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THE TRANSFER OF PROPERTY ACT, 1882

(4 of 1882)

[17^th February 1882]

An Act to amend the law relating to the Transfer of Property by act of Parties

 

Preamble ¡V WHEREAS it is expedient to define and amend certain parts of the law relating to the transfer of property by act of parties; it is hereby enacted as follows: -

 

CHAPTER I

PRELIMINARY

 

1.         Short title - This Act may be called the Transfer of Property Act, 1882.

 

            Commencement - It shall come into force on the first day of July, 1882.

 

Extent - ¹[It extends² in the first instance to the whole of India except ³[the territories which, immediately before the 1st November, 1956, were comprised in Part B States or in the States of] Bombay, Punjab and Delhi.]

 

1         Subs. by the A..O. 1950, for the original third paragraph.

 

2         The application of this Act was barred in the Naga Hills District, including the Mokokchang Sub-Division, the Dibrugarh Frontier Tract, the North Cachar Hills, the Garo Hills, the Khasia and Jaintia Hills and the Mikir Hills Tract, by notification under sec. 2 of the Assam Frontier Tracts Regulation, 1880 (2 of 1880).

 

The Act has been declared to be in force in Panth Piploda by the Panth Piploda Laws Regulation, 1929 (1 of 1929), sec. 2, and continued in force, with modifications, in the territory transferred to Delhi Province by the Delhi Laws Act, 1915 (7 of 1915), sec. 3 and Sch. III. It has also been partially extended to Berar by the Berar Laws Act, 1941 (4 of 1941).

 

The Act has been extended with effect from 1st January, 1893, to the whole of the territories, other than the Scheduled Districts, under the administration of the Govt. of Bombay.

 

Sections 54, 107 and 123 have been extended from 6th May, 1935, to all Municipalities in the Punjab and to all notified areas declared and notified under sec. 241 of the Punjab Municipal Act, 1911 (Pun. 3 of 1911), see Punjab Gazette, Extra., 1925, p. 27. Those sections and section 129 have been extended to certain areas in Delhi Province, see Notifications No. 198/38-III, dated 30th May, 1939, Gazette of India, 1939, Pt. I, p. 918, and No. 61/40-Judl., dated 16th November, 1940, Gazette of India, 1940, Pt. I, p. 1639, respectively.

 

The Act has been extended to Manipur by the Union Territories (Laws) Amendment Act, 1956 (68 of 1956).

 

It has been rep. as to Government Grants by the Government Grants Act, 1895 (15 of 1895) and rep. or modified to the extent necessary to give effect to the provisions of the Madras City Tenants Protection Act, 1921 (Mad. 3 of 1921) in the City of Madras; see sec. 13 of that Act.

 

It has been amended in Bombay by Bombay Act 14 of 1939, and in Uttar Pradesh by Uttar Pradesh Act 24 of 1954.

 

It has been extended to Pondicherry by Act 26 of 1968, sec. 3, Sch., Part I

 

3      Subs. by the Adaptation of Laws (No. 2) Order, 1956, for ¡§Part B States¡¨.

            ¹[But this Act or any part thereof may be notification in the Official Gazette be extended to whole or any part of the ²[said territories] by the ³[State] Government concerned.]

 

            ⁴[And any State Government may ⁵[***] from time to time, by notification in the Official Gazette, exempt, either retrospectively or prospectively, any part of the territories administered by such State Government from all or any of the following provisions, namely: -

 

Sections 54, paragraphs 2 and 3, 59, 107 and 123.]

 

⁶[Notwithstanding anything in the foregoing part of this section, sections 54, paragraphs 2 and 3, 59, 107 and 123 shall not extend or be extended to any district or tract of country for the time being excluded from the operation of the Indian Registration Act, ⁷[1908], (16 of 1908) under the power conferred by the first section of that Act or otherwise.]

 

2.         Repeal of Acts -            Saving of certain enactments, incidents, rights, liabilities, etc.

 

In the territories to which this Act extends for the time being the enactments specified in the schedule hereto annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be deemed to affect -

 

(a) the provisions of any enactment not hereby expressly repealed;

 

(b) any terms or incidents of any contract or constitution of property which are consistent with the provisions of this Act, and are allowed by the law for the time being in force;

 

(c) any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability; or

 

(d) save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction;

1         Subs. by the A.O. 1937, for the original para.

2         Subs. by the Adaptation of Laws (No. 2) Order, 1956, for "said States".

3         Subs. by the A.O. 1950, for ¡§Provincial¡¨.

4         Subs. by Act 3 of 1885, sec. 1, for the original para.

5         The words "with the previous sanction of the Governor General in Council" omitted by Act 38 of 1928, sec. 2 and Sch. I.

6         Added by Act 3 of 1885, sec. 2 (with retrospective effect). Section 54,  paras. 2 and 3, and sections 59, 107 and 123 extend to every cantonment-see sec. 287 of the Cantonments Act, 1924 (2 of 1924).

7         Subs. by Act 20 of 1920, sec. 2, for "1877".

8         The word "Hindu" omitted by Act 20 of 1929, sec. 3.

9         The words "or Buddhist" omitted by Act 20 of 1929, sec. 3.

3. Interpretation clause - In this Act, unless there is something repugnant in the subject or context, -

 

"immoveable property" does not include standing timber, growing crops or grass:

 

"instrument" means a non-testamentary instrument:

 

¹["attested", in relation to an instrument, means and shall be deemed always to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the presence and by the direction of the executant, or has received from the executant a personal acknowledgment of his signature or mark, or of the signature of such other person, and each of whom has signed the instrument in the presence of the executant; but it shall not be necessary that more than one of such witnesses shall have been present at the same time, and no particular form of attestation shall be necessary:]

 

"registered" means registered in ²[³[any part of the territories] to which this Act extends] under the law⁴ for the time being in force regulating the registration of documents:

 

"attached to the earth" means -

 

(a) rooted in the earth, as in the case of trees and shrubs;

 

(b) imbedded in the earth, as in the case of walls or buildings;or

 

(c) attached to what is so imbedded for the permanent beneficial enjoyment of that to which it is attached;

 

⁵["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 to any beneficial interest in moveable property not  in the possession, either actual or constructive, of the claimant, which the Civil Courts recognize as affording grounds for relief, whether such debt or beneficial interest be existent, accruing, conditional or contingent;]

 

⁶[¡§a person is said to have notice" of a fact when he actually knows that fact, or when, but for wilful abstention from an inquiry or search which he ought to have made, or gross negligence, he would have known it.

 

 

1         Ins. by Act 27 of 1926, sec. 2, as amended by Act 10 of 1927, sec. 2 and Sch. I.

2         Subs. by Act 3 of 1951, sec. 3 and Sch., for "a Part A State or a Part C State" (w.e.f. 1-4-1951).

3         Subs. by the Adaptation of Laws (No. 2) Order, 1956, for "any State".

4         See the Indian Registration Act, 1908 (16 of 1908).

5         Ins. By Act 2 of 1900, sec. 2.

6         Subs. by Act 20 of 1929, sec. 4 as amended by Act 5 of 1930, sec. 2 for the original paragraph.

Explanation I - Where any transaction relating to immoveable property is required by law to be and has been effected by a registered instrument, any person acquiring such property or any part of, or share or interest in, such property shall be deemed to have notice of such instrument as from the date of registration or, where the property is not all situated in one sub-district, or where the registered instrument has been registered under sub-section (2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on which any memorandum of such registered instrument has been filed by any Sub-Registrar within whose sub-district any part of the property which is being acquired, or of the property wherein a share or interest is being acquired, is situated:]

 

Provided that -

 

(1) the instrument has been registered and its registration completed in the manner prescribed by the Indian Registration Act, 1908 (16 of 1908), and the rules made thereunder,

 

(2) the instrument or memorandum has been duly entered or filed, as the case may be, in books kept under section 51 of that Act, and

 

(3) the particulars regarding the transaction to which the instrument relates have been correctly entered in the indexes kept under section 55 of that Act.

