Alienation

The Transfer of Property Act, 1882 (TPA) is a foundational piece of legislation governing the transfer of property in
India. It establishes the principles under which property can be transferred between individuals, while also laying
down restrictions and exceptions to ensure fair dealings and public interest. Among these principles, the concept of
restraints on alienation is significant. This doctrine restricts the right of a property owner to transfer their property
to another party under specific conditions, but exceptions to these restrictions also exist.

Concept of Alienation

Alienation refers to the transfer of property rights from one person to another. This transfer can take the form of sale,
mortgage, lease, gift, or exchange. Alienation is a fundamental incident of ownership, as it allows the owner to use
and dispose of their property as they see fit.

However, the Transfer of Property Act, 1882, imposes conditions on this right to prevent its abuse. Restraints on
alienation are such conditions that limit or restrict the transferability of property. These restraints can either be
absolute or partial, depending on the extent to which they limit alienation.

Types of Restraints on Alienation

1. Absolute Restraints

An absolute restraint completely prohibits the transfer of property in any manner. For instance, a condition in a
transfer deed that a property shall not be sold, gifted, mortgaged, or otherwise transferred under any circumstances
is an absolute restraint.

Under Section 10 of the TPA, any condition that imposes an absolute restraint on the transferability of property is
void. The law regards such restrictions as invalid because they conflict with the public policy favoring the free
transferability of property.

Example:

 If A transfers property to B with a condition that B shall not sell or otherwise transfer the property to anyone,
such a condition is void under Section 10. B becomes the absolute owner of the property and can freely
transfer it.

2. Partial Restraints

A partial restraint imposes some limitations on the transferability of the property but does not entirely prevent it.
These restraints are valid if they are reasonable and do not amount to an absolute prohibition.

Example:

 A transfers property to B with a condition that B shall not transfer the property outside the family. If the
court deems this restraint reasonable, it will be upheld.

Exceptions to the Rule of Absolute Restraints (Section 10)

While absolute restraints are generally void, certain exceptions are recognized under the law. These exceptions are
based on considerations of public interest, specific social needs, and other justifiable circumstances. Below are the
key exceptions:

1. Marital Arrangements

Restraints imposed in the context of marriage, particularly to protect the property rights of women, are considered
valid. For example, a condition that prohibits a wife from alienating property given to her during marriage without
her husband’s consent may be upheld if it protects her interests.

2. Direction for the Benefit of a Minor

When property is transferred for the benefit of a minor, conditions that temporarily restrict alienation until the minor
reaches the age of majority are valid. This is because minors are legally incapacitated from entering into contracts
and are vulnerable to exploitation.

Example:

 A transfers property to B, a minor, with the condition that B cannot transfer the property until they turn 21.
This restriction is valid.

3. Transfer of Leasehold Property

A lease agreement often contains conditions that restrict the lessee from transferring the leasehold interest without
the consent of the lessor. Such conditions are valid and enforceable.

Example:

 A landlord leases property to a tenant with a condition that the tenant shall not sublet the premises without
the landlord’s consent. This condition is binding.

4. Religious or Charitable Trusts

Restraints on alienation are valid if they are imposed in relation to property dedicated to religious or charitable
purposes. These restraints are intended to preserve the property for its intended use.

Example:

 Property dedicated to a temple or mosque may have restrictions on its transferability to ensure it continues
to serve its religious or charitable purpose.

5. Pre-emption Rights

In some cases, the law recognizes the validity of pre-emption rights, which grant a preferential right to certain
individuals (e.g., family members or co-owners) to purchase the property before it is sold to an outsider. Such
conditions are enforceable as they do not completely restrict alienation but regulate the manner of transfer.

Example:

 A transfers property to B with a condition that if B wishes to sell the property, it must first be offered to A’s
family members. This condition may be valid if it does not impose unreasonable restrictions.

Other Relevant Sections Restricting or Governing Alienation

1. Section 11: Restriction Repugnant to Interest Created

Under Section 11, conditions that are inconsistent with the interest created by a transfer are void. For example, if a
property is transferred to someone with absolute ownership rights, any condition that restricts their right to use or
transfer the property is invalid.

Example:

 A transfers property to B with a condition that B shall not construct a house on it. This condition is void if it is
inconsistent with the ownership rights conferred upon B.

2. Section 12: Condition Making Interest Determinable on Insolvency or Transfer

Section 12 prohibits conditions that make the interest of a transferee determinable in the event of insolvency or
transfer. For instance, if a property is transferred to someone with a condition that their interest will cease if they
become insolvent, such a condition is void.

Example:

 A transfers property to B with a condition that B's ownership will cease if they declare bankruptcy. This
condition is invalid under Section 12.
3. Restraints in Gifts

Under Section 126, a donor may impose conditions on a gift, but these conditions cannot be illegal, immoral, or
impossible to fulfill. While absolute restraints on alienation are void, partial restraints that are reasonable may be
upheld.

Judicial Interpretations and Case Law

1. Shivji Nathubhai v. Bai Motibai (1921)

In this case, the court held that any condition that imposes an absolute restraint on alienation is void under Section
10 of the TPA. The court emphasized the principle of free transferability of property.

