BLS LLB 5 Years Sem 7 Transfer of Property Act and Easement Act 2025-26 - ATKT 60/40 Question Paper with Solutions

Corporeal ownership is ownership of a material or tangible thing, something perceptible to the senses, such as land, a house, a car or a book.

Incorporeal ownership is ownership of an intangible right, something that has no physical existence, such as a right of way or other easement, a trade mark, a copyright or a patent, a right to receive rent, or a debt.

Section 3: "actionable claim" means a claim to any debt, other than a debt secured by mortgage of immoveable property or by hypothecation or pledge of moveable property, or a claim to any beneficial interest in moveable property not in the possession, either actual or constructive, of the claimant, which the Civil Courts recognise as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent.

Spes successionis means the chance or expectation of succeeding to an estate. Section 6(a) provides that 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.

A transfer of such a chance is void ab initio, and consideration does not cure it.

A partial restraint is a condition which limits, but does not take away, the transferee's power to dispose of the property, for example by restricting the class of persons to whom, or the time within which, or the manner in which he may transfer it.

Section 10 voids only an absolute restraint on alienation. A partial restraint is valid, because it leaves the essential power of alienation intact.

Section 4 of the Indian Easements Act, 1882: the land for the beneficial enjoyment of which the easement exists is called the dominant heritage, and its owner or occupier the dominant owner; the land on which the liability is imposed is the servient heritage, and its owner or occupier the servient owner.

Definition, section 58(d). A usufructuary mortgage is one where the mortgagor delivers possession, or expressly or by implication binds himself to deliver possession, of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property, or any part of them, and to appropriate them in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest and partly in payment of the mortgage-money.

The mortgagee so put in possession is called a usufructuary mortgagee.

Its distinguishing features, which are what an examiner tests, and which are mostly negatives:

1. Possession passes to the mortgagee. This is the defining positive feature.
2. No personal liability of the mortgagor, so the mortgagee cannot sue for the mortgage-money in the ordinary way under section 68.
3. No date is fixed for repayment.

The mortgagee's duties, section 76. As a mortgagee in possession he must manage the property as a person of ordinary prudence would manage his own; pay government dues out of the income; make necessary repairs; commit no act destructive or permanently injurious; apply the receipts as the deed and the section direct; and keep clear, full and accurate accounts, which the mortgagor may inspect. If he fails, he may be charged with what he might have received but for his default.

• the income arising from the property is directed to be accumulated until the time of enjoyment arrives; or
• upon the happening of a particular event the interest is to pass to another person.

Characteristics

1. A present, existing right, though enjoyment may be future.
2. Transferable and heritable.
3. Not defeated by the holder's death before possession.
4. Not dependent on a contingency: the event, if any, must be certain.
5. Attachable in execution, and it passes on insolvency.

Vested and contingent interests

Who he is. An ostensible owner is a person who, with the express or implied consent of the real owner, is held out to the world as the owner of property and has the outward marks of ownership, though the beneficial ownership is in another. He is more than an agent, manager or caretaker: the real owner must have clothed him with the appearance of ownership.

Section 41. Where, with the consent, express or implied, of the persons interested in immoveable property, a person is the ostensible owner of such property and transfers the same for consideration, the transfer shall not be voidable on the ground that the transferor was not authorised to make it; provided that the transferee, after taking reasonable care to ascertain that the transferor had power to make the transfer, has acted in good faith.

The five conditions, all to be proved by the transferee

1. The transferor was the ostensible owner of the property.
2. He was so with the express or implied consent of the real owner, given freely and with knowledge. A minor or a person under disability cannot give it.

Effect. Where the section applies, the transfer is not voidable at the real owner's instance, and he is left to his personal remedies against the ostensible owner for the price received or for damages. Where any condition fails, the transfer is voidable and the real owner may recover the property.

Sub-section (2), transfer to defraud a subsequent transferee. Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee is voidable at the option of that transferee. And, for this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.

The propositions that carry the marks

1. The transfer is voidable, not void, and only at the instance of the person the section protects. Until avoided it is good, and it always binds the transferor himself.
2. Under sub-section (1) the transfer may be with or without consideration; the vice is the intent. Under sub-section (2) it must be without consideration.
3. Intent is inferred from the badges of fraud: a transfer of the whole of the debtor's property; a grossly inadequate price; retention of possession by the transferor; secrecy and haste; a close relationship between the parties; and the transfer being made when a suit or a demand was imminent.

4. It must be without consideration. Natural love and affection is a motive, not consideration.
5. A competent donor (competent to contract and entitled to the property, section 7) and an ascertained donee.
6. Acceptance by or on behalf of the donee, during the donor's lifetime and while he is capable of giving.
7. The mode prescribed by section 123: for immoveable property, a registered instrument signed by or on behalf of the donor and attested by at least two witnesses; for moveable property, such an instrument or delivery.