 

Explanation II - Any person acquiring any immoveable property or any share or interest in any such property shall be deemed to have notice of the title, if any, of any person who is for the time being in actual possession thereof.

 

Explanation III ¡V A person shall be deemed to have had notice of any fact if his agent acquires notice thereof whilst acting on his behalf in the course of business to which that fact is material:

 

Provided that, if the agent fraudulently conceals the fact, the principal shall not be charged with notice thereof as against any person who was a party to or otherwise cognizant of the fraud.

 

4.            Enactments relating to contracts to be taken as part of Contract Act and supplemental to the Registration Act

 

The Chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (9 of 1872).

 

¹[And sections 54, paragraphs 2 and 3, sections 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, ²[1908 (16 of 1908)].]

 

1         Added by Act 3 of 1885, sec. 3.

2         Subs. by Act 20 of 1929, sec. 5, for ¡§1877¡¨.

CHAPTER II¹

 

OF TRANSFERS OF PROPERTY BY ACT OF PARTIES

 

(A) Transfer of Property, whether moveable or immoveable

 

5.            "Transfer of property" defined

 

In the following sections "transfer of property" means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself, ²[or to himself] and one or more other living persons; and "to transfer property" is to perform such act.

 

²[In this section "living person" includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.]

 

6.         What may be transferred

 

Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force, -

 

(a) The chance of an heir-apparent succeeding to an estate, the chance of relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.

 

(b) A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby.

 

(c) An easement cannot be transferred apart from the dominant heritage.

 

(d) An interest in property restricted in its enjoyment to the owner personally cannot be transferred by him.

 

³[(dd) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred.]

 

(e) A mere right to sue ⁴[***] cannot be transferred.

 

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

 

1         Nothing in Chapter II is to be deemed to affect any rule of Muhammadan Law, see section 2, Act 20 of 1929.

2         Ins. by Act 20 of 1929, sec. 6.

3         Ins. By Act 20 of 1929, sec. 6.

4        The words ¡§for compensation for a fraud or for harm illegally caused¡¨ omitted by Act 2 of 1900, sec. 3.

 

(g) Stipends allowed to military ¹[naval], ²[air-force] and civil pensioners of ³[Government] and political pensions cannot be transferred.

 

(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest affected thereby, or (2) ⁴[for an unlawful object or consideration within the meaning of section 23 of the Indian Contract Act, 1872 (9 of 1872)], or (3) to a person legally disqualified to be transferee.

 

⁵[(i) Nothing in this section shall be deemed to authorize a tenant having an untransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate, under the management of a Court of Wards, to assign his interest as such tenant, farmer or lessee.]

 

7.            Persons competent to transfer

 

Every person competent to contract and entitled to transferable property, or authorized to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extend and in the manner, allowed and prescribed by any law for the time being in force.

 

8.            Operation of transfer

 

Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property, and in the legal incidents thereof.

 

Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth;

 

and, where the property is machinery attached to the earth, the moveable parts thereof;

 

and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith;

 

 

 

1         Ins. by Act 35 of 1934, sec. 2 and Sch.

2         Ins. by Act 10 of 1927, sec. 2 and Sch. I.

3         The word "Government" successively subs. by the A.O. 1937 and the A.O. 1950 to read as above.

4         Subs. by Act 2 of 1900, sec. 3, for "for an illegal purpose".

5         Added by Act 3 of 1885, sec. 4.

and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer;

 

and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.

 

9.         Oral transfer

 

A transfer of property may be made without writing in every case in which a writing is not expressly required by law.

 

10.            Condition restraining alienation

 

Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: provided that property may be transferred to or for the benefit of a woman (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.

 

11.            Restriction repugnant to interest created

 

Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.

 

¹[Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.]

 

12.            Condition making interest determinable on insolvency or attempted alienation

 

Where property is transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is void.

 

Nothing in this section applies to a condition in a lease for the benefit of the lessor or those claiming under him.

 

1         subs. by Act 20 of 1929, sec. 8, for the original paragraph.

13.            Transfer for benefit of unborn person

 

Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

 

Illustration

 

A transfers property of which he is the owner to B in trust for A and his intended wife successively for their lives, and, after the death of the survivor, for the eldest son of the intended marriage for life, and after his death for A's second son. The interest so created for the benefit of the eldest son does not take effect, because it does not extend to the whole of A's remaining interest in the property.

 

14.       Rule against perpetuity

 

No transfer of property can operate to create an interest which is to take effect after the life-time of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

 

15.            Transfer to class some of whom come under sections 13 and 14

 

If, on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails ¹[in regard to those persons only and not in regard to the whole class].

 

²[16.            Transfer to take effect on failure of prior interest

 

Where, by reason of any of the rules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails.

 

17.            Direction for accumulation

 

(1) Where the terms of a transfer of property direct that the income arising from the property shall be accumulated either wholly or in part during a period longer than -

 

(a) the life of the transferor, or

 

(b) a period of eighteen years from the date of the transfer,

 

1         Subs. by Act 20 of 1929, sec. 9, for ¡§as regards the whole class¡¨.

2         Subs. by Act 20 of 1929, sec. 10, for the original sections 16 to 18.

such direction shall, save as hereinafter provided, 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 such last-mentioned 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.

 

(2) This section shall not affect any direction for accumulation for the purpose of-

 

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

 

(ii) the provision of portions for children or remoter issue of the transferor or of any other person taking any interest under the transfer, or

 

(iii) the preservation or maintenance of the property transferred;

 

and such direction may be made accordingly.

 

18.            Transfer in perpetuity for benefit of public

 

The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge,  commerce, health, safety, or any other object beneficial to mankind.]

 

19.       Vested interest

 

Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested, unless a contrary intention appears from the terms of the transfer.

 

A vested interest is not defeated by the death of the transferee before he obtains possession.

 

Explanation - An intention that an interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other person, or whereby income arising from the property is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another person.

 

20.       When unborn person acquires vested interest on transfer for his benefit

 

Where, on a transfer of property, an interest therein is created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appear from the terms of the transfer, a vested interest, although he may not be entitled to the enjoyment thereof immediately on his birth.

21.            Contingent interest

 

Where, on a transfer of property, an interest therein  is created in favour of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property. Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter, when the happening of the event becomes impossible.

 

Exception - Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest is not contingent.

 

22.            Transfer to members of a class who attain a particular age

 

Where, on a transfer of property, an interest therein is created in favour of such members only of a class as shall attain a particular age, such interest does not vest in any member of the class who has not attained that age.

 

23.            Transfer contingent on happening of specified uncertain event

 

Where, on a transfer of property, an interest therein is to accrue to a specified person if a specified uncertain event shall happen, and no time is mentioned for the occurrence of that event, the interest fails unless such event happens before, or at the same time as, the intermediate or precedent interest ceases of exist.

 

24.            Transfer to such of certain persons as survive at some period not specified

 

Where, on a transfer of property, an interest therein is to accrue to such of certain persons as shall go to such of them as shall be alive when the intermediate or precedent interest ceases to exist, unless a contrary intention appears from the terms of the transfer.

 

Illustration

 

A transfers property to B for life, and after his death to C and D, equally to be divided between them, or to the survivor of them. C dies during the life of B. D survives B. At B's death the property passes to D.