2. Rama Rao v. Raja of Pittapur (1918)

The Privy Council held that a condition restraining alienation was valid as long as it was for a specific, limited period
and served a justifiable purpose.

3. Rosher v. Rosher (1884)

An English case often cited in Indian jurisprudence, Rosher v. Rosher clarified that a restraint on alienation that
imposed unreasonable or excessive limitations would be void.

4. Narayan Das v. Jatindra Nath (1932)

The court upheld a partial restraint that was considered reasonable in the specific context of the transfer. It
reiterated the need to balance individual rights with public policy considerations.

Public Policy Behind Restraints on Alienation

The principle underlying the invalidation of absolute restraints is rooted in public policy. Free transferability of
property promotes economic efficiency, ensures optimal use of resources, and facilitates the growth of commerce. By
invalidating absolute restraints, the law aims to prevent:

1. Monopolization of Property: Absolute restraints can result in property being locked in one place, hindering
its productive use.

2. Exploitation of Owners: Restricting transferability may expose property owners to exploitation by third
parties.

3. Hindrance to Market Dynamics: Free transferability ensures a vibrant and competitive property market,
benefiting society at large.

Conclusion

The Transfer of Property Act, 1882, strikes a delicate balance between individual autonomy and societal interests by
regulating conditions restraining alienation. While absolute restraints are void as a matter of principle, partial
restraints and specific exceptions ensure that property rights are exercised responsibly and in alignment with broader
public interests. The framework laid down by the Act, complemented by judicial interpretations, ensures that the law
evolves to meet the changing needs of society.

UNBORN

The Transfer of Property Act, 1882 (TPA) is a key legal framework governing property transactions in India. It outlines
the legal procedures and conditions for transferring property, whether movable or immovable, from one person to
another. A particularly intricate and interesting aspect of this law is the concept of transfer to an unborn person
under Section 13 of the Act. This provision embodies both the spirit of legal ingenuity and the delicate balance
between property rights, future interests, and legal constraints.

This detailed discussion seeks to explore the legal principles, conditions, and implications of Section 13 in the context
of the Act, providing a comprehensive understanding of how transfers to unborn persons are conceptualized and
applied under Indian property law.
Understanding the Concept: Transfer to an Unborn Person

1. The Legal Definition of an Unborn Person

An unborn person is someone who does not exist legally at the time the transfer is made. Under Indian law, a person
must be born alive to have legal rights. Therefore, an unborn person is essentially a future entity with the potential
for legal personality upon birth.

The transfer to an unborn person creates an interest in property for someone who will come into existence only in
the future. This is significant because the legal system generally recognizes only existing persons as capable of
holding property rights. Thus, the concept of transferring property to someone yet to be born introduces unique
challenges, addressed through careful conditions stipulated under the TPA.

2. The Legal Framework: Section 13 of the Transfer of Property Act, 1882

Section 13 of the TPA specifically governs the transfer of property for the benefit of unborn persons. It reads as
follows:

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

This provision can be broken down into its essential components:

1. Creation of Prior Interest: The property must first be transferred to a living person who holds the property
until the unborn person comes into existence.

2. Interest for the Unborn Person: The unborn person must take the property as a whole (absolute interest),
without any further limitation or condition.

3. Complete Interest: The interest for the unborn person must include the entire remaining interest of the
transferor in the property.

Conditions for Transfer to an Unborn Person

The transfer to an unborn person under Section 13 is subject to several conditions, ensuring both legal enforceability
and equitable outcomes. These conditions include:

1. Prior Interest Creation

 A transfer to an unborn person must be preceded by the creation of an interest in favor of a living person.
This ensures that there is no gap in ownership, as the law does not permit a property to exist in limbo.

 For example, a property may be transferred to a trustee or a designated individual who holds the property
until the unborn person is born and becomes capable of accepting the transfer.

2. Vesting of Absolute Interest

 The interest created for the unborn person must be absolute and unconditional. This means that once the
unborn person comes into existence, they acquire full ownership of the property, free from further
restrictions or limitations.

 The rationale for this condition is to prevent fragmentation of property rights and ensure clarity in
ownership.

3. Compliance with the Rule Against Perpetuity

  Section 13 must be read alongside Section 14 of the TPA, which enshrines the rule against perpetuity. This
rule mandates that the vesting of an interest in property must not be delayed beyond a certain time frame,
specifically the lifetime of a person in existence at the time of transfer plus 18 years (the minority period).

 This ensures that property is not indefinitely tied up in future interests, maintaining its economic utility.

4. Property Must Exist

 The subject property must exist at the time of the transfer. This ensures that the transferor has a valid and
enforceable interest to transfer, avoiding speculative or illusory transfers.

Illustrations of Transfer to an Unborn Person

Illustration 1: Valid Transfer

A transfers a property to B for life, and upon B's death, to B’s unborn child. In this case:

 B is the living person holding the prior interest.

 Upon B’s death, the unborn child (if born alive) acquires full ownership of the property.