Note what is NOT an essential. Delivery of possession is not required for a gift of immoveable property. Section 123 requires registration and attestation and nothing more. This is the single most important point on these facts, and it is the opposite of the position under Muhammadan law, saved by section 129, where delivery of possession is essential and registration is not.

b) Can A revoke the gift?

No, provided the gift was completed under section 123, that is by a registered instrument signed and attested by two witnesses. The absence of possession makes no difference.

And there is no revocation for a change of mind. Indian law knows no revocation for ingratitude or for regret. Once the gift is complete, "A decides now to revoke" has no legal effect whatever.

The one situation in which A could resile. If the deed was executed but never registered, or if B's acceptance came after A had ceased to be capable of giving, then the gift is incomplete and nothing has passed. A may then simply decline to complete it, and B cannot sue on the promise, because an agreement without consideration is void under section 25 of the Indian Contract Act, 1872, save in the narrow case of section 25(1), a promise made on account of natural love and affection between parties in a near relation, in writing and registered. Note, though, that a document may still be presented for registration within four months of execution under the Registration Act, so completion may remain possible.

Conclusion. If the gift deed is registered and attested and B has accepted, A cannot revoke, and B is entitled to possession. If it is unregistered, no gift has been made at all, and A is free.

But the same section contains the protection for the lessee, and it is the answer to the first question: the lessor does not, by reason only of the transfer, cease to be subject to the liabilities of the lease unless the lessee elects to treat the transferee as the person liable to him; and, crucially, the lessee is not bound to pay rent to the transferee until he has notice of the transfer.

a) Can B recover from C the rent C paid to A?

No. C is discharged, because he paid in good faith to the person he believed to be his landlord, having had no notice of the transfer.

Two provisions supply the answer.

First, section 50, rent bona fide paid to a holder under a defective title. No person shall be chargeable with any rents or profits of any immoveable property which he has in good faith paid or delivered to any person of whom he in good faith held such property, notwithstanding it may afterwards appear that the person to whom such payment or delivery was made had no right to receive such rents or profits.

1. A suit for money had and received. By section 109 the rent accruing after the sale belonged to B. A has received money which, as between him and B, is B's, and he must account for it. Section 70 of the Indian Contract Act, 1872 covers a person who lawfully does something for another and enjoys the benefit, and section 72 requires a person to whom money has been paid by mistake to repay it. On either footing A must hand the rent over, with interest.
2. Under the sale deed. By section 55(4)(a) a seller is entitled to the rents and profits only until the ownership passes; thereafter they are the buyer's. A's retention of the rent is therefore a breach of the arrangement the Act itself makes, and if the deed contains a covenant to account for outgoings and income, that too is enforceable.

a) Is the transfer valid?

At the time it was made, no. After A inherits, it can be made good at B's option. This is the classic case of section 43.

When made, the transfer was ineffective. Section 7 provides that only a person competent to contract and entitled to transferable property, or authorised to dispose of transferable property not his own, may transfer it. The property belonged to A's father. A was neither entitled to it nor authorised to dispose of it, and being the expectant heir gave him nothing: by section 6(a) the chance of an heir apparent succeeding to an estate (spes successionis) cannot be transferred, and a transfer of it is void ab initio.

So on the date of the transfer A conveyed nothing, and B took nothing.

3. The transferor subsequently acquires an interest in the same property.
4. The contract of transfer subsists, that is B has not rescinded it and it is not otherwise at an end.
5. B exercises his option. Section 43 operates at the transferee's election, not automatically.

The condition that decides this problem. If B knew that the property was the father's and that A was merely the expectant heir, then A made no misrepresentation and both parties knowingly dealt in a spes successionis. In that case section 43 does not apply, the transfer remains void under section 6(a), and B gets nothing. Section 43 rescues a transferee who was misled about authority; it does not validate a knowing sale of a chance. The two sections are reconciled in exactly that way.

b) What remedies does B have against A?

1. Enforce the transfer under section 43. If B was misled and the other conditions are met, B may elect to have the transfer operate on the interest A has now inherited, and may sue for a declaration and possession, or for the execution of a proper conveyance. This is his best remedy, because it gets him the property.

2. The limits on that remedy.

4. Damages and refund. If section 43 is unavailable, for example because B knew the true position, B may recover the consideration he paid, on the footing that the agreement was void, under section 65 of the Indian Contract Act, 1872, which obliges a person who has received an advantage under an agreement discovered to be void to restore it or make compensation. If A fraudulently represented his authority, B may also sue for damages for deceit, and rescind under sections 19 and 64 of the Contract Act.

5. If B is in possession. He may hold it, using section 53A as a shield if the contract was in writing and signed, and, for contracts made on or after 24 September 2001, registered.

