Introduction

Section 25 of the Transfer of Property Act, 1882 provides for Conditional

Transfer. It means that any transfer that happens on the fulfilment of a
condition that is imposed on the other party for the transfer of property. For
example, A agrees to transfer his property to B if he gets selected for a job.
The requirement of A for B to get a job is called a condition.

For any kind of a conditional transfer to be valid, the condition that is

imposed should not be:

1. Prohibited by law,
2. Should not be an act that involves fraudulent acts,
3. Should not be any act that is impossible,
4. Should not be an act that is termed as violative of public policy,
5. Should not be immoral,
6. Any act that incurs any harm to any person or his property.

The legal effect of a conditional transfer can vary depending on the

nature of the condition. The conditions required for a transfer of
property can be of three types: Condition Precedent, Condition
Subsequent, and Collateral Condition.

Concept of Conditional Transfer

Conditional transfer refers to such transfer of properties where a condition is
something that makes the existence of a right dependent on the happening or not
happening of a thing, and the legal effect of the transfer may vary according to the
nature of the condition attached to it. The conditions required for the transfer of
property can be of three types – Condition Precedent, Condition Subsequent and
Collateral Condition.All these conditions should also satisfy all the requirements of a
condition as mentioned in Section 25 of the Transfer of Property Act, 1882.
Types of Conditions on Transfer

1. Condition Precedent
It is given in Section 26 of the Transfer of Property Act, 1882. Any
condition that is required to be fulfilled before the transfer of any property is
called a condition precedent. This condition is not to be strictly followed and
the transfer can take place even when there has been substantial compliance
of the condition.

Condition precedent refers to the condition which precedes the transfer of property.
When the terms of a transfer impose a condition to be fulfilled before a person can take
an interest in the property, the condition here is condition precedent. It is given in Section
26 of the Transfer of Property Act, 1882. 5 Any condition that is required to be fulfilled
before the transfer of any property is called a condition precedent. This condition is not
to be strictly followed and the transfer can take place even when there has been
substantial compliance of the condition.

In the landmark case of Wilkinson v. Wilkinson (2), the condition where one
party was required to desert her husband for the transfer to go through, this
was held by the court as invalid as it was against public policy.

• The party asked the other party to end the marriage and divorce
the husband for the transfer to be completed.
• This is an immoral act that violates the other party’s interests.
Hence, it was termed void, and the court held it invalid to go
through with an act against public policy.

2.Condition Subsequent
It is given in Section 29 of the Transfer of Property Act, 1882. Any
condition that is required to be fulfilled after the transfer of any property is
called condition subsequent. This condition is to be strictly complied with and
the transfer will happen only after the completion of such condition. Although
it is an essential requirement that the condition needs to lawful and if it is
not then the condition will be held as void and the transfer will not break
down and will be finalized. For example, A transfers the property to B on the
condition that he shall murder C. This condition is void and hence transfer
will go through and the property will be kept by B.

It is given in Section 29 of the Transfer of Property Act, 1882.8 Any condition that is
required to be fulfilled after the transfer of any property is called condition subsequent.
This condition is to be strictly complied with and the transfer will happen only after the
completion of such condition. Although it is an essential requirement that the condition
needs to lawful and if it is not then the condition will be held as void and the transfer
will not break down and will be finalized.

3.Condition Collateral
Any condition that is required to be fulfilled simultaneously after the transfer
of any property is called condition collateral. It needs to be strictly followed
otherwise the transfer will break down.

Also, it has been recently clarified by the Hon'ble Supreme Court in a case in 2018,9 in
case of a conditional gift where there was no recital of acceptance and no proof or any
sign of acceptance. If the possession of that gift is with the donor for his lifetime and it
is not completed during his lifetime. The deed of gift might be cancelled at the option of
the donor as it has not violated any principles required in a valid transfer of property
and the donor is within his rights to cancel any gift deed of such kind.

The other types of conditional transfer in property law.

As per Section 27 of the Transfer of Property Act 1882,

• A transfer can be made again by a party if one of them fails the

first time they do it.
• Transferor A can choose C as transferee B has not completed
the task as per the law.
• The prior disposition of the conditional transfer in property law
is to be taken seriously.
• Only valid conditions can be fulfilled again if the prior task fails.
• The subsequent transfer comes into effect to break down the
conditional transfer in property law.
Doctrine of Acceleration

• This will assess that the property from one party is to be given
to another party if any of the first conditions fails as it was never
vested for them.
• For example, A wants to transfer the property to B, and B cannot
fulfil the conditions, or the transfer was not successful, or the
property is unregistered. Then the property is accelerated to
their legal heirs and children.
• The doctrine of Acceleration does not apply when it is a gift
unless there is a specific manner of failure involved where it can
be applied for another transfer.
• This counts as an exception to the conditional transfer in
property law. However, the party may also take legal
consultation to know where this is applicable.
Conditional Limitation

• This applies here as this affects any ulterior disposition motives.

• The vested property may have conditions, and if it does not get
fulfilled, the ulterior disposition takes place, and the property is
transferred to the ultimate beneficiary of the other party.

• VOID CONDITIONAL PRECEDENT

Section 25 deals with a conditional precedent. Under this section, a

condition precedent is void if its performance is either impossible
or unlawful and, where a condition precedent is void the transfer
of property is void too. In the following cases the condition is void
and transfer fails because thecondition is not fulfilled

• IMPOSSSIBLE TO PERFORM
A c o n d i t i o n w h i c h c a n n o t b e p r a c t i c a l l y p e r f o r m e d i s c a l l e d impossible
condition. Since such condition can never be performed, the transfer of property too cannever
take place
 • UNLAWFUL
In the following cases the conditions are unlawful and void; the transfer with
such conditions

1. FORBIDDEN BY LAW
- If the conditions are forbidden by law, it is void. Transfer of a property with such
condition take place. A transfers his house to B on condition that B shalltransfer his excise
licence to C. transfer of licence is forbidden by law and condition cannot be
performed.ii.

2. DEFEATS THE PROVISIONS OF LAW-

Where the condition is such that if performed itwould defeat the provision of any existing
law, it is void. Transfer with such conditions fails.

3. FRADULENT
- A condition the fulfilment of which amount to ‘fraud’ is unlawful.

4. INVOLVES ANY INJURY TO PERSON OR PROPERTY

- A condition the performanceof which is an offence causing injury to a person or
property of another person is unlawfuland a transfer with such condition fails.

5. OPPOSE TO PUBLIC POLICY

- Where the condition precedent is immoral or opposed
to public policy, the transfer with such condition cannot take place because the condition isvo
id. A makes a gift of rupees1000 to B when B deserts her husband, B can never be entitledto
get rupees 1000. Excepting one, void condition precedent as contemplated in this
sectionare the same as giving in section 23 of the Indian Contract Act

Conclusion
Conditional Transfers form a very crucial aspect in day to day transactions of
transfer of property. It is important to know about provisions relating to this
concept. All types of conditional transfers are given from Section 25 – 34 of
the Transfer of Property Act, 1882. It is important to note that the condition
on any transfer should not be prohibited by law and can be ideally performed.
This article conveys the basic principles and mechanisms behind these
provisions, and how they fare out with practical examples that will help the
reader relate it with the real time events.