 This arrangement satisfies the conditions of Section 13 and complies with the rule against perpetuity.

Illustration 2: Invalid Transfer

A transfers a property directly to an unborn person without creating a prior interest for a living person. This transfer
is invalid because the property cannot exist in limbo before the unborn person comes into existence.

Legal Implications and Challenges

The provisions for transferring property to unborn persons under the TPA ensure both flexibility and safeguards in
property transactions. However, several legal and practical challenges can arise:

1. Ensuring Compliance with the Rule Against Perpetuity

The rule against perpetuity imposes strict limitations on how long the vesting of an interest can be delayed. Any
violation of this rule renders the transfer invalid. Thus, careful legal drafting is required to comply with both Section
13 and Section 14.

2. Trustee or Life Interest Holder’s Role

The individual or trustee holding the prior interest plays a crucial role in safeguarding the property until the unborn
person acquires ownership. Mismanagement or disputes during this period can complicate the transfer.

3. Practical Uncertainty

Since the unborn person does not exist at the time of the transfer, there is inherent uncertainty about whether the
transfer will take effect. For example, if the unborn person is not born alive, the interest may revert to the transferor
or their heirs.

Judicial Interpretations

Indian courts have interpreted Section 13 and related provisions in various cases, providing clarity and addressing
ambiguities. Some landmark judgments include:

1. Girjesh Datt v. Data Din (1934)

In this case, the court emphasized that a transfer to an unborn person is invalid if it bypasses the requirement of
creating a prior interest for a living person. The judgment reinforced the strict interpretation of Section 13.

2. Raja Bajrang Bahadur Singh v. Thakurain Bakhtraj Kuer (1953)

The Supreme Court clarified the interplay between Sections 13 and 14, stating that any transfer violating the rule
against perpetuity is void. The court also highlighted the importance of ensuring that the interest vests absolutely in
the unborn person.

Comparison with Other Jurisdictions

The concept of transferring property to an unborn person exists in various legal systems but with notable differences:

1. Common Law Jurisdictions

In countries like England and the United States, similar principles apply, often under the broader umbrella of the rule
against perpetuities. However, these systems may provide more flexibility through mechanisms like trusts.

2. Civil Law Systems

Civil law systems, such as those in France and Germany, have different approaches to future interests. These systems
typically rely on codified rules and may offer less flexibility for transferring property to unborn persons.

Conclusion

The transfer of property to an unborn person under Section 13 of the Transfer of Property Act, 1882, exemplifies the
law's adaptability to address future interests while adhering to foundational legal principles. By balancing the rights
of existing and future beneficiaries, the law ensures both fairness and certainty in property transactions.

However, the provisions governing such transfers require meticulous compliance with statutory conditions and
principles, particularly the creation of prior interest and the rule against perpetuity. Legal practitioners must navigate
these requirements with care, ensuring that property transfers align with both the letter and spirit of the law.

Through judicial interpretations and comparative analysis, the concept continues to evolve, reflecting the dynamic
nature of property law in India.

RULE AGAINST PERPETUITY

The Rule Against Perpetuity, as enshrined in Section 14 of the Transfer of Property Act, 1882, serves as a pivotal
principle in property law, aimed at curbing indefinite restrictions on the transfer and alienation of property. By
imposing temporal limits on the vesting of future interests, the rule ensures that property remains a flexible and
economically viable resource, rather than being locked up in perpetuity under rigid ownership schemes. This
principle aligns with broader public policy considerations, emphasizing the need for free alienability and the
productive utilization of property.

The rule finds its roots in English common law and has been adapted to suit the Indian socio-economic landscape. In
India, where land and property are critical assets, the rule plays a vital role in maintaining a balance between an
individual’s autonomy over property and the societal interest in its free circulation.

Historical Evolution of the Rule Against Perpetuity

Origins in English Common Law

The rule against perpetuity originated in medieval England as a response to feudal practices that sought to restrict
the alienation of land. During the feudal era, landowners often imposed long-lasting restrictions to preserve family
estates and prevent their fragmentation. These restrictions led to significant economic inefficiencies and social
stagnation, as land remained tied up in private hands and unavailable for productive use.

To counteract these practices, legal doctrines such as the Statute of Westminster II (De Donis Conditionalibus, 1285)
and the Statute of Uses (1536) emerged, aiming to regulate the creation of future interests. Over time, these statutes
were supplemented by judicial decisions, culminating in the formalization of the rule against perpetuities.

Adoption in Indian Law

In India, the rule was codified under Section 14 of the Transfer of Property Act, 1882, a legislative effort to
harmonize Indian property laws with principles of English common law. Recognizing the Indian context, where
property ownership often serves as a cornerstone of familial and social stability, the framers of the Act incorporated
the rule to prevent excessive restrictions on property alienation while respecting the unique socio-economic
dynamics of the region.

Scope of the Rule Against Perpetuity

The rule against perpetuity has a broad scope, applying to various types of property transfers and interests. Section
14 ensures that no interest in property remains unvested for an indefinite period, thereby fostering the free
circulation of property in the economy. Below are key dimensions of its scope:

1. Applicability to All Property Transfers:

o The rule applies to all instruments that transfer property, such as sales, gifts, settlements, wills, and
trusts.

o It governs both movable and immovable property, ensuring that the principle is universally
applicable across asset classes.

