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LL.B. Semester - II
112 - Property Law

Source : Internet. Dedicated to students of the subject.


22-Apr-2016. Version-1.5. Compiled by ketan.bhatt@iitbombay.org for his
personal use.
Gujarat University Syllabus is in BOLD text. References to questions listed
herein below, are to such questions which were asked in Gujarat University
examinations.
Some good URLs :
http://www.legalservicesindia.com/article/article/definition-&-concept-of-
property-502-1.html
http://www.lawstudentshelpline.com/index.php/transfer-of-property-act
http://mayank-lawnotes.blogspot.in/2007/01/transfer-of-property.html
Vested and Contingent Interests ---
http://www.mylaw.net/Application/View/programmes/materials/93/mate
rial_93_PLRMUnit7.pdf
70 page ---
http://49.50.126.244/web_material/doc/Legal_Studies/XII_U2_Legal_St
udies.pdf
48 page .docx by Naveen Kumar Shelar ---
https://www.academia.edu/6331085/The_transfer_of_property_act_188
2
http://www.lexorates.com/articles/easement-rights/
http://www.legalservicesindia.com/article/article/easement-restrictive-
of-certain-rights-481-1.html

OBJECTIVES :
The course on property conventionally deals with the Transfer of Property Act,
1882. More than a Century has elapsed since the passing of the Act and far-
reaching changes have occurred in the field in property laws owing to altered
social conditions. While archaic feudal rules enacted by the colonial
administration like the rule against perpetuities find a place in the Act, the
post , independence development relating to control and use of agricultural
land do not find a place. The obsolescence of the Transfer of Property Act can

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be best illustrated by citing the provisions relating to leases on unmovable


properties.

CONTENTS

Module-1) General Principles of Transfer of Property I

Module-2) General Principles of Transfer of Property II

Module-3) Specific Transfers

Module-4) Easements

SYLLABUS

Module-1) General Principles of Transfer of Property I :

1..1) Kinds of property : Movable, Immovable, Tangible and


non-tangible property, Intellectual Property
1..2) Which properties may be transferred ? Competency of
person to transfer: Transfer for the benefit of unborn child
1..3) Rule against perpetuity
1..4) Vested Interest and Contingent Interest

Module-1 QUESTIONS :
Q : 2012, 4 : Explain in detail meaning and kinds of property, with case
laws.
Q : 2013, 5 : Define property and transfer of property and
explain in detail the kinds of property under the Transfer of Property
Act.
-----> Discuss in detail : Which properties may be transferred ?
Competency of person to transfer
----> Discuss : Transfer for the benefit of unborn child
Q : Procedure of transferring a property and essentials of a valid transfer
----> Discuss in detail : Rule against perpetuity
Q : 2012, 3 : Explain in detail regarding vested and contingent interests,
with decided cases.

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What is spes successionis (chance of succession) What are the rights of a


spes successionis related to transfer of property?

Go To Contents.

Module-1 ANSWERS :
Q : 2012, 4 : Explain in detail meaning and kinds of property, with case
laws.
Q : 2013, 5 : Define property and transfer of property and explain
in detail the kinds of property under the Transfer of Property Act.
Ans :
What is meant by a property :
Property has a very wider meaning in its real sense. It not only
includes money and other tangible things of value, but also includes
any intangible right considered as a source or element of income or
wealth. The right and interest which a man has in lands and
chattels to the exclusion of others. It is the right to enjoy and to
dispose of certain things in the most absolute manner as he
pleases, provided he makes no use of them prohibited by law.
The sea, the air, and the like, cannot be appropriated; every one
may enjoy them, but no one has any exclusive right in them. When
things are fully our own, or when all others are excluded from
meddling with them, or from interfering about them, it is plain that
no person besides the proprietor, who has this exclusive right, can
have any claim either to use them, or to hinder him from disposing
of them as he pleases; so that property, considered as an exclusive
right to things, contains not only a right to use those things, but a
right to dispose of them, either by exchanging them for other
things, or by giving them away to any other person, without any
consideration, or even throwing them away.

Kinds of properties : Following are the different kinds of properties :


A. Movable property ----- Immovable property
B. Tangible property ----- In-tangible property
C. Intellectual property (a kind of in-tangible property)

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Detailed discussion :
A. Movable property --- Immovable Property :
The Transfer of Property Act has not positively defined the term
Immovable Property anywhere. Vide Sec-3, TP Act 1882 gives
non-exhaustive and negative definition of immovable property,
which say what is not an immovable property. Section 3 :
immovable property does not include standing timber, growing
crops or grass.
Sec-3 of the General Clauses Act defines,
movable property as : "Movable property shall mean property
of every description, except immovable property."
Immovable Property as Immovable property shall include
land, benefits to arise out of land, and things attached to the
earth, or permanently fastened to anything attached to the
earth
Sec-2 of Indian Registration Act, defines,
Moveable property includes standing timber, growing crops
and grass, fruit upon and juice in trees, and property of every
other description, except immovable property.
"immovable property" includes land, buildings, hereditary
allowances, rights to ways, lights, ferries, fisheries or any
other benefit to arise out of land, and things attached to the
earth or permanently fastened to anything which is attached
to the earth, but not standing timber, growing crops nor grass;

Discussion :
Sec-3 of TP Act 1882 : "attached to the earth" means-
(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings;
or
(c) attached to what is so embedded for the permanent
beneficial enjoyment of that to which it is attached;
(d) Chattel attached to earth or building

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Things attached to the earth may become movable property by


severance from the earth. eg soil or stones quarried and loaded
on to a cart can be carried away and become movable property.
(A) Things rooted in the earth- Includes like trees and shrubs,
but when such trees constitute standing timber they are not
immovable property.
Shantabai v/s State of Bombay- if the intention is to use them
for enjoying their fruits, they will be regarded as immovable
property. But if the intention is to cut them down sooner or
later for the purpose of utilizing the wood they would be
timber and regarded as movable property.
Similarly, growing crops, and grass are regarded as movable
property.

(B) Things imbedded in the earth- Includes such things as
houses and buildings. However, there are certain things which
are imbedded in the land but not a immovable property like
anchor imbedded in the land to hold a ship.
The rule is- if the article stands on the earth up to its own
weight, it will not be part of the land (ie movable), but if it is
caused to go deeper in the earth by external agency, then it is
part of a land (ie immovable).
(C) Things attached to what is so imbedded- Includes like door,
window of a house are attached to the house for the permanent
enjoyment of the house. However, when the intention is not
permanent enjoyment then it becomes the movable property like
fans, blinds.
(D) Chattel attached to earth or building- If a chattel, i.e.,
movable property is attached to earth or building, it is immovable
property. For example oil engine.

Case-law :
Shanta Bai v. State of Bombay 1958 SC 532, the distinction
between movable and immovable property was observed. If
the intention is to reap fruits from the trees, then it is
regarded as an immovable property. But if the intention is to

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cut down the tree and use it as timber, it would be regarded as


movable property.
There is difference in between tree and standing timber.
Tree means which is capable of vegetation. Standing timber
means dried out tree which has stopped vegetation
Perumal v/s Ramaswami held- oil engine attached to earth
and the attachment to lasts only so long as the engine is used.
When it is not used, it can be detached and shifted to some
other place. The attachment in such case immovable property.
Narayan Sa v/s Balagure Swami AIR 1924 Madras 187 Vassal
used for destilation of liquor not immovable property.
IMP ----> The degree, manner, extent and strength of
attachment of the chattel to the earth or building, are main
features to be regarded. Further test is whether, such an
attachment is for the permanent beneficial enjoyment of the
immovable property to which it is attached.

Recognized as Immovable properties-


1. Right to collect rent of immovable property.
2. Right to collect dues from a fair on a piece of land.
3. Right of ferry.
4. Right of way.
5. A right of fishery.
6. A debt secured by mortgage and interest of a mortgage of
immovable property.
7. Hereditary offices.
8. Right to receive future rents and profits of land.
9. The equity of redemption.
10. Reversion of property of leased.
11. Right to collect lac from trees.
12. A factory.

Recognized as movable properties-


1. Right to worship.

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2. A royalty.
3. A decree for sale of immovable property.
4. A decree for arrears of rent.
5. A right to recover maintenance allowance.
6. A machinery which is not permanently attached to the
earth.
7. Government promissory notes.
8. Standing timber, growing crops, and grass.

B. Tangible property ---- In-tangible property :


Tangible property : Tangible property refers to any type of
property that can generally be movable and touched or felt.
These include items such as furniture, clothing, jewelery, art,
writings, or household goods.
Intangible property : Intangible property refers to property that
cannot actually be moved, touched or felt, but instead represents
something of value such as negotiable instruments, securities,
goodwill, patents, trademarks, copyrights, etc), and intangible
assets including "chose in action" (a property right in something
intangible, or which is not in one's possession, but enforceable
through legal or court action)

C. Intellectual property : Intellectual property is a kind of intangible


property. Any work such as invention, artistic work or literary work,
design, symbol, name, image, etc created by the knowledge or
intellectual capacity of a person is called intellectual property. Such
intellectual property can be protected by law. The following are the
types of intellectual property :
Trademarks: Any mark put on the product such as the name of a
product or service which helps people to distinguish it from other
products and services is called a Trademark. The names of a
products, companies, etc. are Trademarks. (Example: Apollo
Pharmacy, Titan watches, etc.)
Patents: The right granted over the invention of a product is
called Patent. In other words, when a person invents a new
innovation/product/ etc, he can get a patent for the same. The

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person who made the invention is called patent owner. The


patent owner can decide upon the usage of the innovation and
who should use the same.
Copyrights: Copyright is the right obtained over the creation of
any literary or artistic work. Books, music, films, paintings,
scriptures, etc. are covered under copyright. Any person who
wants to write a book or make a film based on the writing or idea
of another person should seek his permission for the idea that he
has used.
Designs: Any design invented by a person shall be protected by
Designs. Shape, colour, line, pattern, etc. are covered under
Designs. (Example: Design of the wrapper of a biscuit or
chocolate, Design of a car, Design of the shape of a cold drink
bottle, etc.)
Geographical Indications: Certain products or goods have a
specific geographical origin and possess characteristics that
attribute to the place of origin. Such goods and products bear the
name of the geographical origin. This is called geographical
indication. (Example: Darjeeling tea, Tirupathi laddu, etc.)

What is Transfer of Property :


In simple language, 'Transfer' is a process or an act by which
something is made over to another. Transferor must convey a right
to the transferee. Transfer is also known as alienation.
Definition Sec-5 : In the following sections "transfer of property"
means an act by which a living person conveys property, in present
or in future, to one or more other living persons, or to himself and
one or more other living persons;
and "to transfer property" is to perform such act.

Synopsis of definition :
An act by which,
A living person,
Conveys an act of transferor by which certain new titles or
interests are created in favor of the transferee

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In present or future - title of property may vested in the


transferee immediately or its enjoyment can be delayed for
future with certain conditions
Property - tangible/intangible, movable/immovable, intellectual
To another living person.

Kinds of transfers and applicable laws : By its very existence,


society mandates interaction, exchange or transfer. A property,
movable or immovable, is transferred from one person to another
under various different situations and circumstances and for
different values. The transfer may be a gift, an inheritance or an
asset acquired by paying full value. Following is the list of laws
which are applicable in different situations :
When a movable property is transferred inter-vivos (Latin -
between two living persons), Sales of Goods Act, 1930 comes
into play.
When an immovable property is transferred from living person to
living person(s), the Transfer of Property Act, 1882 comes into
play.
When a property is transferred from a dead person to a living
person(s), the law applied will be the Law of succession
When a person die without leaving a will (intestate), the law of
intestate succession is applicable, and
When a person dies leaving a will, the law of testamentary
succession is applicable.

Modes of Transfer : Following are the modes of transfer of property,


Absolute transfer :
1. Sale (Immovable Property). Transfer of Complete Rights.
Consideration.
4. Gift ( No consideration)
Exchange (barter basis)
Limited Rights Transfer

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Mortgage (it is of six kind- a.Possession, b.Enjoyment,


c.Subject to Condition, d.Equitable, e.Symbolic, f.
Constructive)
Lease (Time force, Rent)
Lending (eg transfer of book to a friend on the understanding
that it will be returned when some condition is fulfilled)
Actionable claim- Unsecure debt

Passing of Interest in the property and Legal Incidents thereof :


What actually happen when a property is transferred? Along with
the property, the transferor ALSO conveys all his such interests and
incidents that he holds, AT THAT TIME, in the property. Such
interests and incidents may or may not have been expressed in
writing.
Definition : Section-8 : Unless a different intention is expressed
or necessarily implied, a transfer of property also passes
forthwith to the transferee, all of the interest which the
transferor is THEN capable of passing in the property and in the
legal incidents thereof.
(LAND) Such incidents include, when the property is land, the
easements annexed thereto, the rents and profits thereof
accruing after the transfer, and all things attached to the
earth;
(MACHINERY) and, where the property is machinery attached
to the earth, the movable parts thereof;
(HOUSE) and, where the property is a house, the easements
annexed thereto, the rent thereof accruing after the transfer,
and the locks, keys, bars, doors, windows, and all other things
provided for permanent use therewith;
(DEBT) and, where the property is a debtor other actionable
claim, the securities therefor (except where they are also for
other debts or claims not transferred to the transferee), but
not arrears of interest accrued before the transfer;
(MONEY or property yielding money) and, where the property
is money or other property yielding income, the interest or
income thereof accruing after the transfer takes effect.

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Other terms used for transfer :


Movable Property= Pledge
Immovable Property= Mortgage.
Machinery= Hypotation.

Discussion :
Transfer is an 'action' between living persons,
There must be transfer between living persons only.
"living person includes a company or association or body of
individuals, whether incorporated or not, but nothing herein
contained shall affect any law for the time being in force
relating to transfer of property to or by companies,
associations or bodies of individuals.
living person includes non-natural persons too, ie though an
idol is not a living person, it is a juristic person and capable of
holding property,
a Court is not a living person within the meaning of Section
5 of the Act. Hence the transfers made by Court are not
governed by this Act.
The property must be in existence
The fundamental rule of transfer is that a transfer must be made
in the way prescribe by the Act.
The transferor must convey a right to the transferee
The Transfer may be made at present or future
The transfer need not be absolute. There may be a transfer of
limited interest. e.g. sale, gift and exchange are the examples of
absolute transfers, but lease and mortgage are the examples of
limited transfers.
The transfer includes sale, mortgage, gift, lease and exchange
There may be transfer of absolute or limited interest
There may be a transfer of property by a person to himself. The
Act permits joint transfer and joint ownership

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What are not transfers? Conveying of the property involves the


creation of new title or interest in the transferee. If a new title or
interest is not conveyed there shall be no transfer. Therefore,
according to Sec 5 of the Act, the following instances are not
transfers.
surrender
abandonment of a claim to property
family arrangement or settlement
partition in a joint Hindu family
relinquishment in favour of a coparcener (person having equal
share in an undivided property, typically in HUF)
charge on the property

Go To Module-1 Questions.

-----> Discuss in detail : Which properties may be transferred ?


