SY.

LLB – A

Roll No. 58

Name: Shekhar Atul Panse

Subject: DPC II

Topics:

Sale Deed

Simple mortgage deed and english mortgage deed

Partnership deed

Gift Deed

Leave and license agreement

 SALE DEED

INTRODUCTION:

A sale deed is a transfer of property document. It defines that ownership of a property

or any other asset transferred to some other person. It has all the terms and
conditions mentioned in the sale deed. As it allows no scope for future arguments or
problems.
Sale Deed is a legal document that records the transfer of ownership from the seller to
the buyer. While preparing a Sale Deed, all the clauses of the Transfer of Property Act
should be carefully examined and drafted to lessen the risks involved. The clauses
should be drafted after understanding your requirements and liabilities.
Everywhere we hear phrases like renting out an apartment to a tenant, mortgaging land
for purposes of loan, leasing out shops, buying real estate, etc. This demonstrates the
various ways with which transactions revolve around the land. For doing such
transactions, individuals/ companies/ government authorities may engage in transactions
of buying or selling land and come across a legal transaction called a Sale Deed. It
holds substantial value to buyers as well as sellers.

Sale of immovable property is governed by the provisions of the Transfer of Property

Act, 1882. Chapter-III of the said Act deals with the sale of immovable property
exclusively. Section 54 of the said Act defines sale.
“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 - Such transfer, in the case of tangible immovable 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.
In the case of tangible immovable 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 immovable 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. Besides, Transfer of Property
Act, legislation like Income-Tax Act, FEMA, Urban Land Ceiling Act and some other
laws affect the free transfer of immovable property.

Example: X transfer his flat situated in Mumbai to Y on a consideration of Rs. 2 Crore

to be paid after 6 months from the execution of sale deed. This sale deed should be
registered.
This is sale according to the Transfer of Property Act, 1882.

ESSENTIAL REQUIREMENTS OF SALE OF

IMMOVABLE PROPERTY
The following are the essential requirements of sale of an immovable property:

Consideration
Transfer of ownership in exchange of price paid or promised or part paid or part
promised.

Parties
Parties to transaction of sale are known as seller and buyer.

Subject Matter
Subject-matter of sale is immovable property which is sold by seller and purchased by
buyer.
Mode of Sale
Delivery of possession of property to the buyer by seller may be made as under:
(i) Property of the value of less than Rs. 100/- may be transferred merely by delivery of
physical possession;
(ii) Property of the value exceeding Rs. 100/- may be transferred under a written
instrument known as ‘Sale Deed’ which should be registered under the Registration
Act, 1908.

Stamp Duty
Sale of immovable property attracts stamp duty under the Indian Stamp Act.

Permissions & Approvals

(i) Clearance certificate from the Income-tax Officer
(ii) General permission of RBI is available if the property acquired is owned by
Non-resident
as per the Provisions of FEMA.
(iii) It may also be borne in mind by the draftsman to recite for all the above
permissions, approvals, or exemptions obtained under different acts in the document.

Rights & Obligations

The rights and obligations of the buyer and seller in the transaction of sale emerge as
provided under Section 55 of the Transfer of Property Act.

Rights and Liabilities of Buyer and Seller

Section 55 of the Transfer of Property Act, 1882 prescribes the rights and liabilities of
buyer and seller, which can be modified by the parties to a contract by mutual consent
and contract to the contrary of these provisions.

The seller, under Sub-section (1), is bound to:

Seller’s duty under section 55(1)
(a) Disclosure of Material defect
disclose to the buyer any material defect in the property or in his title to such property,
(b) Providing title document for Investigation
to give title documents to buyer for investigation of seller’s title to the property under
transaction of sale.
(c) Provide necessary answers and information
to answer the question put to him by the buyer and provide all necessary information
to him in regard to the property.
(d) Execution of Conveyance document
to execute the conveyance document on payment of consideration money in favour of
the buyer.
(e) Payment of Public dues pay all public dues on the property till the date of
conveyance and take due care as a man of ordinary prudence to protect the title of the
property till it is passed on to the genuine buyer.

Duties of Buyer under section 55 of TPA, 1882

(a) Communicating the information affecting the price
to disclose to seller the interest of the seller in the property of which he is aware and
believes that the seller is not aware and this information is likely to affect the price of
the property.
(b) Payment of purchase money
to pay or tender the purchase money to the seller or such person as he directs.
(c) Responsibility towards the loss
where the ownership of property has passed to buyer he has to bear the full
responsibility including any loss to the property etc.
(d) Payment of public due post transfer
to pay public dues from the date of transfer of ownership of the property.

Obligations of Buyer under section 55 of TPA, 1882

(a) To transfer the rent and profits
to the rents and profits of the property till the ownership thereof passes to the buyer.
(b) Transfer the interest amount on unpaid consideration
where the property has passed to the buyer before payment of the whole of the
purchase moneys the seller is entitled to a charge upon the property in the hands of the
buyer. He is also entitled for the interest on the amount of unpaid consideration money
for the property.

Obligations of Seller under section 55 of TPA, 1882

(a) Passing the benefits of improvement
where the ownership of the property has passed to buyer, to the benefit of any
improvement in it which may be in any shape of increase in value of the property or its
rent or profit.
(b) Giving due regard to the charge of Buyer
Buyer is entitled to charge upon the property to the extent of entitlement etc.

WHAT IS THE OBJECTIVE OF THE SALE DEED?

The main objective of any sale deed is the transfer of ownership from one person to
another. If you have purchases any legal property without the execution of a sale deed,
it is not yours. You may receive a notice from the owner and you have to reply to the
legal notice.

So, you shall be very clear about the execution of sale deed agreement before
purchasing any property, asset or even a company. It defines the completion of sale and
purchase of the property. The ownership transfers from one person to another. Thus, the
document is the root of any sale and purchase and without it, the purchase would be
declared null and void.
WHAT IS THE LEGAL SIGNIFICANCE OF A SALE
DEED?

The most important thing that you shall know is the legal significance of any sale deed.
It is the most important part of any sale purchase of property, asset or business as well.
The ownership is transferred to you once the sale deed agreement is completed. It gives
you the legal power to send notice to anyone who is using the property without your
permission.

You can also file a suit against them for not complying with terms and conditions of sale
and purchase. Once they receive the notice, they are complied to reply to legal
notice for violating terms and conditions as per the contract.

IMPORTANT CLAUSES IN THE SALE DEED

1. Parties in the sale deed

The sale deed must have the details of the parties. The deed should contain the name,
age, address of the proper parties according to the sales agreement.

2. Description of the sales property

Description of the property is a must. For example, if I am the seller selling my 2 BHK
flat, I must mention the total plot area, ID number, and exact location of the flat.

3. Sales agreement

Before making the sale deed parties need to enter into a sales agreement to settle the
terms and conditions of the agreement. An advance amount is paid by the buyer.
4. Sale consideration

The amount at which the sale is made is contained in the consideration clause the price
should be mentioned in both numbers and digits.

5. Payment method

Parties mutually agree in the sale deed to use the payment method like cash, net
banking demand, along the amount of payment.

6. Advance payment

In buying a flat token amount is always given by the buyer that is an advance payment
to close the deal and the rest of the amount is paid later. It makes the buyer forced to
enter into a sale deed. The sale deed must mention the amount that is paid in advance
the receipt of the amount shall be given by the seller to the buyer. The buyer can pay
the advance payment in instalment as well and interest is charged on that both parties
shall agree to make the instalment payment clause

7. Transfer of title clause

This was mentioned that the transfer of ownership from the seller to the buyer sets out
the aim of the seller to sell the property to buy. All the rights should be shifted from
buyer to seller

8. Delivery of the deed

The sale deed should be handed over to the buyer during the possession of property
along with the sales agreement these are the two important documents that have to be
handed over to the buyer.
9. Indemnity clause

The property of the sale shall be free from all charges like electricity bills, water bills,
motor gauge any due if any charges are left, a buyer who paid the charges has the right
to go over to the seller to indemnify him under this clause.

10. Liability in the case of default

If either party defaults, the party at no fault will be paid a penalty fee so that the cell
does not get troubled.

11. Registration and witnesses

After the sale deed is ready, buyer and seller X it along with the two witnesses’
testimony as per the registration act 1908. It must be done within four months from the
date of execution of the sale deed.

12. Right to quiet enjoyment of property clause

It means there shall be no interruption from the vendor or any third party and the vendor
can peacefully enter and enjoy the property that he has purchased.

13. Reddendum clause

This clause is added by the seller even though the title is transferred, the seller has some
rights like restrictions while using the property.

14. Tandem clause

This close mentions that any advancement in the property is also being sold by the
seller along with the property
 15. Warranty clause

This clause satisfies to Vendee that he is now the rightful owner of the property.

16. Time is of the essence clause

The most important closed today in the real estate contract is the time is essence clause.
it means one party’s efficacious role within a certain time is needed. Inability leads to
breach of contract; this clause mentions the delivery of the documents, termination
method, closing date. This clause demands to meet the deadlines to do sales.

17. Right to call off the deed

If certain circumstances arise one can include a clause to refrain them from continuing
the future obligations in the sale deed. Usually, parties call off the deed when the other
party refuses to hand over the payment and the possession of the property.

18. Dispute resolution clause

This clause is made after mutual agreement to set out the process in case any dispute
arises like mediation-arbitration if any party is still and satisfied it can go to court to
decide the distance.

19. Miscellaneous provisions

Parties also provide some miscellaneous provisions, the sale deed these are listed below:

● Governing Law: parties through the sales agreement choose the governing law that
should be applicable to the sale deed and the sale deed should be enforced and executed
by that governing law for example, if I am the seller selling my 2 BHK flat in Mumbai
the sale deed shall be governed by the Municipal Law of Mumbai, Maharashtra.
● Severability: this provision is one of the important reasons in the sale deed for any
contract it says that if any part of the contract is invalid or unenforceable the other
provisions remain valid.

● Confidentiality: this clause restricts the disclosing of any private details or any
confidential information between the parties involved in the sale deed It is important to
mention the confidentiality clause when drafting the sale deed.

● Breach of contract: when any party violates any of the clauses of the sale deed and
terminates the sale deed, the other party can take action on that and recover the losses in
the event of a breach of the contract.

● Notices: during the drafting of the sale deed and agreement between the parties
regarding the sale the communication plays an important role. This clause is drafted to
describe the mode of communication between the parties and the frequency of the
communication between the parties to the sale deed.

● Amendments: when any clause needs to be added or struck out by the mutual
agreement between the parties as per the terms of the contract the amendments are
made. This clause addresses the amendments to be done in the sale deed.

REGISTRATION OF A SALE DEED

When the sale deed is ready, it needs to be registered in the office of the registrar of that
jurisdiction. The party should be aware of the charges and the mode of payment for the
same. In the registrar’s office, stamp duty and registration charges need to be paid. The
buyer has the responsibility of paying these charges. The process of registration requires
the presence of both parties in person. There is also a requirement for the presence of 2
witnesses to make the process legally binding. During the registration, two witnesses
must mark their presence. An appointment must be marked Sub-Registrar of properties
to register the sale deed.
SPECIMEN FORM FOR DEED OF SALE OF
IMMOVABLE PROPERTY

THIS DEED OF SALE is made at Mumbai on this the 6th day of March 2022
BY AND BETWEEN AB, etc., (hereinafter called “the seller”) which expression shall
unless repugnant to the context shall include its successors, legal representatives,
assigns of the ONE PART
AND CD, etc, (hereinafter called “the buyer”) which expression shall unless repugnant
to the context shall include its successors, legal representatives, assigns of the OTHER
PART.