2. Vesting of Future Interests:

o The rule primarily targets contingent or future interests that do not vest immediately but depend on
an uncertain future event. For example, a gift to a child that is contingent upon their marriage after
the donor’s death would be scrutinized under this rule.

o If such an interest does not vest within the prescribed perpetuity period, it is deemed void.

3. Perpetuity Period:

o The rule stipulates that a future interest must vest within the lifetime of one or more persons alive
at the time of transfer plus 18 years, a timeline that ensures a reasonable limit on the suspension of
property rights.

o This period aligns with the age of legal majority (18 years in India), reflecting the assumption that
individuals become capable of exercising property rights at that age.

4. Exemptions:

o Certain transfers, such as those made for charitable or religious purposes, are exempted from the
rule. These exemptions recognize the societal benefits derived from such arrangements.

o Conditions precedent, where the interest vests immediately but subject to a condition, are also
excluded from the scope of the rule.

5. Partial Invalidity:

o If a transfer violates the rule but can be severed into valid and invalid parts, the valid portion is
upheld. For instance, if a will creates multiple interests and only one violates the perpetuity rule, the
other interests remain enforceable.
 6. Public Policy Alignment:

o The rule supports public policy objectives by ensuring that property is not unduly tied up in
restrictive arrangements, thereby fostering economic activity and social mobility.

Object of the Rule Against Perpetuity

The rule against perpetuity is underpinned by several objectives that reflect its importance in both legal and
economic contexts. These objectives include:

1. Preventing Perpetual Restrictions on Property:

o The primary goal of the rule is to prevent the creation of perpetual or excessively long-lasting
restrictions on the alienation of property.

o By imposing a finite timeline, the rule ensures that property remains a dynamic resource, available
for trade, development, and productive use.

2. Promoting Economic Efficiency:

o The free alienability of property is essential for economic growth. Locked-up property can lead to
economic stagnation by restricting access to valuable resources.

o The rule facilitates the optimal utilization of property, ensuring that it contributes to economic
development.

3. Preventing “Dead Hand” Control:

o The rule limits the ability of a deceased individual to impose long-term conditions on the use or
transfer of property, a concept often referred to as “dead hand control.”

o This restriction prevents undue interference in the affairs of future generations.

4. Encouraging Certainty in Property Transactions:

o Legal certainty is a cornerstone of property law. By prescribing clear limits on the vesting of future
interests, the rule reduces ambiguity and minimizes the risk of disputes.

o This certainty enhances public confidence in property transactions.

5. Balancing Individual Rights and Public Interest:

o While property owners have the right to dispose of their property as they see fit, this right is not
absolute. The rule strikes a balance by limiting the duration of restrictions to a reasonable period.

6. Ensuring Equitable Distribution of Property:

o By preventing the concentration of wealth and property in a few hands over successive generations,
the rule promotes equitable distribution and social justice.

o This aligns with the broader goal of reducing inequality in society.

Key Provisions of Section 14 of the Transfer of Property Act, 1882

Section 14 explicitly embodies the rule against perpetuity in Indian law. Its key provisions are as follows:

1. Contingent Interests:

o The rule applies to contingent interests where the vesting of the property is conditional upon the
occurrence of an uncertain future event.
 2. Perpetuity Period:

o The perpetuity period is defined as the lifetime of one or more persons living at the time of the
transfer, plus 18 years.

o Interests that vest beyond this period are considered void.

3. Validation of Immediate Interests:

o The rule does not apply to immediate interests or conditions precedent, ensuring that the property
can be transferred or utilized without delay.

4. Exemptions:

o Transfers for charitable or religious purposes are exempt from the rule. This exemption recognizes
the broader public benefits of such arrangements.

5. Severability:

o If a transfer contains elements that violate the rule, those elements can be severed, leaving the valid
portions intact.

Judicial Interpretation of the Rule

Indian courts have provided clarity on the interpretation and application of the rule against perpetuity through
various landmark judgments. Some notable cases include:

1. Raja Bajrangi Singh v. Puran Chand (1937):

o The court emphasized that the rule seeks to prevent excessive restrictions on the alienation of
property, thereby aligning with public policy objectives.

2. Manohar Lal v. Baldeo Prasad (1938):

o The court clarified that the rule does not apply to conditions precedent, where the interest vests
immediately but subject to a condition.

3. Shambhu Nath v. Phool Kumari (1962):

o The court reiterated that charitable and religious trusts are exempted from the rule, highlighting the
societal value of such exemptions.

4. Ram Kumar v. Government of Uttar Pradesh (1966):

o The court underscored the importance of free alienability of property, emphasizing that the rule
ensures property remains a flexible and dynamic resource.

Criticism and Challenges

Despite its significance, the rule against perpetuity has faced criticism for being overly rigid and complex. Key points
of criticism include:

1. Lack of Flexibility:

o The fixed perpetuity period may not account for unique or evolving circumstances, leading to
potentially inequitable outcomes.