Competency of person to transfer:
Ans :
Which properties may be transferred ?
Synopsis :
General Rule- Every thing Can be Transfered
Exception- Prohibited by TPA or any other law in force.
For example, following properties may be transferred :
1. Tangible material things. eg land, house, car etc
2. Rights over material things. eg right to enjoy, right to sell etc
3. Rights which over non-material things. eg copy right etc.
However, there are nine kinds of properties which may NOT be
transferred as exceptions to the general rule that property of any
kind may be transferred .
Sec-6 : What may be transferred : Property of any kind may be
transferred, except as otherwise provided by this Act or by any
other law for the time being in force. Following transfers are
expressly prohibited under TPA 1882,

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chance of an heir-apparent --- succeeding to an estate, the


chance of a relation obtaining a legacy on the death of a
kinsman, or any other mere possibility of a like nature, cannot be
transferred.
A mere right of re-entry ---- for breach of a condition
subsequent cannot be transferred to anyone except the owner of
the property affected thereby.
An easement right apart from the dominant heritage.
An interest in property restricted in its enjoyment --- to the
owner personally cannot be transferred by him.
A right to future maintenance --- in whatsoever manner
arising, secured or determined, cannot be transferred.
A right to sue
A public office cannot be transferred, nor can the salary of a
public officer --- whether before or after it has become
payable.
pension - Stipends ----- allowed to military, naval, air-force
and civil pensioners of the government and political pensions
cannot be transferred.
unlawful object or consideration for a transfer ---- within the
meaning of section 23 of the Indian Contract Act, 1872 (9 of
1872), or (3) to a person legally disqualified to be transferee.
Transfer by a tenant having an untransferable right of occupancy
Transfer by a farmer who has defaulted in paying revenue,
Transfer by a lessee of an estate, under the management of a
Court of Wards,

Competency of person to transfer : Any person who is competent to


contract (person above 18 years of age, having sound mind and not
disqualified by any law in force) and authorized to dispose off property
viz, owner of the property or any person authorized to sell the
property, can make a transfer. The person who transfers the property
is called the transferor and the person to whom the transfer is made is
called the transferee.
Section 7 TPA 1882 says that every person who is

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competent to contract --- under section 11 of the Indian


Contract Act and
entitled to transferable property , or
authorized to dispose of transferable property which is not
his own ,
is competent to transfer such property ,
either wholly or partly , and
either absolutely or conditionally .
to the extent, and in the manner, allowed and prescribed by any
law for the time being in force.

According to Section 11 of the Indian Contract Act , 1872, a person


is competent to contract if he is
i) of the age of majority,
ii) of sound mind and
iii) is not otherwise disqualified from contracting by any law.

Discussion :
A person who is competent to contract is competent to transfer a
property.
Section 7 of the TPA 1882 is silent about the persons in favour of
whom transfer can be made.
Minority and insanity are legal inabilities to be a transferor.
However, It is they can be transferee ie transfer of property can
be in favour of a minor or a lunatic, provided.
A minor or a lunatic can be a mortgagee provided there is no
covenant for him to perform.
A minor or a lunatic may be a purchaser provided the sale
does not impose any obligation upon him .
A minor or a lunatic may be given a gift provided the gift does
not impose any obligation on them.
The Karta of a Hindu Joint family, a guardian, an executor or
administrator, a trustee, a person holding power of attorney to

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transfer, etc are authorized to dispose of transferable property


WHICH IS NOT HIS OWN.
Nemo dept quat non habit- You can transfer only what you own.
Section 6 of the TPA lays down three types of persons (tenant /
farmer / lessee / debtor) who can NOT assign their interest. Thus
---
A tenant having an untransferable right of occupancy cannot
assign his interest as such tenant .
A farmer of an estate in respect of which default has been
made in paying revenue , can not assign his interest as such
farmer .
A lessee of an estate under the management of a Court of
Wards can not assign his interest as such lessee .
A debtor, whose property is sold in execution of a decree , is
legally disqualified to transfer the property sold in execution of
a decree.

Go To Module-1 Questions.

Q : Discuss : Transfer for the benefit of unborn child :


Ans :
Intro : General rule of TPA is transfer vivos, ie transfer of property
between living person at the date of transfer, but section 13 of this act
provide the conditions where a interests can be created for unborn
person or a person who does not exist at the date of transfer subject
to certain conditions. Provision is also authenticated by Indian Trust
Act Sec-5

Transfer to an unborn person : An unborn person means , a person


who is not in existence, and is in the mothers womb. Property can be
transfer to a child in mothers womb (en ventre sa mere). But
property can not be transfer to a person who is not in existence
means who is not even his mother womb. Accordingly Sec-5 of this
act provide that transfer of property between two living person.

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Sec-13 Transfer for the benefit of an unborn person : Where, on a


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

Discussion : Sec-13 provides that property can be transfer for the


benefit of unborn person subject to following conditions :
A. No direct transfer
B. Prior interest
C. Absolute interest

A. NO DIRECT TRANSFER : No transfer can be made directly to an


unborn person. Such transfer can be made by the machinery of trust.
Reason being that, if a transfer were made directly to an unborn
person, there would be an abeyance of ownership from the date of
transfer till the coming into existence of the unborn person which is an
impermissible void.
B. PRIOR INTEREST : In case the trust is not created then, the estate
must vest in some person between the date of the transfer and the
coming into existence of the unborn person. In other words, the
interest in favour of an unborn person must always be preceded by a
prior interest in favour of a living person.
Illustrations : A transfer his house to his wife X for life and
thereafter to UB (unborn) who is an unborn son of A-X. The transfer
of house in favour of UB is valid, here since UB is not in existence at
the date of the transfer, A could not have transfered the houser
directly to him. So, A had to make a direct transfer of life interest in
favour of X who is a living person at the date of the transfer. X, just
being a trustee, will not be able to dispose-off the property as per
her free will. After the death of X the FULL interest of the house
shall pass on to UB who is the ultimate beneficiary.
C. ABSOLUTE INTEREST : The entire property must be transferred to
the unborn person. It is not permissible to confer ONLY a life-interest
on an unborn person. ie unborn should get FULL ownership/ right.

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Right of unborn can not be limited to just being a life Where, on a


transfer of property, an interest therein is created for the benefit of an
unborn person not in existence as on the date of the transfer, subject
to a prior interest, in unborn person, created by the same transfer, the
interest created for the benefit of such unborn person shall not take
effect, unless it extends to the WHOLE of the remaining interest of the
transferor in the property.
Illustration :
A transfers his property to his wife X for her life and thereafter to
UB for life. X is a living person at the date of the transfer. UB is
not into existence at the date of transfer so the transfer of life
interest of X is valid. But the transfer of ONLY the life interest to
UB is void because although the transfer in favour of UB is
preceded by a life interest to X, UB himself has not been given
an absolute interest.
The result of above situation is therefore that ---> X shall
hold the property during her life but after her death property
shall not pass on to the UB, but shall revert back to A or ( if A
is dead that time) to As legal heirs. Reason- giving life interest
or creating life estate in favour of a person means giving him
only the RIGHT OF ENJOYMENT AND POSSESSION. HE HAS TO
PRESERVE THE PROPERTY LIKE A TRUSTEE DURING HIS LIFE
TIME ON BEHALF OF ULTIMATE BENEFICIARY.

Go To Module-1 Questions.

Q : Explain : Procedure of transferring a property and essentials of a valid


transfer
Ans :
Procedure of transferring a property :
The mode of transfer of property varies according to the value of
the property.
If the value of the property is more than Rs. 100/-, then transfer
has to be made only by a registered instrument.

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If the property is tangible (furniture, clothing, household goods,


etc) where the value of the property is less than Rs. 100/-, then
transfer has to be made only by delivery, whereas
If the property is intangible (eg shares, securities, etc), transfer has
to be made only by registered instrument. (A registered instrument
contains the records of the owner of the property- for example:
shares, bonds, etc.)
A registered instrument has to be attested at least by two persons
who are witnesses to the transfer. Attestation means affixing the
signature in the registered instrument.
The witnesses should mark their signature too on the instrument
with an intention to attest.
Registration of the instrument is an essential legal formality. During
registration, the parties to the transfer must be present to affix
their signatures in the document and complete the transaction with
regard to immovable property. While doing so, the document
containing the rights, obligations and liabilities of the parties should
be clearly mentioned in the document which is registered.
Registration shall take place by affixing a seal of the Registrar office
which shall be subsequently included in the official records.

Essentials for a Valid Transfer :


The following are the essentials for a valid transfer :
In a transfer of property, the transfer should be between two or
more living persons.
The property that is going to be transferred should be free from
encumbrances (hindrances of any form) and be of a transferable
nature.
The transfer should not be:
for an unlawful object or an unlawful consideration;
involving a person legally disqualified to be a transferor or
transferee.
The transferor who transfers the property must:
be competent to make the transfer;
be entitled to the transferable property;

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be authorized to dispose off the property if the property is not


his own property.
The transfer should be made according to the appropriate mode
of transfer. Necessary formalities like registration, attestation,
etc. should be complied with.
In the case of a conditional transfer, where an interest is created
on the fulfillment of a condition, the condition should not be
illegal, immoral, impossible or opposed to public policy.

Go To Module-1 Questions.

----> Discuss in detail : Rule against perpetuity


Ans :
To remember-
1. Object of Law.
2. Transfer in Perpetuity ( condition void restrain of alienation).
3. By creating future remote interest ( incorporates the rule against
perpetuity)
4. Ingredients of Rule against perpetuity
5. Maximum remoteness of vesting ( 18 years or 21 when court
appoint)
6. Ultimate beneficiary in the mothers womb.
7. Scope and object of rule against perpetuity-
8. Rule Against Perpetuity under English and India Law.
9. Exceptions to the rule Against Perpetuity
10. Transfer for the benefit of public-
11. Personal Agreement

alienation means "the transfer of title to real property, voluntarily and


completely"
Object of Law- The object of law is --- no property should be tied up
or inalienable for an indefinite period or forever. Frequent disposition
of property is in the interest of the society and also necessary for its

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more beneficial enjoyment. The rule against perpetuity protects the


object of Law that property should be in motion.

Transfer in Perpetuity : In any disposition, perpetuity may arise in two


ways :
1. Taking away transferees power of alienation
2. By creating future remote interest
1. Section 10 provides the protection against the first rule that a
condition 'absolutely' restraining the transferees power of alienation is
void.
2. Sec-14 of TPA 1882 : Rule against perpetuity :
No transfer of property can operate to create an interest which is to
take effect after the life time of one or more persons living at the
date of such transfer, and the minority of some person who shall be
in existence (unborn) at the expiration of that period, and to whom,
if he attains full age, the interest created is to belong.
Ingredients of Rule Against Perpetuity Section 14 :
There is a transfer of property
The transfer is for the ultimate benefit of an unborn person who is
given absolute interest
The vesting of interest in favour of ultimate beneficiary is preceded
by life or limited interest of living person/s
The ultimate beneficiary must come into existence before the death
of the last preceding living person
Vesting of interest in favour of ultimate beneficiary may be
postponed only up to the life or lives of living persons plus minority
of ultimate beneficiary, but not beyond that.

The extent of perpetuity period : u/s 14 the maximum permissible


remoteness of vesting is,
in case ultimate beneficiary is minor : Life of the last preceding
interest + Minority of the ultimate beneficiary. Minority in India
terminate at the age of 18 years. And in case the minor is under
supervision of Court then at the age of 21 years.

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In case ultimate beneficiary in mothers womb : Life of the


preceding interest + period of gestation of ultimate beneficiary +
minority of the ultimate beneficiary.
NB : Where the ultimate beneficiary is in mothers womb when the last
person dies (preceding beneficiary) the property vests immediately in
him even while he is still in mothers womb. Therefore the exact period
from which the minority runs is the date when the ultimate beneficiary
was conceived. The gestation period is in which the ultimate
beneficiary remains in mothers womb after date of conception and
before he is born alive.

Scope and object of rule against perpetuity :


The rule against perpetuity is not concerned with the following-
a) Contracts as such or
b) Contractual rights and obligation as such
In Walsh -vs- Secretary of State for India- held- A contract to pay
money to a person, his heirs or legal representative upon a future
contingency which may happen beyond the period prescribed would
be perfectly valid.
In English Law a contract for purchase of real property is regarded
as creating an equitable interest, and if, in the absence of a time , it
is possible that the option for repurchase might be exercised
beyond the prescribed period fixed by the perpetuity rule, the
covenant is regarded as altogether void.

Rule Against Perpetuity under English and India Law : English law
allow 21 years in gross after life or lives in being while Indian Law
allow only the period of minority after a life or lives in being but in
case court appoint the guardian the minority age postponed to 21
years.

Exceptions to the rule Against Perpetuity : There is two exception of


this rule
a) Transfer for the benefit of public- According to Sec-18 of TPA, if the
property is transferred for the benefit of pubic in the advancement of
religion, knowledge, commerce, health, or safety or any other object

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beneficial to mankind, the transfer is not void under the rule against
perpetuity.
In Ram baran v/s Ram mohit SC held- that a mere contract for sale
of an immovable property does not create any interest in immobile
property and therefore the rule cannot apply to such contract.
b) Agreement of personal nature can not be declared void under the
rule of perpetuity.
eg A temple, under an agreement, appointed pujaris out of a
particular family to perform religious services in the temple. The
agreement is valid because the Court held that being a personal
agreement, it was not hit by rule against perpetuity
Similarly Mortgage and Lease do not fall under the rule of
perpetuity.

Situation Under Hindu and Muslim Law :


Section 14 or this rule against perpetuity is made applicable on
Hindus after 1929, but this provision is not applicable to Muslim
Law.
A gift to remote and unborn generations was held void although
exception has been made in case of wakfs.

Go To Module-1 Questions.

Q : 2012, 3 : Explain in detail regarding vested and contingent interests,


with decided cases.
Ans :
Sec-19 of TPA 1882 : Vested interest :
Where, on a transfer of property, an interest therein is created in
favour of a person without specifying the time when it is to take
effect, or in terms specifying that it is to take effect forthwith or on
the happening of an event which must happen, such interest is
vested, unless a contrary intention appears from the terms of the
transfer. A vested interest is not defeated by the death of the
transferee before he obtains possession.

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Sec-21 of TPA 1882 : Contingent interest :


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

There is two issues related to transfer involving vested or contingent


interests :
1. Quantum of right
2. Time of transfer

Symptoms of Vested Rights / Test of Vested Rights :


When no time specified as to when it will take effects ( Test- Silence
of documents or absence of date of vesting the rights)
If transferor specifically mentioned the date of vesting of interests/
rights take effects.
It is to take effect upon happening of an event which must happen
or bound to happen or certain nature of future event. For example
any future date, any person death, any age, or things are bound to
happen.

In following situations it may appear that there is no vested right, but


actually there exists vested rights :
1. Postponement of enjoyment of rights (vesting happen
immediately but the enjoyment of rights postpone)
2. Prior interests- Creation of prior interest. Like interested created
for unborn person.
3. Direction for accumulation.
4. Conditional limitation. It is the English Law concept, which
authenticated in India under Sec-28 of TPA
For example-

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A gifts his house to B with a condition B takes possession of


house within 6 months if he fail to take possession A transfer the
possession of house to H. Here B s vested right is within 6
months

1. POSTPONEMENT OF ENJOYMENT :
Postponement of enjoyment of property does not mean that the
interest of the transferee is not vested. In a transfer of property,
the primary thing is the transfer of interest of title. Possession of
property is secondary.
Enjoyment of property may be postponed until such future date or
future event which is of MUST nature and is bound to happen.
For Example- A transfers his property to B to be given to B on Bs
attaining the age of 20 years, the interest of property is vested
although the enjoyment of property has been postpone. However, if
B Dies before attaining the age of 20 years the possession and
enjoyment of the property shall go to Bs representatives or legal
heirs together with title which B already had and died having it.