NOW THEREFORE IT IS HERE BY AGREED BY AND BETWEEN THE

PARTIES HERE TO AS FOLLOWS:
1. In consideration of the sum of Rs. 3 crores paid by the buyer to the seller on the 7th
day of March, 2022 (the receipt of which the seller hereby acknowledges) the seller as
owner hereby transfers to the buyer by way of sale ALL that pucca house standing on
the land measuring 27 metres by 10 metres fully described in the schedule hereto
annexed and thereon shown with its boundaries coloured red (hereinafter referred to as
“Premises”) TO HOLD the same to the buyer as absolute owner.

2. The seller hereby covenants with the buyer as follows:

(a) The said Premises shall be quietly entered into and upon and held and enjoyed and
the rents and profits received therefrom by the buyer without any interruption or
disturbance by the seller or any person claiming through or under him and without any
lawful disturbance or interruption by any other person whomsoever;
(b) The seller will at the cost of the person requiring the same, execute and do every
such assurance or thing necessary for further more perfectly assuring the said premises
to the buyer, as may reasonably be required;
(c) The interest hereby transferred subsists and the seller has power to sell the same;
(d) The property hereby sold is free from all encumbrances, charges, mortgages, liens,
prior agreement to sell, court proceedings, gifts, of any nature whatsoever.
(e) That the construction existing on the said Premises is in accordance with the
sanctioned plan.

3. If any of the foregoing including the representations and warranties are found to be
false in any manner and/or if the buyer is deprived of the said Premises at any time, in
future after execution of this Sale Deed in full or in part thereof, owing to the above
reason or reasons whatsoever in respect of the said Premises, the Seller hereby
undertakes that he will entirely remain liable and responsible to indemnify the buyer for
the same in all manners, including but not limited by all his moveable and immoveable
properties and all other assets.

4. That the Seller has delivered the peaceful physical vacant possession of the said
Premises under sale along with all its rights of ownership and also delivered all the
previous original documents of the said Premises to the buyer at the time of execution
and registration of this Sale Deed.

5. That the buyer can get the said Premises under sale mutated in its own name in the
record of M.C.D. and/ or any other concerned authority by presenting this Sale Deed or
its true copy.

6. That from the date of execution of this Sale Deed the buyer becomes the sole and
absolute owner of the said Premises under sale and shall be at full liberty to use, enjoy
and utilize the said Premises under sale and also have right, power, absolute authority
and be fully competent to sell or dispose off the same to anyone in any manner as he
may like.

7. That after the execution of this Sale Deed neither the buyer nor his legal heirs, may
raise any objection or create any charge or demand any share in the said Premises under
sale here-after.

IN WITNESS WHEREOF the parties hereto have signed this Deed of Sale on the date
mentioned against their respective signatures.
Witness
Vendor

Witness
Purchaser
The schedule herein referred to
(Description of the property)

SALE BY LIQUIDATOR OF A COMPANY IN

VOLUNTARY LIQUIDATION

Liquidation means winding of the company and Liquidator is the officer appointed to
conduct the winding up of a company. Winding up is a proceeding by means of which
the dissolution of a company is brought about and in the course of which its assets are
collected and realised and applied in payment of its debts and when these are satisfied,
returning to its members the sums which they have contributed to the company or
paying them other moneys due to them in their character of members.
Voluntary winding up is one of the modes of winding up recognised under Section 270
of Companies Act, 2013, which includes liquidation by Tribunal or voluntary.
Sale Deed to be drafted for being executed by the Liquidator of a company in voluntary
liquidation assumes the following form:

A Specimen of Deed of Sale by Liquidator of a Company in

Voluntary Liquidation

THIS SALE DEED is made on this 3rd day of February 2022 by voluntary liquidator of
ALP Co. Ltd., (in voluntary liquidation) (hereinafter called “the vendor”) of the one
part, in favour of Shri Raj, son of Shri Aakash., Occupation- Businessman, resident of
Mumbai (hereinafter called “the purchaser”) of the other part, under the terms and
conditions mentioned below:
WHEREAS by a special resolution passed by the shareholders of ALP Co. Ltd., at an
Extraordinary General Meeting held on the 25th day of January, 2022, of which notice
as prescribed by law had been duly given, and it was resolved that the company be
wound up voluntarily;

WHEREAS the said vendor was appointed its voluntary liquidator on 2nd February
2022 the notice whereof was duly submitted to the Registrar of Companies Mumbai as
prescribed by law, on the 3rd day of February, 2022;

AND WHEREAS in a meeting of the shareholders of the said company held in

accordance with the provisions of the Companies Act, it was resolved that the
properties mentioned in the Schedule annexed hereto be sold by the vendor after
publishing a notice for sale in daily newspapers twice within a period of a fortnight, and
pursuant to such resolution, the vendor had duly advertised the sale of the said
properties in the issues of newspapers and pursuant thereto have received offers, the
highest whereof was that of the said purchaser;

AND WHEREAS the said vendor agreed to sell and the said purchaser agreed to
purchase the said properties on the terms and conditions mentioned herein and
incorporated in an agreement to sell dated 5 March, 2022 between the said vendor and
the said purchaser.

NOW THIS DEED OF SALE WITNESSES AND IT IS HEREBY AGREED AND

DECLARED AS FOLLOWS:
That pursuant to the agreement dated 3rd February, 2022 aforementioned and in
consideration of the sum of Rs. 120 lakhs (Rs. One Hundred and Twenty Lakhs only)
paid by the purchaser before the Sub-Registrar, on presentation of this Deed of sale for
registration thereof (the receipt whereof the vendor hereby acknowledges) the vendor
hereby transfers by way of sale and conveys on behalf of the said company all those
items of the property mentioned more particularly in the Schedule attached hereto, unto
the said purchaser, his heirs and assigns to have and to hold the same absolutely and
forever.

IN WITNESS WHEREOF the parties aforementioned have signed this Deed of Sale
on the date, month and the year aforementioned.
Witness: 1.
Vendor
Witness: 2.
Purchaser

Schedule

Item Nos. 1. 2.
3. 4.

CONCLUSION:

A sale deed is an agreement that defines the transfer of ownership of any asset
like property or business from one party to another. It gives you the legal rights and
ownership of an asset. It also gives the power to take actions against anyone using it
illegally.
 REFERENCES:

⮚ https://www.icsi.edu/media/webmodules/Drafting_Pleadings_Appearances_22112022.
pdf

⮚ https://blog.ipleaders.in/sale-deed-important-clauses-execution/

⮚ https://www.proptiger.com/guide/post/everything-about-your-real-estate-sale-deed

⮚ https://www.myadvo.in/blog/sale-deed-in-india/

⮚ https://www.taxolawgy.com/what-is-a-sale-deed/
 SIMPLE MORTGAGE DEED AND ENGLISH
MORTGAGE DEED

MORTGAGE
A mortgage is a transfer of interest in specific immovable property for the purpose of
securing the payment of money advanced or to be advanced by way of a loan, existing
or future debt or the performance of an acknowledgement, which may give rise to
pecuniary liabilities (Section 58 of the Transfer of Property Act, 1882).

The Transfer of Property Act, 1882 deals with the mortgage of immovable property
alone. It does not deal with movable at all. Therefore, it cannot be regarded as
forbidding the mortgage of movable property. A mortgage of movables, such as plant
and machinery, stock in trade, policy is perfectly a valid transaction even though the
possession is not delivered and the mortgage is only a hypothecation. The
hypothecation of movables is increasingly resorted to in the case of borrowings by
companies for financing and implementation of its various
investment proposals.
The transferor in the case of a mortgage is called a ‘mortgagor’ and the transferee as
‘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 a transfer is
effected is called a “mortgage deed”.

SIMPLE MORTGAGE
In a simple mortgage, the mortgagor without delivering possession of the mortgaged
property binds himself personally to pay the mortgage money and agrees expressly or
impliedly that if he fails to pay the debt and interest in terms of the mortgage deed, the
property will be sold and the proceeds applied in payment of the mortgaged money.
Example: X and Y entered into a mortgaged deed on 10th October, 2009 mortgaging
his residential property situated in Saket, New Delhi. The loan amount is Rs. 10 Lakh.
The terms of the agreement inter-alia include that if X is not able to repay the amount
along with the interest, the property will be sold and proceed of the same will be used
for repayment of the Loan.
This is simple mortgage.

ENGLISH MORTGAGE
In an English mortgage, a mortgagor binds himself to repay the mortgaged money on
certain date and transfers the mortgaged property absolutely to the mortgagee subject to
the proviso that he will retransfer it to the mortgagor upon payment of the mortgaged
money as agreed.
Example: X and Y entered into a mortgaged deed on 10th October, 2009 mortgaging
his residential property situated in Saket, New Delhi. The loan amount is Rs. 10 Lakh.
The terms of the agreement inter-alia include that X by this agreement transfers this
property to Y with a condition (i) If X repays, the property should be retransferred to X
by Y. (ii) If X makes default the property is retained by Y.
This is mortgage by English Mortgage.

WHO CAN BE MORTGAGOR AND MORTGAGEE?

Any living person, company, or association or body of individuals, who has an interest
on immovable property
can mortgage that interest. In the case of a company mortgage of the property should be
duly authorised by ‘Object Clause’ of the Memorandum of Association and approved
by a resolution of the Board of directors.
Further, for creation of a mortgage, the Financial Institutions usually insist on a
resolution of the shareholders under Section 180 of the Companies Act, 2013.
Any person capable of holding property may take a mortgage unless he is dis-qualified
by any special law from doing so. A minor may be a mortgagee but as he cannot enter
into a contract, the mortgage should not involve any covenants by him. Thus, as we
have seen above, any interest in any property which is capable of being transferred may
be a subject of mortgage.
Generally the mortgage is associated with immovable property; immovable property
includes lands, benefits arising out of the land and things attached to it and does not
include standing timber, growing crops or grass.
When the principal money secured is Rs.100/- or more a mortgage other than a
mortgage by deposit of titledeeds, can be effected only by a Registered instrument
signed by the mortgagor and attested by at least two witnesses.

Essentials Of Mortgage:
Transfer Of Interest: There is no transfer of ownership but transfer of interest only
for the purpose of securing payment of money by way of loan. The right of mortgagee
is only an accessory right, which is intended merely to secure the due payment of Debt.
Mortgage is simply a transfer of interest in the immovable property while the ownership
still remains with the mortgagor.
Specific Immovable Property : There must be specific immovable property
intended to be mortgaged .The immovable property must be distinctly specified. The
description of the property in the mortgage deed must be sufficient to identify the
property.
Securing Payment Of Loan : The transfer must be made to secure the payment
of a loan or to secure the performance of a contract. The consideration of mortgage
maybe either.

Rights Of Mortgagee: If the money is not recovered from the mortgagor in the
specified time the mortgagee has the right to recover from the proceed of the property,
or Mortgagee can sue the mortgagor for the recovery of the money.