A condition that B "shall never sell the property during his life time" is an absolute restraint. It is not limited as to the class of buyer, or the price, or a short period; it forbids alienation altogether for the whole of B's life. It therefore falls squarely within section 10 and is void.

The consequence is important and is where most answers go wrong. When a condition is struck down under section 10, only the condition falls; the transfer itself stands, and B takes the property absolutely, as if the condition had never been inserted. So B may sell during his lifetime, and a purchaser from him gets a good title.

Why the law says so. The power of alienation is an incident of ownership. A transferor cannot give ownership with one hand and take away its chief attribute with the other; and property must remain in commerce, which is the same policy that underlies the rule against perpetuities.

The two exceptions in section 10, neither of which applies here:

• a lease, where a covenant against assignment or subletting is valid because it protects the lessor's reversion; and

b) The rules relating to conditional transfer

The scheme. A transfer is conditional when the interest created depends on a condition. The Act asks three questions in order: is the condition lawful (section 25); is it a condition precedent or subsequent (sections 26 and 29); and what happens if it is bad (sections 25 and 32). Alongside them sit sections 10, 11 and 12, which strike at particular kinds of stipulation whatever their form.

1. Section 25, conditional transfer. An interest created on a transfer and dependent upon a condition fails if the fulfilment of the condition is impossible, forbidden by law, of such a nature that it would defeat the provisions of any law, fraudulent, involves or implies injury to the person or property of another, or is regarded by the Court as immoral or opposed to public policy.

2. Section 26, condition precedent: substantial compliance. Where a condition must be fulfilled before a person can take an interest, it is deemed fulfilled if substantially complied with. Illustration: consent of C, D and E is required; E dies; marriage with the consent of C and D is compliance. But consent obtained after the act is not.

7. Sections 33 and 34. Where an act is to be performed and no time is specified, the condition is broken when the person renders performance impossible; where a time is specified and performance is prevented by the fraud of a person who would benefit by non-fulfilment, further time is allowed, and where no time was specified the condition is deemed fulfilled as against him.

8. The neighbouring restraints. Section 10, an absolute restraint on alienation is void. Section 11, where an absolute interest is created, a direction that the transferee shall enjoy it in a particular manner is void and he takes as if the direction had not been made, the exception preserving a direction for the beneficial enjoyment of another piece of the transferor's land. Section 12, a condition making an interest determinable on insolvency or attempted alienation is void, except in a lease.

For full marks, cover: the equitable origin and the mischief, section 53A in full, the six conditions with an example of each, the 2001 registration change, the shield-not-sword rule with a case, who is bound and the proviso, and a table comparing the section with the English doctrine.

What it means. Part performance is the rule that where a person has been let into possession of immoveable property under a contract of transfer, and has acted upon that contract, he is protected against being dispossessed by the transferor merely because the transfer was never completed in the form the law requires.

The mischief it meets. A buyer pays, takes possession, builds, and lives on the land for years, but the seller never executes or registers a conveyance. If the law looked only at the deed, the seller could turn him out and keep both the land and the money. Equity refuses to allow a statute passed to prevent fraud to be used as an instrument of fraud.

Section 53A. Where any 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 of the contract, taken possession of the property or any part of it, or, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that, where there is an instrument of transfer, the transfer has not been completed in the manner prescribed therefor by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him 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.

Proviso: nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof.

THE SIX CONDITIONS, WITH EXAMPLES

Example: the buyer is handed the keys and moves in. Where the buyer was already a tenant, his continuing occupation proves nothing by itself, and he must show a further act, such as paying a large part of the price or spending money on construction.

1. The transferee has performed or is willing to perform his part, and the willingness must be continuous and absolute from the contract to the suit.

Example: the buyer has paid half the price and has tendered the balance, which the seller refuses. Contrast a buyer who has paid nothing for years and comes forward only when prices rise; he is not willing.

1. Registration, for contracts made on or after 24 September 2001. 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) into the Registration Act, 1908, which makes documents containing contracts to transfer for consideration for the purposes of section 53A compulsorily registrable, and provides that if they are not registered they "shall have no effect for the purposes of the said section 53A".

The transferor and everyone claiming under him, including his heirs, legal representatives and a gratuitous transferee. Not bound is a transferee for consideration without notice of the contract or of the part performance. In practice the proviso rarely saves a purchaser, because Explanation II to section 3 fixes him with notice of the title of anyone in actual possession, and the transferee in possession is exactly such a person.

INDIA AND ENGLAND COMPARED

The source. Stanley v. Wilde (1899) 2 Ch 474. Lindley MR: a mortgage is a conveyance of land as a security for the payment of a debt; the security is redeemable on payment; and any provision inserted to prevent redemption on payment is what is meant by a clog or fetter on the equity of redemption, and is therefore void. Equity looks at the substance of the transaction, not its form.