 

25.            Conditional transfer

 

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

 

Illustrations

 

(a) A lets a farm to B on condition that he shall walk a hundred miles in an hour. The lease is void.

 

(b) A gives Rs. 500 to B on condition that he shall marry A's daughter C. At the date of the transfer C was dead. The transfer is void.

 

(c) A transfers Rs. 500 to B on condition that she shall murder C. The transfer is void.

 

(d) A transfers Rs. 500 to his niece C if she will desert her husband. The transfer is void.

 

26.            Fulfilment of condition precedent

 

Where the terms of a transfer of property impose a condition to be fulfilled before a person can take an interest in the property, the condition shall be deemed to have been fulfilled if it has been substantially complied with.

 

Illustrations

 

(a) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. E dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition.

 

(b) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. B marries without the consent of C, D and E, but obtains their consent after the marriage. B has not fulfilled the condition.

 

27.            Conditional transfer to one person coupled with transfer to another on failure of prior disposition

 

Where, on a transfer of property, an interest therein is created in favour of one person, and by the same transaction an ulterior disposition of the same interest is made in favour of another, if the prior disposition under the transfer shall fail, the ulterior disposition shall take effect upon the failure of the prior disposition, although the failure may not have occurred in the manner contemplated by the transferor.

 

But, where the intention of the parties to the transaction is that the ulterior disposition shall take effect only in the event of the prior disposition failing in a particular manner, the ulterior disposition shall not take effect unless the prior disposition fails in that manner.

 

Illustrations

 

(a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within three months after A's death, and, if he should neglect to do so, to C. B dies in A's life-time. The disposition in favour of C takes effect.

 

(b) A transfers property to his wife; but, in case she should die in his life-time, transfers to B that which he had transferred to her. A and his wife perish together, under circumstances which make it impossible to prove that she died before him. The disposition in favour of B does not take effect.

28.            Ulterior transfer conditional on happening or not happening of specified event

 

On a transfer of property an interest therein may be created to accrue to any person with the condition superadded that in case a specified uncertain event shall happen such interest shall pass to another person, or that in case a specified uncertain event shall not happen such interest shall pass to another person. In each case the dispositions are subject to the rules contained in sections 10, 12, 21, 22, 23, 24, 25 and 27.

 

29.            Fulfilment of condition subsequent

 

An ulterior disposition of the kind contemplated by the last preceding section cannot take effect unless the condition is strictly fulfilled.

 

Illustration

 

A transfers Rs. 500 to B, to be paid to him on his attaining his majority or marrying, with a proviso that, if B dies a minor or marries without C's consent, the Rs. 500 shall go to D. B marries when only 17 years of age, without C's consent. The transfer to D takes effect.

 

30.       Prior disposition not affected by invalidity of ulterior disposition

 

If the ulterior disposition is not valid, the prior disposition is not affected by it.

 

Illustration

 

A transfers a farm to B for her life, and, if she do not desert her husband, to C. B is entitled to the farm during her life as if no condition had been inserted.

 

31.            Condition that transfer shall cease to have effect in case specified uncertain event happens or does not happen

 

Subject to the provisions of section 12, on a transfer of property an interest therein may be created with the condition superadded that it shall cease to exist in case a specified uncertain event shall happen, or in case a specified uncertain event shall not happen.

 

Illustrations

 

(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a certain wood, the transfer shall cease to have any effect. B cuts down the wood. He loses his life-interest in the farm.

 

(b) A transfers a farm to B, provided that, if B shall not go to England within three years after the date of the transfer, his interest in the farm shall cease. B does not go to England within the term prescribed. His interest in the farm ceases.

 

32.       Such condition must not be invalid

 

In order that a condition that an interest shall cease to exist may be valid, it is necessary that the event to which it relates be one which could legally constitute the condition of the creation of an interest.

 

33.            Transfer conditional on performance of act, no time being specified for performance

 

Where, on a transfer of property, an interest therein is created subject to a condition that the person taking it shall perform a certain act, but no time is specified for the performance of the act, the condition is broken when he renders impossible, permanently or for an indefinite period, the performance of the act.

 

34.            Transfer conditional on performance of act, time being specified

 

Where an act is to be performed by a person either as a condition to be fulfilled before an interest created on a transfer of property is enjoyed by him, or as a condition on the non-fulfilment of which the interest is to pass from him to another person, and a time is specified for the performance of the act, if such performance within the specified time is prevented by the fraud of a person who would be directly benefited by non-fulfilment of the condition, such further time shall as against him be allowed for performing the act as shall be requisite to make up for the delay caused by such fraud. But if no time is specified for the performance of the act, then, if its performance is by the fraud of a person interested in the non- fulfilment of the condition rendered impossible or indefinitely postponed, the condition shall as against him be deemed to have been fulfilled.

 

Election

 

35.            Election when necessary

 

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

 

subject nevertheless,

 

where the transfer is gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh transfer,

 

and in all cases where the transfer is for consideration,

 

to the charge of making good to the disappointed transferee the amount or value of the property attempted to be transferred to him.

Illustrations

 

The farm of Sultanpur is the property of C and worth Rs. 800. A by an instrument of gift professes to transfer it to B, giving by the same instrument Rs. 1,000 to C. C elects to retain the farm. He forfeits the gift of Rs. 1,000.

 

In the same case, A dies before the election. His representative must out of the Rs. 1,000 pay Rs. 800 to B.

 

The rule in the first paragraph of this section applies whether the transferor does or does not believe that which he professes to transfer to be his own.

 

A person taking no benefit directly under a transaction, but deriving a benefit under it indirectly, need not elect.

 

A person who in his one capacity takes a benefit under the transaction may in another dissent therefrom.

 

Exception to the last preceding four rules - Where a particular benefit is expressed to be conferred on the owner of the property which the transferor professes to transfer, and such benefit is expressed to be in lieu of that property, if such owner claim the property, he must relinquish the particular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same transaction.

 

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 those circumstances which would influence the judgment of a reasonable man in making an election, or if he waives enquiry into the circumstances.

 

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.

 

Such knowledge of 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.

 

Illustration

 

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.

 

If he does not within one year after the date of the transfer signify to the transferor or his representatives his intention to confirm or to dissent from the transfer, the transferor or his representative may, upon the expiration of that period, require him to make his election; and, if he does not comply with such requisition within a reasonable time after he has received it, he shall be deemed to have elected to confirm the transfer.

In case of disability, the election shall be postponed until the disability ceases, or until the election is made by some competent authority.

 

Apportionment

 

36.            Apportionment of periodical payments on determination of interest of person entitled

 

In the absence of a contract or local usage to the contrary, all rents, annuities, pensions, dividends and other periodical payments in the nature of income shall, upon the transfer of the interest of the person entitled to receive such payments, be deemed, as between the transferor and the transferee, to accrue due from day to day, and to be apportionable accordingly, but to be payable on the days appointed for the payment thereof.

 

37.            Apportionment of benefit of obligation on severance

 

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

 

Provided that no person on whom the burden of the obligation lies shall be answerable for failure to discharge it in manner provided by this section, unless and until he has had reasonable notice of the severance.

 

Nothing in this section applies to leases for agricultural purposes unless and until the State Government by notification in the Official Gazette so directs.

 

Illustrations

 

(a) A sells to B, C and D a house situate in a village and leased to E at an annual rent of Rs. 30 and delivery of one fat sheep, B having provided half the purchase-money and C and D one-quarter each. E, having notice of this, must pay Rs. 15 to B, Rs. 7 1/2 to C, and Rs. 7 1/2 to D, and must deliver the sheep according to the joint direction of B, C and D.