2. PRIOR INTEREST :
Where a prior interest exists in the transfer there is postponement
of the enjoyment of property. But the vesting of interest is not
postponed.
eg A transfers property to B for life and then to C. Here, the
interest of C is prior vested interest. Here C has a vested interest
immediately with the transfer made to B, but C's right of enjoyment
is postponed till the life of B, because the death is the future event
and must in nature.

3. DIRECTION FOR ACCUMULATION OF INCOME (U/S 17) :


Direction for accumulation of income is valid provided it is within
the period prescribed in Sec-17. Where the property is transferred
with such direction the interest of the transferee is nevertheless
vested. In this case also the right of enjoyment has been postponed
not the vesting.

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In KOKILAMBAL V/S RAMAN KOLILAMBAL - There was a deed of


family settlement in which the settlor created a limited interest
(right to received the income form rents). The property of the
settlor was to vest in the settlee only on death of settlor. SC Held-
The family settlement does not create a vested interest in favour of
the settlee and settlee cannot be absolute owner during the life of
settlor. Therefore the settlee cannot succeed the property on the
settlors death ?????

4. CONDITIONAL LIMITATION :
It is the concept of English Law, which means upon happening of a
particular event the interest vested in a person shall pass on to
another person, Sec-28 of TPA.
A condition limitation does not prevent the vesting of the interest.
Rather it is implied that the interest which had already been vested
may be divested and may vest somewhere else.
Illustration : A transfers his house to B with a condition that if B
doest not take possession of this house within 6 months form the
date of the transfer, the house shall belong to C. The interest of B is
a vested interest although it is vested only for these 6 month and if
he possess the house within 6 month the vesting would be
permanent.

NATURE OF VESTED INTEREST :


Present fixed right- when an interest is vested, it becomes the
property of the transferee and is u/s 6 transferable by him even
before he has obtained possession. If the transferee dies, his
interest is vested in his legal representatives whether or not he has
obtained possession.
vested interest is transferable and heritable, as it is present and
fixed right. And it is heritable in a sense when transferee dies
having vested interest in a property his interest vests in his legal
heirs, whether or not he has obtained possession.

Difference between Vested interest and Contingent interest :

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Vested Contingent
1 Right of Immediate rights Merely a future possible
Enjoyment rights
accrues
2 Nature of Event No such condition Condition (on happening
(happening or non or non happening of
happening of future future event)
event)
3 Heritability It is heritable right Not a heritable right
4 Nature of Title Perfect immediately Imperfect, Perfect on
happening of or non
happening of event
5 Effect of Immediately from Condition precedent,
Interest the date of Transfer which must in nature
6 Transferability Transferable Transferable, BUT may be
defeated by reason of non
fulfillment of the condition
precedent
7 Attachment & Capable of being Not Capable.
Sale in attached or sold in
Execution of in Execution of
Decreed Decreed

Go To Module-1 Questions.

Q : What is spes successionis (chance of succession) ? What are the rights


of a spes successionis related to transfer of property?
Ans :
Clause (a) of section 6 of the Transfer Of Property Act excludes mere
chance of an heir apparent of succeeding to an estate from the
category of transferable property. The technical expression for such a
chance is Spes Successionis. During the lifetime of a person, the
chance of his heir apparent succeeding to the estate or the chance of
a relation obtaining a legacy under his will is a Spes
Successionis(chance of succession). Such an expectancy does not
amount to an interest in property and cannot be made the subject
matter of a transfer. A person having interest which is spes succession

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is mere expectancy to succeed to the property in future is not a right


and is not capable of being transferred. Such a person cannot bring a
suit on the basis of such chance of succession. Similarly, a gift of spes
successionis is invalid and confers no title on the donee. Where the
transfer is not of the right of expectancy of an heir apparent but of the
property itself, it cannot be said to be a transfer of a mere chance to
succeed. Thus, when a person is not heard of for a long time and is
believed to be dead, an agreement to transfer the property ,entered
into by his brother who is in enjoyment and possession of the property
in dispute, is not a transfer of the right of expectancy ,but of the
property itself and is not hit by cl (a) of s.6
Difference Between Contingent And Spes Successionis : There is thin
line between Spes Successions and Contingent is DEGREE OF
POSSIBILITIES.
1. Spes Succession >>>>>>>>>>>>>>>>> Degree (Remote)
Contingent >>> Degree (not remote)
2. In "Spes successionis" it is naked or mere future possibility
interest, therefore Sec-6 recognized it as a non transferable
interest.
While Contingent is recognized u/ 6 as a transferable interest.

Go To Module-1 Questions.

Module-2) General Principles of Transfer of Property II :

2..1) Doctrine of Election


2..2) Lis Pendens : Principle, Salient Features, application in
India, Essential Requirements, Exceptions
2..3) Fraudulent Transfer : Essential Requirements, Exceptions
2..4) Doctrine of Part-performance : Essentials and Exceptions

Module-2 QUESTIONS :
-----> Discuss in detail : Doctrine of Election
Q : Explain the doctrine of les pendens, and its essentials. What is the
effect of this doctrine? Explain its exception, if any. Can the doctrine of lis
pendens affect the property sold in an auction ordered by the court.

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Q : 2013, 4, 5 : Explain in detail the principle of Lis Pendens with


decided cases.
Q : 2012, 3, 4, 5 : Explain in detail the principle of fraudulent transfer with
decided cases.
Q : 2012, 3, 4, 5 : Explain in detail the principle of part performance, with
decided cases.

Go To Contents.

Module-2 ANSWERS :
-----> Discuss in detail : Doctrine of Election
Ans :
According to the principle of Doctrine of Election [Section 35 of the
TPA], a party to the transfer cannot accept as well as reject in a single
transaction.
In other words, while claiming advantage of an instrument, the burden
of the instrument should also be accepted.
Election means choosing between two inconsistent or alternative
rights . Under any instrument if two rights are conferred on a person
in such a manner that one right is lieu of the other, he is bound to
elect only one of them.
Example : A offer Rs 100 to B in lieu of transfer his house, B can
elect only one, either he can retain the money and transfer his
house or deny the money, he can not enjoy the both.
This doctrine is based on equitable principle under which a person may
not be allowed to approve that part of an instrument which is
beneficial to him and disapprove its that part which goes against him.
Means no one can approbate and reprobate at the same time.
In Cooper v/s Cooper, Held that the Doctrine of Election, applies on
every instrument and every type of property movable or
immovable.

Application of Election :
1. When a person professes to transfer a property not his own

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2. In lieu of the property the transferor confers certain benefits to


the owner of the property
3. Transfer of benefit and confer of benefit to be part of the same
property

1. When a person professes to transfer a property not his own :


Professes means to purports or make contract, for a property which is
not his own but he can make contract for the same.
Example : A may profess to transfer a property B, which is owned
by C, and also confers a benefit Rs 1000 to C. Here A is not
transferring the Cs Property to B but simply profess or contract a
property which he does not own.
Knowledge of the fact that transferor has no authority to transfer
the property is immaterial for applicability of the rule of election.
2. Benefit confered on the owner of the property : Doctrine says
owner must be confered certain benefit for his ownership on the
property. The word Ownership is a wide connotation, it include a
person having vested interest, or contingent interest, etc in the
property.
3. Part of the same transition : This Doctrine only applicable when
transfer and benefit are part from the same transition. Means the
benefit and transition are interdependent and inseparable they form
part of the same transition.

Mode of Election : it can be express or implied


Owner can express his intention in clear and specific word, once the
election has done it is final and conclusive.
Election is implied when the owner of property having aware of his
duty to elect and accepts or consumes the benefits.

Difference between English & Indian Law : There is thin line between
English and India law is the residues (balance).
A professed to gift a House worth Rs 800 to B which belongs to C,
and he offers benefits to C Rs 1000, before election C dies.
According to Indian law the residue (Rs 200) would go to A

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(transferor), while in English law residue (Rs 200) goes to C, as a


compensation.

Go To Module-2 Questions.

Q : Explain the doctrine of les pendens, and its essentials. What is the
effect of this doctrine? Explain its exception, if any. Can the doctrine of lis
pendens affect the property sold in an auction ordered by the court.
Q : 2013, 4, 5 : Explain in detail the principle of Lis Pendens with
decided cases.
Ans :
Les= Litigation
Pendens= Pending
Les Pendens is a latin phrase which means pending litigation.
The Doctrine of lis pendens emerged from the Latin maxim- "pendente
tie nihil innovature" which means during pendency of litigation nothing
new should be introduced.
The doctrine applies only on immovable properties and it prohibit any
creation of new title or transfer of property during pendency of
litigation, which means this doctrine is prohibitive in nature.

Basis of Doctrine :
The basis of doctrine is constructive notice (constructive notice is
the presumption of law that under such circumstances the other
party has knowledge of such les pendency). It is the duty of the
other party (often transferee) that he must enquire about les
pendency of the property.
Being a constructive notice, if the other party has made any
transaction related to les pendent property, it treated as abuse of
the court of law and against the public policy.

Essentials of les Pendens :


There must be a pendency of a suit or proceeding in a court of
competent jurisdiction,

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A right to immovable property must be directly and specifically


involved in the suit,
The suit or proceeding must not be collusive (ie there should not be
any mala fide intention),
The property in dispute must have been transferred or otherwise
dealt with by any party to the suit,
The transfer must affect the rights of the other party to litigation.

Right to immovable property must be directly and specifically


Involved- ie mere representation of immovable property in the plaint
is not enough. Right in respect of immovable property must be in
question. Following are the suit regard in this section :
1. A suit for partition
2. A suit on mortgage
3. A suit for pre-emption
4. Easement suit

Sale or auction ordered by court : In Samarendra Nath Sinha V/s


Krishna Kumar Nag- SC held the doctrine of les pendens applies where
the sale is made by the order of the court.

Illustration :
A suit is pending before the court of law between a landlord and
tenant regarding rent, and if the during the proceeding the landlord
transfer the property it would NOT violate the Doctrine of Les
Pendens as the right on immovable property is not questioned.
A has a litigation in determining the title of the property with X.
During the period of litigation, A initiates a sale of the property in
favour of B. According to the Doctrine of Lis Pendens, the property
cannot be sold because the property is involved in litigation.

Exception : A transfer during the pendency of a suit may be


sanctioned by the court in which the suit is pending, provided the
order must not have been obtained fraudulently.

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Go To Module-2 Questions.

Q : 2012, 3, 4, 5 : Explain in detail the principle of fraudulent transfer with


decided cases.
Ans :
Every owner of property has right to transfer his property as he likes,
but the transfer must be made with bona fide intention. When any
transfer made with the intention to defeating the interest of creditor or
interest of any subsequent transferee, it is called "fraudulant transfer"
because the object of transfer is mala fide in the eye of equity and
justice though it is valid in law. Such transfer is not void but voidable.

Sec-53 of TPA 1882 : Fraudulent transfer


(1) Every transfer of immovable property made with intent to
defeat or delay the creditors of the transferor shall be voidable at
the option of any creditor so defeated or delayed.
Nothing in this sub-section shall impair the rights of a
transferee in good faith and for consideration.
Nothing in this sub-section shall affect any law for the time
being in force relating to insolvency.
A suit instituted by a creditor (which term includes a decree-
holder whether he has or has not applied for execution of his
decree) to avoid a transfer on the ground that it has been
made with intent to defeat or delay the creditors of the
transferor shall be instituted on behalf of, or for the benefit of,
all the creditors.
(2) Every transfer of immovable property made without
consideration with intent to defraud a subsequent transferee shall
be voidable at the option of such transferee.
For the purposes of this sub-section, no transfer made without
consideration shall be deemed to have been made with intent
to defraud by reason only that a subsequent transfer for
consideration was made.

Note :

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Sec-53(1) does not apply where the transfer is in itself void. This
section makes a valid transfer void at the option of creditor after
the property had already vested in transferee. The suit under this
section must accept the validity of the transfer first and then
proceed to get it invalidated by proving it to be fraudulent.
Sec-53(1) also protects the right of transferee if he acted in a good
faith.

Essential Conditions of Fraudulent Transfers :


1. There is a transfer of immovable property
2. The transfer if fraudulent

1. There is a transfer of immovable property :


The doctrine applies only when there is a transfer of property
within the meaning of Sec-5. Accordingly,
relinquishment is not transfer of property.
Dissolution of partnership is also not regarded as a transfer
under this section.
Partition also not cover under transfer so this section does not
apply on it.
However, a deed of wakf executed with the object of making the
property inalienable and beyond the reach of creditor was held to
be a transfer within the meaning of this section.
Sham, Benami transaction are also out of the purview of this
section as the sham transfer means fictitious transfer, which is
not real but a fake transfer.
2. The transfer is fraudulent :
This section applies only when there is fraudulent transfer.
Intent to defeat or delay- the transfer made with the intention to
defeating or delaying the interest of creditor, the only interest of
creditor in the debtor s property is that he can recover his
money form that property in case the debtor fails to repay it
personally.

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Preference to one creditor- if there are several creditor, and


transfer in favour of one creditor does not amount to an intention
to defeat or delay in other creditor.
eg A, who has taken loan from B, C and D, and transfers
certain property in favour of B, it does not mean transfer is
with intent to delay with other creditor.

Transfer is voidable by creditors : The option remain with creditor to


make the transaction void. Till the creditor exercises his option, the
transfer remains valid.
Burden of proof- the burden of proof for fraudulent transfer lies with
creditors.

Go To Module-2 Questions.

Q : 2012, 3, 4, 5 : Explain in detail the principle of part performance, with


decided cases.
Ans :
Doctrine of part performance is an equitable doctrine, it based on the
Maxim equity looks on that as done which ought to have been done.
Means equity treats the subject matter of a contract as to its effects in
the same manner as if the act contemplated in the contract had been
fully executed, from the momement the agreement has been made,
though all the legal formalities for example registration of contract
have not been yet completed.

Sec-53-A Part Performance :


Where any person contracts to transfer for consideration any
immovable property by writing signed by him or on his behalf from
which the terms necessary to constitute the transfer can be
ascertained with reasonable certainty,
and the transferee has, in part performance of the contract, taken
possession of the property or any part thereof, or the transferee,
being already in possession, continues in possession in part
performance of the contract and has done some act in furtherance
of the contract,

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and the transferee has performed or is willing to perform his part of


the contract,
then, notwithstanding that the contract, though required to be
registered, has not been registered, or, where there is an
instrument of transfer, that the transfer has not been completed in
the manner prescribed therefor by the law for the time being in
force, the transferor or any person claiming under him shall be
debarred from enforcing against the transferee and persons
claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right
expressly provided by the terms of the contract:
PROVIDED that nothing in this section shall affect the rights of a
transferee for consideration who has no notice of the contract or of
the part performance thereof.

Doctrine of part performance protects the transferee who has done his
part or willing to perform his part, he can not be distitle on the basis
of the legal formalities having not been completed.
For example A sales his house to B, and gets the consideration
against the house and B also takes the possession of the house. A
sale deed has been made but it not being registered. A sales, once
again, his house to C, and C gets it registered, and now C is trying
to eject B. Here law would not help to B, BUT equity would help
him.

