in property for securing repayment of a loan.
Lease – Transfer of right to enjoy property for a certain time.
Exchange – Transfer of property for another property.
Gift – Voluntary transfer without consideration.
Each mode has specific requirements regarding registration, consideration, delivery, and possession. These modes ensure certainty and legality in dealings related to immovable property.

8. Conditional Transfer

A conditional transfer is one where the vesting of rights in the transferee depends on the happening or non-happening of a specified event. Such transfers are valid if the condition is not illegal or impossible. Example: A transfers land to B provided that B marries C. If the condition is fulfilled, the transfer becomes complete. Sections 25–34 of the Act deal with such conditions. Conditional transfers provide flexibility but must comply with legality and public policy.

9. Vested and Contingent Interest

Vested interest means an immediate right to property even though the enjoyment may be postponed. For example, property given to B after the death of A – B’s interest is vested.
Contingent interest depends on the happening of an uncertain event. For example, property is given to B if he marries C. Here, B’s interest is contingent.
The distinction is crucial as vested interest is transferable and heritable, whereas contingent interest may fail if the condition is not satisfied.

10. Transfer to Unborn Person

Section 13 of the Transfer of Property Act provides that property cannot be directly transferred to an unborn person. However, property may be transferred for the benefit of an unborn child by creating a prior interest in favor of a living person, until the unborn person comes into existence. Example: A transfers property to B for life, then to the unborn child of C. This is valid, but the whole interest must be transferred to the unborn person, otherwise the transfer is void. This provision ensures protection of rights of persons yet to be born.

11. Void and Unlawful Conditions in Transfer

Under Section 25 of the Transfer of Property Act, a transfer cannot be made subject to conditions that are impossible, unlawful, or opposed to public policy. If a condition is void, the transfer takes effect as if no condition had been attached. Examples of void conditions include:

Impossible Conditions – If A transfers property to B on condition that B must go to the moon, the condition is void.
Unlawful Conditions – A transfer requiring B to commit a crime is void.
Conditions against Public Policy – A condition that restrains marriage, trade, or legal rights is invalid.
Thus, law ensures that transfers serve lawful purposes and do not encourage illegality or uncertainty.

12. Condition Precedent

A condition precedent is a condition which must be fulfilled before the transfer takes effect. Until the condition is satisfied, no rights pass to the transferee. For example, A transfers land to B on condition that B shall marry C. The transfer will take effect only after the marriage. Such conditions must be valid, possible, and not opposed to law. Section 26 of the Act governs condition precedent. If the condition is partly impossible but substantially possible, the transfer may still be valid. This ensures fairness while balancing intent of transferor and practicality.

13. Condition Subsequent

A condition subsequent is one which divests an already vested interest upon its occurrence. Here, the transferee initially acquires rights, but they are lost if the condition is fulfilled. For example, A transfers land to B with the condition that if B joins the army, the property shall revert to A. Once B joins the army, his interest ceases. Section 27 of the Act deals with such conditions. However, if the condition is unlawful or impossible, it is void and the transfer becomes absolute. Thus, the law prevents abuse of conditional transfers.

14. Vested Interest

A vested interest is a right that is absolute and not dependent on any uncertain event. Even if the possession is postponed, the right exists immediately. For example, property given to B after A’s death gives B a vested interest. Under Section 19 of the Act, vested interest is transferable and heritable. Death of the transferee before getting possession does not destroy his right, as it passes to his heirs. Courts have consistently favored vested interest, as it provides certainty and stability in property transactions.

15. Contingent Interest

A contingent interest is one that depends upon the happening of an uncertain event. The transferee acquires no right unless and until the condition is satisfied. For example, A transfers land to B if B marries C. Here, B’s right is contingent on marriage. Section 21 of the Act deals with contingent interest. Unlike vested interest, contingent interest is uncertain and may fail altogether. It is neither transferable nor heritable until the condition is fulfilled. This provision prevents speculative rights from disturbing settled ownership.

16. Difference between Vested and Contingent Interest

The distinction lies in certainty of rights:

Vested interest is a present right which may be enjoyed in the future; contingent interest is dependent on an uncertain event.
Vested interest is transferable and heritable, while contingent interest may fail.
Example: A transfers land to B after his death – vested interest. A transfers land to B if B marries C – contingent interest.
Courts interpret provisions in favor of vested rather than contingent interest, ensuring security of transactions. This difference is crucial in succession and transfer cases.

17. Rule against Perpetuity

The rule against perpetuity, under Section 14 of the Transfer of Property Act, prevents property from being tied up for an indefinite period. Property must vest within the lifetime of living persons plus the minority of the unborn beneficiary (maximum 18 years). Example: A transfer to an unborn person’s unborn child is invalid, as it postpones vesting indefinitely. This rule ensures free circulation of property and prevents owners from imposing unreasonable restrictions on future generations. It balances individual freedom with public interest.

18. Transfer for the Benefit of an Unborn Person

As per Section 13 of the Act, property cannot be transferred directly to an unborn person. It must first be given to a living person, who holds it for life, and then it vests in the unborn beneficiary upon birth. Example: A transfers land to B for life, and thereafter to the unborn child of C. The whole interest must be transferred to the unborn person; otherwise, the transfer is void. This provision ensures protection of unborn persons while preventing uncertainty in ownership.

19. Transfer to a Class of Persons

When property is transferred to a class of persons, some of whom may be unborn, the transfer is valid only for those who are alive. Example: A transfers property to all children of B. If B has some living children and some unborn, only the living children take the benefit. This rule avoids illegal transfers to non-existent persons while protecting living beneficiaries. It is an application of Sections 13 and 14 of the Act.

20. Doctrine of Election

The doctrine of election, under Section 35 of the Act, states that a person who takes benefit under a transfer must also accept the burden attached to it. He cannot both approbate and reprobate. For example, A transfers B’s property to C, and also gives a gift of A’s property to B. B must choose – either accept the gift and allow C to retain his property, or reject the gift and keep his property. This doctrine prevents unfair advantage and promotes justice.