 

(b) In the same case, each house in the village being bound to provide ten days' labour each year on a dyke to prevent inundation, E had agreed as a term of his lease to perform this work for A. B, C and D severally require E to perform the ten days' work due on account of the house  of each. E is not bound to do more than ten days' work in all, according to such directions as B, C and D may join in giving.

 

(B) Transfer of Immoveable Property

 

38.            Transfer by person authorised only under certain circumstances to transfer

 

Where any person, authorized only under circumstances in their nature variable to dispose of immoveable property, transfers such property for consideration, alleging the existence of such circumstances, they shall, as between the transferee on the one part and the transferor and other persons (if any) affected by the transfer on the other part, be deemed to have existed, if the transferee, after using reasonable care to ascertain the existence of such circumstances, has acted in good faith.

 

Illustration

 

A, a Hindu widow, whose husband has left collateral heirs, alleging that the property held by her as such is insufficient for her maintenance, agrees, for purposes neither religious nor charitable, to sell a field, part of such property, to B. B satisfies himself by reasonable enquiry that the income of the property is insufficient for A's maintenance, and that the sale of the field is necessary, and acting in good faith, buys the field from A. As between B on the one part and A and the collateral heirs on the other part, a necessity for the sale shall be deemed to have existed.

 

39.            Transfer where third person is entitled to maintenance

 

Where a third person has a right to receive maintenance, or a provision for advancement or marriage, from the profits of immoveable property, and such property is transferred, ¹[***] the right may be enforced against the transferee, if  he has notice ²[thereof] or if the transfer is gratuitous; but not against a transferee for consideration and without notice of the right, nor against such property in his hands.

 

³[***]

 

40.            Burden of obligation imposing restriction on use of land

 

Where, for the more beneficial enjoyment of his own immoveable property, a third person has, independently of any interest in the immoveable property of another or of any easement thereon, a right to restrain the enjoyment ⁴[in a particular manner of the latter property], or

 

Or of obligation annexed to ownership but not amounting to interest or easement

 

Where a third person is entitled to the benefit of an obligation arising out of contract and annexed to the ownership of immoveable property, but not amounting to an interest therein or easement thereon,

1         The words ¡§with the intention of defeating such right¡¨ omitted by Act 20 of 1929, sec. 11.

2         Subs. by Act 20 of 1929, sec. 11, for ¡§of such intention¡¨.

3         The illustration omitted by Act 20 of 1929, sec. 11.

4         Subs. by Act 20 of 1929, sec. 12, for ¡§of the latter property or to compel its enjoyment in a particular manner¡¨.

such right or obligation may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby, but not against a transferee for consideration and without notice of the right or obligation, nor against such property in his hands.

 

Illustration

 

A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur to C, who has notice of the contract. B may enforce the contract against C to the same extent as against A.

 

41.            Transfer by ostensible owner

 

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 authorized 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.

 

42.            Transfer by person having authority to revoke former transfer

 

Where a person transfers any immoveable property, reserving power to revoke the transfer, and subsequently transfers the property for consideration to another transferee, such transfer operates in favour of such transferee (subject to any condition attached to the exercise of the power) as a revocation of the former transfer to the extent of the power.

 

Illustration

 

A lets a house to B, and reserves power to revoke the lease if, in the opinion of a specified surveyor, B should make a use of it detrimental to its value, Afterwards A, thinking that such a use has been made, lets the house to C. This operates as a revocation of B's lease subject to the opinion of the surveyor as to B's use of the house having been detrimental to its value.

 

43.            Transfer by unauthorized person who subsequently acquires interest in property transferred

 

Where a person ¹[fraudulently or] erroneously represents that he is authorized to transfer certain immovable property, and professes to transfer such property for consideration, such transfer shall, at the option of the transferee, operate on any interest which the transferor may acquire in such property at any time during which the contract of transfer subsists.

 

Nothing in this section shall impair the right of transferees in good faith for consideration without notice of the existence of the said option.

 

1.     Ins. By Act 20 of 1929, sec. 13.

 

Illustration

 

A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z, representing that A is authorized to transfer the same. Of these fields Z does not belong to A, it having been retained by B on the partition; but on B's dying A as heir obtains Z. C, not having rescinded the contract of sale, may require A to deliver Z to him.

 

44.            Transfer by one co-owner

 

Where one of two or more co-owners of immoveable property legally competent in that behalf transfer his share of such property or any interest therein, the transferee acquires, as to such share or interest, and so far as is necessary to give effect to the transfer, the transferor's right to joint possession or other common or part enjoyment of the property, and to enforce a partition of the same, but subject to the conditions and liabilities affecting, at the date of the transfer, the share or interest so transferred.

 

Where the transferee of a share of a dwelling-house belonging to an undivided family is not a member of the family, nothing in this section shall be deemed to entitle him to joint possession or other common or part enjoyment of the house.

 

45.       Joint transfer for consideration

 

Where immoveable property is transferred for consideration to two or more persons, and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property in proportion to the shares of the consideration which they respectively advanced.

 

In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property.

 

46.            Transfer for consideration by persons having distinct interests

 

Where immoveable property is transferred for consideration by persons having distinct interests therein, the transferors are, in the absence of a contract to the contrary, entitled to share in the consideration equally, where their interest in the property were of equal value, and, where such interests were of unequal value, proportionately to the value of their respective interests.

 

Illustration

 

(a) A, owing a moiety, and B and C, each a quarter share, of mauza Sultanpur, exchange an eighth share of that mauza for a quarter share of mauza Lalpura. There being no agreement to the contrary, A is entitled to an eighth share in Lalpura, and B and C each to a sixteenth share in that mauza.

 

(b) A, being entitled to a life-interest in mauza Atrali and B and C to the reversion, sell the mauza for Rs. 1,000. A's life- interest is ascertained to be worth Rs. 600, the reversion Rs. 400. A is entitled to receive Rs. 600 out of the purchase-money. B and C to receive Rs. 400.

 

47.            Transfer by co-owners of share in common property

 

Where several co-owners of immoveable property transfer a share therein without specifying that the transfer is to take effect on any particular share or shares of the transferors, the transfer, as among such transferors, takes effect on such shares equally where the shares were equal, and, where they were unequal, proportionately to the extent of such shares.

 

Illustration

 

A, the owner of an eight-anna share, and B and C, each the owner of a four-anna share, in mauza Sultanpur, transfer a two-anna share in the mauza to D, without specifying from which of their several shares the transfer is made. To give effect to the transfer one-anna share is taken from the share of A, and half-an-anna share from each of the shares of B and C.

 

48.            Priority of rights created by transfer

 

Where a person purports to create by transfer at different times rights in or over the same immoveable property, and such rights cannot all exist or be exercised to their full extent together, each later created right shall, in the absence of a special contract or reservation binding the earlier transferees, be subject to the rights previously created.

 

49.            Transferee's right under policy

 

Where immoveable property is transferred for consideration, and such property or any part thereof is at the date of the transfer insured against loss or damage by fire, the transferee, in case of such loss or damage, may, in the absence of a contract to the contrary, require any money which the transferor actually receives under the policy, or so much thereof as may be necessary, to be applied in reinstating the property.

 

50.       Rent bona fide paid to holder under 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.

Illustration

 

A lets a field to B at a rent of Rs. 50, and then transfers the field to C. B, having no notice of the transfer, in good faith pays the rent to A. B is not chargeable with the rent so paid.