Part performance before 1929 :


Before 1929, English equity of part performance was neither certain
nor uniform, In Mohamman Musa v/s Aghore kumar Gangualy, Privy
Council applied this doctrine in the matter of Razinama of Land
distribution.
But in Arrif v/s Jadunath, PC, Privy Council changed its opinion and
held the equity of part performance can not be overruled by Indian
Registration Act.

Scope in India : It is an enacted law in India, but it is not an


application of English Equity, it is almost same as principle that Privy

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Council laid down in Mohammad Musa case, with certain restrictions,


in two aspects,
1. English equity also protect the interest of such defendant who
has taken possession on the basis of oral agreement, while in Sec-
53-A, the Agreement must be in writing.
2. English equity, also gives a right of action against the evictor but
Sec-53-A, gives no such rights.

Essentials Ingrediants :
1. Written contract for the transfer of immovable property (Transfer
for consideration, for Movable property, and must be valid contract)
2. Transferee takes possession of the property under the contract
(the possession must be in furtherance of contract, some act in
furtherance of contract, taking possession is not only the method of
part performance of contract. If the transferee is already in
possession of the property then, after the contract of transfer, he
has to do some further act in part performance of that contract. In
order to attached Sec-53-A)
3. The transferee either performed his part or willing to perform.

Nature of transferee's rights :


The section doe not confer any interest or title. It just protects the
right of transferee form ejection if the property is in his possession.
It is a statutory bar on the transferor that he cannot dispossess the
transferee if he possess the property. ie Sec-53-A does not give to
the transferee any rights of action. It provides merely a right of
defense. It is shield not a sword

Right of subsequent transferee for value : Section protect the interest


of subsequent transferee for value without notice of previous
transferees right of part performance.
eg A owns a land and contract to sale it to B, the contract is
unregistered and in part performance B possessed the land, the
transferor and or any other person cannot dispossess B form that
land. But when A sale this land to C, and C dully registered the sale
deed, C does not have a right to dispossess B from such land, but C

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does have a right to recover the consideration value that C paid to


A.

Go To Module-2 Questions.

Module-3) Specific Transfers :

3..1) Sale : Essentials, Rights & Liabilities of Buyer and Seller


3..2) Mortgage & Charge : Definition, Kinds of Mortgage, Rights
& Liabilities of Mortgagor Mortgagee, Redemption-Clog on
Redemption
3..3) Lease : Definition, Essentials, Rights & Liabilities of
Lessor and Lessee
3..4) Gift : Definition, Essential requirements, Kinds of Gift,
Onerous Gifts, Universal Donee, Exchange : Definition &
Features
3..5) Actionable Claim : Definition & transfer of Actionable
Claims
Module-3 QUESTIONS :
Q : 2012, 3, 4, 5 : Define sale and state the rights and liabilities of buyer
and seller, with case laws.
Q : 2012, 3, 4, 5 : Define mortgage and state the kinds of mortgage, with
decided case laws.
Q : 2014 : Once a mortgage, always a mortgage, explain this statement
with its exceptions.
Q : Case of Vernon v Bethell (1762) or Doctrine of "Clog on redemption"
(Once a mortgage, always a mortgage)
Q : 2013, 4, 5 : Explain in detail the term Lease and state its essential
elements with decided cases.
Q : 2015 : Explain in detail the term Gift and state its essential elements
with case laws.
Q : Discuss : Gift (Definition & Essential requirements), Kinds of Gift,
Onerous Gifts, Universal Donee, Exchange - Definition & Features
------> Discuss in detail Actionable Claims

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Go To Contents.

Module-3 ANSWERS :
Q : 2012, 3, 4, 5 : Define sale and state the rights and liabilities of buyer
and seller, with case laws.
Ans :
Sec-54. "Sale" defined :
"Sale" is a transfer of ownership in exchange for a price paid or
promised or part-paid and part-promised.
Sale how made : 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.

Essential of Valid Sale :


Two parties seller and purchaser
Competent parties
Subject matter (ie tangible immovable property) must be in
existence
Money consideration, price of the property
The conveyance/ contract made in accordance with existing law

Discussion :

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When sale is made, Prior owner gets dis-titled, and the new owner
gets title of the property.
Transfer of ownership- In sale there must be transfer of absolute
ownership, means ownership with liability.
Money consideration- when ownership is transfer in money
consideration it is called sale, the adequacy of consideration is
immaterial. The price may be paid full, part, immediately or in
future.
Contract FOR sale does not in itself, create any interest or charge
on the property. No title or interest in respect of the property is
therefore created in favour of purchaser on the basis of such
contract.
In Laclman Nepak v/s Nadam Kayalu Syama held It is well
settled law in India that existence of any agreement for sale does
not of itself create any interest in or charge upon such property.
Even if the purchaser paid the consideration and had taken the
possession of the property on the basis of such contract, he
cannot get ownership unless a sale deed is dully executed in his
favour.

Mode of Sale : How sale made- if the value of property is above Rs


100, it must be registered, in case value of tangible immovable
property is less then Rs 100 such transfer may be made either by
registered instrument or transfer of property.

Delivery of property : Deliver of tangible immovable property takes


place when buyers takes the possession of the property.

Difference between Indian and English laws :


under English Law : Under English law the seller acquire lie on
property under the principle of equity. When the contract of sale is
constituted the seller gives to the buyer an equitable estate even
before the completion of sale, in return he also acquires the lien on
the property from the date of contract, subject to price unpaid.

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In India contract of sale does not given any interest in the property,
the charge is created only after the conveyance. In India the charge
is created by Law not by equity.

Difference between contract OF SALE, and contract FOR SALE :

Contract OF Contract FOR SALE


SALE
1 Rule Contract + Transfer Contract for future sale
+
consideration
2 Time Immediate / Future
Present contract Some time parties are
shall take palace if not in a position to
terms settled execute the Sale Deed at
between the present but they intend
parties, it may be that sale would take
noted that there place between them in
may be a preceding future. In order to have
contract for sale, the evidence of their
upon the execution intention and agreement
of this, preceding that the property would
contract the sale be sold, the contracting
happened between FOR sale may be made
the parties. Thus between the parties.
sale complete in
furtherance of his
very contract.
3 Part performance Immediate/ Postponed / future/
simultaneous delay
activity
4 Type Sale deed Agreement for sale
5 Position in India Establish law Not establish law, it is
the
concept of English law
6 Remedy for Protected by Law Not protect by Law ( only
parties (In India) Doctrine of Equity u/s 54
applicable to transferee)

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Contract OF Contract FOR SALE


SALE
7 Right of Establish Right Not establish right
Purchaser It can restrain or Agreement cannot
set aside the restrain or set aside the
execution of a sale execution of a sale deed
deed of the same of the same property to
land to another another person.
person. However, law of equity
protects the interest of
purchaser.
8 Nature Expressed and Unless, agreement is
implied registered, it is merely a
document creating a
right to obtain another
documents namely, dully
executed sale deed.
9 Effect It provides the Sec-54 clearly says that
established interest a contract for sale does
/ ownership on the not in itself, create any
property,. There is interest or charge on the
dully executed sale property. No title or
deed. interest in respect of the
property is therefore
created in favour of
purchaser on the basis of
such contract.

Sec-55- Rights and Obligation of Buyers and Seller : These can be


divided in to 2 parts :
1. Before sale :
Seller's Rights : To get the rent and profits of the property till he
has the ownership.
Seller's Duties :
1. Disclosure of material defect in the property if any.
2. Produce of title deed of the property.

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3. Answer relevant questions, asked by buyer.


4. Take care of the property and title deed as any prudent person
would do.
5. Make payments for outstanding dues till date of sale.
Buyer's Rights : In case the sale does not take place due to any
reason, buyers has a right to take back his payment made in
advance with interest.
Buyer's Duties :
1. Duty of disclosure, if the seller is ignorant about his rights in
the property. It is the duty of the buyer to disclose to the seller
that some material fact can increase the cost of the property in
future.
2.Payment of price. To pay the agreed payment/ price for the
property in the contract FOR sale.

2. After sale :
Seller's Rights :
1.Sellers Lien or charge-
Seller's Duties :
1. Giving possession of the property
2. Convent for title.
3. Delivery of the title deed.
Buyer's Rights : Enjoy all the rights arising out of the property
Buyer's Duties :
1. Bear the loss to property.
2. Pay accruing dues beginning the date of purchase of the
property.

Sec-55(4)(b) : Unpaid Seller : Sellers Lien or Charge :


After completion of sale, if the price or any part of it remains unpaid,
the seller acquires a lien or charge on the property. Which means
when the ownership is transfered to the buyer after completion of
sale, and the seller remain unpaid; the seller can neither refuse the

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delivery of possession nor can claim back the possession of the


property. Therefore u/s 55(4) (b) the seller has been given a right to
recover the unpaid purchase money from out of the property. This is
called the statutory charge of the unpaid seller.
In other, word this is the only remedy left with the seller to recover of
the balance purchase money.
There is creation of a right of payment out of the property; it may be
created by the act of the parties or by operation of law.
Since under this right the seller is not entitled to retain the possession
of the property this charge is said to be the non-possession lien.
For the recovery of unpaid purchase money the seller shall enforce his
charge u/s 100 by a suit against the buyer for sale of the property.
But such a charge can not be enforced against any subsequent buyer.
Also , and such a charge can not be enforced after the expiry of 12
years of the date of sale.
In Bhag mal v/s Shromani Gurudwara held, where the property has
been sold to several purchaser, the seller has a charge on the whole
property for unpaid price without having any regard as to the
proportion of money to be paid by each purchaser.
Interest on Unpaid Price. The seller is also entitle to claim not only the
unpaid part of the purchase money but also interest on such amount
form the date on which the possession was delivered (not from the
date of transfer of ownership).
Transfer of Seller charge : a charge created in favour of the vendor is
an unsecured debt, therefore it is a Actionable Claim, and
transferable.
Exclusion of the Charge- can be possible by contract between the
parties.
Difference between Indian and English laws :
under English Law : Under English law the seller acquire lie on
property under the principle of equity. When the contract of sale is
constituted the seller gives to the buyer an equitable estate even
before the completion of sale, in return he also acquires the lien on
the property from the date of contract, subject to price unpaid.

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In India contract of sale does not given any interest in the property,
the charge is created only after the conveyance. In India the charge
is created by Law not by equity.

Go To Module-3 Questions.

Q : 2012, 3, 4, 5 : Define mortgage and state the kinds of mortgage, with


decided case laws.
Ans :
In an old case of 1883 , Justice Mahmood observed ,. . . . a
mortgage , as understood in this country , cannot be defined better
than by the definition adopted by the Legislature in section 58 of the
Transfer of Property Act . That definition has not , in any way , altered
the law , but , on the contrary , has only formulated in clear
language , the notions of a mortgage , as understood by all the
writers of the text-books on Indian mortgages . Every word of the
definition is borne out by the decisions of Indian Courts of
Justice . . . .
It is a security against loan on the basis of any immovable property

Section 58 of the Transfer of Property Act defines mortgage .


According to this section a mortgage is the transfer of an interest in
specific immovable property for the purpose of securing,
i) the payment of money advanced or to be advanced by way of
loan ,
ii) an existing or future debt , or
iii) the performance of an engagement which may give rise to a
pecuniary liability .

The transferor is called a mortgagor,


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

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There are three essential elements of a mortgage. They are as follows



1) There must be transfer of an interest with respect to immovable
property .
2) The interest transferred must be of some specific immovable
property .
3) The purpose of transfer of interest must be ----
a) to secure
payment of money advanced, or
to be advanced by way of loan , or
an existing or future debt or ,
b) the performance of an engagement which may give rise to a
pecuniary liability .

Kinds of mortgage : Section 58 of the Transfer of property Act has


introduced six kinds of mortgages . they are as follows ----
1) Simple mortgage : Sec-58(b) :
2) Mortgage by conditional sale .
3) Usufructuary mortgage (subordinate real right of limited
duration, usually for a person's lifetime. The holder of a usufruct,
known as a usufructuary, has the right to use the property and
enjoy its fruits).
4) English mortgage .
5) Mortgage by deposit of title-deeds .
6) Anomalous mortgage .

(1) Definition : "Simple mortgage" is a mortgage where, without


delivering possession of the mortgaged property, the mortgagor binds
himself personally to pay the mortgage-money, and agrees, expressly
or impliedly, that, in the event of his failing to pay according to his
contract, the mortgagee shall have a right to cause the mortgaged
property to be sold and the proceeds of sale to be applied, so far as
may be necessary, in payment of the mortgage-money, the

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transaction is called a simple mortgage and the mortgagee a simple


mortgagee.
Discussion : In a simple mortgage the following elements must
remain present ---
There should be a personal obligation on the part of the
mortgagor to pay the debt;
an express or implied power is given to the mortgagee to cause
the Property to be sold through the intervention of the Court;
there is no transfer of ownership.
(2) Definition : "Mortgage by conditional sale" is a mortgage where,
the mortgagor ostensibly sells the mortgaged property-
on condition that on default of payment of the mortgage-money
on a certain date the sale shall become absolute, or
on condition that on such payment being made the sale shall
become void, or
on condition that on such payment being made the buyer shall
transfer the property to the seller,
the transaction is called a mortgage by conditional sale and the
mortgagee a mortgagee by conditional sale:
PROVIDED that no such transaction shall be deemed to be a
mortgage, unless the condition is embodied in the document which
effects or purports to effect the sale.
Discussion :
(3) Definition : "Usufructuary mortgage" is a mortgage where the
mortgagor delivers possession or expressly or by implication binds
himself to deliver possession of the mortgaged property to the
mortgagee, and authorizes him to retain such possession until
payment of the mortgage-money, and to receive the rents and profits
accruing from the property or any part of such rents and profits and to
appropriate the same in lieu of interest or in payment of the
mortgage-money, or partly in lieu of interest or partly in payment of
the mortgage-money, the transaction is called a usufructuary
mortgage and the mortgagee a usufructuary mortgagee.
Discussion : Usufructuary mortgage is a subordinate real right of
limited duration, usually for a person's lifetime. The holder of a
usufruct, known as a usufructuary, has the right to use the property

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and enjoy its fruits. The main characteristics of a usufractuary


mortgage are as follows :-
There is delivery of possession of the mortgaged property to the
mortgagee .
The mortgagee is to retain the possession until repayment of the
money and to receive rents and profits or part thereof in lieu of
interest , or in payment of the mortgage money , or partly in
lieu of interest and partly in payment of the mortgage money .
The mortgage is redeemed when the amount due is personally
paid or is discharged by rents and profits received .
Sale or foreclosure is no remedy against usufractuary mortgage .
When the mortgage is for Rs. 100 /- or upwards , the instrument
must be registered . If the mortgage is for below Rs. 100 /- the
instrument may not be registered and the mortgage may be
created by delivery of the property .
(4) Definition : "English mortgage" is a mortgage where the
mortgagor binds himself to repay the mortgage-money on a certain
date, and transfers the mortgaged property absolutely to the
mortgagee, but subject to a proviso that he will re-transfer it to the
mortgagor upon payment of the mortgage-money as agreed, the
transaction is called an English mortgage.
Discussion : The following are the main characteristics of an
English mortgage:
English mortgage is followed by delivery of possession.
There is a personal covenant to pay the amount.
English mortgage is effected by an absolute transfer of
property, with a provision for retransfer in case of repayment
of the amount due.
Power of sale out of Court is conferred on certain persons
under certain circumstances .
Remedy open to an English mortgagee is to realize the mortgage-
money by sale, and not by foreclosure.
(5) Definition : "Mortgage by deposit of title-deeds" is a mortgage
where a person in any of the following towns, namely, the towns of
Calcutta, Madras, and Bombay, and in any other town which the State
Government concerned may, by notification in the Official Gazette,

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specify in this behalf, delivers to a creditor or his agent documents of


title to immovable property, with intent to create a security thereon,
the transaction is called a mortgage by deposit of title-deeds.
Discussion : The following are the main Characteristics of a
mortgage by deposit of title-deeds
It is created in the towns of Calcutta, Madras and Bombay
and other towns notified in the Official Gazette . It can be
created in such towns , by deposit of title-deeds, even though
the property is situated outside those towns.
It is effected by deposit of material title-deeds. It is not
necessary that all the deeds should be deposited. It is
sufficient if material documents are deposited.
Delivery of possession of property does not take place.
This mortgage is made to secure a debt or advances made, or
to cover future advances.
Registration is not necessary, even if there is a writing to
record the deposit under section 59.
This mortgage prevails against a subsequent transferee who
takes under a registered instrument.
This mortgage prevails against all who are not bona fide
purchasers for value without notice.
(6) Definition : "Anomalous mortgage" : A mortgage which is not a
simple mortgage, a mortgage by conditional sale, a usufructuary
mortgage, an English mortgage or a mortgage by deposit of title-
deeds within the meaning of this section is called an anomalous
mortgage.
Discussion : The rights and liabilities of the parties to such a
mortgage are to be determined ----
by their contract , as evidenced in the mortgage deed and
failing that ,
by local usage .
The main characteristics of anomalous mortgage are as follows :-
It would include a simple mortgage usufructuary and a
mortgage usufructuary by conditional sale .