21. Doctrine of Accretion

The doctrine of accretion applies when property transferred increases by natural or legal means. Section 70 of the Act provides that the transferee is entitled to any accession to the property. For example, if a river deposits soil on transferred land, the transferee acquires the added land. Similarly, improvements or profits added during possession also belong to the transferee. This doctrine ensures that ownership rights include benefits naturally attached to the property.

22. Doctrine of Election vs. Accretion

While election deals with choice between benefit and burden under a transfer, accretion deals with natural or legal additions to the property. In election, the transferee cannot accept benefits while rejecting obligations. In accretion, the transferee gains ownership of any additions to the property. Both doctrines safeguard fairness but apply in different contexts. Courts apply election in cases of inconsistent transfers and accretion in cases of property growth.

23. Transfer by Ostensible Owner

Section 41 of the Act deals with ostensible ownership. If a person, with consent of the real owner, appears to be the owner and transfers property for consideration, the transfer is valid if the transferee acts in good faith and takes reasonable care. Example: A allows B to appear as owner; B sells property to C. If C acted in good faith, the sale binds A. This doctrine protects bona fide purchasers and prevents fraud by owners who allow false appearances.

24. Feeding the Grant by Estoppel

Section 43 of the Act provides that if a person transfers property which he does not own but later acquires, the transferee can claim the benefit when the transferor acquires ownership. Example: A sells land to B without owning it, but later buys the land. B can enforce the original transfer. This doctrine is based on estoppel and aims to protect transferees who rely in good faith on representations of transferors.

25. Part-Performance (Section 53A)

The doctrine of part-performance protects a transferee who has taken possession of property and performed his part of the contract, even if the transfer is not formally completed. For example, A agrees to sell land to B, B pays price and takes possession, but A refuses to register the deed. B can defend his possession under Section 53A. This doctrine prevents injustice to transferees and enforces equity, though it cannot be used as a sword (to claim ownership), only as a shield (to defend possession).

LAW OF PROPERTY Unit-Il:

1. Doctrine of Election

The doctrine of election is embodied in Section 35 of the Transfer of Property Act, 1882. It applies when a person professes to transfer property that does not belong to him, but in the same transaction, he confers some benefit on the true owner. The true owner must then choose—either to accept the benefit and allow the transfer of his property to stand or reject the benefit and retain his property. This principle is based on equity: one cannot approbate and reprobate at the same time. For example, if A transfers B’s land to C but gives B another benefit in the same deed, B must elect whether to accept the benefit and allow C to hold the land or reject the benefit and keep the land. If B elects against the transfer, the benefit is forfeited. Courts uphold this doctrine to maintain fairness in transactions.

2. Covenants in Property Transfer

Covenants refer to agreements or promises contained in a deed relating to property rights and obligations. They are either affirmative (to do something) or negative (not to do something). For instance, a covenant may restrict the use of land for commercial purposes or bind the transferee to maintain a boundary wall. Indian law does not codify covenants extensively, but courts have recognized them under principles of equity. In leases and transfers, covenants ensure the enjoyment of property without interference. Breach of covenant may give rise to injunctions or damages. They play a crucial role in protecting property values and regulating land use.

3. Transfer by Ostensible Owner

Section 41 of the Transfer of Property Act, 1882 deals with transfer by ostensible owner. An ostensible owner appears to be the owner of property but does not have real ownership, often due to consent or negligence of the true owner. If such a person transfers property for consideration, the transfer is valid, provided the transferee acted in good faith and after taking reasonable care. For example, if X lets Y manage his land and Y sells it to Z (who acts in good faith), then X cannot later deny the transfer. This protects innocent purchasers and encourages diligence in ownership management.

4. Doctrine of Feeding the Grant by Estoppel

This doctrine is codified in Section 43 of the Transfer of Property Act, 1882. It applies when a person fraudulently or erroneously represents that he has authority to transfer certain property and later acquires an interest in that property. The transferee can then claim the benefit of such interest. For example, if A transfers property to B claiming to be its owner but later acquires ownership, B can insist that the property should vest in him. However, the transferee must have acted in good faith and for consideration. This doctrine prevents injustice and ensures honesty in transactions.

5. Doctrine of Lis Pendens

The doctrine of lis pendens is laid down in Section 52 of the Transfer of Property Act, 1882. It means “pending litigation.” When a dispute over property is pending before a court, neither party can transfer or otherwise deal with the property so as to affect the rights of the other party. The purpose is to prevent multiplicity of litigation and to protect the subject matter of a suit. For example, if litigation is ongoing about the ownership of a house, one party cannot sell it during the suit. However, transfers made are not void but are subject to the outcome of the case.

6. Fraudulent Transfer

Section 53 of the Transfer of Property Act, 1882 deals with fraudulent transfer. Any transfer made with the intention to defeat or delay creditors is voidable at their option. Fraudulent transfers can include sham transactions, undervalued transfers, or transfers made to relatives to avoid paying debts. However, transfers made in good faith for adequate consideration are protected. For example, if a debtor transfers property to his brother to avoid paying creditors, the court can set aside the transfer. The doctrine prevents misuse of property law to cheat creditors.

7. Doctrine of Part-Performance

This doctrine is codified in Section 53A of the Transfer of Property Act, 1882. It protects transferees who, in reliance on an unregistered or incomplete transfer, take possession and perform their part of the contract. Although the transferor remains the legal owner, he is barred from enforcing rights against the transferee. For example, if A agrees to sell land to B, accepts consideration, and lets B take possession, A cannot later evict B simply because registration was incomplete. However, this right can only be used as a shield, not as a sword, i.e., it is a defense, not a claim.