 

51.            Improvements made by bona fide holders under defective titles

 

When the transferee of immoveable property makes any improvement on the property, believing in good faith that he is absolutely entitled thereto, and he is subsequently evicted therefrom by any person having a better title, the transferee has a right to require the person causing the eviction either to have the value of the improvement estimated and paid or secured to the transferee, or to sell his interest in the property to the transferee at the then market-value thereof, irrespective of the value of such improvement.

 

The amount to be paid or secured in respect of such improvement shall be the estimated value thereof at the time of the eviction.

 

When, under the circumstances aforesaid, the transferee has planted or sown on the property crops which are growing when he is evicted therefrom, he is entitled to such crops and to free ingress and egress to gather and carry them.

 

52.            Transfer of property pending suit relating thereto

 

During the ¹[pendency] in any Court having authority ²[³[within the limits of India excluding the State of Jammu and Kashmir] or established beyond such limits] by ⁴[the Central Government] ⁵[***], of ⁶[any] suit or proceeding which is not collusive and in which any right to immoveable property is directly and specifically in question, the property cannot be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect the rights of any other party thereto under any decree or order which may be made therein, except under the authority of the Court and on such terms as it may impose.

 

⁷[Explanation - For the purposes of this section, the pendency of a suit or proceeding shall be deemed to commence from the date of the presentation of the plaint or the institution of the proceeding in a Court of competent jurisdiction, and to continue until the suit or proceeding has been disposed of by a final decree or order, and complete satisfaction or discharge of such decree or order has been obtained, or has become unobtainable by reason of the expiration of any period of limitation prescribed for the execution thereof by any law for the time being in force.]

1         Subs. by Act 20 of 1929, sec. 14, for ¡§active prosecution¡¨.

2         Subs. by the A.O. 1950, for ¡§in the Provinces or established beyond the limits of the Provinces¡¨.

3         Subs. by Act 3 of 1951, sec. 3 and Sch., for ¡§within the limits of Part A States and Part C States¡¨ (w.e.f. 1-4-1951).

4         Subs. by the A.O. 1937, for ¡§the Governor General in Council¡¨.

5         The words ¡§or the Crown Representative¡¨ rep. by the A.O. 1948.

6         Subs. by Act 20 of 1929, sec. 14, for ¡§a contentious¡¨.

7         Ins. By Act 20 of 1929, sec. 14.

¹[53.            Fraudulent transfer

 

(1) Every transfer of immoveable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.

 

Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.

 

Nothing in this sub-section shall affect any law for the time being in force relating to insolvency.

 

A suit instituted by a creditor (which term includes a decree-holder whether he has or has not applied for execution of his decree) to avoid a transfer on the ground that it has been made with intent to defeat or delay the creditors of the transferor, shall be instituted on behalf of, or for the benefit of, all the creditors.

 

(2) Every transfer of immoveable property made without consideration with intent to defraud a subsequent transferee shall be voidable at the option of such transferee.

 

For the purposes of this sub-section, no transfer made without consideration shall be deemed to have been made with intent to defraud by reason only that a subsequent transfer for consideration was made.]

 

²[53A.  Part performance

 

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 thereof, or the transferee, 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 the contract, though required to be registered, has not been registered, or, where there is an instrument of transfer, that 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 tranferee 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:

1         Subs. by Act 20 of 1929, sec. 15, for the original section.

2         Ins. By Act 20 of 1929, sec. 16.

Provided that 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.]

 

CHAPTER III

 

OF SALES OF IMMOVEABLE PROPERTY

 

54.       "Sale" defined

 

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

 

Sale how made

 

¹Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.

 

¹In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.

 

Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

 

Contract for sale

 

A contract for the sale of immovable property is a contract that a sale of such property shall take place on terms settled between the parties.

 

It does not, of itself, create any interest in or charge on such property.

 

55.       Rights and liabilities of buyer and seller

 

In the absence of a contract to the contrary, the buyer and the seller of immoveable property respectively are subject to the liabilities, and have the rights, mentioned in the rules next following, or such of them as are applicable to the property sold:

 

(1) The seller is bound -

 

(a) to disclose to the buyer any material defect in the property ²[or in the seller's title thereto] of which the seller is, and the buyer is not, aware, and which the buyer could not with ordinary care discover;

 

1         As to limitation to the territorial operation of paragraphs 2 and 3 of section 54, see section 1, supra.  These paragraphs extend to every cantonment see section 287 of the Cantonments Act, 1924 (2 of 1924).

2         Ins. by Act 20 of 1929, sec. 17.

 

(b) to produce to the buyer on his request for examination all documents of title relating to the property which are in the seller's possession or power;

 

(c) to answer to the best of his information all relevant questions put to him by the buyer in respect to the property or the title thereto;

 

(d) on payment or tender of the amount due in respect of the price, to execute a proper conveyance of the property when the buyer tenders it to him for execution at a proper time and place;

 

(e) between the date of the contract of sale and the delivery of the property, to take as much care of the property and all documents of title relating thereto which are in his possession as an owner of ordinary prudence would take of such property and documents;

 

(f) to give, on being so required, the buyer, or such person as he directs, such possession of the property as its nature admits;

 

(g) to pay all public charges and rent accrued due in respect of the property up to the date of the sale, the interest on all encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances on the property then existing.

 

(2) The seller shall be deemed to contract with the buyer that the interest which the seller professes to transfer to the buyer subsists and that he has power to transfer the same:

 

Provided that, where the sale is made by a person in a fiduciary character, he shall be deemed to contract with the buyer that the seller has done no act whereby the property is encumbered or whereby he is hindered from transferring it.

 

The benefit of the contract mentioned in this rule shall be annexed to, and shall go with, the interest of the transferee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

 

(3) Where the whole of the purchase-money has been paid to the seller, he is also bound to deliver to the buyer all documents of title relating to the property which are in the seller's possession or power:

 

Provided that, (a) where the seller retains any part of the property comprised in such documents, he is entitled to retain them all, and, (b) where the whole of such property is sold to different buyers, the buyer of the lot of greatest value is entitled to such documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest value, is bound, upon every reasonable request by the buyer, or by any of the other buyers, as the case may be, and at the cost of the person making the request, to produce the said documents and furnish such true copies thereof or extracts therefrom as he may require; and in the meantime, the seller, or the buyer of the lot of greatest value, as the case may be, shall keep the said documents safe, uncancelled and undefaced, unless prevented from so doing by fire or other inevitable accident.

 

(4)            The seller is entitled -

 

(a) to the rents and profits of the property till the ownership thereof passes to the buyer;

 

(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, ¹[any transferee without consideration or any transferee with notice of the non-payment], for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part ¹[from the date on which possession has been delivered].

 

(5) The buyer is bound

 

(a) to disclose to the seller any fact as to the nature or extent of the seller's interest in the property of which the buyer is aware, but of which he has reason to believe that the seller is not aware, and  which materially increases the value of such interest;

 

(b) to pay or tender, at the time and place of completing the sale, the purchase-money to the seller or such person as he directs: provided that, where the property is sold free from encumbrances, the buyer may retain out of the purchase-money the amount of any encumbrances on the property existing at the date of the sale, and shall pay the amount so retained to the persons entitled thereto;

 

(c) where the ownership of the property has passed to the buyer, to bear any loss arising from the destruction, injury or decrease in value of the property not caused by the seller;

 

 

1         Ins. by Act 20 of 1929, sec. 17.

 

(d) where the ownership of the property has passed to the buyer, as between himself and the seller, to pay all public charges and rent which may become payable in respect of the property, the principal moneys due on any encumbrances subject to which the property is sold, and the interest thereon afterwards accruing due.

 

(6)            The buyer is entitled -

 

(a) where the ownership of the property has passed to him, to the benefit of any improvement in, or increase in value of, the property, and to the rents and profits thereof;

 

(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, 1[***] to the extent of the seller's interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.