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Possession may or may not be delivered in anomalous


mortgage .
If the anomalous mortgage is for Rs. 100 /- or upwards , it
must be registered . If below Rs. 100 /- it may be by a
registered deed or by delivery of possession .

Go To Module-3 Questions.

Q : 2014 : Once a mortgage, always a mortgage, explain this statement


with its exceptions.
Q : Case of Vernon v Bethell (1762) or Doctrine of "Clog on redemption"
or Equity of Redemption or Once a mortgage, always a mortgage
Ans :
http://www.lawctopus.com/academike/doctrine-of-clog-on-
redemption/
Vernon v Bethell (1762) is a classic English property law case, where it
was affirmed that there could be no clog on the equity of redemption.
In justifying this rule, Lord Henley LC in his judgment observed, . . .
necessitous men are not, truly speaking, free men. . . . This court, as
a court of conscience, is very jealous of persons taking securities for a
loan, and converting such securities into purchases.
Under a mortgage, two interests are generated by the owner of the
property.
One is the interest of the creditor on the property, which is limited
and fixed, and
another, is the residuary interest left which can be quantified only
by deducting the creditors interest from the value of the security.
The fundamental bargain from this division of interests is the presence
of a right to buy back the property without any encumbrances by
paying the loan. This right is called the equitable right to redeem.

Section 60 of the Transfer of Property Act, 1882 provides the right of


redemption to the mortgagee. This right becomes alive only after the
principal money becomes[8]. There are certain limitations to this right
by the fact that it exists only till the mortgagee decides to exercise his
right of foreclosure on the property[9]. Thus, the contract of mortgage

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between the parties ends, when the debtor exercises his right to
redeem through paying off the loan. Any obstruction to this right
would be declared as void as a clog on the equity of redemption.

Basis of this doctrine A mortgage is a conveyance of land or an


assignment of chattels as a security for the payment of a debt or the
discharge of some other obligation for which it is given. This is the
idea of a mortgage: and the security is redeemable on the payment or
discharge of such debt or obligation, any provision to the contrary
notwithstanding. That, in my opinion, is the law. Any provision
inserted to prevent redemption on payment or performance of the
debt or obligation for which the security was given is what is meant by
a clog or fetter on the equity of redemption and is therefore void. It
follows from this, that once a mortgage always a mortgage.

The maxim once a mortgage always a mortgage means that there


can no covenant that modifies the character of the mortgage agreed
between the parties that would stop the mortgagor to redeem his
property back on payment of the principal and respective
interests[14].

The basis of this doctrine lies in the exercise equity, justice and good
conscience[15] and is extensive to areas where the act is not
applicable[16]. On a realistic perusal of the workings of a mortgage, it
is observed in most of the cases that the mortgagor enters into such
an agreement because of some financial predicament[17]. The law
recognizes the power of the dominant party to insert clauses which
will serve his personal interests by creating impediments on the right
to redeem the property[18]. Such obstructions are henceforth struck
down by the courts to enable the mortgagee to redeem his
property[19]. In U. Nilan v. Kannayyan (Dead) Through Lrs.[20],
explaining the philosophy behind the doctrine, it was said that

Adversity of a person is not a boon for others. If a person in stringent


financial conditions had taken the loan and placed his properties as
security therefor, the situation cannot be exploited by the person who
had advanced the loan. The Court seeks to protect the person affected
by adverse circumstances from being a victim of exploitation. It is this

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philosophy which is followed by the Court in allowing that person to


redeem his properties by making the deposit under Order 34 Rule 5
C.P.C.

Summary :
The case "Vernon v Bethell (1762)" stands for the principle that
"once a mortgage, always a mortgage". ie mortgage is just a
mortgage, it is not deed of conveyance. In a mortgage, a borrower
does not contract to give up his right to redeem title to his property
once his debt is discharged. It was a landmark decision in upholding
some basic protection at common law for debtors.
Whether something would or would qualify as clog on the right of
redemption is something that cannot be determined absolutely. It
has to be settled through a careful perusal of the of the mortgage
deed, the circumstances surrounding the parties entering into a
mortgage, the amount advanced and nature of the transaction. The
doctrine was envisaged at a time when feudal landlords would use
their power over oppressed peasants to enter into unfair
agreements by virtue of their necessity. Where a major chunk of
the population in India still works in the agrarian sector and lives
under below poverty line without any formal banking systems, the
doctrine still has some prevalence in such situations. It is left at the
discretion of the judiciary to decide in which cases a prudent
application of this doctrine lies.

Go To Module-3 Questions.

Q : 2013, 4, 5 : Explain in detail the term Lease and state its essential
elements with decided cases.
Ans :
The word 'transfer' is defined with reference to the word 'convey'
which is used in a much wider sense to include any form of an
assurance inter vivous. A lease comes within the meaning of the word
'transfer'. The fundamental conception of a lease is that it is the
separation of the right of possession from ownership.
A lawful agreement of lease of property is a contract within the
meaning of section 10 of the contract Act. An agreement of lease must

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also be executed lawfully by the lessor and the lessee containing the
terms and conditions of the lease for lawful consideration. The lessor
and lessee must also be persons who are competent to contract.
Unless the aforesaid requirements are satisfied, an agreement of lease
of immovable property cannot be lawfully made and executed.
Sec-105. Lease defined :
A lease of immovable property is a transfer of a right to enjoy such
property, made for a certain time, express or implied, or in
perpetuity, in consideration of a price paid or promised, or of
money, a share of crops, service or any other thing of value, to be
rendered periodically or on specified occasions to the transferor by
the transferee, who accepts the transfer on such terms.
Lessor, lessee, premium and rent defined : The transferor is called
the lessor, the transferee is called the lessee, the price is called the
premium, and the money, share, service or other thing to be so
rendered is called the rent.

In simple words, a lease, in this generic sense, is that form of


encumbrance which consists in a right to the possession and use of
property owned by some other person. It is the outcome of the
rightful separation of ownership and possession.
A lease of immovable property is a transfer of a right to enjoy such
property made for a certain time or in perpetuity. The expression
transfer of a right to enjoy stands is contrast with the words
transfer of ownership occurring in Section 54 in the definition of
sale.
In a sale, all the rights of ownership, which the transferor has,
passes on to the transferee.
In a lease, there is a partial transfer, that is a transfer of a right of
enjoyment for a certain time.
It should be noted that while both a sale and a mortgage to a minor
are valid, a lease to a minor is void as the lease imports a covenant by
transferee(lessee), to pay rent and perform various conditions which
may be imposed in a lease. A contract with a minor is void.
The term 'lease' imports a transfer of an interest to enjoy the
property. One of the essential conditions of a lease is that the tenant
should have the right to the exclusive possession of the property.

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The essential elements of a lease are:-


A. the parties;
B. the subject-matter of immovable property;
C. the duration of a right to enjoy the immovable property; and
D. the consideration.

A. The parties : Both parties, i.e., the lessor and the lessee must be
competent to contract. A lease cannot be created without any express
or implied contract between two parties.
B. Subject-matter : The subject-matter of a lease must be immovable
property.
C. Duration : The right to enjoy the property must be transferred for a
certain time or in perpetuity. It may commence either in the present
or on some date in future or on the happening of a event which is
bound to happen. Where day is expressed for the commencement of
the lease, such day must be excluded in computing the whole period
of lease.
If the day of commencement is not stated, the lease begins from
the date or execution. If it is expressed to commence from a past
day, that is only for the purpose of computation, and the interest of
the lessee begins from the date of execution.
Both the time when the lease begins and the time when i ends must
be fixed. Apart from leases for certain time, a lease may be in
perpetuity. Such leases are generally agricultural leases.
D. Consideration : The consideration is either premium or rent.
Section 105 bring out the distinction between a price paid and the rent
to be paid periodically to the lessor.
Premium or salami :
is the price paid or promised to be paid in a lump sum.
is a capital income
the transaction may either be,
a zuripeshgi lease, ie the premium is not given as a loan and
the relationship of a debtor and a creditor does not subsist, or

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a usufructuary mortgage, ie the premium is essentially a


lending and a borrowing transaction.
Rent :
is a periodical payment. But the definition of rent given in this
section is wide enough to include not only money but also the
delivery of a share of the crop, of the rendering of service, etc.
is a revenue receipt,

Agreement to lease : A document whereby the terms of a lease, are


finally fixed and it intended to give the right of enjoyment to the
lessee either at once or at a future date is a lease. On the other hand,
a document which only binds the parties, the one person promising to
grant of the lease and the other promising to accept it, is merely an
agreement to lease. If the intended lessee enters into possession, he
can, under section 53-A, resist the lessor's suit for ejection, provided
the agreement is in writing.

Types of lease :
Permanent Lease.-- In India, the permanent leases or a lease in
perpetuity may be created either expressly or inferred from the
circumstances of a given case. In the latter case it is said to have
been created through a presumed grant. The tenancy of a
permanent nature in the sense that it could not be revoked so long
as the plaintiff paid rent in cash or kind, may be inferred from
various terms and conditions of a lease.
The mere fact that a uniform fixed rent had been paid for a long
time or the fact that the lessees had been in possession of the
land for a long time making construction of land at their own cost
would not raise a presumption that the tenancies were of a
permanent character. In every case an inference of permanency
of tenancy is a question of fact depending upon the facts of each
particular case. The onus of proving that a tenancy is permanent
is on the tenant setting up such a case.
Tenancy at will : A lease which is silent as to duration of term
would be void as a lease, but if the lessee has taken possession, a
tenancy-at-will is created. It arises by implication of law in cases
where a person takes possession of the premises with the consent

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of the owner. It may also arise by an express agreement to let for


an indefinite period for compensation accruing from day to day. The
tenant in such a case is not a trespasser and his only liability is to
pay compensation for use and occupation. A tenancy-at-will is
terminable by either party. A demand by the landlord for possession
is sufficient to terminate his tenancy-at-will.
Tenancy by sufferance : Another type of a tenancy may be noted
here. It is called a 'tenancy by sufferance'. It also arises by
implication of law when a person who has been in possession under
a valid lease continues in possession even after the expiration of
the lease without the consent of the lessor. Thus, a tenant holding
over after the expiration of the term is a tenant at sufferance. A
tenancy at sufferance is terminated at any time by the landlord
entering without notice or demand.

Difference between lease and licence :


There is no simple Litmus Test distinguish a lease as defined in
Section 105 from a licence as defined in Section 52 of the Easement
Act, but the character of the transaction turn on the operative
intent of the parties. To put it pithily, if an interest in immovable
property, entitling the transferee to enjoyment, is created, it is a
lease, if permission to use land without right to exclusive
possession is alone granted, it is a licence.
Marginal variations to above broad statement are possible. It is not
correct to say that exclusive possession of a party is irrelevant but
at the same time it is not conclusive. The other tests, namely
intention of the parties and whether the document creates any
interest in the property or not are important consideration.

Lease Licence
1. In lease , the interest in the In licence , interest in the
property is transferred . property is not transferred .
Licensee acquires only a right to
occupy the property .
2. Lease is heritable and But licence is neither heritable
transferable . nor transferable .
3. Lease can be terminated by Licence can not be terminated

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forfeiture . by forfeiture .
4. Lease can be terminated by any Licence is revocable at will by
one of eight ways enumerated the grantor .
in section 111 of the Transfer of
Property Act .
5. Lease is not affected by the On the other hand , licence is
death of either of the parties . terminated on the death of
either of the parties .
6. A lessee can sue the trespassers But a licensee can not sue the
and strangers in his own trespassers and strangers in his
capacity . own capacity .
7. In case of subsequent transfer But a subsequent transfer of the
of the property , interest of the property terminates a licence .
lessee is not defeated .
8. If during continuance of the A licensee acquires no right by
lease , any accretion is made to accretion .
the property , such accretion is
deemed to be comprised in the
lease .

Go To Module-3 Questions.

Q : 2015 : Explain in detail the term Gift and state its essential elements
with case laws.
Q : Discuss : Gift (Definition & Essential requirements), Kinds of Gift,
Onerous Gifts, Universal Donee, Exchange - Definition & Features
Ans :
Sec-122 : "Gift" defined :
"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.
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.

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A gift of immovable property must be effected by,


i) a registered instrument signed by or on behalf of the donor , and
ii) attested by at least two witnesses .
In the event of gift of movable property , it may be effected , either
i) by a registered instrument signed and attested as above, or
ii) by delivery of the property , such delivery may be made in the
same way as goods sold maybe delivered .

The following are the essentials of a valid gift :-


1) The subject matter of the gift should be capable of transfer ,
2) There should be two parties , in one side the donor and in other
side the donee .
3) The donor must be capable of gifting the property .
4) The gift should be made without any consideration and
voluntarily .
5) There should be a transfer of interest on the part of the donor .
6) The donor and donee must be living persons .
7) The acceptance of gift must be made during the lifetime of the
donor, and while donor is still capable of giving .
8) The gift should be accepted by or on behalf of the donee during
donee's life time .

Kinds of Gift :

Onerous Gifts :
The provisions of onerous gift is contained in section 127 of the
Transfer of property Act . Onerous gift is a gift burdened with an
obligation .

Sec-127 : Onerous gifts :


1. Where a gift in the form of a single transfer to the same
person of several things of which one is, and the others are not,

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burdened by an obligation, the donee can take nothing by the


gift unless he accepts it fully.
Illustration : 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 gives B all his shares in joint stock companies. If B refuses
to accept the shares in Y, then he cannot take the shares in X.
2. 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.
Illustration : 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, gives 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 this refusal forfeit the money.
3. Onerous gift to disqualified person : A donee not competent to
contract and accepting 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.