8. Distinction between Vested and Contingent Interest

A vested interest is an interest created in favor of a person which is not dependent on any condition precedent, though its enjoyment may be postponed. A contingent interest depends on the happening of a specified uncertain event. For example, if property is transferred “to A on attaining age 18,” A has a contingent interest until he turns 18. But if property is transferred “to A, though possession will begin at 18,” A has a vested interest from the date of transfer. The law favors vested interest as it provides certainty.

9. Conditional Transfers

A conditional transfer is one where the transfer of property depends upon the happening or non-happening of a specified event. Conditions may be precedent (to be fulfilled before transfer takes effect) or subsequent (which may terminate an interest upon occurrence). For example, if property is transferred to A on condition that he marries within a year, it is a condition precedent. If transferred to A but to be forfeited if he marries B, it is a condition subsequent. However, conditions must be lawful and not against public policy.

10. Void and Unlawful Conditions

Under Section 25 of the Transfer of Property Act, 1882, any condition that is impossible, forbidden by law, fraudulent, injurious to others, or against public policy is void. For example, a transfer “to A on condition that he commits theft” is void. Similarly, conditions restraining marriage or absolute restraints on alienation are void under Sections 10–12. The law ensures that transfers do not encourage illegal or immoral acts.

11. Condition Precedent

A condition precedent is one which must be fulfilled before an interest in property takes effect. If the condition is impossible or unlawful, the transfer fails. For instance, if X transfers land to Y on condition that Y marries Z, Y acquires rights only after fulfilling the condition. Until then, no interest vests in Y. This ensures that the intention of the transferor is respected.

12. Condition Subsequent

A condition subsequent operates after an interest has already been created, and upon its happening, the interest may be defeated. For example, if land is transferred to A with a condition that if he uses it for business purposes, it shall revert to the transferor, then breach of condition terminates the transfer. However, such conditions must not be unlawful or against public policy.

13. Transfer to an Unborn Person

Under Section 13 of the Transfer of Property Act, 1882, property cannot be directly transferred to an unborn person. It must first be transferred to a living person, who holds it for the benefit of the unborn, and upon his birth, the interest vests in him. For example, if property is transferred “to A for life, then to the unborn son of B,” it is valid. This ensures that legal rights are not vested in non-existent persons.

14. Rule against Perpetuity

The rule against perpetuity, under Section 14, prohibits creation of future interests that postpone the vesting of property beyond the lifetime of living persons plus the minority of an unborn beneficiary. For example, if property is transferred to A for life, then to B’s son (unborn) after attaining 25 years, it is void as it may vest too remotely. This rule ensures free circulation of property.

15. Difference between Lease and License (related to transfer doctrines)

A lease is a transfer of the right to enjoy property for consideration (rent) for a certain time, creating an interest in the property. A license, however, merely grants permission to use property without transferring interest. For example, renting a house creates a lease, whereas allowing someone to park in a driveway creates a license. This distinction is important when applying doctrines like part-performance or lis pendens, as only a lease creates proprietary rights, whereas a license does not.

16. Transfer by Co-owners

Under Section 44 of the Transfer of Property Act, 1882, one co-owner can transfer his share in immovable property. The transferee then steps into the shoes of the transferor and becomes entitled to joint possession and profits. However, in the case of a dwelling house belonging to an undivided family, a transferee who is not a member of the family cannot demand joint possession but can seek partition. This rule prevents intrusion of strangers into family dwellings. For example, if A, B, and C are co-owners of a house and A sells his share to X (a stranger), X cannot claim residence in the house but can claim his portion by partition. This balances ownership rights with family privacy.

17. Transfer by Unauthorized Person (Section 41 vs Section 43)

A transfer by an ostensible owner (Section 41) is valid if the transferee acts in good faith and with reasonable care, while a transfer by a person without ownership but who later acquires title (Section 43 – feeding the grant by estoppel) also becomes valid at the option of the transferee. The distinction is that under Section 41, ownership appears genuine due to the true owner’s consent, whereas under Section 43, there is no ownership initially, but later acquisition validates it. Example: If X lets Y appear as owner and Y sells to Z → valid under Section 41. But if Y falsely represents ownership and later acquires it → Z can enforce transfer under Section 43. Both doctrines protect innocent transferees.

18. Doctrine of Accretion

Accretion means the gradual addition to land by natural forces, such as the deposit of soil by a river. Under Section 63 of the Transfer of Property Act (applied with general property principles), when property is transferred, all legal incidents of ownership, including accretion, pass to the transferee unless expressly excluded. For example, if A sells land bordering a river to B, and later the river deposits extra soil on the bank, that land belongs to B. This doctrine ensures that the benefits naturally attached to property pass along with ownership.

19. Transfer Pending Revocation or Forfeiture

Transfers may sometimes be made subject to conditions of revocation or forfeiture. Section 31 of the Transfer of Property Act, 1882 states that such transfers are valid if the conditions are not unlawful. A revocable transfer is one where the transferor retains a right to revoke under specified circumstances. A forfeiture transfer terminates the transferee’s interest upon breach of condition. Example: A sells land to B with a condition that if B uses it for gambling, the transfer shall be void. Such conditional transfers ensure compliance with transferor’s wishes, provided they do not violate public policy.

20. Distinction between Fraudulent Transfer and Benami Transaction

A fraudulent transfer (Section 53, TPA) is a transfer made to defeat or delay creditors, voidable at their option. A benami transaction (regulated under the Benami Transactions (Prohibition) Act, 1988) is one where property is transferred in the name of one person while the consideration is paid by another, for concealment or illegal purposes. In fraudulent transfer, the focus is on defeating creditors; in benami, it is on hiding real ownership. For example, a debtor transferring property to his wife to avoid paying debts is fraudulent. But buying property in the name of a servant with owner’s money is benami. Courts strike down both to ensure transparency in property dealings.