Rights Of Mortgagor:
Right Of Redemption: The essential right vested with a mortgagor in a mortgage is a
right of redemption, which transfers back to the mortgagor, the same right that was
mortgaged. This right is incidental to every mortgage and it continues to be in existence
notwithstanding the default on the part of the mortgagor to pay the debts. Sec 60 in the
Transfer of Property Act, 1882 deals with the right of Redemption.
There can be three primary kind of redemption:
-Delivery of the title documents and the mortgage deed,
-Delivery of the possession back to the mortgagor,
-Reconveyance of the mortgaged property in favor of the mortgagor.
Right Of Foreclosure: Section 67 of Transfer of Property Act, 1882 defines
foreclosure as “A suit to obtain a decree that a mortgagor shall be absolutely debarred
of his right to redeem the mortgaged property is called a suit for foreclosure
Right To Sale: Certain forms of mortgage provide a right to sue for sale by intervention
of courts.

MORTGAGE DEED:
A mortgage deed is a legal document that gives the lender an interest in a property
when you take out a loan backed by the property. A mortgage deed is a legally binding
agreement, using property as collateral for a loan. When you purchase a home, you
make payments on a home loan. The mortgage deed is the paperwork you sign that
allows the lender to put a lien on the property until the loan is paid. When people say
they make a monthly mortgage payment, they actually mean they make a monthly loan
payment while the mortgage deed secures the property for the lender. If a borrower
doesn't pay back a loan in accordance with the agreement, the lender can foreclose and
take possession of the land or have it auctioned off.
The Mortgage Deed is the evidence of the interest transferred to the mortgage holder.
Often simply referred to as the mortgage, the mortgage deed is the document transferred
to the mortgage holder.

Contents:
1.Details of the property
2.Name of the parties
3.Loan sum and Repayment
4.Reconveyance of property
5.Insurance
6.Default in Repayment
7.Compensation received by the property
8.Leasing of property

Importance Of Mortgage Deed:

When a real estate owner secures a loan through a mortgage, it is necessary for the
owner to transfer an interest in the property to secure the loan. The real estate interest
transferred is the right to retain a lien on the property, and the right to foreclose upon the
lien if the mortgage is not paid as agreed.
Mortgage deeds are necessary because the mortgage lender will need your permission
to place a lien on the property you purchase. Thus, the lender requires all borrowers to
sign a mortgage deed. The mortgage deed is typically signed at your solicitor’s office as
part of the closing of the real estate transaction.

DRAFTING OF DEED OF MORTGAGE

A deed of mortgage may be drafted either as a name change deed or Deed Poll on
behalf of the mortgagor in favour of the mortgagee or as a deed between the mortgagor
and mortgagee as parties.
The following points should be borne in mind while drafting a Deed of Mortgage:

(a) Parties: There should be two parties, the mortgagor and the mortgagee. The
former is usually defined as the borrower. The Indian practice of having a deed of
mortgage executed by the mortgagor only is unscientific, because the mortgage deed
usually contains covenants by both the parties.

(b) Recitals: These are of two kinds. Firstly, recital as to the title of the mortgagor,
such as “Whereas the borrower is the absolute owner of the property hereby mortgaged
free from encumbrances”. The second form of recital is as to the agreement for loan,
such as: “And Whereas the mortgagee has agreed with the borrower to lend him the
sum of Rs. .............. upon having the re-payment thereof with interest hereinafter
mentioned secured in manner hereinafter appearing”.

(c) Covenant for re-payment: This clause usually recites that in pursuance of the
said agreement and in consideration of the receipt of the mortgage money the mortgagor
covenants to pay the mortgage money with interest at the stipulated rate in the manner
agreed upon.

(d) Mortgage clause: This clause describes the property mortgaged. In case of
simple mortgage, the property is charged and assured as security for re-payment of
mortgage debt. In an English mortgage it is absolutely sold to the mortgagee, subject to
the covenants as to re-conveyance upon repayment of debt with interest. A thorough
investigation of the titles upto 60 years and preparation of an abstract of title to ensure
that mortgagor has an absolute right over the property is recommended.

(e) (i) Covenants by the mortgagor: To repair the mortgaged property, in default
the mortgagee is given power to enter into possession without being liable as a
mortgagee in possession, with a view to effect repairs. Mortgagee’s expenses for this
purpose are considered properly incurred.

(ii) Covenant to insure: The mortgagor covenants to insure the mortgage property
in the name of the mortgagee of an insurance office approved by the mortgagee. In
default, the mortgagee is entitled to insure and the costs incurred are to be charged to
the mortgagor.

(iii) Covenant not to grant leases or accept surrender thereof: It often

happens that the mortgagor while in possession, grants long term leases to the detriment
of the mortgagee. To guard against such a contingency, it is agreed that the mortgagor
shall not grant leases of mortgaged property for a period exceeding one year without the
written permission of the mortgagee or accept surrender of existing leases without like
permission. (See Section 65A of the Transfer of Property Act)
(iv) Covenant to pay outgoings: The borrower undertakes to pay and discharge
and indemnify the mortgagee against all rates, taxes, duties, charges, assessments,
outgoings, whatever.

(f) Period fixed for the mortgage: Under this clause, the parties enter into a
covenant by which mortgagor is debarred from redeeming the security before lapse of a
certain period. This should not be unnecessarily a long period, as otherwise the Court
might hold it as clogging equity of redemption and unenforceable.
The mortgagee may also enter into a covenant not to call in his money before the lapse
of certain period provided that:
(i) If the mortgagor is declared insolvent;
(ii) If he alienates the mortgage property or creates a subsequent mortgage in favour of a
third person without consent of mortgagee, the mortgagee may call in his dues even
before the expiry of the term agreed upon.

(g) Power of sale: Under this clause, the mortgagee is entitled to recover his dues by
sale of the mortgaged property, and if the sale proceeds are insufficient, to recover the
balance from the person and other property of the mortgagor.

(h) Power to appoint Receiver: Under this clause, the mortgagee is given power
to appoint a Receiver of the mortgaged property in case the payment of interest for two
or more instalments is in arrear under Section 69A of Transfer of Property Act.

(i) Power to sell given to mortgagor with the consent of the mortgagee:
The mortgagor is authorised to sell the whole or part of the mortgaged property with the
consent of the mortgagee provided the sale proceeds are paid to the credit of the
mortgage account.
(j) Proviso for redemption : Under this clause, the mortgagee covenants and
declares that on payment of his dues, he shall re-transfer the mortgaged property to the
mortgagor or his nominee at his expense.

(k) Possession : In English mortgage, the mortgagee has a right to take possession of
the property. In usufractuary mortgage, the possession of the property is given to the
mortgagee.

(l) Attestation & Execution : Attestation is compulsory in every mortgage. In case

where the mortgagor does not know the language, deed must be explained to him by
some competent person.

(m) Registration & Stamp duty is compulsory in case of mortgage value of

Rs.100/- and above.

(n) Mortgagee is entitled to all the title deeds of the mortgaged property. If for any
reason they are left with the mortgagor through inadvertance or negligence he can
manipulate a prior equitable mortgage by depositing the same elsewhere.

(o) The application of any other law either to the mortgage or to the property under
mortgage has to be ascertained. For example: Urban Land Ceiling Regulation Act.
In Drafting of Memorandum of Mortgage by deposit of title deeds, the following
information is invariably included:

I. Preliminary information:
(1) Caption
(2) Name and address of the borrower/mortgagor Company
(3) Name and address of Mortgagee
(4) Amount of loans made available/sanctioned
(5) Date of creation of mortgage by deposit of title deeds.
II. Memorandum record note to contain brief information covering creation of deposit,
date of deposit, name and authorisation of person who created deposit, name of the
lender in whose favour deposit was made, description of title deeds is to be given in the
Schedule to be appended thereto, and reference of property with situation and location
briefly described thereto.

III. Consideration for creation of equitable mortgage i.e. the description of the property
offered with title deeds with full description in a different schedule, the amount of loans
against and for which the security is created, this… by coverage of other cash charges,
expenses, interests, liquidated damages, etc.

IV. Description of Board Resolution to create equitable mortgage by the person

authorised therein.

V. Declaration of clear and marketable title to the property.

VI. Witnessing clause - Mention of the name of the person in whose presence the
deposit of title was made.

VII. (Schedule I - List of document of title and evidence) (Schedule II - Details of

property).

VIII. Date and Signature.

DEED OF SIMPLE MORTGAGE

THIS DEED of Mortgage is made on the 2nd day of March, 2022, BETWEEN ‘AB’ of
Mumbai (hereinafter called “the Mortgagor”), of the One Part and ‘CD’ of Delhi
(hereinafter called the “Mortgagee”), of the Other Part.
WHEREAS the Mortgagor is absolutely seized and possessed of or otherwise is well
and sufficiently entitled then property intended to be hereby mortgaged which is free
from all encumbrances and attachments.

AND WHEREAS the Mortgagee has agreed to lend and advance a sum of Rs.45 lakhs
to the Mortgagor at his request upon having the repayment thereof, with interest at the
rate hereunder stated and secured in the manner hereinafter expressed.

NOW THIS DEED WITNESSES, that in pursuance of the said agreement and in
consideration of the sum of Rs. 20 lakhs paid to the Mortgagor by the Mortgagee
simultaneously with the execution of these presents the receipt whereof the Mortgagor
do hereby admit, acknowledge and confirm, the Mortgagor do hereby agree with the
Mortgagee that the Mortgagor will on or before the 15th day of April 2022, pay or cause
to be paid to the Mortgagee the sum of Rs. 15 lakhs with interest for the same in the
meantime at the rate of Rs. 10 per cent, per annum, such interest to be paid monthly and
every month on the 7th of each following month without any delay or default.
AND THIS DEED FURTHER WITNESSETH that as a security for the repayment of
the said loan with interest, the said ‘AB’ do hereby charge, assure and mortgage, by
way of simple mortgage, upto and in favour of the said ‘CD’ all property specifically
described in the Schedule hereto annexed, and charge and assure the same by way of
security for the repayment of the said sum of said amount together with interest thereon
at the rate of 10 per cent, per annum;
AND THE Mortgagor does hereby agree and covenant with the Mortgagee that he will
pay or cause to be paid to the Mortgagor the principal sum aforesaid, together with the
interest then due, on or before the 15th day of April 2022, without delay or default;

AND THE INDENTURE FURTHER WITNESSETH and it is hereby agreed and

declared by and between the parties that in case the said sum of Rs. 15 lakhs with
interest thereon at the stipulated rate is not paid within the time and in the manner as
aforesaid, it shall be lawful for the Mortgagee to enforce this mortgage and to cause the
property or any portion sold and appropriate the proceeds towards satisfaction of the
mortgage debt provided, however, that in the event of any short-fall or deficiency, i.e.
should the claim be not then satisfied, the Mortgagee shall be entitled to recover the
balance personally as against the Mortgagor who shall be entitled to redeem the said
mortgage at his option by payment of the amount of mortgage debt inclusive of interest
at any time before the .... day of .... 2022.
AND THIS INDENTURE FURTHER WITNESSETH that the Mortgagor do hereby
covenant with the Mortgagee that notwithstanding any act, deed or thing here before
done, executed, performed or suffered to the contrary, the Mortgagor has good title, full
power and absolute authority to charge, assure and mortgage the said property in the
manner hereunder effected and that the same is free from all encumbrances and
attachments.