Summary : Onerous gift is based on the maxim qui sensit


commodum , debt et sentire onus which means that who wants
the roses must not fear the thorns . The rule is similar to the
doctrine of election .

Universal Donee :
A universal donee is one to whom all the properties , including
movables and immovables , are given by a person by way of gift
and the donee consequently becomes liable for all the debts due by
and the liabilities of the donor , to the extent of the property
comprised in the gift .
Section 128 of the Transfer of Property Act deals with the nature of
the liabilities of a universal donee .

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Sec-128 : Universal donee : Subject to the provisions of section


127, 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 the property comprised
therein.

The following are the essential conditions of the rule of universal


donee :-
i) Donor should gift all the properties to the donee ;
ii) Properties should include all the movable and immovable
properties ;
iii) The donee becomes personally liable for all the debts due by
the donor ;
iv) Nature of liability of the donee extends , to the extent of the
property comprised therein , at the time of the gift .

If all the properties are not transferred by way of gift , the donee
can not be universal donee so as to discharge the liabilities to pay
the debts due by the donor .
Section 53A of the Transfer of Property Act deals with fraudulent
transfers of movable property whereas section 128 deals with both
movable and immovable property .
Section 128 protects the interest of the creditors .

Exchange - Definition & Features :


Exchange of property is one of the various modes to transfer
ownership rights in a property (both movable and immovable).
After due completion of the process of exchange, as required under
law, the transactions acquires the sanctity of transaction under
sale.
Sec-118 : "Exchange" defined :
When two persons mutually transfer the ownership of one thing
for the ownership of another, neither thing or both things being
money only, the transaction is called an "exchange".

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A transfer of property in completion of an exchange can be made


only in manner provided for the transfer of such property by sale.

Important features :
All the formalities associated with transfer by sale have to be
complied with, for transfer of ownership rights in exchange of
another property.
If the value of the property is Rs.100/- or more then a
conveyance deed is required to be executed and that must be
registered with the office of Registrar / Sub-registrar.
Under section 119 of the said act provides relief to a party who
suffers in transfer by exchange due to defect in the title of the
transferor. A person with defective title is liable to return the
original property of the other person and is also liable for the
losses incurred due to such exchange.
Further, under Sec-120 of TPA 1882, each party, to such transfer
by exchange, enjoys the rights and is subject to liabilities of a
seller, pertaining to the thing which he gives and enjoys the
rights and is subject to liabilities of a buyer, pertaining to the
thing which he takes. This provision is there for protection of
both the parties involved in the process of transfer of ownership
rights in immovable property by exchange.
(Sec-121) On an exchange of money, each party thereby
warrants the genuineness of the money given by him.
Difference between exchange of movable property and
exchange of immovable property is that the former is known
as barter and is subject to the Indian Contract Act, 1872,
whereas the latter is known as exchange and is subject to the
Transfer of Property Act, 1882.

Advantage of exchange over two separate sale : In terms of Article


31 to Schedule-I of Indian Stamp Act, 1899, Instrument of
Exchange of property would attract the same duty as for
Conveyance on the consideration equal to the value of the property
of the greatest value indicated in the instrument. Thus, INSTEAD
OF PAYING STAMP DUTY TWICE (2 separate sale), what is payable

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in exchange of property is only once on the highest value of the


property mentioned in the exchange deed.

Go To Module-3 Questions.

------> Discuss in detail Actionable Claims


Ans :
An actionable claim is a kind of property. In simple language,
"actionable claim",
it EXCLUDES not only a claim to any immovable property for a debt
but also a debt secured or any movable property in possession of
the claimant
it is a movable property because a debt is a property and anything
which is not immovable property is movable property
it is a beneficial claim for a simple debt or liability,
it can be recovered only by an action in a Civil Court.
In English law it is known as chose in action or thing in action.
Sec-3 : Definition :
"actionable claim" means a claim to any debt, other than a debt
secured by mortgage of immovable property or by hypothecation or
pledge of movable property, or to any beneficial interest in movable
property not in the possession, either actual or constructive, of the
claimant, which the civil courts recognize as affording grounds for
relief, whether such debt or beneficial interest be existent, accruing,
conditional or contingent;

Sec-130 : Transfer of actionable claim :


(1) The transfer of an actionable claim whether with or without
consideration shall be effected only by the execution of an
instrument in writing signed by the transferor or his duly authorized
agent, shall be complete and effectual upon the execution of such
instruments, and thereupon all the rights and remedies of the
transferor, whether by way of damages or otherwise, shall vest in
the transferee, whether such notice of the transfer as is hereinafter
provided be given or not:

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PROVIDED that every dealing with the debtor other actionable


claim by the debtor or other person from or against whom the
transferor would, but for such instrument of transfer as
aforesaid, have been entitled to recover or enforce such debt
or other actionable claim, shall (save where the debtor or
other person is a party to the transfer or has received express
notice thereof as hereinafter provided) be valid as against
such transfer.
(2) The transferee of an actionable claim may, upon the execution
of such instrument of transfer as aforesaid, sue or institute
proceedings for the same in his own name without obtaining the
transferor's consent to such suit or proceeding and without making
him a party thereto.
Exception : Nothing in this section applies to the transfer of a
marine or fire policy of insurance or affects the provisions of section
38 of the Insurance Act, 1938 (4 of 1938).

Illustrations :
(i) A owes money to B, who transfers the debt to C. B then
demands the debt from A, who, not having received notice of the
transfer, as prescribed in section 131, pays B. The payment is valid,
and C cannot sue A for the debt.
(ii) A effects a policy on his own life with an insurance company and
assigns it to a bank for securing the payment of an existing or
future debt. If A dies, the bank is entitled to receive the amount of
the policy and to sue on it without the concurrence of A's executor,
subject to the proviso in sub-section (1) of section 130 and to
provisions of section 132.

What are and what are NOT actionable claims?


Following are actionable claims :
An unsecured debt
any beneficial interest in movables not in possession of the
claimant,
a claim which the Civil Court recognize as affording grounds for
relief

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examples of actionable claims : future rents, amounts payable


under a deed, amount due under a policy of life insurance, a letter
of credit, confirmed sale price, dividend due on shares, etc.
What are NOT actionable claims :
Exceptions : Sec-137 - Nothing in the foregoing sections of this
Chapter applies to stocks, shares or debentures, or to negotiable
instruments, or to any mercantile document of title to goods.
Accordingly transfers of following instruments are governed by
independent separate statutes passed in respect thereof and
are not, therefore, governed by the Transfer of Property Act,
example : stocks, shares, debentures, instruments which
are negotiable, mercantile documents of title to goods,
Marine Insurance claims
A debt is an actionable claim, but a debt which has passed
into a decree is not an actionable claim.
The right to recover damages for breach of contract is not
actionable claim

Assignment : Every actionable claim or chose in action is assignable


except in four cases:
(1) where the assignment is prohibited by law,
(2) where the terms of the contract under which the claim accrues
prohibit such assignment,
(3) where the contract is of a personal nature, and
(4) where the assignment would increase the burden on the other
party.

Go To Module-3 Questions.

Module-4) Easements :

4..1) Easements : Meaning, Nature, Essentials and


Characteristics
4..2) Kinds of Easements, Incidents of Easements, Creation of
Easement

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4..3) Various Easementary Rights :Right of Way, Right of Air,


Right of support, Right of water etc.
4..4) Extinction, Suspension and Revival of Easements,
4..5) Licences : Meaning, elements, Grant and Revocation of
Licences
Module-4 QUESTIONS :
Q : Explain in detail : (1) meaning, nature, essentials, characteristics of
easement right, (2) kinds of easements, Incidents of Easements, Creation
of Easement.
Q : 2012, 3, 4, 5 : Explain the meaning, nature and essential
characteristics of easements
Q : 2014, 5 : Explain in detail : Definition and kinds of easements.
---> Q : Discuss in detail : Kinds of Easements, Incidents of Easements,
Creation of Easement
Q : 2013, 4 : Explain in detail Natural rights and Easement rights
-----> Q : Discuss in detail : Various Easementary Rights :Right of Way,
Right of Air, Right of support, Right of water etc
Q : 2015 : Explain in detail : Legal remedies against violation of easement
right.
Q : 2012, 3, 4, 5 : Explain in detail the extinction, suspension and revival
of easements.
-----> Discuss in detail : Licences : Meaning, elements, Grant and
Revocation of Licences

Go To Contents.

Module-4 ANSWERS :
Q : Explain in detail : (1) meaning, nature, essentials, characteristics of
easement right, (2) kinds of easements, Incidents of Easements, Creation
of Easement.
Q : 2012, 3, 4, 5 : Explain the meaning, nature and essential
characteristics of easements.
Q : 2014, 5 : Explain in detail : Definition and kinds of easements.

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---> Q : Discuss in detail : Kinds of Easements, Incidents of Easements,


Creation of Easement
Q : 2013, 4 : Explain in detail Natural rights and Easement rights
Ans :
The word Easement stands for the right to use anothers property. It is
a right, which the owner of a particular land enjoys over an adjacent
property, which he does not possess. It is the right over a property
belonging to someone else and not to the person claiming easement.

Sec-4 of the Indian Easements Act, 1882 : Easement defined :


(1) An easement is a right which the owner or occupier of certain
land possesses, as such, for the beneficial enjoyment of that land,
to do and continue to do something, or to prevent and continue to
prevent something being done, in or upon, or in respect of certain
other land not his own,
(2) Dominant and servient heritages and owners : The land for the
beneficial enjoyment of which the right exists is called the dominant
heritage, and the owner or occupier thereof the dominant owner;
the land on which the liability is imposed is called the servient
heritage, and the owner or occupier thereof the servient owner.
Explanation. -In the first and second clauses of this section the,
expression land includes also things permanently attached to the
earth; the expression beneficial enjoyment includes also possible
convenience, remote advantage, and even a there amenity; and the
expression to do something includes removal and appropriation by
the dominant owner, for the beneficial enjoyment of the dominant
heritage, or any part of the soil of the servant heritage, or anything
growing or subsisting thereon.

In simple terms easement is a right and the person entitled thereof


being owner or occupier of certain land, for the beneficial enjoyment
of his land, could require adjoining land owners to do or continue to
do something and even also could prevent them from doing something
being done in or upon the their lands which are not owned by right
holder.

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Illustration : A, as the owner of a certain house, has the right to go


on his neighbour Bs land and to take water for the purposes of his
household, out of a spring therein. This is an easement.

Essentials / Ingredients of easement :


1) There must be dominant and a servient tenement;
2) The easement must accommodate the dominant tenement.
3) The right of easement must be possessed for the beneficial
enjoyment of the dominant tenement ;
4) Dominant and servient owners must be different persons;
5) The right should entitle the dominant owner to do and continue
to do something , or to prevent and continue to prevent something
being done, in or upon, or in respect of servient tenement; and
6) That something must be of certain or well defined character and
be capable of forming the subject matter of grant.

Discussion of easement rights through an illustration :


Case :
There are several villages in the midst of hundreds of acres of
sprawling agricultural lands and there are houses surrounded by
other houses. The local inhabitants of these places have one
common disadvantage they do not have direct access to the
road. To reach the public road they have to pass through
someone elses property.
For most of these properties, water has to flow through adjoining
properties. There are some remote areas where people still
collect water manually from a distant water body, walking over a
long stretch of land, which does not belong to them. The owners
of such lands, on the other hand, cannot deny these trespassers.
The Easements Act of 1882 clearly says that people are
privileged to use the land out of necessity and /it is the privilege
of the people to use the land out of necessity, which the owners
cannot deny.
Application of Sec-4 of IEA 1882 to above case :

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Dominant heritage or dominant tenement : The landowner who


gets the benefit from the property which is not his own and over
which he has a right is called dominant heritage or dominant
tenement, and
Dominant owner : The owner of such a land (Dominant heritage)
is called the dominant owner. Dominant because the owner has
control over the use of that particular land which he does not
possess.
Servient heritage or servient tenement : The property of the
actual landowner who cannot object to the other using his land is
called servient heritage or servient tenement, and
Servient owner : The owner of such a land (Servient heritage) is
called servient owner. Servient or subordinate because he has to
abide by the requirements and convenience of the dominant
owner. In fact, whether he likes it or not, it is a burden brought
to bear on him by necessity granted, by custom or by
prescription.
eg : X owns a piece of land. Y has the right of way over it. Here X
is the servient owner and has the servient heritage. Y is the
dominant owner and he has the dominant heritage.

In short, Servient Heritage means an inherited property over which


the dominant owners have a right to use it to their advantages and
Dominant Heritage means inheriting a right over anothers property
without owning it.
Loss to servient owner : The dominant owner has the right over the
property of the servient or subordinate owner. It is a privilege enjoyed
by the dominant owner over the property, which he does not own. The
servient owner is bound to suffer because of the advantageous
position of the dominant owner. If at all the servient owner does
something on dominance own property, the dominant owner has the
right to prevent it.

Creation of Easement Rights : The title to easement may be created,


(i) by grant, (ii) by prescription, or (iii) by custom.
1. Easement by grant : When an easement is acquired by grant, the
deed of easement may be separate or the grant may be included in

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a deed relating to the dominant heritage. Grant may be given by an


agreement executed by the grantor in favour of the grantee for a
consideration. The grant becomes effective when the grantee has
the right to enter upon the grantors land.
For example, X sells his land to Y and by the same deed he may
grant a right of way to Y for such land or for another land of his.
2. Easement by Prescription : Easement by Prescription means
getting a right by continuous assertion of the right, which has been
in use for a long period of time. According to the Indian Easements
Act, for example, the inhabitants of a building enjoying the access
and use of air and light as a right, continuously for over 20 years,
have the right to enjoy them without any condition or restriction.
3. Easement by Custom : Easement by virtue of custom is a legal
right acquired by the operation of a customery practice in the
society.
Note :
Easement can be made, altered and released,
Creation of an easement does not mean transfer of property,
Similarly, surrendering an easement right does not imply transfer
of property,
Easements by prescription and custom need not be in writing,
easements by grant cannot be created or modified orally. It must
be in a written form.

Natural rights and Easement rights : Easement rights are different


from Natural rights. Easements are acquired rights abstracted from
the ownership of one man and added to the ownership of another.
Whereas natural rights are themselves part of the complete rights of
ownership, belonging to the ordinary incidents of property and are
ipso facto enforceable in law. Note : Some of the natural rights are
themselves subject to restriction at the instance of easements (Sec-7
of IEA 1882).

Types of easements : There are several types of easement. Few of


them are, (i) Right of way, (ii) right to air and light, (iii) riparian
rights, (iv) right to build, (v) right to uninterrupted flow of water,

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Sec-6 of IEA 1882 : Easement for limited time or on condition : An


easement may be permanent, or for a term of years or other limited
period, or subject to periodical interruption, or exercisable only at a
certain place, or at certain times, or between certain hours, or for
particular purpose, or on condition that it shall commerce or become
void or voidable on the happening of a specified event or the
performance or nonperformance of a specifieAct.