LAW OF PROPERTY Unit-IIl:

1. Sale – Essential Features

A sale under Section 54 of the Transfer of Property Act, 1882 means a transfer of ownership in exchange for a price paid, promised, or partly paid and partly promised. Essential features are:

Transfer of ownership – Absolute rights in immovable property are transferred.
Consideration – Must be monetary (price), not barter or exchange.
Parties – Seller (transferor) and buyer (transferee), both competent to contract.
Property – Sale applies to immovable property of value ₹100 or more.
Registration – Compulsory if value is ₹100 or above.
Delivery of possession – Though not mandatory, often accompanies sale.
Thus, a sale is a complete transfer of ownership for consideration, distinguished from gift or exchange.

2. Mode of Sale

The mode depends on the property’s value:

Value below ₹100 – May be by delivery of possession with intent to transfer ownership.
Value of ₹100 or more, or reversionary interest – Must be by a registered instrument, signed and attested.
Court sale – Through public auction under decree.
Thus, registration and writing are vital for validity in most cases.

3. Rights and Liabilities of Parties in Sale

Seller’s duties (Sec. 55 TPA): disclose material defects, produce title deeds, answer questions, execute proper conveyance, give possession, and pay outgoings before transfer.
Seller’s rights: right to rents and profits till ownership passes, right to charge for unpaid purchase money.
Buyer’s duties: disclose facts about property, pay price, bear loss after ownership passes, and pay public charges after transfer.
Buyer’s rights: benefit of property, rents and profits, and claim damages for misrepresentation.

4. Mortgage – Kinds of Mortgages

A mortgage (Sec. 58 TPA) is a transfer of interest in specific immovable property as security for repayment of a loan. Kinds:

Simple Mortgage – No possession given, personal liability exists.
Mortgage by Conditional Sale – Ostensible sale with condition of retransfer.
Usufructuary Mortgage – Possession given; mortgagee takes rents/profits in lieu of interest/principal.
English Mortgage – Absolute transfer with promise to retransfer after repayment.
Equitable Mortgage (Mortgage by deposit of title deeds) – Deposit of title deeds in notified towns.
Anomalous Mortgage – Combination of above.

5. Rights and Liabilities of Mortgagor and Mortgagee

Mortgagor’s rights: right to redeem (Sec. 60), right to get title deeds, right to inspection.
Mortgagor’s liabilities: pay mortgage money, indemnify for defective title.
Mortgagee’s rights: right to foreclosure or sale, right to possession (where applicable), right to sue for mortgage money.
Mortgagee’s liabilities: return property on redemption, manage property prudently, account for receipts.

6. Marshalling and Contribution

Marshalling (Sec. 81 TPA) – When a mortgagor mortgages two or more properties to one mortgagee and subsequently mortgages one property to another, the later mortgagee can compel the prior mortgagee to satisfy his debt from the property not mortgaged to him. This protects subsequent mortgagees.
Contribution (Sec. 82 TPA) – If several properties owned by different co-owners are mortgaged together, and one property is sold for repayment, the other owners must contribute proportionately to discharge the debt. This ensures equitable burden-sharing.

7. Distinguish between Sale and Agreement to Sell

A sale is an executed contract where ownership in immovable property is immediately transferred from seller to buyer upon registration and consideration. An agreement to sell is an executory contract where transfer is to take place in the future upon fulfillment of conditions.
Key differences:

Transfer of ownership – Immediate in sale; future in agreement to sell.
Interest – Buyer becomes owner in sale; only has a contractual right in agreement to sell.
Risk – In sale, risk passes to buyer; in agreement, risk remains with seller.
Legal remedy – Buyer in sale can sue for possession; in agreement, he can sue for specific performance or damages.
Thus, a sale creates real rights in property, while an agreement to sell only creates personal rights.

8. Define Mortgage and State Its Essentials

A mortgage (Sec. 58 TPA) is a transfer of interest in specific immovable property as security for repayment of a loan.
Essentials:

Transfer of interest – Only limited interest passes, not ownership.
Purpose – To secure payment of money advanced or to be advanced.
Parties – Mortgagor (borrower/owner) and mortgagee (creditor).
Consideration – Money advanced as a loan.
Property – Must be specific immovable property.
Form – For value above ₹100, must be by registered instrument.
Thus, mortgage is a security transaction protecting the creditor.

9. Distinguish between Mortgage and Charge

Mortgage: transfer of interest in immovable property as security for a debt (Sec. 58).
Charge: security created without transfer of interest (Sec. 100).
Differences:

Interest – Mortgage transfers interest; charge does not.
Creation – Mortgage by act of parties; charge may arise by act of parties or law.
Registration – Mortgage must be registered (if value > ₹100); charge may or may not require registration depending on law.
Remedies – Mortgagee has right to foreclosure or sale; charge-holder can only enforce sale.
Hence, mortgage is stronger security than charge.

10. Simple Mortgage

In a simple mortgage, the mortgagor personally binds himself to repay and agrees that in case of default, the mortgagee may cause the property to be sold.
Features:

No possession delivered.
Personal liability of mortgagor.
Mortgagee’s remedy is sale of property through court.
Common in urban loans.
This gives creditor stronger security, while mortgagor retains possession.

11. Mortgage by Conditional Sale

Here, mortgagor ostensibly sells the property with condition that:

On repayment, sale becomes void, or
Buyer will retransfer property, or
On default, sale becomes absolute.
Features:

Appears like a sale, but essentially a mortgage.
Possession may or may not pass.
Mortgagee’s remedy is foreclosure (not sale).
This type safeguards lender while leaving chance of redemption to borrower.

12. Usufructuary Mortgage

In this mortgage, possession of property is delivered to mortgagee, who enjoys rents and profits in lieu of interest or principal.
Essentials:

No personal liability of mortgagor.
Mortgagee cannot sue for sale or foreclosure.
Debt is repaid from income of property.
This is common in agricultural land transactions.

13. English Mortgage

In an English mortgage, the mortgagor transfers property absolutely to the mortgagee, with a covenant to repay on a certain date and mortgagee agrees to retransfer upon repayment.
Features:

Absolute transfer subject to condition.
Mortgagor personally liable.
Mortgagee can sell property without court (if expressly provided).
This form is common in commercial loans.