2. Complexity:
 o The rule’s legal intricacies often make it difficult for laypersons to understand, necessitating legal
expertise for its proper application.

3. Misalignment with Modern Needs:

o Critics argue that the rule, rooted in historical contexts, may not fully align with contemporary
societal and economic dynamics.

Relevance in Contemporary Context

Despite these criticisms, the rule remains highly relevant in modern property law. Its objectives of promoting
economic efficiency, legal certainty, and equitable distribution continue to resonate with contemporary legal and
societal needs. The rule’s adaptability, as evidenced by its exemptions and judicial interpretations, ensures its
continued applicability in a changing world.

Conclusion

The rule against perpetuity under the Transfer of Property Act, 1882, is a cornerstone of property law, reflecting a
delicate balance between individual rights and public policy objectives. By preventing the indefinite tying up of
property, it ensures that property remains a productive and dynamic resource, contributing to economic growth and
social welfare. While it has faced criticism, its enduring relevance underscores its importance in regulating property
relations in India.

Introduction to Vested and Contingent Interest

Transfer of Property Act deals with vested and contingent interest. Vested Interest is created where there is a
condition of the happening of a specified certain event. While Contingent Interest is created on fulfilling a condition
of happening of a specified uncertain event.

Vested Interest

Section 19 of the Transfer of Property Act, 1882 talks about Vested Interest. It is an interest which is created in favour
of a person where there is a condition of the happening of a specified certain event and time is not specified. The
person having the vested interest does not obtain the possession of that property but expects to receive it upon
happening of a specified certain event.

Example- A promises to transfer his property to B on him attaining the age of 21. B will have vested interest in A’s
property till the time he does not become 21 years old and gets the possession of it.

After death, the person (promise) who is having this interest will not have any right over that property and the
interest will vest in his legal heirs.

In the above example, if B dies at the age of 20, then the interest vested in B will pass on to the legal successors of B
and they will get the charge over the property in the mentioned time period.

All the aforementioned important aspects of a vested interest are written in detail below:

1. Interest should be vested: This basic postulate lays down that interest should be created in favour of a person
where time is not specified or a condition of the happening of a specified certain event is provided. A person should
proclaim to transfer a particular property in order for this interest to be created.

2. Right to enjoy property is postponed: When interest is vested in a person, he does not immediately get
the possession of that property and hence cannot enjoy that property.

But any person who is not a major and has a guardian is only entitled to the vested interest after he attains majority.

Example- X agrees to transfer the property ‘O’ to Y and commands his guardian Z to give him the property when he
attains the age of 20. Y gets vested interest once he attains the age of 18, the age of majority.
Other important point to remember:-

1. Contrary Intention: The transferor can specify a time slot as to vest the interest in the person who will receive the
property.

2. Death of the transferee: If the transferee dies before getting the property in his possession, the interest vested in
him will be vested in his legal heirs and they will get the possession of that property after the condition is fulfilled.

3. Time of vesting: The interest is vested right after the moment when the transfer is initiated.

In the case of Lachman v. Baldeo (1)[i], a person transferred a deed of gift in favour of another person but directed
him that he will get the possession of that property only when the transferor himself dies. The transferee will have a
vested interest even though his right of enjoyment is postponed till the death event.

Characteristics

1) Vested interest creates a current right that comes in effect immediately, although the enjoyment is postponed to
the time prescribed in the transfer. It does not entirely dependent on the condition as the condition involves a certain
event.

2) Vested interest is a Transferable and heritable right.

3) Death of transferee will not make the transfer invalid as the interest will pass on to his legal heirs.

Section 20 of the Transfer of Property Act, 1882 talks about vested interest to an unborn child. The interest in the
property will be vested in him once he is born. The unborn child might not get the right of enjoyment of the property
immediately after having vested interest.

Contingent Interest

Section 21 of the Transfer of Property Act, 1882 states about Contingent Interest. It is an interest which is created in
favour of a person on fulfilling a condition of happening of a specified uncertain event. The person having the
contingent interest does not get the possession of the property but receives it upon happening of that event but will
not receive the property if the event does not happen. Contingent interest is entirely dependent on the condition
imposed on the transfer.

Example- A agrees to transfer the car ‘X’ to B on the condition that he shall secure 80 % in his exams. This condition is
uncertain on the happening of the event or not happening and therefore B here acquires a contingent interest in the
car ‘X’. He shall get the property only if he gets 80 % and when the condition is fulfilled.

In the case of Leake v. Robinson (2)[ii], the court upheld that when a condition involves an event that is to be given
‘at’ a particular age or ‘upon attaining’ a particular age or ‘after’ attaining this particular age, then it can be derived
that the transfer involves a contingent interest.

Characteristics

1. This interest only happens when the condition is fulfilled.

2. Contingent interest is a transferable right, but the condition of heritability depends upon the nature of such any
transfer and the condition.

3. Death of the transferee before getting the possession of the property will result in the failure of continent interest
and the property will remain with the transferor.