The Schedule above referred to

IN WITNESS WHEREOF the parties herein under have set their hands on the day and
year hereinabove mentioned.
Witnesses:
1.
AB.......................... MORTGAGOR
2.
CD...........................MORTGAGEE

DEED OF ENGLISH MORTGAGE

THIS MORTGAGE made the 1st day of March, 2022, BETWEEN ‘AB’ of Rajasthan,
etc. (hereinafter called the “Mortgagor”) of the One Part, and ‘CD’ of Gujarat, etc.
(hereinafter called the “Mortgagee”) of the Other Part.

WITNESSES WHEREAS the Mortgagor is absolutely seized and possessed or is

otherwise well and sufficiently entitled to an absolute estate of inheritance or an estate
equivalent thereto free from encumbrances to the lands, hereditaments .....fully
mentioned and described in the Schedule hereto AND whereas the Mortgagor having
occasion to borrow a sum of Rs. 25 lakhs approached the Mortgagee which the
Mortgagee has agreed to lend and advance on having repayment thereof with interest at
10 per cent per annumand secured by a conveyance by way of mortgage of the said
property.

NOW THIS INDENTURE WITNESSETH that in consideration of the sum of Rs. 10

lakhs this day paid to the said ‘AB’ by the said ‘CD’ (the receipt whereof the said ‘AB’
hereby acknowledges), the Mortgagor here by agrees with the covenant to pay to the
Mortgagee on the 25th day of March, 2022 the sum of Rs. 15 lakhs with interest thereon
in the meantime at the rate of 10 per cent per annum computed from the date of this
deed such interest to be paid monthly and every month on the 15th of every current
month.

NOW THIS INDENTURE also witnesses that for the consideration aforesaid the said
‘AB’ as the beneficial owner, do hereby grant, transfer convey unto and to the use of
the said ‘CD’ all that etc. (describe the property):

TO HAVE AND TO HOLD the same absolutely and forever PROVIDED ALWAYS
that if the Mortgagor shall pay or cause to be paid the sum of Rs. 15 lakhs with interest
thereon, on the 25th day of March, 2022, according to the foregoing agreement in that
behalf, the Mortgagee, his heirs, representatives or assigns shall, at the request and costs
of the Mortgagor, his heirs, representatives or assigns, reconvey to him or them as he or
they shall direct, the said property. AND THAT the Mortgagor do hereby covenant
unto the Mortgagee that the Mortgagor has absolute title to the land, hereditaments,
messages and premises hereby granted and conveyed and that the Mortgagor has good
right, full power, absolute authority and indefeasible title to grant, convey, transfer,
assign and assure the same unto and to the use of the Mortgagee in the manner
hereinbefore indicated and further the Mortgagor and all persons having lawfully or
equitably any estate or interest in the same shall at all time hereafter during the
continuance of the security do execute or perform or cause to be done, executed and
performed all such further or other acts, deeds and things as may be reasonably required
for further and more perfectly assuring the same unto and in favour of the Mortgagee.

Provided, however, and it is further agreed by and between the parties that if the
Mortgagor commits any default in payment of the principal amount on the due date or
any three instalments of interest, whether they have been demanded or not it shall be
lawful for the Mortgagee to institute a suit for sale and to have a Receiver appointed
over the mortgaged property.

IN WITNESS WHEREOF the parties herein under have set their hands on the date and
year hereinabove mentioned in the presence of:
Witnesses:
1.
‘AB’
2.
‘CD’
The Schedule above referred to
Signed, sealed and delivered
Memo of consideration.

CONCLUSION:
The concept of mortgage is one of the important concepts under the Transfer of
Property Act, 1882 section 58 as it helps in securing the debt to the mortgagor and also
helps in redeeming the property as soon as the mortgagor pays back the amount due to
the mortgagee.
 REFERENCES:

⮚ https://www.icsi.edu/media/webmodules/Drafting_Pleadings_Appearances_22112022.
pdf
⮚ https://legalraj.com/articles-details/mortgage-deed
⮚ https://lawctopus.com/clatalogue/mortgage-transfer-of-property-act
⮚ https://www.legalserviceindia.com/legal/article-6078-mortgage.html
 PARTNERSHIP DEED

INTRODUCTION
A detailed discussion of the Partnership Act, 1932 is not within the scope of this Study.
Students are, therefore, advised to study the Indian Partnership Act, 1932 in detail on
their own so as to acquaint themselves, inter alia, with the nature, formation,
registration and dissolution of partnership. However, introductory observations on some
of the relevant aspects of the partnership are made below.

Partnership - Its Nature and Meaning

Partnership is an association of two or more like minded persons formed with a
common objective to establish a lawful business house of their choice with the idea of
earning profits. However, in any business enterprise the possibility of its incurring loss
cannot be ruled out. Therefore, all partners of a firm mutually agree to share all profits
and losses of the business amongst them according to their predetermined
shares/proportions fixed by them in the partnership agreement.

Partnership is defined in Section 4 of the Partnership Act, 1932 as a relation between

persons who have agreed to share profits of business carried on by all or any one of
them acting for all. Partnership requires three elements-
(a) an agreement entered into by all persons concerned;
(b) distribution of the profits of business; and
(c) management of the business by all or any one or more of them acting for all, i.e.,
mutual agency. Out of these three, the third element, i.e., the element of mutual agency,
is most essential and it distinguishes partnership from other type of contractual
relationship between the parties. If this element is absent the partnership fails.
One partner is not only an agent of the firm but also of the other partners and, if so, can
bind another which falls within the scope of partnership subject to limitation under
Section 20 of the Act.
A partnership is distinguishable from associations e.g., clubs, societies, co-operative
bodies and incorporated companies. The real intention and conduct of the parties
appearing from the (a) written agreement, or (b) verbal agreement together with
surrounding circumstances are the tests of partnership [Cox v. Hickman (1860) 8 HLC
268].
Persons who have entered into partnership with one another are called individually
partners and collectively a firm, and the name under which their business is carried on is
called the firm name (Section 4 of the Indian Partnership Act, 1932).
A partnership agreement usually makes provisions for the duration of the partnership or
for its determination.
Where no such provision is made the partnership is “partnership at will”.

WHO CAN BE PARTNERS

The word “person” in Section 4 of the Indian Partnership Act, 1932 contemplated only
natural and legal persons. (Duli Chand v. C.I.T., AIR, 1956 SC 354). Partnership
relation is one of contractual nature. Therefore, such persons who are competent to
contract can enter into partnership. A firm or a Hindu Undivided Family is not a legal
person and cannot enter into partnership with any person. When the Karta of a Joint
Hindu Family enters into a partnership with strangers the other members of the family
do not ipso facto become partners.
(Firm Bhagat Ram v. Comm. of Excess Profits Tax, AIR 1956 SC 374).
A minor cannot be a partner in a firm but, with the consent of all the partners, he can be
admitted to the benefits of partnership (Section 30). He is entitled to share in the profits
and his share is liable for the acts of the firm, but he is not personally liable. He cannot
be made liable for the losses of the firm. Within six months of attaining majority or
obtaining knowledge of his admission, whichever is later, the minor may elect to
become or not to become a partner in the firm.
A person may be an active partner in the firm or he or she may choose to remain a
dormant or a sleeping partner only. It all depends on the contract between the parties.
Two partnership firms cannot enter into partnership as such but its partners can certainly
form a new partnership. However, a partnership firm may be a member of an
association or company licenced under Section 8 of the Companies Act, 2013. The
limited company of which a firm may be a member should be one formed for
promoting Commerce, Art, Science, Religion, Charity or any other useful object
without any profit making motive. On dissolution of the firm, its membership of the
association or company shall cease.
While considering applications for registration of firms with bodies corporate as
partners under the Indian Partnership Act, 1932, the State Government should examine
the applications before them and find out whether the memorandum and articles of
association of the applicant incorporated companies contain any special article which
authorise the incorporated companies to enter into partnership.

Example: Mr. X and a Hindu Undivided family entered into partnership agreement.
Karta contended that all the members of family becomes ipso facto partner of the
partnership. Is the contention of Karta tenable?
No, the Intention of Karta is not tenable as Hindu Undivided Family is not a legal
person and cannot enter into partnership with any person.

REGISTRATION OF PARTNERSHIP FIRM

Registration of partnership firm has been made optional under the provisions of Section
58 of the Indian Partnership Act, 1932. Consequences of non-registration of a
partnership firm are set out in Section 69 of the Partnership Act. An unregistered firm
cannot enforce a right or claim arising out of a contract against any third party.
However, if the firm obtains registration on the date of institution of the claim against
third person, the said claim or right would be perfectly maintainable. Since the blow of
the consequences of non-registration is very severe, it is advisable to get the partnership
registered under the Partnership Act, 1932 immediately on its incorporation.

Registration of Partnership Firm under the Income-tax Law

Registration of partnership under the Income-tax Law is distinct from registration of
firm under the Partnership Act. Rule 22 of Income-tax Rules, 1962 provides that an
application for registration of partnership firm should be accompanied with an
instrument of partnership specifying the apportionment of shares of profit and losses of
 the business amongst the partners of the firm. This registration is required to be renewed
every year under the orders of the concerned Income-tax Officer.

BENEFIT OR IMPORTANCE OF PARTNERSHIP DEEDS

It is extremely important to have a written partnership deed with the partner.
Registration of partnership deeds is the call of all the partners. Partnership deeds can be
in oral format also but the drawback with oral format is that has no value for tax
purpose and in a case or any dispute there won’t exist any legal documents to resolve
the query. Also if any partner changes from his/her words then the rest of the partners
won’t have any legal documents as proof to be used against the guilty partner. So it’s
advisable to have a written partnership deed with all the partner according to their
capital investment
● It provides clear transparency about the role, responsibility, and liability to each
partner.
● Helps in avoidance of misunderstanding between the partners, as all the terms and
conditions have been laid down in the partnership deeds
● Any disputes between the partners can be easily resolved based on terms and
conditions laid down in the partnership deed.
● Helps in the clearance of doubts regarding profit/loss share ratio.
● It clearly defined the role of each partner towards the business and what rights have
been entitled to them as the partner of the business
● It gives a clear understanding of the salary, commission that will be paid, or interest
that will be paid to partners for their capital. Or in case if they withdraw capital from
business what interest they would have to pay if applicable.

PARTNERSHIP DEED/HOW MADE

The partnership is based on contract. This contract may be made either orally or in
writing or even may be inferred from the course of dealing between the partners. In
order to avoid all disputes relating to terms of partnership, it is suggested that a written
document containing terms and conditions of partnership be executed between the
partners. The deed is executed by all the partners and is drafted as an agreement to carry
on certain business in partnership on certain terms and conditions. Some of the
While drafting partnership deed we should incorporate all terms and conditions that
govern a particular partnership business. Partners of any partnership business are
normally interested in settling certain terms amongst them before they join hands to
carry on business in partnership. As a draftsman of the partnership deed one should be
extra careful to understand and properly incorporate in partnership deed the terms
relating to the following:
(1) Name and place of business.
(2) Duration of the partnership.
(3) Shares of each partnership in the profits and losses of the business.
(4) The management of the business.
(5) Nature of principal work agreed to be carried on in partnership.
(6) Number of partners and initial capital employed by each one of them.
(7) Provision and the manner for raising future capital, if required.
(8) Work distribution, if any, of each of the partners.
(9) Obligation of partners who are members of a partnership firm.
(10) Operation of Bank Accounts.
(11) Withdrawal by partners.
(12) Accounting system of the business.
(13) Whether place of business belongs to partnership or any individual partner.
(14) Division/Devolution of goodwill of the business in case of dissolution of
partnership.
(15) Distribution of assets and liabilities amongst partners at the time of dissolution.
(16) Provisions for bringing in or admitting new partners.
(17) The effect of the death of a partner, whether his heirs will take his place, or the
partnership will be continued by the remaining partners or it will stand dissolved.
(18) Provision for resolving disputes relating to partnership if arises amongst the
partners. If all partners agree to settle their partnership disputes through the intervention
of some named person who may act as an arbitrator for them or even otherwise by
arbitration, it is always advisable to include an arbitration clause in the partnership
stating that all disputes that may arise between the partners will be resolved by reference
to arbitrator under the provisions of the Arbitration and Conciliation Act, 1996.
Besides the above conditions, if there are any other particular conditions which partners
want to include in the partnership deed the same may suitably be incorporated therein.
Language used in the partnership deed must be such that it may avoid all possible
confusion relating to terms of partnership and should be easily understandable.