14. Equitable Mortgage (Mortgage by Deposit of Title Deeds)

Here, the mortgagor delivers title deeds to mortgagee in notified towns (like Mumbai, Kolkata, Chennai) with intent to create security.
Features:

No written instrument required.
Saves stamp duty and registration costs.
Mortgagee can sue for sale.
This is a flexible and popular form of mortgage in business circles.

15. Anomalous Mortgage

Any mortgage which does not fall under the six categories is an anomalous mortgage (Sec. 58(g)).
Features:

Mixture of two or more types (e.g., usufructuary + simple).
Rights and liabilities depend on contract between parties.
It provides flexibility but may cause disputes if terms are unclear.

16. Rights of Mortgagor

Right to redeem (Sec. 60).
Right to transfer mortgage (Sec. 61).
Right to inspection of title deeds (Sec. 62).
Right to accession and improvements (Sec. 63).
These rights protect ownership despite mortgage.

17. Liabilities of Mortgagor

Pay mortgage money and interest.
Disclose defects in title.
Pay public charges and rents.
Protect property from waste.
Failure may give mortgagee right to foreclose or sell.

18. Rights of Mortgagee

Right to foreclosure or sale.
Right to possession (if agreed).
Right to sue for mortgage money.
Right to add expenses to mortgage money.
Thus, mortgagee’s rights ensure security of debt.

19. Liabilities of Mortgagee

Must return property on redemption.
Must manage property prudently when in possession.
Must render accounts of income received.
Liable for damages caused by waste.
Thus, he acts as trustee for mortgagor’s property.

20. Marshalling and Contribution

Marshalling (Sec. 81): When mortgagor mortgages several properties to one person and later one property to another, the later mortgagee can ask the first to satisfy his debt from other properties.
Contribution (Sec. 82): When several properties owned by different co-owners are mortgaged for one debt, each must contribute proportionately to discharge the debt.
Both doctrines protect fairness among creditors and co-owners.

LAW OF PROPERTY Unit-IV:

1. Essential Features of a Lease

A lease under Section 105 of the Transfer of Property Act, 1882, is a transfer of the right to enjoy immovable property for a certain time, express or implied, in consideration of a price paid or promised. Essential features include:

Parties – The lessor (owner) and the lessee (tenant).
Subject matter – Must be immovable property.
Transfer of right – Only the right to enjoy is transferred, not ownership.
Consideration – Called rent, premium, or both.
Duration – Must be for a certain time, fixed or periodic.
Acceptance – Lessee must accept terms.
Thus, a lease is distinct from a sale or license because it gives possessory rights for a limited duration.

2. Kinds of Leases

Leases may be classified as:

Fixed-term lease – For a definite period (e.g., 10 years).
Periodic lease – Renewed automatically (monthly/yearly).
Perpetual lease – Lease without termination, continuing indefinitely.
Building lease – For construction purposes.
Agricultural lease – For cultivation or farming.
Lease by mortgagee in possession – When mortgagee leases mortgaged property.
These types ensure flexibility in property use and rental arrangements.

3. Rights of the Lessor

The lessor’s rights under TPA include:

Right to rent/premium – To receive rent as agreed.
Right to recover possession – If lease expires or lessee defaults.
Right to inspect – To check condition of property.
Right to sue for damages – For waste or unlawful use by lessee.
Right of forfeiture – On breach of conditions.
Thus, the lessor ensures protection of ownership while granting use.

4. Liabilities of the Lessor

The lessor is bound:

To disclose material defects in property.
To ensure lessee’s lawful possession.
To provide quiet enjoyment during lease.
To maintain title and not interfere in enjoyment.
To repair defects if covenanted.
Hence, the lessor must guarantee peaceful possession to lessee.

5. Rights of the Lessee

A lessee enjoys:

Right to possession – For the lease period.
Right to quiet enjoyment – Without disturbance.
Right to transfer interest – By sub-letting or assignment (unless prohibited).
Right to recover expenses – For repairs done in emergency.
Right to crops – Lessee may remove crops if lease ends.
These rights secure the tenant’s interest.

6. Liabilities of the Lessee

The lessee must:

Pay rent regularly.
Maintain property in good condition.
Avoid unlawful use.
Not erect permanent structures without consent.
Restore property after lease ends.
Thus, lessee is a custodian, not owner.

7. Termination of Lease

A lease may terminate by:

Efflux of time – Expiry of fixed term.
Notice to quit – By either party.
Surrender – Mutual agreement.
Merger – Lessee becomes owner.
Forfeiture – On breach.
Destruction – Property ceases to exist.
Termination ends lessee’s possessory rights.

8. Forfeiture of Lease

Forfeiture is termination before expiry when lessee breaches conditions. Grounds:

Non-payment of rent.
Breach of condition.
Insolvency of lessee.
Lessor must give notice before forfeiture. Courts may grant relief against forfeiture to protect lessee’s interest.

9. Exchange under TPA

Section 118 of TPA defines exchange as transfer of ownership of one property for another, not involving money. Essentials:

Two parties mutually transfer ownership.
Consideration is property, not money.
Both movable and immovable property can be exchanged.
Must be executed by registered instrument for immovable property.
Example: Exchanging a flat for agricultural land.

10. Essential Features of a Gift

A gift under Section 122 of TPA is a voluntary transfer of property without consideration. Essentials:

Donor (owner) and Donee (recipient).
Property must be existing and transferable.
Transfer must be voluntary and without coercion.
Must be without consideration.
Acceptance by donee during donor’s lifetime.
Gift becomes valid only on acceptance.

11. Different Types of Gifts

Valid gift – Lawfully executed and accepted.
Onerous gift – Burden attached, donee must accept wholly.
Conditional gift – Subject to fulfillment of conditions.
Void gift – If property is future, or not transferable.
Revocable gift – Subject to donor’s power of revocation.
Thus, law regulates gifts to avoid fraud.