 

An omission to make such disclosures as are mentioned in this section, paragraph (1), clause (a), and paragraph (5), clause (a), is fraudulent.

 

²[56.            Marshalling by subsequent purchaser

 

If the owner of two or more properties mortgages them to one person and then sells one or more of the properties to another person, the buyer is, in the absence of a contract to the contrary, entitled to have the mortgage-debt satisfied out of the property or properties not sold to him, so far as the same will extend, but not so as to prejudice the rights of the mortgagee or persons claiming under him or of any other person who has for consideration acquired an interest in any of the properties.]

 

Discharge of Encumbrances on Sale

 

57.            Provision by Court for encumbrances and sale freed therefrom

 

(a) Where immoveable property subject to any encumbrance, whether immediately payable or not, is sold by the Court or in execution of a decree, or out of Court, the Court may, if it thinks fit, on the application of any party to the sale, direct or allow payment into Court, -

 

 

1         The words ¡§with notice of the payment¡¨ omitted by Act 20 of 1929, sec. 17.

2         Subs. by Act 20 of 1929, sec. 18, for the original section.

 

(1) in case of an annual or monthly sum charged on the property, or of a capital sum charged on a determinable interest in the property -- of such amount as, when invested in securities of the central Government, the Court considers will be sufficient, by means of the interest thereof, to keep down or otherwise provide for that charge, and

 

(2) in any other case of a capital sum charged on the property -- of the amount sufficient to meet the encumbrance and any interest due thereon.

 

But in either case there shall also be paid into Court such additional amount as the Court considers will be sufficient to meet the contingency of further costs, expenses and interest, and any other contingency, except depreciation of investments, not exceeding one-tenth part of the original amount to be paid in, unless the Court for special reasons (which it shall record) thinks fit to require a large additional amount.

 

(b) Thereupon the Court may, if it thinks fit, and after notice to the encumbrance, unless the Court, for reasons to be recorded in writing, thinks fit to dispense with such notice, declare the property to be freed from the encumbrance, and make any order for conveyance, or vesting order, proper for giving effect to the sale, and give directions for the retention and investment of the money in Court.

 

(c) After notice served on the persons interested in or entitled to the money or fund in Court, the Court may direct payment or transfer thereof to the persons entitled to receive or give a discharge for the same, and generally may give directions respecting the application or distribution of the capital or income thereof.

 

(d) An appeal shall lie from any declaration, order or direction under this section as if the same were a decree.

 

(e) In this section "Court" means (1) a High Court in the exercise of its ordinary or extraordinary original civil jurisdiction, (2) the Court of a District Judge within the local limits of whose jurisdiction the property or any part thereof is situate, (3) any other Court which the State Government may, from time to time, by notification in the Official Gazette, declare to be competent to exercise the jurisdiction conferred by this section.

 

CHAPTER IV

 

OF MORTGAGES OF IMMOVEABLE PROPERTY AND CHARGES

 

58.            "Mortgage", "mortgagor", "mortgagee", "mortgage-money" and "mortgage-deed" defined

 

(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 called a mortgagor, the transferee a mortgagee; the principal money and interest of which payment is secured for the time being are called the mortgage-money, and the instrument (if any) by which the transfer is effected is called a mortgage-deed.

 

(b) Simple mortgage

 

Where, without delivering  possession of the mortgaged property, the mortgagor binds himself personally to pay the mortgage-money, and agrees, expressly or impliedly, that, in the event of his failing to pay according to his contract, the mortgagee shall have a right to cause the mortgaged property to be sold and the proceeds of sale to be applied, so far as may be necessary, in payment of the mortgage-money, the transaction is called a simple mortgage and the mortgagee a simple mortgagee.

 

(c)            Mortgage by conditional sale

 

Where the mortgagor ostensibly sells the mortgaged property -

 

on condition that on default of payment of the mortgage-money on a certain date the sale shall become absolute, or

 

on condition that on  such payment being made the sale shall become void, or

 

on condition that on such payment being made the buyer shall transfer the property to the seller,

 

the transaction is called a mortgage by conditional sale and the mortgagee a mortgagee by conditional sale:

 

¹[Provided that 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.]

 

(d)            Usufructuary mortgage

 

Where the mortgagor delivers possession ¹[or expressly or by implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and authorizes him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property ²[or any part of such rents and profits and to appropriate the same] in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest ³[or] partly in  payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.

 

(e)            English mortgage

 

Where the mortgagor binds himself to re-pay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will retransfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.

 

⁴[(f)            Mortgage by deposit of title-deeds

 

Where a person in any of the following towns, namely, the towns of Calcutta, Madras, ⁵[and Bombay], ⁶[***] and in any other town⁷ which the ⁸[State Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.

 

(g)            Anomalous mortgage

 

A mortgage which is not a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within the meaning of this section is called an anomalous mortgage.]

 

1         Ins. by Act 20 of 1929, sec. 19.

2         Subs. by Act 20 of 1929, sec. 19, for "and to appropriate them".

3         Subs. by Act 20 of 1929, sec. 19, for "and".

4         Added by Act 20 of 1929, sec. 19.

5         Subs. by the A. O. 1948 for "Bombay and Karachi". The word "and" had been ins. by the A. O. 1937.

6         The words "Rangoon, Moulmein,  Bassein and Akyab" omitted by the A. O. 1937.

7         For notifications relating to the towns of ¡V Ahmedabad, see Gazette of India, 1935, Pt. I, p. 936, Bandra, Kurla and Ghathkoper Kirol, see Gazette of India, 1924, Pt. I, P.1064, Cawnpore, Allahabad and Lucknow, see Gazette of India, 1938, Pt. I, p. 158. Coimbatore, Madura, Cocanada and Cochin, see Gazette of India, 1935, Pt. I, p. 526.

8         The words ¡§Governor General in Council¡¨, successively amended by the A.O. 1937 and the A.O. 1950 to read as above.

 

¹[59.            Mortgage when to be by assurance

 

Where the principal money secured is one hundred rupees or upwards, a mortgage ²[other than a mortgage by deposit of title-deeds] can be effected only by a registered instrument signed by the mortgagor and attested by at least two witnesses.

 

Where the principal money secured is less than one hundred rupees, a mortgage may be effected either by ³[a registered instrument] signed and attested as aforesaid, or (except in the case of a simple mortgage) by delivery of the property.

 

⁴[***].

 

⁵[59A.            References to mortgagors and mortgagees to include persons deriving title from them

 

Unless otherwise expressly provided, references in this Chapter to mortgagors and mortgagees shall be deemed to include references to persons deriving title from them respectively.]

 

Rights and Liabilities of Mortgagor

 

60.       Right of mortgagor to redeem

 

At any time after the principal money has become ⁶[due], the mortgagor has a right, on payment or tender, at a proper time and place, of the mortgage-money, to require the mortgagee (a) to deliver ⁷[to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee], (b) where the mortgagee is in possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgment in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:

 

Provided that the right conferred by this section has not been extinguished by act of the parties or by ⁸[decree] of a Court.

 

1         As to limitation to the territorial operation of section 59, see, section 1, supra. Section 59, extends to every cantonment ¡V see section 287 of the Cantonments Act, 1924 (2 of 1924).