Introduction of a New Partner

Introduction of a new partner is a matter of agreement between the partners (vide
Section 31 of the Partnership Act, 1932. Also see Section 42 of the said Act).
Introduction of a new partner in the existing partnership brings in a change in the
constitution of the firm. A new partner cannot be admitted to the existing partnership
except with the consent of all the existing partners of the firm but subject to any contract
to the contrary between such partners. The person so admitted as a new partner in the
existing partnership shall not be liable for any act of the firm done before he became a
partner.

Where the articles of partnership provide in express terms for the retirement and
admission of partners, the right of retiring and introducing new partners under the
agreement are fixed thereby except so far as they may be modified by the terms of a
subsequent agreement. If a person enters an existing firm without specifying the terms
upon which he becomes a partner, it is presumed that he accepts the terms of the
original partnership articles, except as they are modified by the introduction of a new
member.

Retirement and Expulsion of Partners

These matters can be regulated by the terms incorporated in a deed of partnership.
Sections 32 and 33 of the Partnership Act, 1932 also make provision for these matters.
A partner may retire from a firm with the consent of all other partners. If the terms of
the agreement so provide, a partner may retire by notice to the other partners. In a
partnership at will also a partner can retire by giving notice in writing to all the other
partners of his intention to retire. A partner can be expelled from a firm by a majority of
the partners where such a power is conferred by the agreement between the partners
and the power is exercised in good faith.

Nomination of Successor
It is not uncommon in partnership agreements to find a clause as to nomination of a
successor who has the right to be declared and admitted as partner in the event of death
or retirement of a partner. It was, however, held by the Supreme Court in Commissioner
of Income Tax v. Govindram Sugar Mills, AIR 1966 SC 24, that the nomination is not
effective in case of partnership firm consisting of two partners only as it stands
dissolved on the death of a partner; nevertheless, in view of the rights and obligations of
a person to be nominated as under Section 31 of the Act, the same principle in case of
agreement between two persons is applicable in case of partnership between two
partners.

Purchase of Business by a Partner

When a partnership ceases to exist and partnership business is closed its assets and
liabilities are valued and thereafter every partner or his representative is entitled as
against all the other partners or their representatives to have the property of the firm
applied in payment of the debts and liabilities of the firm and to have the surplus
distributed among the partners or their representatives according to their rights.

Dissolution of Partnership
When jural relation between all the partners inter se is snapped, this constitutes
dissolution of the firm.
Dissolution of a firm may take place:
(1) Without the intervention of the Court.
(2) With the intervention of the Court.
Dissolution without the intervention of the Court may take place:
(a) by agreement between the parties,
(b) by the adjudication as insolvent of all the partners or of all the partners but one.
(c) by the business of the firm becoming unlawful,
(d) subject to agreement between the partners:
(i) by the expiry of the term fixed,
(ii) by the death of a partner,
(iii) by the insolvency of a partner,
(e) by notice in writing in case of partnership at will.

Dissolution with the intervention of the Court may be made on any of the grounds
contained in Section 44 of the Partnership Act.
The mere incoming or outgoing of partners does not dissolve the firm.

Execution and Attestation: Registration

A deed of partnership, or of dissolution of partnership, must be executed and attested as
a bond on a nonjudicial stamp paper of proper value, and its registration is not
compulsory; but where a deed of dissolution of a firm involves transfer of immovable
property worth Rs. 100 or upwards, the deed is compulsorily registrable.
No law requires that a deed of partnership should be attested, but it is desirable that it
should be attested by at least two partners. Stamp duty on an instrument of partnership
and on a deed of dissolution is payable under Article 46. Schedule I to the Indian Stamp
Act, 1899.
Example: ABC and Associates, a partnership firm is in process of dissolution. The firm
has an assets of Rs. 50 Crore including a land of value 10 Crore. Is the registration
compulsory for the deed of dissolution.
Yes, the registration of this deed of dissolution is compulsory.

DEED OF PARTNERSHIP BETWEEN TWO PARTNERS

(To be executed on Rs. 15/- Non Judicial Stamp Paper)

THIS INDENTURE OF PARTNERSHIP IS MADE ON the 1st day of March 20202
Between Rahul Chavan S/o Anil Chavan R/o Mumbai aged 28 years (hereinafter called
the ‘First Party’) AND Swapnil Patel S/o Shreyas Patel R/o Mumbai aged 30 years
(hereinafter called the ‘Second Party’).

WHEREAS the parties hereto have agreed to commence business in partnership and it
is expedient to have a written instrument of partnership.

WHEREAS the parties hereto have mutually agreed to carry on the business of leather
business at Mumbai and to share the profits and losses of the said business in
partnership between themselves and they have with that object constituted themselves
into a firm of partners under the name and style of M/s RS Enterprises (here give the
name of the firm).

The terms and conditions agreed to by and between the parties hereto witnesses:

1. The duration of the firm shall be, to begin with, a period of 5 years or such further or
lesser period as the parties may choose to mutually agree.

2. The capital of the firm for the time being is fixed at Rs. 20 lakhs (Rupees Ten Lakhs
) only which has been contributed by the partners as follows namely:
First Party-10 lakhs, Second Party-10 lakhs
Provided that the partners may by mutual agreement increase or decrease the capital and
their respective contributions thereto. The partners by mutual consent may raise capital
by way of loans if considered expedient.

3. The partners shall distribute the net profits and bear the losses in the following ratios:
1:1

4. The partner, shall be entitled to withdraw out of the profits, money not exceeding Rs.
25,000 in each month adjustable against the account of the respective partners at the
time of annual accounting.
5. The First party shall make available to the firm the shop premises in which the
business of the firm shall be carried on, situated at Mumbai and which shop or premises
is in his occupation as a tenant from month to month paying a monthly rent of Rs.
40,000 to Shri. Aniket Surve and shall hereafter hold the said shop or premises in trust
for the partnership for which rent shall be paid out of the partnership from the date
mentioned in para 1 above.

6. The said rent, and all taxes, duties, repairs and outgoings in respect of the said shops
or premises or other place or places of business of the partnership shall be paid out of
the partnership.

7. No apprentice, clerk or servant shall be employed or dismissed without the consent

of all the partners.

8. The firm shall regularly maintain in the ordinary course of business a true and correct
account of all its incoming and outgoings and also all its assets and liabilities in proper
books of accounts which shall ordinarily be kept at the firm’s place of business.

9. Immediately after each 31st day of March in every year, the partners shall take an
account and valuation of the effect, credits and liabilities of the partnership. Such
accounts and valuations shall after mutual examination be drawn up in duplicate and
signed by the partners, we shall each retain a copy.
The entries in such signed accounts shall be final and binding between the parties. The
profits or loss, as the case may be, shall be divided as aforesaid, after the signing of
such account.

10. The authority of the partners, individually shall be limited to the following:
(a) No partner shall individually purchase goods for the partnership without consulting
the other and obtaining his consent for purchases of the value exceeding Rs. 1 lakh.
(b) No partner shall singly bind the partnership by taking any loan or raising any money
whether with or without security to the extent of more than Rs. 5 lakhs.
(c) No partner shall commit the partnership without obtaining the written consent of the
other, to any undertaking which involves the partnership financially to the extent of
more than Rs. 5 lakhs.
(d) All law suits shall be filed and defended by the partnership by the partners acting
jointly in all cases which involve the partnership financially to the extent of more than
Rs. 2 lakhs.

11. The partnership shall be deemed to be continuing on the admission of a fresh

partner or partners, provided the admission is on the terms herein laid down and is
approved by all the partners.

12. Every partner shall be entitled to dissolve the partnership in the event of the other
committing breach of the conditions herein covenanted. The partnership may be
dissolved by a notice in writing sent by registered post to the address herein given or
such address as may be registered from time to time with Registrar of Firms. On the
dissolution of the firm under this clause the expelled partners shall not be liable for any
loss incurred as from the date of dissolution. But no profit or loss shall be paid or
become payable except at the time of annual accounting.

13. On the bankruptcy of any partner or on notice being given to either partner under
clause 12 above or on the death and there being no major legal representative willing or
capable to take the place of the deceased partner the partnership shall terminate. The
share of such partner may be purchased by the remaining partner(s) at a valuation to be
made by arbitrators or their umpire as hereinafter mentioned. The price shall be paid in
3 equal six monthly instalments. The tenancy right of the first party shall be valued at…
years’ rental.

14. Upon the determination of the partnership by afflux of time, or upon its
determination by any other partner then, as soon as convenient, a full and general
account of valuation shall be taken of the property and assets and liabilities of the
partnership and the property and the assets put to sale and the debts realised and the
creditors paid. The net proceeds in cash shall be equally divided between the then
partners or the partners and the legal representative or representatives of the deceased
partner;
PROVIDED always, that if the proceeds are less than the liabilities the loss shall be
made good in equal shares by the then partner, or the legal representative or
representatives of any deceased partner.

15. If at any time any dispute, doubt or question shall arise between the partners, or
their representatives either on the construction of these presents, or respecting the
accounts, transaction, profits or losses of the business or otherwise in the relation to the
partnership then every such dispute, doubt or question shall be referred to arbitrators
chosen by each of the partners and the representatives of their umpire to be appointed in
the manner provided by law and such reference shall in all respect, as to the mode and
consequence thereof conform to the provisions in that behalf contained in the
Arbitration and Conciliation Act, 1996 or any statutory modification thereof.

IN WITNESS WHEREOF the said Rahul Chavan and Swapnil Patel have hereto at
Mumbai signed the day and the year first above mentiond.

WITNESSES:
Sd/- Rahul Chavan
Sd/- Swapnil Patel

DEED EXTENDING PERIOD OF A PARTNERSHIP

THIS DEED OF AGREEMENT is made the 10th day of March 2013 BETWEEN
A.B., C.D. and E.F. AND WITNESSES as follows:
That each of the said A.B., C.D. and E.F. do hereby agree with the others of them,
jointly and severally, in the manner following, that is to say:
That the said A.B., C.D. and E.F. will remain and continue partners together in the said
trade or business of Garments for the further term of 5 years to be counted from the 10th
day of March 2022 the day on which the original deed of partnership shall expire, upon
such and the same terms and conditions, and with, under and subject to such and the
same covenants, provisions and agreements as are expressed and contained in the said
original deed of partnership to which this agreement is appended, and to which the said
partners hereto, their respective legal representatives would have been subject or liable,
if the said deed of partnership and the partnership thereby created, and the several
covenants, declarations, provisions and agreements therein mentioned and contained
had been made or entered into for the term of ten years instead of the term of five years.

