BLS LLB 5 Years Sem 7 Transfer of Property Act and Easement Act 2024-25 - ATKT 60/40 Question Paper with Solutions

Section 3: "attested" means attested by two or more witnesses, each of whom has seen the executant sign or affix his mark, or seen some other person sign in the presence and by the direction of the executant, or received from the executant a personal acknowledgement of his signature or mark; and each of whom has signed the instrument in the presence of the executant.

It is not necessary that more than one witness was present at the same time, and no particular form of attestation is necessary.

Section 60: at any time after the principal money has become due, on payment or tender of the mortgage-money at a proper time and place, the mortgagor may require the mortgagee to deliver up the mortgage-deed and documents, to deliver possession where the mortgagee is in possession, and at the mortgagor's cost to re-transfer the property or execute an acknowledgement in writing that the mortgagee's right is extinguished. This is the right to redeem.

"Mesne profits" is defined not in this Act but in section 2(12) of the Code of Civil Procedure, 1908: mesne profits of property mean those profits which the person in wrongful possession of such property actually received or might with ordinary diligence have received therefrom, together with interest on those profits, but not including profits due to improvements made by the person in wrongful possession.

Section 13 of the Indian Easements Act, 1882: where one person transfers or bequeaths immoveable property to another, or a partition is made of joint property, and an easement in other land is necessary for enjoying the subject of the transfer or the property retained, the person entitled may claim it as an easement of necessity.

The test is absolute necessity, not convenience, and the standard case is the landlocked plot with no other access.

An heir apparent is a person who would succeed to another's estate if he survived him and the other died intestate, but who has, during that other's lifetime, no right, title or interest in the property, only a chance of succeeding, called spes successionis.

Section 6(a): that chance cannot be transferred, and a transfer of it is void.

Transfer, section 130. The transfer of an actionable claim, whether with or without consideration, shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorised agent, and is complete and effectual upon the execution of that instrument, whereupon all the rights and remedies of the transferor vest in the transferee, whether notice of the transfer be given or not.

Two propositions follow: the transfer must be in writing and signed, but registration is not required; and notice to the debtor is not a condition of validity. The transferee may sue in his own name without the transferor's consent and without making him a party.

The proviso protects the debtor: every dealing with the debt by the debtor with the transferor, until the debtor receives express notice of the transfer, is valid as against the transferee. So a debtor who pays his original creditor in ignorance of the assignment is discharged.

Origin. An equitable doctrine of English law, settled in Maddison v. Alderson (1883) 8 App Cas 467, enacted here as section 53A by the Amendment Act of 1929. Its purpose is to stop a transferor using the absence of a completed transfer as an instrument of fraud against a transferee who has taken possession and acted on the contract.

Section 53A. Where a person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf, from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance, taken possession of the property or any part of it, or, being already in possession, continues in possession in part performance and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part, then, notwithstanding that the transfer has not been completed in the manner prescribed by law, the transferor and any person claiming under him shall be debarred from enforcing against the transferee any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract.

5. The transferee has performed or is willing to perform his part, continuously and absolutely.
6. For contracts made on or after 24 September 2001, the contract must be registered. The Registration and Other Related Laws (Amendment) Act, 2001 deleted from section 53A the words "the contract, though required to be registered, has not been registered", and inserted section 17(1A) of the Registration Act, 1908, under which such documents are compulsorily registrable and, if unregistered, "shall have no effect for the purposes of the said section 53A".

A shield, not a sword. The section confers no title and no interest. It may be used only defensively, by a transferee already in possession; it founds no suit for possession, declaration or transfer, for which the remedy is specific performance under the Specific Relief Act, 1963. In Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi (2002) 3 SCC 676 the Supreme Court held that section 53A may still be pleaded in defence even where specific performance is barred by limitation, since the section prescribes no period.

Contingent interest, section 21. Where, on a transfer of property, an interest 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, that person thereby acquires a contingent interest, which becomes a vested interest on the happening of the event, or when the happening of the event becomes impossible.

Exception to section 21. Where, under a transfer, a person becomes entitled to an interest on attaining a particular age, and the transferor also gives him absolutely the income of that interest until he attains that age, or directs the income to be applied for his benefit, the interest is not contingent.

The comparison

The maxim. Quod approbo non reprobo: a person who takes a benefit under an instrument must accept the whole of it and cannot approbate and reprobate. The doctrine rests on the presumed intention of the transferor that his whole disposition shall take effect.