Restrictive easements : A restrictive easement is a condition placed on


land by its owner or by government that in some way limits its use,
usually regarding the types of structures which may be built there or
what may be done with the ground itself.
Sec-7 of IEA 1882 Easement restrictive of certain rights : Easement
are restrictions of one or other of the following rights (namely):
(a) Exclusive right to enjoy : The exclusive right of every
owner of immovable property (subject to any law for the time
being in force) to enjoy and dispose of the same and all
products thereof and accessions thereto.
(b) Rights to advantages arising from situation : The right of
every owner of immovable property (subject to any law for the
time being in force) to enjoy, without disturbance by another,
the natural advantages arising from its situation.

Restrictive easements are also called "negative easements," as their


"use" is normally prohibitive, such as a common "non-vehicular
access" easement as shown along a main thoroughfare where the
governmental entity needs to restrict access. For instance, if a
leased piece of land is not precluded by zoning laws (probably
because it is not in a township) from having people inhabit it, and
the government feels that for some reason living there would be
especially unsafe, it may place a restrictive easement on the
property stating that no one may live there. Restrictive easements
are also frequently placed on wetlands (i.e., a conservation
easement) to prevent them from being destroyed by development.

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Incidents of Easements : The right of easements gives rise to certain


incidental rights, duties, benefits, etc, both on the dominant owner
and servient owner. Rules of Incidental Easements (Sec-20-31 of IEA
1882) : The following are the rules of incidents of easements.
1. An Easements must not be used for any purpose not
connected with the enjoyment of the dominant heritage. Eg:- "A"
an owner of a house lets it for rent, along with the land adjacent
to it to "B". Now "a" has a right of way in the land only for the
purpose of collecting rent or repair.
2. The dominant owner must exercise his right in such a way
that it creates least inconvenience to the servient owner. Eg:- "A"
has a right of way over "B"'s field. "A" must use the established
way and must not create a new way.
3. The dominant owner may, from time to time, alter the mode
of enjoying the easements. However by such alteration, he
should not impose any additional burden on the servient
heritage. Further just for fun or pleasure the dominant owner
cannot alter the enjoyment of easement though it does not
impose any additional burden.
4. The dominant owner is entitled to do all acts necesasary to
secure the full enjoyment of the easement but he must do such
acts without causing inconvenience to the servient owner and
damage to the servient heritage. This right of the dominant
owner is called "Accessory Right".
5. The expenses incurred in constructing works or making
repairs for the use or preservation of easements must be borne
by the dominant owner.
6. In an easements which is enjoyed by means of an artificial
work, the damage caused to the servient heritage must be
compensated by the dominant owner.
7. The servient owner need not do anything for the benefit of
the dominant heritage and he can use the servient heritage in
any matter but without affecting the enjoyment of the easement.
8. In deciding the extent of easement and mode of its
enjoyment the intention of the parties and the purposes of which
the easements was acquired must be considered. In the absence

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of evidence for intention and purpose the following are the


rules :
a. In the case of right of way, one kind does not include right
of any other kind.
b. In the case of right to light or air acquired by grants, the
quantity of light or air available during the whole of
prescripition period is considered.
9. IF an easement has been granted or bequeathed so that its
extent shall be proportionate to the extent of the dominant
heritage, THEN easements can be increased by alluvion
(increase) in dominant heritage and diminished by diluvion
(decrease) in dominant heritage. OTHERWISE easement is not at
all affected by any change in the dominant or servient heritage.
10. When a dominant heritage is divided between two or more
persons,the easements becomes annexed to each of the shares.
Eg:- A house is divided into two parts and given to two persons.
Each is entitled for right of way.
11. In the cae of excessive use of an easemnt the servient
owner may obstruct the user on the servient heritage only.
Further such obstruction should not affect the lawful enjoyment
of easement.

Above rules relating to such incidental right etc, are controlled by


contracts between dominant and servient owners relating to the
servient heritage. However such contracts cannot affect incidents
arising out of customary easements. It is helpful to know the rules
of incidents of easements.

Caselaw :
Owner of the land adjoining the public street has got a right to
access at every point where his land adjoins Public Street : Neither
the Government nor the Municipality or any local body has got any
right to put up any obstruction over the public street so as to
prevent it from having any access to the adjoining land. It has been
repeatedly held that the owner of the land adjoining the public
street has got a right of access at every point where his land
adjoins public street. In view of the above ratio the fencing of an

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iron fence put up between the land of the petitioner and that of the
suit cart track is illegal and on that ground alone the petitioners are
entitled to an order of injunction as prayed for[4].
Owners right to enjoy limited by Municipal Act : Under the Bombay
Municipal Corporation Act (iii of 1888), the Bombay Municipal
Corporation has power to enter upon lands belonging to private
owners , to make connection between their main pipes and to lay
the pipes forming connection through or under such lands , even
without the owners permission , provided reasonable notice is given
to them.
Owners right to build any structure on his land : Parties may build
whatever structure they please on their land, i.e., a Hindu temple,
by the side of a mosque, provided that they do not interfere with
the free enjoyment of the neighbors property. The general rule of
law is that the owner of one piece of land has a right to it in the
natural course of user; unless, in doing so, he interferes with some
right created either by law or by contract. This has been uniformly
followed by the courts in India as evident from the decisions in
Gopalkrishna Panicker v. Thirunakkara Devasworn.
Right of owner to build a ridge on his land : A person has a natural
right, as owner of land, to raise a ridge on his own land, adjoining a
highway, so as to prevent water flowing from such highway into his
garden ;and the Municipality will be guilty of trespass and liable for
damages, if it removes the ridge so put up. An injunction may be
granted restraining such illegal act.
Easement of discharging water : A right of easement to allow the
water from the plaintiffs mori and roof to fall on the defendants
land will not entitle the plaintiff to claim that the land shall be kept
open and unbuilt. The defendant can build making necessary
arrangements to receive the water from the mori and roof and to
carry it away.
Easement of discharging smoke: Building on the servient
tenement : An injunction to restrain the servient owner from
building on his land so as to interfere with the right of easement to
discharge smoke over such land may be granted.
Magistrate may make an order to prevent riot : Any person is
entitled to establish a market on his own land, and the owner of
a neighbouring market has no right of the suit for the loss which

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may ensue from the establishment of the new market. This right
is subject to the order of the Magistrate to prevent riot,etc.
Fundamental position as the right to build : So far as the right to
build is concerned, the fundamental position is that every person is
entitled to build right up to the limits of his own property. In doing
so , must not infringed the right of the owner of adjoining property.
But these rights have first to be acquired. If they are not acquired
then the fundamental position remains. If the fundamental position
is that a man is entitled to right upon the limit of his own property,
then the mere fact that he exercises that right cannot be regarded
as an actionable nuisance. The decision cited in Cawashah Bomanji
Parakh v. Profulla Nath Rudra.
Natural right of passage arising out of the location of plots : Natural
rights are rights in rem, that is enforceable against all who may
violate them,and they are either affirmative, as rights to do
something, or a negative, as rights which every owner of
immoveable property has, that his neighbor shall not disturb the
natural conditions under which he enjoys his property. Sections 7(b)
of the Indian Easement Act deals with rights to advantages arising
out of situations have been dealt with. A set of statutory
illustrations have been provided under the section. None, however
deals with a right of passage, Bramwell, L.J., in the case of Bryant
v. Lefever, observed :
it is to have all natural incidents and advantages , as nature
would produce them; there is a right to the light and heat that
would come ,to all the rain that would fall to all the wind that
would flow ; aright that the rain , which would pass over the
land , should not be stopped and made to fall on it ; a right
that the wind should not be checked , but should be able to
escape freely; and it were possible that these rights interfered
with one having no right , no doubt an action would lie. But
these natural rights are subject to the right of the adjoining
owners , who , for the benefit of the community , have and
must have rights in relation to the use and the enjoyment of
their property that qualify and interfere with those of their
neighbours rights to use their property in various ways in
which property is lawfully and commonly used.

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Go To Module-4 Questions.

-----> Q : Discuss in detail : Various Easementary Rights :Right of Way,


Right of Air, Right of support, Right of water etc
Ans :
Right of Way :
There are two classes of right of way :
Public rights of way which exist for the benefit of all people.
These are Highway, navigating way. Its origin is in dedication,
express or implied. It is normally acquired by prescription.
Private rights of way which is vested in particular individuals or
to owners of particular tenements; and its origin is found ingrant
or prescription or to certain classes of persons or certain portions
of the public, such as the tenement of a manor, or the inhabitant
of the parish or village.
eg A, as owner of a certain house, has a right or way over Bs field.
A may remove rocks to make the way.

An easementary right of way is created by - (i) Express grant or (ii)


by immemorial custom, necessity or (iii) by prescription, or (iv) by
statute or (v) through private dedication.

The term "general right of way" is applied to private rights of way


on which there are no restriction except the necessary qualification,
which nature or the law requires regarding all private rights of way.
Actual significance of the term general right of way lies in its use in
contradistinction to the special limitations expressed or inferred
upon the user of any particular right of way over and above the
limitations thus imposed by general law.

The private right of way is the means of access to and from a


dominant heritage by way of grant. If a seller sells one of his
adjoining properties to the purchaser, the seller reserves the right
of way for passage running across the property sold. In this case
the seller reserves the right of way in the sale , a deed in favour of
the purchaser.

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If the purchaser has no right of way to access the road, the seller
will grant to the purchaser a right of way over his property. Here
the seller of the plot has to execute a separate deed in favour of the
purchaser granting a right of way.
A private right of way can be either permanent or periodic or for a
particular time during the day only, or seasonal or for a limited
time, for to and fro movement of human beings, cattle and light
vehicles. In case, right of way is by way of formal grant, drawing
showing the passage is often marked in different colours and
annexed to the document of grant.
The dominant and servient owners have certain rights and
obligations to maintain and preserve the easement. While
exercising his right over the property of the servient heritage, the
dominant owner has responsibilities to preserve the easement. His
acts and deeds shall not put the servient owner into inconvenience.
Being the actual user he shall rectify the damages if any caused by
his acts at his own expense.

The servient owner is not obliged to do anything to the advantage


of the dominant heritage. He has no liability whatsoever to
construct a way for the use of the dominant owner or to carry out
repairs in case of any damage to the passageway. As the holder of
the property he is free to use the servient heritage in any manner
he likes, but his acts shall not dilute the right of the dominant
owner.

Apart from statute, the determination of the question who may use
a right of way, depends upon the nature and extent of the right. If
the right is created by grant, the persons or classes or persons
entitled to use it may be expressly limited by the terms of the
instrument, a grant of this kind being construed, not strictly, but in
accordance with the apparent intention of the parties. As a general
rule the persons or the classes of persons who may use the right
must be ascertained by construing the instrument having regard to
the general circumstances surrounding the exception of the grant.
The most important of these circumstances are the nature of the
place over which the right is granted, and the nature of the

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dominant tenement, and the purposes for which that tenement is,
in the contemplation of the parties, intended to be used.

Exception : If dominent owner has another way then he cannot


claim easementary right by way of prescription1.

REMEDIES : It does not matter whether the way was created by


express grant or by way of reservation, or is claimed under the
doctrine of prescription. The nature of the remedy is the same.
The person claiming for an easementary right of way has the
remedy to sue for an injunction - to restrain obstruction of the
way or for getting damages. Whether any particular interruption
amounts to an unlawful interference or not depends upon the
nature of the right of way and of the place, and also on the
circumstances of the case. If he suffers no damage by
obstruction, nominal damages will be awarded only, and an
injunction will be refused. A person who purported exercise of a
right of way makes on excessive use of the survient tenement
commits a trespass and may be restrained from doing at the
instance of the survient owner. The factor for deciding the
excessive user depends on the scope of the right, based on the
true construction of an express grant or based on the user,
established by the prescription as the case may be.

CONCLUSION : Unlike a lease, an easement does not give the


holder a right of "possession" of the property. Therefore an
easementary right is provided for specific relief from specific
violations of common basic rights. In the case of the right to way,
any wrongful interference with the right of way constitutes a
nuisance. However, a right of way never entitles the grantee, or
those lawfully using the way under the grant, to the exclusive use
of the land over which the way exists nor every obstruction of the
way amounts to an unlawful interference, and no action would lie
unless there is a substantial interference with the easement
granted.
In the leading case of Hero vinoth Vs Seshammal (AIR 2006 SC
2234), it is held that an easement would last only as long as
the absolute necessity existed and such a legal extinction could

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not apply to an acquisition by grant- if a right of way was


provided to a particular sharer, it could not be extinguished
merely because such sharer had other alternative way.

RIGHT OF LIGHT & AIR :


The right to light is basically the right to prevent the owner or
occupier of an adjoining tenement from building or placing on his
own land anything which has the effect of illegally obstructing or
obscuring the light of the dominant tenement.
The easementary right to light is a right to be protected against a
particular form of nuisance, and an action for the obstruction of
light which has in fact been used and enjoyed for twenty years
without having any interruption, or written consent cannot be
sustained unless the obstruction amounts to an actionable
nuisance.

The right of light is an easement and may be acquired.


by way of - either grant or by covenant, which may be express
or implied, or
by way of custom, necessity, or
as per the provisions of the India Easement Act, and by
Presciption under the Prescription Act in England. These acts
necessitate an enjoyment without interruption for a period of
twenty years to confer the right.
by way of reservation on the sale of the survient tenement. If
the vendor of a land desires to reserve any right in the nature of
easement and for taking the benefit of his adjacent land which he
is not parting with, he must do it by express words in the deed of
conveyance, except in the case of easement of necessity.

Easements of air and light arise only in the thickly populated cities
and towns. Earlier buildings were constructed close by often
ignoring the conveniences of the nearby inhabitants. Virtually no
space was left in between the buildings hindering airflow and
natural light to the smaller houses. The inhabitants of houses who

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were getting fresh air and natural light suddenly found these were
denied to them because of a multi-storied building nearby.
Haphazard constructions are no more a rule of modern architecture.
Presently, buildings are constructed in a well-planned manner.
Leaving minimum set backs as prescribed between two buildings for
free flow of air and natural light is now mandatory.
Therefore, anyone who comes into possession of a servient heritage
has to carry the burden of easement for all times to come for the
benefit and enjoyment of the person who comes into possession of
the dominant heritage. This sort of master-servant relationship
cannot be severed as long as such properties co-exist.

Whether or not, the interference complained against, amounts to a


nuisance or not cannot be determined by the fact - whether the
diminution is enough materially to lessen the amount of light
previously enjoyed, nor it can be determined by the fact that how
much light is left, without regard to what there was before,
But it can be properly decided by the fact - whether the diminution
(i.e. difference between the light before and the light after the
obstruction) really makes the building to a sensible degree less fit
than it was before, for the purposes of business or occupation as
per the ordinary requirements of mankind.

Right to air : So far as the easementary right to access of air is


concerned, it is co-extensive with the right to light. In this regard it
is pertinent to note that the owner of the house cannot by
prescription claim an entitlement of the flow and uninterrupted
passage of current of wind, neither the owner of the house is
entitled to right of uninterrupted flow of breeze as such, rather he
can claim only such amount of air which is sufficient for sanitary
purposes. He cannot be allowed to sustain his unjustifiable claim in
this regard.