The equity of redemption. What remains with the mortgagor is the equity of redemption. It is itself property: it may be sold, mortgaged again, inherited and attached in execution. It is created by equity, not by the contract, which is why it cannot be bargained away in the mortgage deed.

The Indian statutory footing: section 60. At any time after the principal money has become due, on payment or tender of the mortgage-money, 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 his right is extinguished.

The proviso is the maxim in statutory form: the right subsists unless it "has not been extinguished by the act of the parties or by a decree of a Court". Those are the only two ways it can end.

• Gangadhar v. Shankarlal (AIR 1958 SC 770): whether a term is a clog is a question of the substance of the bargain; a long term of redemption is not, by itself, a clog.
• U. Nilan v. Kannayyan (1999) 8 SCC 511: the right of redemption is a statutory right that cannot be defeated by a term of the mortgage; the borrower must not be trapped by his own necessity.
• Pomal Kanji Govindji v. Vrajlal Karsandas Purohit (1989) 1 SCC 458: a long-term usufructuary mortgage was examined for clogs, the Court identifying the length of the term, the relative bargaining power of the parties, the rate of interest, and whether the mortgagor could have obtained terms elsewhere.

WHAT IS NOT A CLOG

• A subsequent and independent transaction. A mortgagor may lawfully sell his equity of redemption to the mortgagee by a later, separate agreement for fresh consideration. The rule strikes only at terms imposed as part of the loan, when the borrower is under pressure; by then the pressure is over.
• A long term of redemption by itself, unless it makes redemption illusory.

• The Court passes a preliminary decree under Order XXXIV Rule 2 of the Civil Procedure Code giving A a further period, usually six months, to pay; only on default is a final decree passed.
• Until that decree, A's right of redemption survives, because the proviso to section 60 says it ends only by act of parties or by a decree.

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 of any part of the soil of the servient heritage or anything growing or subsisting thereon, which is how a profit a prendre counts as an easement in India.

Essentials. A dominant heritage and a servient heritage; belonging to different persons; the right existing for the beneficial enjoyment of the dominant heritage, not for its owner personally; and capable of forming the subject matter of a grant.

1. CONTINUOUS AND DISCONTINUOUS, section 5

• Continuous: one whose enjoyment is, or may be, continual without the act of man. Examples: a right to light and air through a window, a right to receive water through a fixed drain, a right of support from a neighbour's building.
• Discontinuous: one that needs the act of man for its enjoyment. Examples: a right of way, a right to draw water from a well.

• Positive: the dominant owner does something on the servient land, such as passing over it or drawing water from it.
• Negative: the dominant owner prevents something being done on the servient land, such as preventing a building that would block his light. He does nothing on the land himself.

Why it matters: the way an easement is disturbed differs. A negative easement of light is disturbed by a building, and section 33 provides that no damage to a right of light is substantial unless it affects the evidence of the easement, or interferes materially with physical comfort, or prevents the plaintiff carrying on his accustomed business as beneficially as before.

4. PERMANENT AND LIMITED, section 6

An easement may be permanent, or for a term of years or other limited period, or subject to periodical interruption, or exercisable only at a certain place, or at certain times, or between certain hours, or for a particular purpose, or on condition that it shall commence or become void or voidable on the happening of a specified event or the performance or non-performance of a specified act. A limited easement is extinguished on the expiry of the period or the happening of the condition (section 40).

For full marks, cover: section 54 in all four parts, the essentials, sale distinguished from a contract for sale and from other transfers, then section 55 in the four groups the section itself uses with the sub-clause letters, and the two statutory charges.

Definition, section 54. "Sale" is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

Sale how made. In the case of tangible immoveable property of the value of one hundred rupees and upwards, or of a reversion or other intangible thing, the transfer can be made only by a registered instrument. In the case of tangible immoveable property of a value less than one hundred rupees, it may be made either by a registered instrument or by delivery of the property; delivery takes place when the seller places the buyer, or such person as he directs, in possession.

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.

Before completion:

• (a) Disclose to the buyer any material defect in the property or in the seller's title of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover.
• (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 would take, between the date of the contract and delivery.

On or after completion:

• (f) Give possession to the buyer or such person as he directs.

• Where the ownership has passed before payment of the whole price, to a charge upon the property in the hands of the buyer, or of any transferee without consideration or with notice of the non-payment, for the unpaid price and interest from the date possession was delivered. This is the unpaid vendor's lien.

BUYER'S LIABILITIES, section 55(5)

• (a) Disclose to the seller any fact as to the nature or extent of the seller's interest of which the buyer is, and the seller is not, aware, and which materially increases the value of that interest.
• (b) Pay or tender the purchase money at the time and place of completing the sale, subject to a deduction where the property is sold subject to encumbrances.
• (c) Where the ownership has passed, bear any loss arising 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)