2         Ins. by Act 20 of 1929, sec. 20.

3         Subs. by Act 6 of 1904, sec. 3, for ¡§an instrument¡¨.

4         The third paragraph was omitted by Act 20 of 1929, sec. 20.

5         Ins. by Act 20 of 1929, sec. 21.

6         Sub. by Act 20 of 1929, sec. 22, for ¡§payable¡¨.

7         Subs. by Act 20 of 1929, sec. 22, for ¡§the mortgage-deed, if any to the mortgagor¡¨.

8         Subs. by Act 20 of 1929, sec. 22, for ¡§order¡¨.

 

The right conferred by this section is called a right to redeem and a suit to enforce it is called a suit for redemption.

 

Nothing in this section shall be deemed to render invalid any provision to the effect that, if the time fixed for payment of the principal money has been allowed to pass or no such time has been fixed, the mortgagee shall be entitled to reasonable notice before payment or tender of such money.

 

Redemption of portion of mortgaged property

 

Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except ¹[only] where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor.

 

²[60A.            Obligation to transfer to third party instead of re-transference to mortgagor

 

(1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on the fulfilment of which he would be entitled to require a re-transfer, he may require the mortgagee, instead of re-transferring the property, to assign the mortgage-debt and transfer the mortgaged property to such third person as the mortgagor may direct; and the mortgagee shall be bound to assign and transfer accordingly.

 

(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by any encumbrancer notwithstanding an intermediate encumbrance; but the requisition of any encumbrance shall prevail over a requisition of the mortgagor and, as between encumbrancers, the requisition of a prior encumbrancer shall prevail over that of a subsequent encumbrancer.

 

(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in possession.

 

60B.    Right to inspection and production of documents

 

A mortgagor, as long as his right of redemption subsists, shall be entitled at all reasonable times, at his request and at his own cost, and on payment of the mortgagee's costs and expenses in this behalf, to inspect and make copies or abstracts of, or extracts from, documents of title relating to the mortgaged property which are in the custody or power of the mortgagee.]

 

 

1         Ins. by Act 20 of 1929, sec. 22.

2         Sections 60A and 60B ins. By Act 20 of 1929, sec. 23.

 

¹[61.     Right to redeem separately or simultaneously

 

A mortgagor who has executed two or more mortgages in favour of the same mortgagee shall, in the absence of a contract to the contrary, when the principal money of any two or more of the mortgages has become due, be entitled to redeem any one such mortgage separately, or any two or more of such mortgages together.]

 

62.       Right of usufructuary mortgagor to recover possession

 

In the case of a usufructuary mortgage, the mortgagor has a right to recover possession of the property ²[together with the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee], -

 

(a) where the mortgagee is authorized to pay himself the mortgage-money from the rents and profits of the property, -- when such money is paid;

 

(b) where the mortgagee is authorized to pay himself from such rents and profits ³[or any part thereof a part only of the mortgage-money], -- when the term, if any, prescribed for the payment of the mortgage-money has expired and the mortgagor pays or tenders to the mortgagee ⁴[the mortgage-money or the balance thereof] or deposits it in Court as hereinafter provided.

 

63.            Accession  to mortgaged property

 

Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, received any accession, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to such accession.

 

Accession acquired in virtue of transferred ownership

 

Where such accession has been acquired at the expense of the mortgagee, and is capable of separate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it. If such separate possession or enjoyment is not possible, the accession must be delivered with the property; the mortgagor being liable, in the case of an acquisition necessary to preserve the property from destruction, forfeiture or sale, or made with his assent, to pay the proper cost thereof, as an addition to the principal money, ⁵[with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent per annum].

 

1         Subs. by Act 20 of 1929, sec. 24 for the original section.

2         Ins. by Act 20 of 1929, sec. 25.

3         Subs. by Act 20 of 1929, sec. 25, for "the interest of the principal money".

4         Subs. by Act 20 of 1929, sec. 25, for "the principal money".

5         Subs. by Act 20 of 1929, sec. 26, for ¡§at the same rate of interest¡¨.

In the case last mentioned the profits, if any, arising from the accession shall be credited to the mortgagor.

 

Where the mortgage is usufructuary and the accession has been acquired at the expense of the mortgagee, the profits, if any, arising from the accession shall, in the absence of a contract to the contrary, be set off against interest, if any, payable on the money so expended.

 

¹[63A.            Improvements to mortgaged property

 

(1) Where mortgaged property in possession of the mortgagee has, during the continuance of the mortgage, been improved, the mortgagor, upon redemption, shall, in the absence of a contract to the contrary, be entitled to the improvement; and the mortgagor shall not, save only in cases provided for in sub-section (2), be liable to pay the cost thereof.

 

(2) Where any such improvement was effected at the cost of the mortgagee and was necessary to preserve the property from destruction or deterioration or was necessary to prevent the security from becoming insufficient, or was made in compliance with the lawful order of any public servant or public authority, the mortgagor shall, in the absence of a contract to the contrary, be liable to pay the proper cost thereof as an addition to the principal money with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent per annum, and the profits, if any, accruing by reason of the improvement shall be credited to the mortgagor.]

 

64.            Renewal of mortgaged lease

 

Where the mortgaged property is a lease ²[***] and the mortgagee obtains a renewal of the lease, the mortgagor, upon redemption, shall, in the absence of a contract by him to the contrary, have the benefit of the new lease.

 

65.            Implied contracts by mortgagor

 

In the absence of a contract to the contrary, the mortgagor shall be deemed to contract with the mortgagee, -

 

(a) that the interest which the mortgagor professes to transfer to the mortgagee subsists, and that the mortgagor has power to transfer the same;

 

(b) that the mortgagor will defend, or, if the mortgagee be in possession of the mortgaged property, enable him to defend, the mortgagor's title thereto;

 

1         Ins. by Act 20 of 1929, sec. 27.

2         The words ¡§for a term of years¡¨ omitted by Act 20 of 1929, sec. 28.

(c) that the mortgagor will, so long as the mortgagee is not in possession of the mortgaged property, pay all public charges accruing due in respect of the property;

 

(d) and, where the mortgaged property is a lease ¹[***], that the rent payable under the lease, the conditions contained therein, and the contracts binding on the lessee have been paid, performed and observed down to the commencement of the mortgage; and that the mortgagor will, so long as the security exists and the mortgagee is not in possession of the mortgaged property, pay the rent reserved by the lease, or, if the lease be renewed, the renewed lease, perform the conditions contained therein and observe the contracts binding on the lessee, and indemnify the mortgagee against all claims sustained by reason of the non-payment of the said rent or the non-performance or non-observance of the said conditions and contracts;

 

(e) and, where the mortgage is a second or subsequent encumbrance on the property, that the mortgagor will pay the interest from time to time accruing due on each prior encumbrance as and when it becomes due, and will at the proper time discharge the principal money due on such prior encumbrance.

 

            ²[***]

 

The benefit of the contracts mentioned in this section shall be annexed to and shall go with the interest of the mortgagee as such, and may be enforced by every person in whom that interest is for the whole or any part thereof from time to time vested.

 

³[65A.            Mortgagor's power to lease

 

(1) Subject to the provisions of sub-section (2), a mortgagor, while lawfully in possession of the mortgaged property, shall have power to make leases thereof which shall be binding on the mortgagee.

 

(2) (a) Every such lease shall be such as would be made in the ordinary course of management of the property concerned, and in accordance with any local law, custom or usage.

 

(b) Every such lease shall reserve the best rent that can reasonably be obtained, and no premium shall be paid or promised and no rent shall be payable in advance.

 

(c) No such lease shall contain a covenant for renewal.

 

 

 

1         The words ¡§for a term of years¡¨ omitted by Act 20 of 1929, sec. 29.

2         Certain words omitted by Act 20 of 1929, sec. 29.

3         Ins. by Act 20 of 1929, sec. 30.

(d) Every such lease shall take effect from a date not later than six months from the date on which it is made.