IN WITNESS whereof the said A.B., C.D. and E.F. have hereto at Mumbai by way of
a supplementary deed executed these presents on the day and the year first above
mentioned and appended the same to the original deed of partnership, deed…
WITNESSES:
Sd/- A.B.
Sd/- C.D.
Sd/- E.F.

DEED OF AGREEMENT OF ADMISSION INTO FIRM OF

A NEW PARTNER

THIS DEED OF AGREEMENT IS made the 11th day of March 2022 BETWEEN Mr.
AB son of PQ aged 27 years R/o Mumbai and Mr. CD son of TS aged 28 years R/o
Mumbai, partners in the firm CD & CO. of the one part, AND Mr. EF son of JK aged
27 years resident of Mumbai of the other part.

WHEREAS the said Mr. AB and Mr. CD are partners in the firm CD & Co. situated in
Mumbai and are bound as such under a deed partnership executed by them on the 5th
day of January 2022 hereinafter referred to as the “partnership deed”.
AND WHEREAS the said Mr. EF is desirous of being admitted as a member in the
aforesaid firm of CD and Co. and invest a sum of Rs. 10 lakhs AND the said Mr. AB
and Mr. CD are willing to admit him as an additional partner.

NOW THEREFORE THE DEED WITNESSES that in pursuance of the said

agreement and in consideration of the said EF bringing in and contributing the sum of
Rupees 10 lakhs (Rs 10 lakhs) only as additional capital of the above partnership firm,
it is mutually agreed as follows:

1. The parties hereto shall, as from the date hereof be and continue partners for the
unexpired residue of the terms mentioned in para of the partnership deed subject in all
respects to the conditions, stipulations, and provisions of the aforesaid partnership deed,
so far as applicable, and except as varied by this deed of agreement.

2. The capital mentioned in the partnership deed shall hereafter be changed to the sum
of Rupees 30 lakhs only and the partners shall hereafter have the undernoted shares in
the capital.
AB shall have Rs. 10 lakhs in the said capital;
CD shall have Rs. 10 lakhs in the said capital; and
EF shall have Rs. 10 lakhs in the said capital.

3. The profits and losses of the partnership shall continue to be borne by the partners
hereto in proportion to their above named respective shares.

IN WITNESS WHEREOF the said Mr. AB, Mr. CD and Mr. EF have hereto
at………… signed the day and the year first
above mentioned.

WITNESSES:
1. Sd/- Mr. A.B.
2. Sd/- Mr. C.D.
3. Sd/- Mr. E.F.
DEED OF DISSOLUTION OF PARTNERSHIP

(To be executed on Rs. 10/- Non Judicial Stamp Paper)

THIS DEED OF DISSOLUTION OF PARTNERSHIP made the 10th day of March
2022
BETWEEN Mr. AB, Mr. CD, Mr. EF
WHEREAS the partners hereto under a deed of partnership dated 1st August 2015
made between them formed themselves into a business firm and carried on business
under the name and style of M/S ABC Enterprises pursuant to the covenants,
stipulations and provision contained in the said deed;
AND WHEREAS it has been mutually decided between the parties that the said
partnership shall be dissolved, and the said trade and business shall be wound up and
the stock-in-trade, assets and credits realized and called in, and the net proceeds after
payment and satisfaction of all debts and liabilities divided between the partners
according to the covenants in this behalf appearing in the deed of partnership.

NOW THIS DEED WITNESSES that in pursuance of the said agreement it is hereby
declared and agreed by and between the parties hereto as follows, that is to say:

1. The said partnership between the partners hereto under the deed, dated 1st August
2015 hereunto appended shall be determined and stand dissolved as from the 10th day
of March 2022. And the parties hereto singly or jointly shall not carry on the business
of the said firm of M/S ABC Enterprises under the said name and style for a period of
3years hence.

2. The parties hereto shall on the aforesaid date of 10th March 2022 sign notices of the
dissolution and forthwith advertise in the local Official Gazette the fact of dissolution as
required by Section 45 of the Indian Partnership Act AND shall also intimate the fact of
dissolution to the Registrar of Firms under the provision of Section 63 of the said Act.
3. Within 10 days after the dissolution of the partnership a full and general account and
balance sheet shall be taken and made of the property, assets and liabilities of the
partnership; and a full and particular inventory and valuation of all the machinery,
plants, tools, utensils, stock in hand, office equipment, materials and effects belonging
to the firm shall be made by the parties or such other person as the partners may choose
to appoint, whose decision shall be final and binding upon the partners, and all debts
owing to the firm shall be collected and got in by the parties or such other persons as
the parties may by instrument in his behalf appoint.

4. That as soon as may be, after the property, assets and liabilities have been got in and
disbursed the parties or such other person or persons whom the parties may have
appointed under the foregoing clause shall divide and apportion the share of the parties,
in the proportion of the contribution of the parties towards the capital. In such division
any amounts paid earlier or due to the parties according to the books of the partnership
shall be taken into account. That the cost of liquidation proceedings shall also be
deemed to be a liability of the partnership and paid from the funds of the partnership.

5. That in case the winding up shows a loss or the assets of the partnership are
insufficient to meet the liabilities and debts of the partnership then the partners shall
forthwith pay such losses in the proportion of their contribution to the capital.

6. Each of the parties shall, so soon as the others or any of them, or their or his
representatives, shall have executed and done all the assurances, acts or things hereby
agreed to be done by them respectively and at the request and cost of such other or
others, or their or his representatives execute to them or him such releases, indemnifies,
and assurances as may be reasonable and proper;

IN WITNESS WHEREOF the said Mr. AB, Mr. CD and Mr. EF have hereof signed
and executed this agreement of dissolution and appended it to the said deed of partners,
dated 10th March 2022.
WITNESSES:
1. Sd/- Mr. A.B.
2. Sd/- Mr. C.D.
3. Sd/- Mr. E.F.

CONCLUSION:
Working towards a common goal– Partnership in business’s fulfill all the
requirements needed for the successful running of a business, when people with a
common goal, some may have good plans, some can have a healthy risk management
experience, some can take care of inventory making the functioning of business
smoother and healthier.

Sharing inventory, network, and Resources- The main aim of any business is
financial stability, when people from different firms and experiences come together they
bring in resources and networks of all types Amy it is many power or consumers. A
business partnership runs on sharing of networks. One may know but due to lack of
resources or capital, the business can go into a downfall.

Maximizing profits- In partnership deeds all the partners must stay equally passionate
about making a profit, looks for plans and ways to execute to make profits. Or it
increases power for bargaining and decision making as people have a different
perspective for some things, which will bring all the angles of a particular thing in the
notice and help in taking fruitful decisions and generation of profits and also at times of
recovering if loss partners may come with various plans.
 REFERENCES:
⮚ https://www.icsi.edu/media/webmodules/Drafting_Pleadings_Appearances_22112022.
pdf
⮚ https://www.legalraasta.com/blog/partnership-deed-features/
⮚ https://byjus.com/commerce/partnership-deed
⮚ https://ebizfiling.com/blog/what-is-the-importance-of-a-partnership-deed/
 GIFT DEED

GIFT
Some Basic Aspects
Gift has been defined under Section 122 of the Transfer of Property Act, 1882. Section
122 states that ‘Gift’ is the transfer of certain existing movable or immovable property
made voluntarily and without consideration, by one person, called the donor, to another,
called the donee, and accepted by or on behalf of the donee. Such acceptance must be
made during the life time of the donor and while he is still capable of giving. If the done
dies before acceptance, this gift is void.
For the purpose of making gift of immovable property, the transfer must be affected by
a registered instrument signed by or on behalf of the donor and attested by at least two
witnesses.
For the purpose of making gift of movable property, the transfer may be affected either
by a registered instrument signed as aforesaid or by delivery. Such delivery may be
made in the same way as goods sold may be delivered.
Gift should be made only for the existing property as gift of future property is void
under Section 124 of the Transfer of Property Act, 1882, because gift of future property
is mere promise and cannot be enforced. Section125 provides that the gift of a thing to
two or more donees of whom one does not accept it, is void as to the interest which he
would have taken had he accepted. The intention conveyed under this Section is that a
gift is personal to the donee and therefore if a gift made to two persons jointly and one
of them does not accept it, the other cannot accept the whole.

Section 126 of T.P. Act, 1882 prescribes the circumstances when a gift may be
suspended or revoked. As per Section 126, the donor and donee may agree that on the
happening of any specified event which does not depend on the will of the donor a gift
shall be suspended or revoked, but a gift which the parties agree shall be revocable
wholly or in part at the mere will of the donor is void, wholly or in part as the case may
be. A gift may also be revoked in any of the cases (save want or failure of
consideration) in which, if it were a contract it might be rescinded. Save as aforesaid a
gift cannot be revoked. Gift in India are regulated by personal law, usages and customs.
Under Hindu Law a gift once completed is binding upon the donor and it cannot be
revoked by him unless it was obtained by fraud or undue influence [Ganga Baksh v.
Jagat Bahadure (1896) 23 Cal - 15].
But the rules of Muslim Law are different. Section 126 of T.P. Act, 1882 for revocation
of gift cannot be applied to Muslims.
A Muslim can revoke a gift even after delivery of possession except in following cases
(1) when the gift is made by a husband to his wife or by a wife to her husband; (2)
when the donee is related to the donor within the prohibited degrees; (3) when the gift
is Sadaka (made to a charity or for a religious cause); (4) when the done is dead; (5)
when the thing given has passed out of the donees’ possession by sale, gift or
otherwise; (6) when the thing given is lost or destroyed; (7) when the thing given has
increased in value; (8) when the thing given is so changed that it cannot be identified;
(9) when the donor has received some thing in exchange for the gift.

Revocation or Suspension of Gift

The donor and done may agree that on the happening of any specified event which
does not depend on the will of the donor a it shall be suspended or revoked; but a gift
which the parties agree shall be revocable wholly or in part at the mere well of the
donor is void wholly or in part, as the case may be.
A gift also be revoked in any of the cases (save want or failure of consideration) in
which, if it were a contract, it might be rescinded.

Illustrations
(a) A gives a field to B, reserving to himself, with B’s assent, the right to take back the
field in case B and his descendants dies before A, B dies without descendants in A’s
lifetime. A may take back the field.
(b) A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to take
back at pleasure Rs. 10, 000 out of the lakh. The gift holds good as to Rs. 90, 000, but
is void as to Rs.10, 000, which continue to belong to A.
218
Transfer of Property Act describes onerous gift also. Section 127 states that where a gift
is in the form of a single transfer to the same person of several things of which one is
and the others are not, burdened by an obligation, the donee can take nothing by the gift
unless he accepts it fully. Where a gift is in the form of two or more separate and
independent transfers to the same person of several things, the donee is at liberty to
accept one of them and refuse the others, although the former may be beneficial and the
latter onerous. Besides, a donee not competent to contract and accepting the property
burdened by any obligation is not bound by his acceptance but if after becoming
competent to contract and being aware of the obligation, he retains the property given,
he becomes so bound, subject to these provision of Section 127 of the Act. Where a gift
consists of the donor’s whole property, the donee is personally liable for all the debts
due by and liabilities of the donor at the time of the gift to the extent of property
comprised therein. A company can make gift of its movable and immovable property
provided it had been vested with requisite power of doing so in objects clause in its
Memorandum of Association and Articles of Association. It would require sanction of
shareholders in general meeting under Section 181 of the Companies Act, 2013.