12. Registration of Gifts

As per Section 123 TPA:

Gift of immovable property must be registered under the Registration Act, 1908.
Executed by donor and attested by at least two witnesses.
Delivery of possession is not compulsory if registered.
Gift of movable property may be by delivery or registration.
Thus, registration ensures legal validity and prevents disputes.

13. Transfer of Actionable Claims

Section 130 TPA defines actionable claims as claims to unsecured debts or beneficial interest in movable property not in possession of claimant. Essentials:

Transfer must be in writing and signed.
Registration not compulsory, except if law requires.
Notice to debtor is necessary to bind him.
Example: Transfer of insurance policy or book debts.

14. Registration Process for Actionable Claims

Deed executed in writing, signed by transferor.
Registration not compulsory unless law provides.
Notice to debtor/concerned person is essential.
On transfer, transferee gets all rights of transferor.
This ensures smooth enforcement of debts or interests.

15. Distinction between Lease, Exchange, and Gift

Lease – Transfer of right to enjoy property for consideration (rent), not ownership.
Exchange – Mutual transfer of ownership in properties without money.
Gift – Voluntary, uncompensated transfer of ownership.
Thus, while lease is temporary and possessory, exchange and gift are ownership transfers.

16. Distinction between Lease and License

A lease is a transfer of a right to enjoy immovable property, whereas a license is a mere permission to do something on another’s property.

Transfer of Interest: Lease transfers a legal interest in property; license does not transfer any interest, only grants permission.
Possession: A lessee enjoys exclusive possession; a licensee only has a right to use property.
Duration: Lease is for a fixed period; license may be revoked at will unless coupled with consideration.
Consideration: Lease involves rent or premium; license involves license fee.
Legal Protection: Lessee has statutory protection; licensee can be evicted more easily.
Thus, lease creates a stronger and enforceable right than a license.

17. Difference between Lease and Mortgage

A lease is transfer of a right to enjoy property for a limited period, while a mortgage is transfer of an interest in property as security for a debt.

Purpose: Lease – enjoyment of property; Mortgage – security for loan.
Ownership: In lease, ownership remains with lessor; in mortgage, limited ownership rights pass to mortgagee.
Consideration: Lease involves rent; mortgage involves loan/debt.
Duration: Lease is time-bound; mortgage continues until repayment.
Rights: Lessee has possessory rights; mortgagee has security rights and may sell property if debt unpaid.
Hence, lease is a contract of enjoyment, mortgage is a contract of security.

18. Essentials of a Valid Exchange

Section 118 of the Transfer of Property Act defines exchange as mutual transfer of ownership of one property for another, neither being money. Essentials are:

Two Parties: Each must be capable of transferring.
Transfer of Ownership: Ownership in one property exchanged for another.
Consideration: The consideration is property, not money.
Properties Involved: Both movable and immovable property can be exchanged.
Registration: For immovable property, registration is mandatory.
Title Warranty: Each party is bound by warranties similar to those in sale.
Example: A gives his land to B in exchange for B’s house.

19. Onerous Gifts under TPA

An onerous gift is one which carries a burden or obligation along with it. Section 127 of the TPA governs it.

Acceptance Rule: The donee cannot accept part of the gift and reject the burden. He must accept or reject wholly.
Example: A gifts a house with liability to pay debts attached. Donee must accept both house and liability.
Minor as Donee: If a minor accepts an onerous gift, he can repudiate it on attaining majority.
Purpose: Law prevents donee from enjoying benefits while avoiding obligations.
Thus, onerous gifts balance donor’s intention and donee’s responsibility.

20. Revocation of Gifts

Generally, a gift once accepted cannot be revoked. However, under Section 126 TPA, revocation is possible in two cases:

Revocation by Mutual Agreement – Donor and donee may agree that gift shall be suspended/revoked on happening of an event. Such condition must not depend solely on donor’s will.
Revocation by Rescission of Contract – If gift deed was obtained by fraud, coercion, or undue influence, it may be revoked like a contract.
Not Grounds for Revocation: Mere ingratitude of donee is not enough.
Thus, gift once validly made is generally irrevocable, ensuring certainty in property transfers.

LAW OF PROPERTY Unit-V:

1. Definition of Easement

An easement is a right possessed by the owner or occupier of certain land to use the land of another for a specific purpose. Under the Indian Easements Act, 1882, it is defined as a right which the owner or occupier of certain land possesses, for the beneficial enjoyment of that land, to do or continue to do something, or to prevent something from being done, in or upon the land not his own. The land for whose benefit the right exists is called the dominant heritage, and the land upon which the liability is imposed is called the servient heritage. For example, a right of way, right to light, or right to water can be easements. Easements may arise by express grant, implication, necessity, or prescription. They are not absolute rights but limited in nature. They attach to the property and not the person, meaning that easementary rights transfer automatically with the land. Thus, an easement is a legal encumbrance balancing the interests of neighboring landowners.

2. Distinction between Lease and License

A lease is a transfer of a right to enjoy immovable property for a certain time, in consideration of a price paid or promised. It creates an interest in the property, governed by the Transfer of Property Act, 1882. In contrast, a license, under Section 52 of the Indian Easements Act, 1882, is a right granted to a person to do something in the immovable property of another, which would otherwise be unlawful, without creating any interest in the property. In lease, the lessee enjoys exclusive possession, while in license, the licensee only has permission to use. Lease is heritable and transferable unless agreed otherwise, while license is personal and non-transferable. Lease requires registration if for more than one year, whereas license does not. For example, renting a house is a lease, but buying a cinema ticket is a license. Thus, lease conveys a proprietary interest, whereas license only gives a personal privilege.

3. Dominant and Servient Tenements

An easement always involves two pieces of land:

Dominant tenement (heritage): The land which enjoys the benefit of the easement.
Servient tenement (heritage): The land over which the easement is exercised.