 

(e) In the case of a lease of buildings, whether leased with or without the land on which they stand, the duration of the lease shall in no case exceed three years, and the lease shall contain a covenant for payment of the rent and a condition of re-entry on the rent not being paid within a time therein specified.

 

(3) The provisions of sub-section (1) apply only if and as far as a contrary intention is not expressed  in the mortgage-deed; and the provisions of sub-section (2) may be varied or extended by the mortgage-deed and, as so varied and extended, shall, as far as may be, operate in like manner and with all like incidents, effects and consequences, as if such variations or extensions were contained in that sub-section.]

 

66.       Waste by mortgagor in possession

 

A mortgagor in possession of the mortgaged property is not liable to the mortgagee for allowing the property to deteriorate; but he must not commit any act which is destructive or permanently injurious thereto, if the security is insufficient or will be rendered insufficient by such act.

 

Explanation - A security is insufficient within the meaning of this section unless the value of the mortgaged property exceeds by one third, or, if consisting of buildings, exceeds by one-half, the amount for the time being due on the mortgage.

 

Rights and Liabilities of Mortgagee

 

67.       Right to foreclosure or sale

 

In the absence of a contract to the contrary, the mortgagee has, at any time after the mortgage-money has become ¹[due] to him, and before a decree has been made for the redemption of the mortgaged property, or the mortgage-money has been paid or deposited as hereinafter provided, a right to obtain from the Court ²[a decree] that the mortgagor shall be absolutely debarred of his right to redeem the property, or ²[a decree] that the property be sold.

 

A suit to obtain ²[a decree] that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.

 

 

 

1         Sub. by Act 20 of 1929, sec. 31, for ¡§payable¡¨.

2         Subs. by Act 20 of 1929, sec. 31, for ¡§an order¡¨.

 

Nothing in this section shall be deemed -

 

¹[(a) to authorize any mortgagee other than a mortgagee by conditional sale or a mortgagee under an anomalous mortgage by the terms of which he is entitled to foreclose, to institute a suit for foreclosure, or an usufructuary mortgagee as such or a mortgagee by conditional sale as such to institute a suit for sale; or]

 

(b) to authorize a mortgagor who holds the mortgagee's rights as his trustee or legal representative, and who may sue for a sale of the property, to institute a suit for foreclosure; or

 

(c) to authorize the mortgagee of a railway, canal or other work in the maintenance of which the public are interested, to institute a suit for foreclosure or sale; or

 

(d) to authorize a person interested in part only of the mortgage-money to institute a suit relating only to a corresponding part of the mortgaged property, unless the mortgagees have, with the consent of the mortgagor, severed their interests under the mortgage.

 

^2[67A.            Mortgagee when bound to bring one suit on several mortgages

 

A mortgagee who holds two or more mortgages executed by the same mortgagor in respect of each of which he has a right to obtain the same kind of decree under section 67, and who sues to obtain such decree on any one of the mortgages, shall, in the absence of a contract to the contrary, be bound to sue on all the mortgages in respect of which the mortgage-money has become due.]

 

³[68.     Right to sue for mortgage money

 

(1) The mortgagee has a right to sue for the mortgage-money in the following cases and no others, namely: -

 

(a) where the mortgagor binds himself to repay the same;

 

(b) where, by any cause other than the wrongful act or default of the mortgagor or mortgagee, the mortgaged property is wholly or partially destroyed or the security is rendered insufficient within the meaning of section 66, and the mortgagee has given the mortgagor a reasonable opportunity of providing further security enough to render the whole security sufficient, and the mortgagor has failed to do so;

 

 

1         Subs. by Act 20 of 1929, sec. 31 for the original clause.

2         Ins. by Act 20 of 1929, sec. 32.

3         Subs. by Act 20 of 1929, sec. 33, for the original section.

(c) where the mortgagee is deprived of the whole or part of his security  by or in consequence of the wrongful act or default of the mortgagor;

 

(d) where, the mortgagee being entitled to possession of the mortgaged property, the mortgagor fails to deliver the same to him, or to secure the possession thereof to him without disturbance by the mortgagor or any person claiming under a title superior to that of the mortgagor:

 

Provided that, in the case referred to in clause (a), a transferee from the mortgagor or from his legal representative shall not be liable to be sued for the mortgage-money.

 

(2) Where a suit is brought under clause (a) or clause (b) of sub-section (1), the Court may, at its discretion, stay the suit and all proceedings therein, notwithstanding any contract to the contrary, until the mortgagee has exhausted all his available remedies against the mortgaged property or what remains of it, unless the mortgagee abandons his security and, if necessary, re-transfers the mortgaged property.]

 

69.       ¹[(1)] Power of sale when valid

 

²[³[***] A mortgagee, or any person acting on his behalf, shall, subject to the provisions of this section, have power to sell or concur in selling the mortgaged property, or any part thereof, in default of payment of the mortgage-money, without the intervention of the Court, in the following cases and in no others, namely: - ]

 

(a) where the mortgage is an English mortgage, and neither the mortgagor nor the mortgagee is a Hindu, Muhammadan or Buddhist ⁴[or a member of any other race, sect, tribe or class from time to time specified in this behalf by ⁵[the State Government], in the Official Gazette];

 

(b) where ⁶[a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgagee is ⁷[the Government];

 

 

1         Section 69 was numbered as sub-section (1) of that section, by Act 20 of 1929, sec. 34.

2         Subs. by Act 20 of 1929, sec. 34, for certain original words.

3         The words and figures ¡§notwithstanding anything contained in the Trustees¡¦ and Mortgagees¡¦ Powers Act, 1866: omitted by Act 48 of 1952, sec. 3 and Sch. II.

4         Ins. by Act 3 of 1885, sec. 5.

5         The words ¡§the L.G., with previous sanction of the G.G. in C¡¨ successively amended by the A.O. 1937 and the A.O. 1950 to read as above.

6         Ins. by Act 20 of 1929, sec. 34.

7         The words ¡§the Secretary of State for India in Council¡¨ successively amended by the A.O. 1937 and the A.O. 1950 to reade as above.

 

(c) where ¹[a power of sale without the intervention of the Court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgaged property or any cart thereof ²[was, on the date of the execution of the mortgage-deed], situate within the towns of Calcutta Madras, Bombay, ³[***] ⁴[or in any other town⁵ or area which the State Government may, by notification in the Official Gazette, specify in this behalf].

 

⁶[(2)]            ⁷[***] No such power shall be exercised unless and until -

 

⁸[(a)] notice in writing requiring payment of the principal money has been served on the mortgagor, or on one of several mortgagors, and default has been made in payment of the principal money, or of part thereof, for three months after such service; or

 

⁹[(b)] some interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due.

 

¹⁰[(3)] When a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorize the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person damnified by an unauthorized or improper or irregular exercise of the power shall have his remedy in damages against the person exercising the power.

 

¹¹[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of prior encumbrances, if any, to which the sale is not made subject, or after payment into Court under section 57 of a sum to meet any prior encumbrance, shall, in the absence of a contract to the contrary, be held by him in trust to be applied by him, first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of the mortgage-money and costs and other money, if any, due under the mortgage; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof.

 

1         Ins. by Act 20 of 1929, sec. 34.

2         Subs. by Act 20 of 1929, sec. 34, for ¡§is¡¨.

3         The word ¡§Karachi¡¨ omitted by the A.O. 1948.

4         The words ¡§or Rangoon¡¨ have been successively amended by Act 6 of 1904, 11 of 1915, 20 of 1929, the A.O. 1937 and the A.O. 1950 to read as above.

5         For notif