Illustrations
(a) A has shares in X, a prosperous joint stock company, and also shares in Y, a joint
stock company, in difficulties. Heavy calls are expected in respect of the shares in Y. A
given B all his shares in joint stock companies. B refuses to accept the shares in Y. He
cannot take the shares in X.
(b) A, having a lease for a term of years of a house at a rent which he and his
representatives are bound to pay during the term, and which is more than the house can
be let for, given to B the lease, and also, as a separate and independent transaction, a
sum of money. B refuses to accept the lease. He does not by his refusal forfeit the
money.

GIFT DEED:
A gift is generally considered as the exchange or transfer of ownership of any property
from one person to another where the sender willingly transfers his/her property to the
receiver without any compensation.

There are various ways through which you can transfer a property that you own. It
could be by way of sale, Will or gift. A commonly used method, especially when
transferring to a family member or friend, is executing a gift deed in favor of the
recipient.
Under section 122 of the Transfer of Property Act, 1882, you can transfer immovable
property through a gift deed. A gift deed is a deed in which the consideration is not
monetary, but is made in return for love and affection. It is a document which transfers
property to another as a gift. Such a deed is often used to present someone with a gift.
Transfer of a gift deed can be reported as a gift for federal tax purposes.
A gift deed is a document that records the act of giving a gift and is executed between
the Donor and the Donee. The person who transfers the property is called
the Donor and the person who receives is called the donor without any consideration or
price. The transfer must be out of love and affection towards the Donee.

Importance Of Gift Deed:

A Gift Deed is a proof of the transfer of all the rights associated with the property from
the Donor to the Donee thereby declaring the Donee as an absolute owner.The right for
owning or ownership of the given property is directly transferred under the gift deed
without requiring to pay or make any return transactions to the giver of the gift.
A Gift Deed records the transfer of property to the donee. The complete details of the
property and the details of the parties to the transaction make this document a legal
proof to the title of the property. A Gift Deed is of evidentiary value before the Courts
in event of any future disputes that may arise. A Gift Deed serves as a legal protection
to the parties in event of any disputes that may arise in future.
When It Is Used : A gift deed can be used when a person being a valid owner of
an existing property wishes to gift his property to someone. A minor is incompetent to
gift a property. Gift deeds can be used by natural persons and not by corporate entities.
In Case Of Minor: Minors are not eligible to contract; therefore they cannot transfer
property as a gift. A gift deed in case of donor being a minor is legally not valid.In case
of donee being a minor, a natural guardian can accept a gift on his behalf. Guardian acts
as a manager of the gifted property. Once the donee is an adult, he must either accept
the burden or return the gift.

CONTENTS:
A Gift Deed is a legal document, thus must be clear and unambiguous stating all the
term in proper legal language. The name and details of the Donor and the Donee. The
details of the title and ownership of the subject matter. Other details of the property.
1.Relation between parties, if any
2.Date and place of execution.
3.A Gift Deed is required to be signed by both parties
4.The Donor who consents to the transfer of subject matter through Gift-deed,
5.The Donee who accepts the gift wholly, and Two adult witnesses.

DEED OF GIFT - HOW MADE

The gift deed should be drafted as a deed of transfer with recitals if necessary. There is
no consideration involved in gift as such no mention is required to be made of the same
in the gift deed. However, the words “natural love and affection” is generally expressed
in all cases of gift to relations, and “consideration of esteem and regard” is expressed
when the gift is in favour of same person for whom the donor has regard e.g. when the
donee is his religious preceptor. But for a Company these intra-personal characteristic
may be necessary. A Company may make gift to honour a person for his outstanding
achievements in social life if so authorised under its memorandum and articles.

Stamp Duty and Registration

The value of the property gifted must be set forth in the deed of gift. Stamp Duty is
payable on gift deed as on the conveyance as per amount of value of the property as
mentioned in the deed or as per market value of such property whichever is greater as
per Article 23 of the Indian Stamp Act, 1899. If the value of the property is
intentionally omitted or under-valued with a view to defraud the revenue, prosecution
may be invited under Section 64 of Indian Stamp Act (Muhamad Muzaffar Ali ILR 44
Allahabad 339 FB). Further, penalty provisions under Gift-tax Act may also be
attracted.
Gift deed of immovable property is compulsorily registrable as per Section 123 of the
Transfer of Property Act and Section 17(i)(a) of the Registration Act, 1908, whatever
may be the values.

(1) DEED OF GIFT FOR LOVE AND AFFECTION

THIS DEED of GIFT is made on the 10th day of March 2022 BETWEEN AB, etc.
(caled “the donor”) AND CD, etc. (called “the donee”).

WHEREAS the donor is owner of the property described in the Schedule and out of his
paternal affection for his daughter, the donee, is desirous of making a gift of the said
property to the donee at the time of her marriage. NOW THIS DEED WITNESSES
AS FOLLOWS:
1. In consideration of the natural love and affection of the donor for the donee, the
donor transfers to the donee free from encumbrances ALL the property described in the
Schedule TO HOLD the same to the donee absolutely for ever.
2. The donee accepts the transfers.

IN WITNESS WHEREOF, etc.,

The Schedule above referred to
Signed, sealed and delivered
AB
 CD

(2) DEED OF GIFT OF PROPERTY FOR PARTICULAR

PURPOSE

THIS DEED of GIFT is made the 10th day of March 2022 BETWEEN AB of
Mumbai, etc. (hereinafter called “the Donor”) of the one part, and CD of Mumbai, etc.
(hereinafter called “the Donee”) of the other part.
WHEREAS the donee intends to start a school in his village Gokulnagar for the
education of girls AND whereas the donor is desirous of donating the land fully
mentioned and described in the Schedule hereto to be used as a site for the said School.

NOW THIS INDENTURE WITNESSETH that in pursuance of the said pious wish
and desire and as a patron of the proposed school to be started by the donee, the donor
do hereby and hereunder freely and voluntarily grant, convey, transfer, give, assign and
assure unto and to the use of the donee and his successor ALL THAT, etc., etc., to be
used solely and exclusively for the purpose of a site for construction and
accommodation of the proposed girls’ school TO HAVE AND TO HOLD the same so
long as the same shall be used and occupied as a site and/or building of the school
AND THAT the donee accepts the gift of the said property hereunder made solely and
exclusively for the purpose hereinbefore indicated subject to the condition hereunder
provided.

THIS INDENTURE FURTHER WITNESSETH that it is expressly agreed and

understood by and between the parties that this gift of land will stand ipso facto revoked
in the event the land hereunder given is not used for the purpose of the intended school
for which the same is given within a period of one year from the date of these presents
or in the alternative the said school is abolished or shifted elsewhere
or amalgamated with some other institution when and in all or any such event or events
the land with all buildings and structures, if any erected thereon, shall revert to and
revest in the donor or his heirs, executors, administrators and representatives and shall
form part of his former estate as if this deed of gift was never executed nor intended.
And it is further agreed by and between the parties that in case the land is acquired by
the Government, the donee or his successors, including any person or persons
managing the school, shall invest the compensation money to be awarded in purchase
of another land or building to be used solely and exclusively for the school unless
otherwise directed by any court of competent jurisdiction.

The estimated value of the property is Rs. 10 crores.

IN WITNESS WHEREOF the donor has executed this deed of a gift and delivered the
same to the donee who has also executed the same in token acceptance thereof the day,
month and year first above written.
The Schedule above referred to
Signed, sealed and delivered
AB

CD

(3) DEED OF GIFT OF LAND IN TRUST TO CHARITY

THIS DEED OF GIFT made the 5th day of March 2022 BETWEEN AB of Mumbai
etc. (hereinafter called “the Donor”), of the one part, and CD of Gujarat etc., and EF of
Delhi, etc. (hereinafter called “the Trustees”) of the other part.
WHEREAS it is proposed to erect a serai for the use of travellers, and a committee has
been constituted to raise subscriptions for construction of the building and creation of
the endowment.
AND WHEREAS the trustees are members of such committee:
AND WHEREAS the donor has agreed to contribute the piece of land hereinafter
described in the schedule below as a site for such serai :
NOW THIS DEED WITNESSES that in pursuance of such pious wish and desire and
as a patron for the proposed serai the said AB does hereby freely, voluntarily and
absolutely and subject to the condition hereunder imposed grant; convey transfer and
give unto and to the use of the said CD and EF and their successors in office, as trustees
as aforesaid. ALL THAT, etc., (describe the property) and valued at Rs. 10 crores.
TO HAVE AND TO HOLD the same as trustees upon trust hereinafter mentioned.
And it is hereby AGREED AND DECLARED by and between the parties hereto that
the trustees and their successors in office shall from time to time and at all times
hereafter stand possessed of the land hereby conveyed and building or buildings to be
erected thereon IN TRUST to be used solely and exclusively as a serai for food and
shelter of the travellers all thorugh the year free of any charge or other contribution.
AND it is hereby further agreed and declared that in case the object of the gift fails; or
in the event serai is closed or shifted anywhere or used for any purpose contrary to law
or against religion or if the object of the gift is frustrated otherwise for any reason
whatsoever - this gift will stand ipso facto revoked and the property shall in that event
revert to and revest in the donor or his descendants as may remain alive with all
improvements thereon free from any claim on that account as if the gift was never made
nor intended unless otherwise directed in an appropriate action by a court of competent
jurisdiction.

IN WITNESS WHEREOF etc.,

The Schedule above referred to
Signed, sealed and delivered
AB
CD
EF
CONCLUSION:

According to Section 122 of the Transfer of Property Act, “Gift is the transfer of certain
existing movable or immovable property made voluntarily and without consideration,
by one person called the donor, to another person called the donee, and accepted by or
on behalf of the donee. Acceptance when to be made – Such acceptance must be made
during the lifetime of the donor and while he is still capable of giving. If the donee dies
before acceptance, the gift is void.”

A gift deed is a document that records the act of giving a gift and is executed between
the Donor and the Donee.
 REFERENCES:

⮚ https://www.icsi.edu/media/webmodules/Drafting_Pleadings_Appearances_22112022.
pdf
⮚ https://blog.ipleaders.in/importance-gift-deed/
⮚ https://legalraj.com/articles-details/gift-deed
 LEAVE AND LICENSE AGREEMENT

INTRODUCTION:

Leave and License Agreements are preferred by the parties to get out of the rigours of
landlord-tenant relationship. Many types of agreements are made for the occupation of
property like lease deeds, lease or tenancy agreements, rental agreements, etc. Despite
these agreements, most owners prefer to give their premises on leave and license basis
rather than tenancy or lease basis. The process of eviction of tenants is generally
difficult. The law is tilted in favour of the tenant for various purposes. Generally, it is
being witnessed that a person having a vacant apartment will never rent it out fearing
what if the tenant decides not to vacate and makes the apartment his own. That is why,
tenancy has been put on the backburner and Leave and License is now the most
popular option.