Section 35. Where a person professes to transfer property which he has no right to transfer, and as part of the same transaction confers any benefit on the owner of that property, the owner must elect either to confirm the transfer or to dissent from it; and in the latter case he shall relinquish the benefit, which reverts to the transferor or his representative as if it had not been disposed of.

Three conditions, all necessary

1. The transferor professed to transfer property he had no right to transfer, whether or not he believed it his own.
2. He conferred a benefit on the owner of that property, as owner. A person taking only an indirect benefit need not elect, and a person taking in one capacity may dissent in another.
3. Both formed one and the same transaction.

The exception. Where a particular benefit is expressed to be conferred in lieu of the property, the owner claiming the property must relinquish that benefit only, and not any other benefit under the same transaction.

The illustrations. The farm of Sultanpur, worth Rs. 800, is C's; A by an instrument of gift professes to transfer it to B and by the same instrument gives Rs. 1,000 to C. C keeps the farm and forfeits the Rs. 1,000. If A dies before the election, his representative must pay Rs. 800 out of the Rs. 1,000 to B. And, on implied election: A transfers to B an estate to which C is entitled and gives C a coal-mine; C takes possession of the mine and exhausts it, and has thereby confirmed the transfer.

(i) Is Akash's direction for accumulation valid?

It is valid for the permitted period and void for the excess. It is not wholly void.

Section 17(1) provides that where the terms of a transfer direct that the income arising from the property shall be accumulated, either wholly or in part, during a period longer than

• the life of the transferor, or
• a period of eighteen years from the date of the transfer,

such direction shall be void to the extent to which the period during which the accumulation is directed exceeds the longer of the aforesaid periods; and at the end of that period the property and the income thereof shall be disposed of as if the period during which the accumulation has been directed to be made had elapsed.

(ii) The rule relating to accumulation

The rule and its purpose. A direction to accumulate income keeps the income out of anybody's hands and sterilises it, and the objection to it is the same as the objection to a perpetuity: property, and the fruits of property, must not be tied up indefinitely by a dead hand. The section therefore fixes an outer limit on how long income may be directed to be accumulated.

The permitted period: the LONGER of the transferor's life, or 18 years from the date of the transfer. Two things to notice about this. It is the longer, not the shorter, so the two are alternatives in the transferor's favour. And the eighteen years run from the date of the transfer, not from the transferor's death.

Effect of an excessive direction. The direction is not wholly void; it is void only as to the excess, and the property and income are then disposed of as if the accumulation period had run out.

The exceptions, section 17(2). The rule does not affect a direction for accumulation for the purpose of:

• (i) the payment of the debts of the transferor or of any other person taking any interest under the transfer;

One condition must be checked, and it is the one that decides modern cases: was the contract in writing, signed, and registered? Section 53A requires writing signed by the transferor from which the terms can be ascertained with reasonable certainty. And for contracts made on or after 24 September 2001 it must also be registered: the Registration and Other Related Laws (Amendment) Act, 2001 deleted from section 53A the words dispensing with registration, and inserted section 17(1A) of the Registration Act, 1908, under which an unregistered agreement of this kind "shall have no effect for the purposes of the said section 53A". If Mr Jagtap's agreement is oral, or written but unregistered, the shield is not available to him, and he must rely on the second remedy alone.

2. A suit for specific performance, under the Specific Relief Act, 1963. This is the active remedy, and it is the one that actually gets him the house. Two points matter:

• Since the amendment of 2018, specific performance is no longer discretionary. The old section 20, which gave the Court a discretion, has been substituted, and section 10 now provides that specific performance shall be enforced by the Court subject to sections 11(2), 14 and 16. A plaintiff who makes out his case is entitled to a decree.

Conclusion. Mr Jagtap should sue for specific performance, and meanwhile defend his possession, using section 53A if his agreement satisfies the writing and registration requirements, and in any event his possession under a subsisting contract plus his charge under section 55(6)(b).

(ii) The rule applicable

The rule is the doctrine of part performance, section 53A, and it exists to stop a seller using the incompleteness of the transfer as an instrument of fraud.

A shield, not a sword. Section 53A gives no title and no interest. It only bars the transferor from enforcing his rights against the transferee in possession. It cannot found a suit for possession or a declaration of title. That is precisely why part (i) must also give Mr Jagtap specific performance: the section defends what he has, and only a decree can give him what he bargained for. The Supreme Court in Shrimant Shamrao Suryavanshi v. Pralhad Bhairoba Suryavanshi (2002) 3 SCC 676 held that the defence survives even where a suit for specific performance would be barred by limitation.