For instance, if A has a right of way across B’s land to reach his house, A’s land is the dominant tenement and B’s land is the servient tenement. The dominant owner gains benefit, whereas the servient owner bears the burden. The relationship is inseparable: an easement cannot exist without both. The easement is attached to the land, not to an individual, meaning when the dominant land is transferred, the right passes to the new owner automatically. Similarly, the servient land continues to remain subject to the burden regardless of ownership changes. The principle ensures harmony between neighboring landowners by recognizing reasonable rights for beneficial enjoyment of land.

4. Acquisition of Property through Testamentary Succession

Testamentary succession refers to the transfer of property according to the wishes of a deceased person expressed in a valid Will. In this mode of succession, the deceased has the freedom (testamentary freedom) to decide how his property will be distributed after his death. It differs from intestate succession, where property is divided according to personal laws due to absence of a will. The Indian Succession Act, 1925 governs testamentary succession in India. Any person of sound mind and not a minor can make a will. Through testamentary succession, the testator can bequeath property to legal heirs, strangers, charities, or institutions. The property devolves only after the testator’s death, and the heirs or legatees derive their rights under the will. Courts ensure that the will is executed according to law and free from fraud, undue influence, or coercion. Testamentary succession provides clarity, avoids disputes, and upholds the last wishes of the deceased.

5. Will – Meaning and Nature

A Will is a legal declaration of the intention of a person with respect to his property, which he desires to take effect after his death. Defined under Section 2(h) of the Indian Succession Act, 1925, it is an instrument by which a person disposes of his property, to take effect upon his death. Essential features include: (i) it operates only after the death of the testator, (ii) it is revocable during his lifetime, and (iii) it must be executed by a person of sound mind. A Will can be simple, joint, or conditional. It may dispose of all or part of the property. The testator can change, alter, or revoke his Will at any time before his death. Since it represents the final wishes of a person, the law gives importance to due execution and attestation. Thus, a Will ensures orderly distribution of property and minimizes disputes.

6. Capacity to Execute a Will

Under Section 59 of the Indian Succession Act, 1925, every person of sound mind, not being a minor, may dispose of his property by Will. A person is said to be of sound mind if he is capable of understanding the nature of the act and its consequences. Persons ordinarily insane may make a Will during lucid intervals. Persons who are deaf, dumb, or blind can also make a Will if they understand its implications. However, minors are incompetent to make a Will. The testator must act voluntarily, free from undue influence, fraud, or coercion. Courts have emphasized testamentary capacity in cases like Banks v. Goodfellow, where understanding the extent of property, claims of heirs, and nature of disposition were considered essential. Thus, testamentary capacity requires both legal age and soundness of mind at the time of making the Will.

7. Codicil – Meaning and Effect

A Codicil is a document made in relation to a Will, explaining, altering, or adding to its dispositions. Section 2(b) of the Indian Succession Act, 1925 defines codicil as an instrument made in relation to a Will and forms part of it. It is used when the testator wishes to make minor modifications without rewriting the entire Will. It must be executed and attested like a Will. For example, a testator may change the executor or add a new beneficiary by codicil. A codicil does not operate independently but depends on the Will. It can itself be revoked or altered by another codicil. Courts recognize codicils as valid extensions of Wills if executed properly. Thus, a codicil is an accessory to the Will, ensuring flexibility in testamentary disposition while maintaining legal validity.

8. Nature of Bequests under a Will

A bequest is the transfer of property by a Will. Under the Indian Succession Act, 1925, bequests may be of different types:

Specific bequest: Refers to a particular property, e.g., “my gold ring to X.”
General bequest: Not tied to any specific property, e.g., “₹10,000 to Y.”
Demonstrative bequest: Payable from a particular source, e.g., “₹5,000 from my bank account to Z.”
Residuary bequest: Refers to the remainder of property not specifically bequeathed.

Bequests may also be conditional or contingent. They take effect only upon the death of the testator. If the property bequeathed is not in existence at the time of death, the bequest fails (doctrine of ademption). The law protects the intention of the testator, provided it is legally valid. Bequests ensure clarity in distribution of assets and help avoid intestate succession.

9. Executor of a Will – Role and Duties

An executor is a person appointed by the testator in his Will to carry out its provisions after his death. The executor’s role is recognized under the Indian Succession Act, 1925. Duties of an executor include: (i) proving the Will in court and obtaining probate, (ii) collecting the assets of the deceased, (iii) paying debts and liabilities, (iv) distributing property to beneficiaries according to the Will, and (v) maintaining accounts. The executor acts as the legal representative of the deceased. He must act in good faith, with diligence, and in accordance with the directions of the Will. If no executor is appointed, the court may appoint an administrator. Executors play a vital role in ensuring smooth execution of testamentary succession. Courts also supervise them to prevent mismanagement. Thus, executors are trustees of the wishes of the deceased.

10. Rights of Legatees

A legatee is a person to whom a bequest is made under a Will. Rights of a legatee include: (i) right to receive the property bequeathed after the death of the testator, (ii) right to sue the executor or administrator if the bequest is not delivered, (iii) right to rents, profits, or interest from the date specified in the Will or from the testator’s death, and (iv) right to disclaim or renounce the legacy. Legatees have no rights during the lifetime of the testator. Their rights are also subject to the payment of debts and liabilities of the deceased. The Indian Succession Act, 1925 protects the legatee’s rights, provided the bequest is valid and not void for uncertainty, illegality, or non-existence of subject matter. Courts give effect to the testator’s intention in favor of legatees unless contrary to law.

11. Obligations of Legatees

Along with rights, legatees also have obligations. A legatee must accept the bequest with all attached conditions. If a legacy is subject to a charge or liability, the legatee must bear it. For example, if property is bequeathed subject to mortgage, the legatee takes it with the burden unless otherwise directed. Legatees may also be obliged to contribute proportionately where estate assets are insufficient to pay all legacies (abatement of legacies). If a conditional legacy is accepted, the legatee must fulfill the condition. They also cannot claim benefits under the Will while simultaneously challenging it. Thus, obligations ensure fairness between beneficiaries and protect the estate from being unfairly depleted.