Some important aspects of contingent interest are explained in detail below:

1. Interest: In a transfer if a condition is such that the transfer will take effect only upon the fulfillment of that
condition and till that time, the interest is contingent.

2. Exception: When a person who has an expectancy in the rights of ownership of a specific property, and he for the
time being till the happening of the event, gets any sort of income that arises from that property. This interest in the
property does not come under the aspect of contingent interest.
The following sections of Transfer of Property Act lay down the conditions for contingent interest.

Section 22 talks about the transfer to a group or class of members with a contingent interest. Example:- there is a
transfer to a group of 4 people, and the condition is that the property will be vested in persons who attain the age of
40 years on a particular date. The persons who have attained that age will get an interest in the property and people
who have not attained, will not get an interest in that property.

Section 23 talks about a transfer which happens after happening of an event that was mentioned in the transfer
which involves contingent interest. This section writes about what happens after the happening of the specified
uncertain event.

Section 24 states about a transfer to a group or class of members who will get the property on a condition that they
shall be living at the specified date. This is also a contingent interest as an uncertain event. The transfer will only take
place for those people who satisfy the condition of surviving at a particular date. The legal heirs of the deceased
cannot claim an interest in that property as a transfer involving a contingent interest solely depends upon the
fulfillment of the condition.(3)[iii]

Conclusion for Vested and Contingent Interest

The Transfer of Property Act, 1882 deals with vested interest and contingent interest.

The concepts of vested interest and contingent interest are very important to understand as there are many sections
relating to these concepts.

The transfer of property involving Contingent interest takes effect only after the condition is fulfilled, if the condition
is not fulfilled then the transfer will not take effect. The conditions are required to be fulfilled and they have to
mandatorily synchronize with the preamble rules that talk about justice, equity and good conscience, the three major
principles of the natural law on which this whole act is based upon.

CONDITIONAL TRANSFER

Transfer of properties can be broadly of two types – Absolute transfer and Conditional Transfer. Absolute transfer
refers to such situations where the transferee acquires full, immediate and unconditional title in the transferred
property, without any encumbrances and limitations.2 On the other hand, a Conditional transfer is such in which an
interest is created in the favour of the transferee which are subject to the fulfilment or non-fulfilment of a condition
attached with the transfer of property.3

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. 4 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:

o Prohibited by law,

o Should not be an act that involves fraudulent acts,

o Should not be any act that is impossible,

o Should not be an act that is termed as violative of public policy,

o Should not be immoral,

o Any act that incurs any harm to any person or his property.

For example, X transfers a property 'B' to Y stating that he shall murder Z as a condition for the transfer. Such transfer
is void as the condition is prohibited by law.This paper looks into detail about what is a conditional transfer.

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.

Condition Precedent

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. For example, A is
ready to transfer his property to B on the condition that he needs to take the consent of X, Y and Z before marrying. Z
dies and afterward, B takes the consent of X and Y so the transfer can take place as there has been substantial
compliance. These facts were from a case of Dawson v. Oliver-Massey.6

In the landmark case of Wilkinson v. Wilkinson,7 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.

Condition Subsequent

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. For example, A transfers any property 'X' to B on the
condition that he has to score above 75 percent in his university exams. If B fails to achieve 75 percent marks, then
the transfer will break down and the property will revert back to A.

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.

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. For example, A transfers property
'X' to B on the condition that he shall maintain A's wife C for a period of 10 years. If B complies with it and maintains
C, the transfer will be valid and the property will be in the possession of B.

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.

Other Types of Conditions

Section 27 of the Transfer of Property Act, 1882, deals with situations where the first transfer fails and a subsequent
transfer is made to another person. For example, if A transfers a car to B on the condition that B transfers his bike to
C, but B fails to do so, the car will go to D as per the prior disposition. However, for the subsequent transfer to be
valid, the condition on the first transfer must be valid. If the condition is not fulfilled or is deemed to fail, only then
does the subsequent transfer take effect.

The Doctrine of Acceleration, illustrated in Ajudhia v. Rakhman Kaur, states that if the first condition fails, the
property should pass to another person as if it was never vested in the first person. This doctrine does not apply to
gift transfers unless the first transfer fails in a specified manner.
Section 28 addresses subsequent transfers that occur based on the non-occurrence of a specified event. This involves
Conditional Limitation, where a condition affects any ulterior disposition of the property. If a vested property involves
a condition that does not happen, the property is transferred to the ulterior disposition, which is the ultimate
beneficiary.

Section 30 clarifies that the invalidity of an ulterior disposition does not affect the validity of the initial transfer. For
example, if X transfers land to Y and then, after his marriage, life interest to his male offspring (which is invalid), the
transfer to Y remains valid.

Section 31 states that a transfer where a condition of happening or non-happening of an event is applied will cease
to have effect if the condition is not met. This condition is given in a negative sense, where the transferor prescribes
when the transfer shall cease to have effect. The case of Ambika Charan v. Sasitara confirms that even collateral
conditions are valid under this section.

Section 32 specifies that the conditions in Section 31 should not be invalid or prohibited by law. If a condition in an
ulterior disposition is invalid, it will not affect any prior transfers, as long as the conditions in Section 25 are met.