Section 126 allows revocation on two grounds only, and neither is available to her:

• There is no agreement for revocation. Revocation by agreement requires the donor and donee to have agreed, as part of the same transaction, that on a specified event not depending on the will of the donor the gift shall be suspended or revoked. Nothing of the kind was reserved here. And had Kala reserved a power to revoke at her own pleasure, the section says the gift would be void to that extent, so that route would have destroyed the very gift she wanted to make.
• There is no ground on which a contract could be rescinded. The second ground covers fraud, coercion, undue influence or misrepresentation, and the facts exclude all of them. Want of consideration is expressly excluded as a ground, because a gift is by definition without consideration.

Indian law knows no revocation for ingratitude. Unlike some civil law systems, and unlike the position under certain statutes for the benefit of specific classes, the Transfer of Property Act gives a donor no right to take back a completed gift because the donee has proved ungrateful, neglectful or unpleasant. Subsequent dislike is not a ground at all.

• the agreement must be part of the same transaction as the gift; and
• the event must be outside the donor's will.

A gift which the parties agree shall be revocable, wholly or in part, at the mere will of the donor, is void wholly or in part, as the case may be.

2. Revocation on any ground on which a contract could be rescinded. That is, where the gift was not a free act: fraud, coercion, undue influence or misrepresentation. Want of consideration is expressly excluded.

Saving. Nothing in the section affects the rights of transferees for consideration without notice. So if the donee has already sold the property to a bona fide purchaser for value without notice of the ground of revocation, the donor's right is defeated as against that purchaser.

The Act's illustrations. (a) A gives a field to B, reserving to himself, with B's assent, the right to take back the field in case B and his descendants die before A. B dies without descendants in A's lifetime. A may take back the field. (b) A gives a lakh of rupees to B, reserving to himself, with B's assent, the right to take back at pleasure Rs. 10,000 out of it. The gift holds good as to Rs. 90,000 but is void as to Rs. 10,000.

This problem is the second illustration to section 35 of the Act, with a tea estate for the estate, a marble-mine for the coal-mine, and John, Bill and Rosie for A, C and B. The Act's words are: "A transfers to B an estate to which C is entitled, and as part of the same transaction gives C a coal-mine. C takes possession of the mine and exhausts it. He has thereby confirmed the transfer of the estate to B."

(i) Can Bill retain the tea estate?

No. By taking possession of the marble-mine and exhausting it, Bill has ELECTED TO CONFIRM the transfer, and the tea estate goes to Rosie.

The doctrine applies, because all three conditions are satisfied.

He has chosen, and he has chosen by conduct. Section 35 provides that acceptance of the benefit by the person on whom it is conferred constitutes an election by him to confirm the transfer, if he is aware of his duty to elect and of the circumstances which would influence the judgment of a reasonable man in making an election, or if he waives enquiry into those circumstances. It goes on: such knowledge or waiver may be inferred from any act of his which renders it impossible to place the persons interested in the property professed to be transferred in the same condition as if such act had not been done.

Exhausting the mine is exactly such an act. The mine cannot be restored; nobody can be put back in the position they were in before. Bill has therefore been treated by the Act as having elected to confirm, and he cannot now keep the tea estate as well.

What if he wants to argue he did not know? The argument is closed on these facts. The Act does not merely presume knowledge from the irreversible act; it says knowledge may be inferred from it, and the illustration states the conclusion flatly, "he has thereby confirmed the transfer of the estate to B". Had Bill merely held the mine without working it, he might have argued ignorance, though even then a presumption would arise after two years' enjoyment without any act expressing dissent.

3. Two years' enjoyment without dissent. "Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the person on whom the benefit has been conferred has enjoyed it for two years without doing any act to express dissent." This is a rebuttable presumption, and it is the most commonly applied limb in practice.

4. Failure to elect after being required to do so. If the owner does not, within one year of the date of the transfer, signify to the transferor or his representatives his intention to confirm or dissent, they may require him to make his election; and if he does not comply within a reasonable time, he shall be deemed to have elected to confirm the transfer. This is not strictly an implied election but a deemed one, and it is the transferor's remedy against an owner who simply waits.

Two qualifications. Where the owner is under a disability, the election is postponed until the disability ceases or until an election is made by some competent authority. And a person taking a benefit in one capacity may dissent in another, so an act done in one character is not an election in the other.