The word “leave” has many meanings. In Leave and License Agreements, it is used to
indicate “permission”.
The occupancy is in essence a permission granted by the landlord or owner to use and
occupy the property concerned.
Mention should be made that the practice of entering into “Leave and License
Agreements” was adopted in Mumbai. In Mumbai, the provisions contained under the
then Bombay Rents Hotel and Lodging House Rates Control Act, 1947, popularly
known as the “Bombay Rent Act” were considerably in favour of the tenants.
Further, Tenancy or Lease Agreement had to be stamped and registered. Even if the
Agreements were duly stamped and registered, the eviction of tenants was still a very
tough and time-consuming procedure.

With the hope of getting over the stamp duty and registration requirements, and also
with the view of not creating any tenancy that will be covered by the said Act, a
practice of entering into “Leave and License Agreements” was adopted. However, by
virtue of an amendment to the said Act in 1973, those who were in occupancy of
premises under Leave and License Agreements as on the specified date became
statutory tenants under the provisions of the said Act. Provisions were also introduced
to protect the landlords, in as much as a person who was in occupation of premises
under Leave and License Agreement on termination of License. Such person was liable
to be summarily evicted.

LEASE, LICENSE AND RENTAL AGREEMENTS

The license is not a lease. The lease and the license both are different. The word
“License” under Section 52 of the Indian Easement Act, 1882 is a grant by one person
to another or to a definite number of persons, a right to do, or continue to do, in or upon
the immovable property of the grantor, something which would, in the absence of such
right, be unlawful, and such right does not amount to an easement or an interest in the
property, the right is called a license. A right to use the property of a person granted by
the owner of such property to live peacefully is an example of License.
A lease of immovable property as per Section 105 of the Transfer of Property Act is a
transfer of a right to enjoy such property. It may be for a specified period, express or
implied. The price or payment of money is usually referred to as the “rent”. For
example, Rent Agreement, usually for eleven months. Lease Agreements, usually for
more than eleven months.
In a Leave and License Agreement, the juridical possession of the premises is deemed
to remain with the licensor and the licensee is said to be in constructive possession of
the said premises. Thus, a leave and License does not create any interest in the premises
in favour of the licensee but gives the licensee the mere right to use and occupy the
premises for a temporary period.
A Rental Agreement between the landlord and tenant sets down the terms which will
be followed while the tenant lives in the rental unit. Month-to-Month Agreement is
commonly called a “Rental Agreement”. This agreement is for an indefinite period of
time, with rent usually payable on a monthly basis. The agreement itself can be in
writing or oral, but if any type of fee or refundable deposit is being paid, the agreement
must be in writing.
Lease and License: Distinction
The cardinal distinction between a lease and a license is that in a lease, there is a
transfer of interest in the premises, whereas in the case of a license there is no transfer of
interest, although the licensee acquires a right to occupy the premises. When premises
are given out on lease or tenancy basis the legal possession of the premises in these
cases is also deemed to be transferred to the lessee and tenant respectively. Whether an
agreement to occupy the premises between the landlord and tenant is allowed to occupy
was an agreement to lease or an agreement of leave and license has been a subject of
many Supreme Court & High Court rulings.
In a number of judgements various High Courts as well as the Apex Court have
distinguished the lease and the license. In Khalil Ahmed Bashir Ahmed v. Tufelhussein
Samasbhai Sarangpurwala,1988 SCC 155, the Supreme Court has held:
“In order to determine whether a document created a license or a lease the real test is to
ascertain the intention of the parties i.e. whether they intended to create a license or a
lease. If the document creates an interest in the property entitling the transferee to
enjoyment, then it is a lease; but if it only permits another to make use of the property
without exclusive possession, then it is a license.”[See also Rajbir Kaur & Anr. v. M/s S
Chokesiri & Co., 1988 (2) SCJ 316]
From the judgments of various Courts, it appears that the main factors to decide
whether the agreement isa lease or a license are (i) the intention of the parties and (ii)
whether the agreement creates an interest in the property.
A licensee is a licensee whether the license is for occupation of the premises or for
casual visits or for any other purpose. The status of a licensee cannot change or vary
according to the purpose of the license. The principle “once a licensee always a
licensee” would apply to all kinds of licenses.
If the premises are given under the Leave and License Agreement, the same can be
terminated as per the terms of the agreement or otherwise and the licensor can demand
possession, back from the licensee. The termination is easy in the Leave and License
Agreement and therefore Leave and License Agreements are preferred by the parties.
 BENEFITS OF LEAVE AND LICENSE FOR THE
LICENSOR

● Leave and license agreements Benefits allows the licensor to take more measures in
case eviction is required of the licensee from the property as they are generally entered
for a period of 11 months with an option to renew the agreement on its expiration.
● It is a legal document that binds the tenant for paying the security and rent amount for
the purpose of use of the property. Failure to do so, legal action can be taken against a
tenant by the licensor.
● Since property prices are increasing these days, having such an agreement can help to
re-claim the licensor's property in case of a dispute.
● The Rent Control Act strongly favors the tenants and limits the power of the landlord to
reclaim the land. However, in leave and license, an action can be initiated on the
unlawful tenant who is occupying the property after the cessation of the license or after
expiration.

BENEFITS OF LEAVE AND LICENSE FOR TENANT

● It can be used as a valid address proof anywhere in India.

● These leave and license agreements are legal documents binds the licensor in terms of
the security amount, rent amount, stay duration, other payables for the use of property
that cannot be changed once the agreement is signed by both the parties.
● It is imperative for a tenant as it protects his right to stay for a certain duration and
endures some stability. It gives surety of the conditions of the stay.

FACTORS TO BE CONSIDERED WHILE GIVING OUT

PREMISES ON LEAVE & LICENSE BASIS
In deciding whether to give out premises on leave & license basis some of the factors to
be considered are as follows:
• Possession: In a leave and license agreement, the owner is deemed to be in legal or
judicial possession of the premises and the licensee is in constructive possession of the
premises.
• Income Tax: In a leave and license agreement, the owner has to pay the applicable
rate of tax.
• Municipal Tax : In a leave and license agreement, the Municipal Authorities may
charge taxes as applicable in the area and if there is a security deposit amount
sometimes the Municipal Authorities may calculate a notional interest on the securities
deposit amount and charge tax thereon.

A SPECIMEN OF LEAVE AND LICENSE AGREEMENT

THIS AGREEMENT is made at Mumbai this 3rd day of March, 2022, between Mr. A
hereinafter referred to as ‘the Licensor’ of the One Part and Mr. B of Mumbai
hereinafter referred to as the ‘Licensee’ of the Other Part, as follows;

WHEREAS the Licensor is the owner of a piece of land at Mumbai bearing Survey No
125 with a building consisting of 10 floors having built up area of about … square feet.
AND WHEREAS the Licensee has approached the licensor with a request to allow the
Licensee to temporarily occupy and use a portion of the 5th floor of the said building,
admeasuring about … square feet for carrying on his leather business, on leave and
license basis until the Licensee gets other more suitable accommodation.

AND WHEREAS the Licensor has agreed to grant leave and license to the Licensee to
occupy and use the said ground floor portion of the said building and which portion is
shown on the plan hereto annexed by red boundary line on the following terms and
conditions agreed to between the parties hereto;
NOW IT IS AGREED BY AND BETWEEN THE PARTIES HERETO AS
FOLLOWS..

1. The Licensor hereby grants leave and license to the Licensee to occupy and use the
said portion of the ground floor/. floor of the said building of the Licensor (hereinafter
referred to as the Licensed Premises) for a period of eleven months from The Licensee
agrees to vacate the said premises even earlier if the Licensee secures any other
accommodation in the locality where the said premises are situated.

2. The Licensee shall pay to the Licensor a sum of Rs. 50,000 per month (calculated at
the rate of Rs … per square foot) as License fee or compensation to be paid in advance
for each month on or before the 10th day of each month.

3. All the Municipal taxes and other taxes and levies in respect of the licensed premises
will be paid by the Licensor alone.

4. The electric charges and water charges for electric and water consumption in the said
licensed premises will be paid by the Licensee to the authorities concerned and the
Licensor will not be responsible for the same. For the sake of convenience a separate
electric and water meter if possible will be provided in the said premises.

5. The Licensee will be allowed to use the open space near the entrance to the Licensed
premises and shown on the said plan by green wash for parking cars during working
hours of the Licensee and not for any other time and no car or other vehicle will be
parked on any other part of the said plot.

6. The licensed premises will be used only for carrying on business and for no other
purpose.

7. The licensed premises have normal electricity fittings and fixtures. If the Licensee
desires to have any additional fittings and fixtures, the Licensee may do so at his cost
and in compliance with the rules. The Licensee shall remove such fittings and fixtures
on the termination of the license failing which they shall be deemed to be the property
of the Licensor.

8. The licensed premises are given to the Licensee on personal basis and the Licensee
will not be entitled to transfer the benefit of this agreement to anybody else or will not
be entitled to allow anybody else to occupy the premises or any part thereof. Nothing in
this agreement shall be deemed to grant a lease and the licensee agrees and undertakes
that no such contention shall be taken up by the Licensee at any time.

9. The Licensee shall not be deemed to be in the exclusive occupation of the licensed
premises and the Licensor will have the right to enter upon the premises at any time
during working hours to inspect the premises.

10. The Licensee shall maintain the licensed premises in good condition and will not
cause any damage thereto.
If any damage is caused to the premises or any part thereof by the Licensee or his
employees, servants or agents the same will be made good by the Licensee at the cost
of the Licensee either by rectifying the damage or by paying cash compensation as may
be determined by the Licensor’s Architect.

11. The Licensee shall not carry out any work of structural repairs or additions or
alterations to the said premises. Only such alterations or additions as are not of structural
type or of permanent nature may be allowed to be made by the Licensee inside the
premises with the previous permission of the Licensor.

12. The Licensee shall not cause any nuisance or annoyance to the people in the
neighbourhood or store any hazardous goods on the premises.

13. If the Licensee commits a breach of any term of this agreement, then
notwithstanding anything herein contained, the Licensor will be entitled to terminate
this agreement by fifteen days’ prior notice to the Licensee.
14. On the expiration of the said term or period of the License or earlier termination
thereof, the Licensee shall hand over vacant and peaceful possession of the Licensed
premises to the Licensor in the same condition in which the premises now exist subject
to normal wear and tear. The Licensee’s occupation of the premises after such
termination will be deemed to be that of a trespasser.

IN WITNESS WHEREOF the parties hereto have put their hands the day and year first
hereinabove written.
Signed by the within named Licensor Shri A. in the presence of Mr. P
Signed by the within named Licensee Shri B. in the presence of Mr. K

CONCLUSION:

A leave and license agreement is an agreement wherein the licensor temporarily allows
the licensee to use and occupy licensor's immovable property full or a portion of it, for
the purpose of carrying business activity or residential use. For this, the licensor shall be
paid by the licensee a fixed amount also known as the rent. The leave and license are
usually granted to the licensee for a period of 11 months. The agreement must be
registered before the sub-registrar at the place of jurisdiction (the place where the
immovable property is located).
 REFERENCES:

⮚ https://www.icsi.edu/media/webmodules/Drafting_Pleadings_Appearances_22112022.
pdf
⮚ https://legaldocs.co.in/blog/what-is-the-meaning-of-leave-and-license
⮚ https://parthasaarathi.com/blogs/leave-and-license-agreement-all-you-need-to-know