Section 33 deals with transfers where no time is specified for the happening or non-happening of an act. The transfer
ceases to have effect only when the act becomes permanently impossible.

Section 34 addresses transfers where a time is specified for the happening or non-happening of an act. If the
condition is fulfilled within the prescribed time, the transfer continues to have effect; otherwise, it ceases to have
effect. If the delay is caused by a person interested in the non-fulfilment of the condition, the delay is excused, as
seen in the example of X transferring property to Y with a condition regarding going to the U.S. within 2 years. If Z, by
playing a fraud, prevents Y from fulfilling the condition, the delay is excused.

Conclusion

Conditional transfer in property law is a fundamental concept as it allows parties to tailor property transactions to
meet their specific needs and circumstances. Understanding the different types of conditions and their legal
implications is essential for ensuring the validity and enforceability of property transfers. By adhering to the
principles outlined in the Transfer of Property Act, parties can navigate the complexities of conditional transfers and
safeguard their property interests.

ELECTION

Introduction to Doctrine of Election

Election means choosing between two alternative rights. If two rights are endowed on a person under any
instrument in such a manner that one right is more preferable than the other, he is bound to elect or choose only
one of them. Section 35 of the Transfer of Property Act, 1882 deals with Doctrine of election. It subsumes the
Doctrine of election alongwith Sections 180-190 of the Indian Succession Act 1925.

Theme behind Section 35-

Allegans contraria non est audiendus : he is not to be heard who alleges things contradictory to each other.

Section 35 of Transfer of Property Act, 1882 reads:

Where a person professes to transfer property which he has no right to transfer, and as part of the same transaction
confers any benefit on the owner of the property, such owner must elect either to confirm such transfer or to dissent
from it; and in the latter case he shall relinquish benefit so conferred, and the benefit so relinquished shall revert to
the transferor or his representative as if it had not been disposed of, subject nevertheless, where the transfer is
gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh
transfer, and in all cases where the transfer is for consideration, to the charge of making good to the disappointed
transferee the amount or value of the property attempted to be transferred to him. The rule in the first paragraph of
this section applies whether the transferor does or does not believe that which he professes to transfer to be his
own. A person taking no benefit directly under a transaction, but deriving a benefit under it indirectly, need not elect.
A person who in his own capacity takes a benefit under the transaction may in another dissent there from. [i]
Understanding the Doctrine of Election

This doctrine is universal in nature and is applicable to Hindus, Muslims, Christians. This doctrine consists of the
principle of a person exercising a choice out of his own free will to do one thing and is founded on the equitable
doctrine that he who accepts the benefit under an instrument or transaction of its choice must adopt the whole of it
or renounce everything. [ii]

This principle was determined in the case of Codrington v Codrington (1857) 7 HL 854, 861.

Essential Conditions for application of the Doctrine of Election

From the case of Dhanpati v. Devi Prasad and others (1970) (3) SCC 776 (778), it was determined that before election
following conditions must be fulfilled-

1. A person having no right to transfer, transferring property

2. He must transfer some benefit on the owner of the property, as part of the same transaction

3. The owner must elect either to confirm the transfer or to dissent from it.[iii]

Effect of election against the transfer-

Where the owner dissents from the transfer of his property –

1. He must forgo the benefit

2. The benefit contemplated for him would then go back to the transferor.

Exceptions to Doctrine of Election

Where a particular benefit is expressed to be conferred on the owner of the property which the transferor possesses
to transfer, and such benefit is in lieu of that property, if such owner claims the property, he is not bound to
relinquish any other benefit that he achieves through the same transaction.

The acceptance of the benefit by the original owner will be considered to be an election by him to confirm the
transfer, if he is aware of his duties and responsibilities and of the circumstances that might influence a prudent
(reasonable) man into making an election.

This knowledge of the circumstances can be assumed if the person who gets the benefit enjoys it for a period of
more than two years without doing any act to express dissent.

The transferor would ask him to elect his choice, if the original owner does not elect his option within a year of the
transfer of property. Even after the reasonable time, if he still does not elect, the original owner shall be presumed to
have elected the validation of the property transfer as his choice.[iv]

In context of a minor, the period of election shall be adjourned till the individual attains majority unless he is
represented by a guardian.

Modes of Election

The election by the owner can either be direct or indirect.

In direct election, one just needs to simply communicate about the elected choice or option. Though, in case of an
indirect election, the acceptance of the benefit by the owner is subject to two conditions:

1. He has to have the knowledge of his responsibility to elect.

2. There must be proof of knowledge of circumstances which would influence the judgment of a prudent man to
make an election. [v]

The election shall be presumed when the donee acts in such a manner with the property gifted to him that it
becomes impossible to return it to the original owner in its original state.
Difference between English Law and the Indian Law Perspective-

The English law depends upon the principle of compensation which states that if the original owner does not validate
the transfer, he will be able to retain the property and also the benefit accrued, subject to compensation provided to
the donee, to the extent to which he had suffered a loss.