12. Revocation of a Will

A Will can be revoked at any time by the testator during his lifetime, provided he has testamentary capacity. Revocation may be (i) by execution of a new Will, (ii) by codicil, (iii) by destruction of the Will with intent to revoke, or (iv) by marriage, in some cases, under the Indian Succession Act, 1925. Revocation must be intentional, not accidental. Courts require clear evidence of revocation to prevent fraud. Once revoked, the old Will becomes invalid, and succession takes place according to the new Will or intestate succession. Revocation ensures that the testator retains full control over his property during his lifetime.

13. Probate of a Will

Probate is the judicial proof of a Will, granted by a competent court. It establishes the validity of the Will and the authority of the executor. Under the Indian Succession Act, 1925, probate is mandatory for Wills made in certain cities like Calcutta, Bombay, and Madras. Probate proceedings involve notice to heirs and examination of witnesses. Once granted, probate is conclusive as to the genuineness of the Will. It enables the executor to administer the estate and transfer property to legatees. Probate thus provides legal certainty, prevents disputes, and safeguards the last wishes of the deceased.

14. Difference between Specific and General Bequest

A specific bequest refers to a particular, identifiable property, such as “my diamond ring to A.” If the property is not available at the time of the testator’s death, the bequest fails (ademption). A general bequest, on the other hand, is not tied to any specific property, such as “₹50,000 to B.” It is payable from the general estate of the testator and does not fail unless the estate lacks sufficient funds. Specific bequests are favored when the testator intends to give a unique item, while general bequests are for monetary or non-unique gifts. The distinction helps in distribution when estate assets are insufficient.

15. Intestate vs Testamentary Succession

Intestate succession occurs when a person dies without leaving a valid Will. Property is distributed according to personal laws such as the Hindu Succession Act, 1956, or Muslim personal law. Testamentary succession, on the other hand, occurs when a person leaves a valid Will directing how his property should be distributed. In testamentary succession, the wishes of the testator prevail, subject to legal limits. Intestate succession ensures legal heirs inherit by default, while testamentary succession provides flexibility for the deceased to favor certain heirs, charities, or others. Both systems ensure continuity of property rights, but testamentary succession reflects individual autonomy.

16. Conditional and Contingent Bequests

A conditional bequest is one which takes effect only if a certain condition is fulfilled. For example, “I give my property to A if he marries by age 25.” If A fails to marry, the bequest fails. A contingent bequest, under Sections 124–131 of the Indian Succession Act, 1925, is dependent on the happening or non-happening of an uncertain event. For instance, “I bequeath ₹1,00,000 to B if India wins the World Cup.” The distinction is subtle: conditions generally relate to acts of beneficiaries, while contingencies depend on uncertain events. Both are valid provided the conditions are not illegal, immoral, or impossible. If the condition is contrary to public policy, the bequest becomes void. Courts uphold valid conditions but strike down unfair restrictions, e.g., total restraint on marriage. These provisions ensure fairness while honoring the testator’s wishes.

17. Void Bequests under Indian Law

Certain bequests are void under the Indian Succession Act, 1925:

Uncertain bequests: If the subject matter or beneficiary is vague, e.g., “some money to my friend.”
Illegal or immoral bequests: Those opposed to public policy.
Impossible conditions: If fulfillment is impossible, the bequest fails.
Non-existent property: If the property is not owned by the testator at death.
Lapsed legacies: If the beneficiary predeceases the testator, unless the law provides substitution.
Contradictory bequests: If two inconsistent bequests cannot stand together.
The principle is that a bequest must be clear, certain, and lawful. Courts interpret Wills liberally to uphold them, but where validity is doubtful, the bequest fails. This ensures protection of heirs and prevents misuse of testamentary freedom.

18. Abatement of Legacies

When the estate of the deceased is insufficient to satisfy all the bequests, they are subject to abatement. This means the legacies are reduced proportionately. Under the Indian Succession Act, 1925, the order of abatement is: (i) residuary legacies, (ii) general legacies, and (iii) demonstrative legacies. Specific legacies generally do not abate unless no other assets are available. For example, if a testator leaves ₹50,000 to X, ₹50,000 to Y, and his estate is only ₹50,000, both legacies abate by half, so each gets ₹25,000. Abatement ensures equitable distribution among legatees when the estate is inadequate. The doctrine prevents injustice and ensures debts and funeral expenses are paid first. Thus, abatement is a safeguard for fair adjustment between competing claims on a limited estate.

19. Doctrine of Ademption

The doctrine of ademption applies when a specific bequest fails because the subject matter is no longer part of the testator’s estate at the time of death. For instance, if a testator bequeaths “my gold watch to A” but sells the watch before death, the bequest is adeemed, i.e., extinguished. Ademption applies only to specific legacies, not general ones. The rationale is that a Will speaks from the death of the testator, and if the property is absent then, there is nothing to transfer. Exceptions exist: if the property is changed in form but not substance (e.g., company shares converted into new shares), the bequest may still take effect. Courts strive to uphold the intention of the testator. Ademption highlights the importance of updating a Will to reflect current assets.

20. Difference between Executor and Administrator

An executor is a person appointed by the testator in his Will to carry out its directions. He derives authority from the Will itself. An administrator, on the other hand, is appointed by the court when no executor is named, or the named executor is unwilling or incapable of acting. Executors must prove the Will and obtain probate, while administrators obtain “letters of administration.” Both perform similar functions: collecting assets, paying debts, and distributing property. However, executors are chosen by the testator, while administrators are chosen by law. Executors may act immediately on the authority of the Will, subject to probate, whereas administrators cannot act until the court grants them authority. The distinction is important because it affects succession procedures and probate rights.