For full marks, cover: section 58(a) with the four essentials and the defined terms, section 59 on the mode, then each of the six kinds in section 58(b) to (g) with its definition, its features and an example, a comparison table, and the mortgagee's remedies.

Definition, section 58(a). A mortgage is the transfer of an interest in specific immoveable 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.

The transferor is the mortgagor, the transferee the mortgagee, the principal money and interest the mortgage-money, and the instrument, if any, by which the transfer is effected the mortgage-deed.

Essentials

1. A transfer of an interest, not of ownership. What remains with the mortgagor is the equity of redemption.
2. The property must be specific and identifiable.

Features: no possession; an express personal covenant; remedy is sale by decree of the Court, never foreclosure and never a private sale. Because of the personal covenant the mortgagee has two remedies, a suit for sale under section 67 and a suit for the money under section 68. Example: A borrows Rs. 5 lakh from B, executes a registered and attested deed promising to repay in two years and agreeing that on default B may have the house sold. A stays in the house throughout.

2. Mortgage by conditional sale, section 58(c). Where the mortgagor ostensibly sells the property on condition that on default of payment on a certain date the sale shall become absolute, or that on such payment being made the sale shall become void, or that the buyer shall retransfer the property.

Proviso, added in 1929: no such transaction shall be deemed to be a mortgage unless the condition is embodied in the document which effects or purports to effect the sale.

Features: no personal liability; remedy is foreclosure and not sale, section 67(a). Example: A executes a deed selling his land to B for Rs. 5 lakh, the same deed providing that if A repays within two years the sale shall be void and B shall reconvey.

Features: an absolute transfer subject to a proviso for reconveyance, so the mortgagee may take possession; an absolute personal covenant to repay on a fixed date; remedy is sale, and in the narrow circumstances of section 69 a sale without the intervention of the Court. Example: A conveys his flat to a bank absolutely, covenanting to repay Rs. 50 lakh on a stated date, with a proviso for reconveyance on payment.

5. Mortgage by deposit of title-deeds, section 58(f). Where a person in any of the towns of Calcutta, Madras and Bombay, and in any other town which the State Government concerned may by notification specify, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon.

Features: also called an equitable mortgage; needs no writing and no registration, the three requisites being a debt, deposit of the title deeds, and an intent to create a security; confined to notified towns, though the property may be anywhere. By section 96 the provisions applying to a simple mortgage apply, so the remedy is sale. Example: A, in Mumbai, hands his flat's original sale deed and chain of title to a bank as security for an overdraft, signing nothing.

The remedies generally. Section 67, foreclosure or sale by suit, according to the kind; section 68, a suit for the mortgage-money where there is a personal covenant, or where the security is lost or destroyed by the mortgagor's wrongful act, or where the mortgagee is deprived of his security by the mortgagor's default in title; section 69, sale without the Court, available only in the narrow cases stated and only after a written notice and a default of three months; section 69A, appointment of a receiver.

Contract for sale. A contract for the sale of immoveable property is a contract that a sale shall take place on terms settled between the parties. It does not, of itself, create any interest in or charge on such property.

THE ESSENTIAL INGREDIENTS

1. Competent parties. A seller competent to contract under section 11 of the Indian Contract Act, 1872, and entitled to the property or authorised to dispose of it under section 7. A buyer competent to hold property; a minor may buy but not sell.
2. Subject matter: immoveable property, tangible or intangible.
3. Transfer of ownership, absolute and not of any lesser right. This is what separates a sale from a lease (a right to enjoy) and a mortgage (an interest by way of security).

• (b) Produce all documents of title in his possession or power for the buyer's examination on request.
• (c) Answer all relevant questions as to the property or the title, to the best of his information.
• (d) Execute a proper conveyance at the buyer's cost, on payment or tender of the amount due, when the buyer tenders it at the proper time and place.
• (e) Take as much care of the property and the title deeds as an owner of ordinary prudence between the date of the contract and delivery.

On or after completion:

• (f) Give possession to the buyer or such person as he directs.
• (g) Pay public charges and rent accrued due up to the date of sale, the interest on encumbrances up to that date, and, except where the property is sold subject to encumbrances, discharge all encumbrances then existing.
• (h) Deliver the title deeds on payment of the whole price, where the whole of the property is sold.

• (c) Where the ownership has passed, bear any loss from destruction, injury or decrease in value not caused by the seller.
• (d) Where the ownership has passed, pay the public charges and rent and the interest on encumbrances accruing due after the date of sale.