But in the Indian law, this doctrine is affected by the principle of forfeiture which says that if the real owner does not
confirm the transfer, the donee incurs a forfeiture of the granted benefit which goes back to the transferor.[vi]

Compensation

The estimated cost of the property which is to be transferred to the transferee is the approximate value of the
compensation that he will receive. But in case of immovable properties, the issue of changing value of the properties
according to the lapse of time arises. Thus, this valuation needs to take place at the time of the instrument coming
into force rather than at the time of election [vii].

Conclusion

Section 35 of the Transfer of Property Ac, 1882 explains the concept of the Doctrine of Election. This article deals
with the various gradations involved in the doctrine through the usage of various landmark judgments. A special
emphasis has been conferred upon the conditions necessary for the election by the original owner. The differences
between the Indian Law perspective as well as the English Law perspective are mentioned here to critically analyze
the provisions i.e. Principle of forfeiture and Principle of compensation. The foundation of the doctrine of election is
that the person taking a benefit under an instrument must also bear the burden. In simple words, a person cannot
take under and against one and the same instrument.

Introduction to Apportionment of Property

This article deals with apportionment of property in India. The legal term ‘apportionment’ means distribution or
allotment in proper shares. The expression ‘apportionment’ means division of a common fund between several
claimants.

In law this term is used in various senses even various statutes define it in various ways and as per the laws regulating
these apportionment the process of determine the apportioned amount also changes.

Section 36 & 37 of the Transfer of Property Act lay down the rules regarding the principle of apportionment. It is
classified into two types

Apportionment of Property by time

Section 36deals with the apportionment of time, which states- “In the absence of a contract or local usage to the
contrary, all rents, annuities, pensions, dividends and other periodical payments in the nature of income shall, upon
the transfer of the interest of the person entitled to receive such payments, be deemed, as between the transferor
and transferee, to accrue due from day to day and apportionable accordingly but to be payable on the days
appointed for the payment thereof”.[1]

This principle does not apply on tractions which take place by operation of law but to those transaction based on
equity.

When a property generates certain kind of periodical income, apportionment of income between the transferor and
transferee arises. The general rule in regards to the transfer of income between the transferor and transferee is dealt
in section 8 of the Act and is inapplicable on transaction of periodical nature requiring apportionment.

Liability of the tenant – section 6 of the Act specifies that the section is applicable for transaction held between
transferor and transferee and does not make tenant liable.

Concept of Transfer – The Transfer of Property Act, 1882 says that when a property is lent to several owners, any of
those several owners on the basis of being the co-owner cannot ask for proportion of rent of evection in case of non-
payment. The apportionment created by the Apportionment Act 1870 statute is “apportionment in respect of time.”
The cases to which it applies are mainly cases of either:

 apportionment of rent due under leases where at a time between the dates fixed for payment the lessor or
lessee dies, or some other alteration in the position of parties occurs

 apportionment of income between the representatives of a limited owner and the remainder-man when the
limited interest determines at a time between the date when such income became due.

Apportionment of Property by Estate

Apportionment in respect of estate may result either from the act of the parties or from the operation of law.

Section 37 deals with this kind of apportionment stating that “ When, in consequence of a transfer, property is being
divided and held in several shares, and thereupon the benefit of any obligation relating to the property as a whole
passes from one to several owners of the property, the corresponding duty shall, in the absence of a contract, to the
contrary amongst the owners, be performed in favour of each of such owners in proportion to the value of his share
in the property, provided that the duty can be severed and that the severance does not substantially increase the
burden of the obligation the duty shall be performed for the benefit of such one of the several owners as they shall
jointly designate for that purpose:

Provided that no person on whom the burden of the obligation lies shall be answerable for failure to discharge it in
manner provided by this section, unless and until he has had reasonable notice of the severance. Nothing in this
section applies to leases for agricultural purposes unless and until the State Government by notification in the Official
Gazette so directs”.[2]

when the whole of a property is transferred to more than one person, any benefit arising out of obligation to the
property is transferred to the several owners.

Apportionment by estate simply means transferring of property to several person whereby distribution of benefits
and obligation arising out of property between those several owners takes place.

Section 37 i.e. apportionment by estate highlights a situation where income arising out of the property is
apportionment between owners on the basis of share in the property. How the payment is to be done whether
separately to owner or to single has to be contemplated. This section basically deals with apportionment in case
tenancy be liable only singly.

Apportionment by act of the parties

Where a lessee is evicted or he forfeits part possession of the leased property he becomes liable to pay the
apportioned value of rent which he retains

Apportionment by Operation of Law

Apportionment by operation of law may be brought about where by due to some reasons like by the “act of God”, as,
for instance, where part of an estate is submerged by the encroachments of the sea it becomes inoperative as
regards to its subject matter.

Conclusion

In this Article the major discussion was on section 36 and 37 of the transfer of property Act, 1882 which deals with
Apportionment of Property in India. And how it is read with section 8 of the transfer of property of property Act,
1882. Various exceptions to these sections to Apportionment of Property in India was discussed. Theses section are
of immense important in the Act as it specifies the rule of apportionment and how apportionment of income has to
be done in case of transfer or tenancy or lease.