BUYER'S RIGHTS, section 55(6)

• To the benefit of any improvement in, or increase in the value of, the property, and to the rents and profits, from the date the ownership passes.
• Unless he has improperly declined to accept delivery, to a charge on the property, as against the seller and all persons claiming under him, for the purchase money properly paid in anticipation of delivery, with interest, and for the earnest and costs awarded to him where he properly declines to accept delivery.

The whole of section 55 operates "in the absence of a contract to the contrary".

Explanation. "Land" includes things permanently attached to the earth; "beneficial enjoyment" includes possible convenience, remote advantage and even a mere amenity; and "to do something" includes the removal and appropriation by the dominant owner, for the beneficial enjoyment of the dominant heritage, of any part of the soil of the servient heritage or anything growing or subsisting thereon.

The Act's own illustrations to section 4, which are the best examples available:

• (a) A, as owner of a certain house, has a right of way over his neighbour B's land for purposes connected with the beneficial enjoyment of the house. This is an easement.
• (b) A, as owner of a house, has the right to go on B's land and take water for his household out of a spring there. This is an easement.
• (c) A has the right to conduct water from B's stream to supply the fountains in his garden. This is an easement.

TYPES UNDER SECTION 5

• Continuous: enjoyment is or may be continual without the act of man. Illustration: a right of way annexed to A's house over B's land is discontinuous; but a right annexed to A's house to receive light by the windows without obstruction by his neighbour is continuous.
• Discontinuous: needs the act of man for its enjoyment. Example: a right of way, or a right to draw water from a well.
• Apparent: shown by some permanent sign which, on careful inspection by a competent person, would be visible. Illustration: rights annexed to A's house to receive light and air by windows, or to a drain from A's land through B's land, of which the opening is visible.
• Non-apparent: with no such sign. Illustration: a right annexed to A's house to prevent B building on his own land, or an unmarked right of way over open ground.

The four combine in pairs: continuous and apparent (light through a window), continuous and non-apparent (a right to stop the neighbour building), discontinuous and apparent (a made-up path), discontinuous and non-apparent (an untrodden track).

OTHER CLASSIFICATIONS

For full marks, cover: section 122 with acceptance in the donor's lifetime, the essentials, section 123 split by kind of property, then the kinds of gift, onerous, universal, conditional, gift to several donees, of future property, and donatio mortis causa, each with its section and illustration, and close with section 126 on revocation.

Definition, section 122. "Gift" is the transfer of certain existing moveable or immoveable 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.

Acceptance must be made during the lifetime of the donor and while he is still capable of giving. If the donee dies before acceptance, the gift is void.

Essentials

1. Transfer of ownership, not of a lesser interest.
2. The property must be existing, moveable or immoveable.
3. Voluntary, that is with free consent.

Illustrations to section 127: (a) A has shares in X, a prosperous joint stock company, and also shares in Y, a company in difficulties on which heavy calls are due. A gives B all his shares in both companies in a single transfer. B refuses to accept the shares in Y; he cannot take the shares in X. (b) A, having a lease for a term of years of a house at a rent which he and his representatives are bound to pay during the term, and which is more than the house can be let for, gives to B the lease and also a sum of money. B refuses to accept the lease; he cannot take the money.

Onerous gift to a disqualified person: a donee not competent to contract who accepts an onerous gift is not bound by his acceptance, but if, after becoming competent and being aware of his obligations, he retains the property, he becomes bound.

3. Universal donee, section 128. Where the gift consists of the donor's whole property, the donee is a universal donee and is personally liable for all the debts due by, and liabilities of, the donor at the time of the gift, to the extent of the property comprised in the gift. Example: A gives B everything he owns while owing Rs. 3 lakh; B must answer the creditors up to the value he received, and no further.

8. Donatio mortis causa, a gift in contemplation of death, section 129. The chapter does not apply to gifts of moveable property made in contemplation of death. Such a gift requires: it must be of moveable property; made in contemplation of the donor's death from an existing illness or peril; delivery of possession to the donee; and it is conditional on death, so it is revoked if the donor recovers. Example: a man about to undergo a dangerous operation hands his watch to a friend, saying he is to keep it if the operation goes badly.

9. Gift under Muhammadan law (hiba), saved by section 129. Governed by personal law, not by this chapter. Its three essentials are a declaration by the donor, acceptance by the donee, and delivery of possession; registration is not necessary even for immoveable property. This is the opposite of section 123, and the contrast is regularly examined.

REVOCATION, section 126