REMEDIES :
Regarding the cases of easementary right of light the Courts
generally do not interfere by way of injunction where the courts
find that the obstruction of light is very slight and where the

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injury sustained is little, except in such rare and exceptional


cases. Here again it is necessary to understand that no damage
is substantial unless it materially diminishes the value of the
dominant heritage, or interferes materially with physical comfort
of the plaintiff, or prevents him from carrying on his accustomed
business in the dominant heritage as beneficially as he had done
previous to instituting the suit.
In India the Court has discretion: It may or may not issue an
injunction depending on the fact- where the injury is such that
pecuniary compensation would not afford adequate relief.
In some cases a mandatory injunction will also be granted. Court
will grant such injunction where a man, who has a right to light
and air which is obstructed by his neighbor's building, brings his
suit and applies for an injunction as soon as he can after the
commencement of the building, or after it has become apparent
that the intended building will interfere with his light and air. But
the court should be satisfied that a substantial loss of comfort
has been caused.
If plaintiff has not brought his suit or applied for an injunction at
the earliest opportunity, and has waited till the building has been
finished, and then asks the Court to have it removed, a
mandatory injunction will not generally be granted.

CONCLUSION : Unlike a lease, an easement does not give the


holder a right of "possession" of the property. Therefore an
easementary right is provided for specific relief from specific
violations of common basic rights. In the case of right to access of
light, it does not consist of a right to have a continuance of the
same amount of light throughout. In case of a diminution, the
dominant owner is bound to show that the diminution has interfered
with his ordinary occupations of life and it results in a nuisance if it
is sufficient to render the occupation of the house uncomfortable,
and prevent the owner from carrying his business as beneficially as
he formerly did.

Right of support :

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Easement of lateral and subjacent support. Prohibits an adjoining


land owner from digging too deep on his lot or in any manner
depriving his neighbor of vertical or horizontal support on the
latter's structures e.g. buildings, fences, etc.

Easements are also separate from natural rights, which operate


universally and do not have to be created. Some natural rights
appear similar to easements. For example, there is a natural right
to support of one's land. This does not, however, extend to
buildings upon the land or the consequences on the land of building
upon it. The operate of prescription to bring about a right of support
of buildings as well as land in the form of an easement limits the
operation of this natural right, however. Natural rights are only
actionable after the fact where damage has already occurred; the
neighbouring landowner cannot be compelled to take preventative
steps or give support in any particular fashion
eg A has an easement of support from Bs well. The wall of the well
gives in. A may enter upon Bs land and repair the wall,

Right of water :
Easements are also separate from natural rights, which operate
universally and do not have to be created. Some natural rights
appear similar to easements. For example, the right to water from a
stream or river is a right which may be extended through the
operation of an easement.

Go To Module-4 Questions.

Q : 2015 : Explain in detail : Legal remedies against violation of easement


right.
Ans :
http://uk.practicallaw.com/9-385-9230?service=property#a1005222
An easement is a right that a property owner has to some use of the
(usually adjoining) property of another person. eg, a right of way such as
a driveway. If your rights under an easement are being interfered with,

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you can take action to remove the interference yourself or you can bring
proceedings in the courts.

The remedies for interference with an easement include:


A. Declaratory relief.
B. Injunctions.
C. Damages.
D. Abatement of a nuisance.
The first three remedies (declarations, injunctions and damages) are
available by court order and can be granted singularly or in any
combination. Abatement is a self-help remedy and should be exercised
cautiously.

A. Declaratory relief :
Quite often, all that a claimant wants, having gone to the trouble of
issuing proceedings, is a declaration by the court confirming the
existence, and defining the extent, of the easement. Although
damages may also be sought arising from the interference, a claimant
needs certainty so that it is confident in its future use of the
easement.
Declarations are a discretionary remedy and are viewed by the courts
as a useful way of confirming the rights and duties of the respective
parties (often without the need for penalising a transgressing party by
way of injunction or damages).
It is also possible to obtain a negative declaration that a proposed
action, such as the development of land subject to an easement, will
not amount to an interference.
A declaration by the court is binding on the parties to the proceedings
and their successors in title (unlike an injunction which only binds the
parties). As a result, all parties with an interest in the proceedings
should be joined in the action.
However, it is not a contempt of court to fail to comply with or ignore
a declaration. If that happens, the injured party should go back to the
court to seek an injunction to enforce the declaration. It is, therefore,
often prudent to ask the court to grant liberty to apply for an interim
injunction in the event that the declaration is ignored.

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Injunctions :
Injunctions are equitable remedies, which may be awarded at the
discretion of the court. An injunction is only binding on the parties to
the proceedings and not on their successors in title, but breaching an
injunction is a contempt of court. An injunction will not normally be
granted where damages would be an adequate remedy for the
claimant.
There are three types of injunctions :
Mandatory, which orders the defendant to do something.
Prohibitory, which orders the defendant to refrain from doing
something.
Quia timet, which orders the defendant to act to prevent future
harm occurring.
An injunction may be awarded only where damages would not
adequately compensate the claimant. Injunctions may be interim
(interlocutory) or final (perpetual), and can be awarded
unconditionally or subject to such conditions as the court thinks fit.
An injunction is a very effective remedy and, if granted, will effectively
prohibit any further interference with the easement as established.
However, an injunction is a rather draconian remedy and the courts do
not grant injunctions lightly.

Damages:
Damages in respect of disputes concerning easements are calculated
on a tortious measure of damages basis. Damages for trespass or
nuisance are assessed to compensate the claimant for the loss
actually suffered as a result of the defendant's actions. If the claimant
has suffered no loss, the most the claimant can recover is nominal
damages.
Not all losses that flow from a tort are recoverable. Damages for
liability under tort are restricted by certain principles. For example,
sometimes:
Losses will be viewed as too remote to be recoverable.
There will not be a sufficiently strong causal connection between
the breach and the loss.

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The claimant may have failed to mitigate its loss.


The claimant may have suffered loss partly as a result of its own
fault.
Generally, when an easement has been interfered with, or wrongly
asserted, the damages will arise from:
Direct damage to the claimant's property, for example, the
demolition of a wall or the destruction of pipes.
Loss due to the claimant's inability to use its land or to exercise
its rights over other land.
Consequential loss flowing directly from the tort (provided it was
foreseeable by a reasonable person).

Abatement :
There is a general and limited common law principle that a party is
entitled to enter onto another's land in order to put an end to an
interference. This is known as abatement, and it comprises of both :
A right to enter onto the servient land in certain circumstances.
A remedy of putting right the interference.
Abatement can only be used where a cause of action exists and, in the
case of easements, this lies in nuisance. So, for example, abatement
may be used to lawfully remove an obstruction that is blocking a right
of way.
Abatement is only appropriate in simple cases or where an immediate
remedy is needed.
If there is more than one way to abate the nuisance, the least
"mischievous" method should be used as the party abating a nuisance
must act in the most reasonable manner available.
The party abating the nuisance must not cause any unnecessary
damage.
A claimant cannot resort to abatement if a court has already refused a
mandatory injunction.
Abatement must be exercised promptly.
Unless it is an emergency, or there is no need to enter onto someone
else's land, the party abating the nuisance should give notice to the
party causing the nuisance.

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If a party enters property to abate a nuisance, then that party is not


precluded from seeking other remedies of damages and/or a
declaration in court. If the nuisance recommences, an injunction may
also be sought.

Go To Module-4 Questions.

Q : 2012, 3, 4, 5 : Explain in detail the extinction, suspension and revival


of easements.
Ans :
Extinction of easements :
An easement gets extinguished under the Indian Easement Act 1882
in any of the following 12 ways :
01. Extinction by dissolution of right of servient owner
02. Extinction by release
03. Extinction by revocation
04. Extinction on expiration of limited period or happening of
dissolving condition
05. Extinction on termination of necessity
06. Extinction of useless easement
07. Extinction by permanent change in dominant heritage
08. Extinction on permanent alteration of servient heritage by
superior force
09. Extinction by destruction of either heritage
10. Extinction by unity of ownership
11. Extinction by non-enjoyment
12. Extinction of accessory right

01. Sec-37. Extinction by dissolution of right of servient owner :


When, from a cause which preceded the imposition of an easement,
the person by whom it was imposed ceases to have any right in the
servient heritage, the easement is extinguished.

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Exception-Nothing in this section applies to an easement lawfully


imposed by a mortgagor in accordance with Section 10.
eg A and B, tenants of C, have permanent transferable interest in
their respective holdings. A imposes on his holding an easement to
draw water from a tank for the purpose of irrigating Bs laid. B
enjoys the easement for twenty years. Then As rent falls into
arrear and his interest is sold Bs easement is extinguished.

02. Sec-38. Extinction by release. -An easement is extinguished when


the dominant owner releases it, expressly or impliedly, to the servient
owner. An easement may be released as to part only of the servient
heritage.
eg - A grants B an easement over As land for the beneficial
enjoyment of his house. B assigned the house to C, B then
purports to release the easement. The release is ineffectual.
- A, having an easement of light to a window, builds up that window
with bricks and mortar so as to manifest an intention to abandon
the easement permanently. The easement is impliedly in released.

03. Sec-39. Extinction by revocation. -An easement is extinguished


when the servient owner, in exercise of power reserved in this behalf,
revokes the easement.

04. Sec-40. Extinction on expiration of limited period or happening of


dissolving condition. -An easement is extinguished where it has been
imposed for a limited period, or acquired on condition that it shall
become void on the performance or non-performance of a specified
act, and the period expires or the condition is fulfilled.

05. Sec-41. Extinction on termination of necessity. -An easement of


necessity is extinguished when the necessity comes to an end.
eg A grant B a field inaccessible except by passing over As
adjoining land, B afterwards purchases a part of that land over
which he can pass to his field. The right of way over As land which
B has acquired is extinguished.

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06. Sec-42. Extinction of useless easement-An easement is


extinguished when it becomes incapable of being at any time and
under any circumstances beneficial to the dominant owner.

07. Sec-43. Extinction by permanent change in dominant heritage.


-Where by, any permanent change in the dominant heritage, the
burden on the servient heritage is materially increased and cannot be
reduced by the servient owner without interfering with the lawful
enjoyment of the easement, the easement is extinguished unless---
The injury caused to the servient owner by the change is so slight that
no reasonable person would complain of it; or --- The easement is an
easement of necessity.

08. Sec-44. Extinction on permanent alteration of servient heritage by


superior force. -An easement is extinguished where the servient
heritage is by superior force so permanently altered that dominant
owner call no longer enjoy such easement: Provided that, where a
way of necessity is destroyed by superior force, the dominant owner
has a right to another way over the servient heritage;
eg A grants to B, right to fish in a river running through As land.
The river changes its course permanently and runs through Cs
land. Bs easement is extinguished.

09. Sec-45. Extinction by destruction of either heritage. -An easement


is extinguished when either the dominant or the servient heritage is
completely destroyed.
eg A has a right of way over a road running along the foot of a sea-
cliff. The road is washed away by a permanent encroachment of
the sea. As easement is extinguished.

10. Sec-46. Extinction by unity of ownership. -An easement is


extinguished when the same person becomes entitled to the absolute
ownership of the whole of the dominant and servient heritages.
eg The joint owners of the dominant heritage jointly acquire the
servient heritage; the easement is extinguished.

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11. Sec-47. Extinction by non-enjoyment. -A continuous easement is


extinguished when it totally ceases to be enjoyed as such for an
unbroken period of twenty years. A discontinuous easement is
extinguished when, for a like period, it has not been enjoyed as such.
However, an easement is not extinguished under this section- Where
the easement is necessary easement.
eg A has, an annexed to his house, rights of way from the high road
neither over the heritages X and Z and the intervening heritage Y.
Before the twenty years expire. A exercise his right of way over X.
His rights of way over Y and Z are not extinguished.

12. Sec-48. Extinction of accessory right. -When an easement is


extinguished, the right (if any) accessory thereto are also
extinguished.
eg A has an easement to draw water from Bs well. As accessory
thereto be has a right of way over Bs land to and from the well.
The easement to draw water is extinguished under Section 47. The
right of way is also extinguished.

Suspension of easements :
There are two conditions under which easement right gets
suspended :
1. Sec-49 : An easement is suspended when the dominant owner
becomes entitled to possession of the servient heritage for a limited
interest therein or when the servient owner becomes entitled to
possession of the dominant heritage for a limited interest therein.

Above sec-49 embodies a well established rule of English law that,


though "unity of ownership" of estates extinguishes easement,
mere "unity of possession" only suspends the easement.
It is important to note that easement automatically gets revived
when there is no unity of possession.
eg Tenent A has right to draw water from landlord B. B enters in to
a sub-lease to acquire possession of A's property. The easement
gets suspended. However, easement gets revived when sub-lease is
terminated.

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02. Sec-50 : The servient owner has no right to require that an


easement be continued; he is not entitled to compensation for
damage caused to the servient heritage in consequence of the
extinguishment or suspension of the easement, PROVIDED the
dominant owner has given to the servient owner such notice.
However, when such notice has not been given, the servient owner
is entitled to compensation for damage caused to the servient
heritage in consequence of such extinguishment or suspension.
eg A, in exercise of an easement, diverts to his canal the water of
Bs stream. The diversion continues for many years, and during
that time the bed of the steam partly fills up. A then abandons his
easement. Bs land is consequently flooded. B sues A for
compensation for the damage caused by the flooding. It is proved
that A gave B one months notice of his intention to abandon the
easement, and that such notice was not sufficient to enable B to
have prevented the damage. B is entitled to recover his loss from A.

Discussion : In one calcutta case, the defendant A had an easement to


discharge sur-plus water of his tank on plaintiff B's land. When A
stopped exercising his easement, B filed a suit which was dismissed
because easement right of Dominant owner does NOT give reciprocal
right to servient owner to receive such water.

Revival of easements :
Section 51 of IEA 1882 provides for revival of such an easement,
which was extinguished by complete destruction of either heritage,
AND status quo is restored within twenty years of extinguishment.

Sec-51 : Revival of easement : An easement extinguished under


Section 45 revives,
(a) when the destroyed heritage is, before twenty years have
expired, restored by the deposit of alluvion;
(b) when the destroyed heritage is a servant building and before
twenty years have expired such building is rebuilt upon the same
site, and

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(c) when the destroyed heritage is a dominate building and


before twenty years have expired such building is rebuilt upon
the same site and in such a manner as not to impose a greater
burden on the servant heritage.

Framji- vs- Framji, Held by Bombay high court that in case of (c), it is
not necessary that such new building be of the same dimention as the
old one.

Note :
An easement extinguished under Section 46 revives when the grant
or bequest by which the unity of ownership was produced is set
aside by the decree of a competent Court.
A 'necessary' easement extinguished under the same section
revives when the unity of ownership ceases from any other cause.
A 'suspended' easement revives if the cause of Suspension is
removed before the right is extinguished under Section 47.

Illustration : A, as the absolute owner of field Y, has right of way over


Bs field Z. A obtains from B a lease of Z for twenty years. The
easement is suspended so long as A remains lessee (of Z). But when
A surrenders the lease to B, the right of way revive.

Go To Module-4 Questions.

-----> Discuss in detail : Licences : Meaning, elements, Grant and


Revocation of Licences
Ans :
https://coporatelaws.wordpress.com/2010/04/21/concept-of-leave-and-
license-under-indian-law/
http://www.lawctopus.com/academike/definition-license/
WHAT IS A LICENSE? :
A license is a personal right granted to a person to do something upon
immovable property of the grantor and does not amount to the
creation of interest in the property itself. It is purely a permissive right

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and is personal to the grantee. It creates no duties and obligations


upon the persons making the grant and is, therefore, revocable except
in certain circumstances expressly provided for in the Act itself.

Sec-52 of Indian Easement Act, 1882 defines License as under :


Where one person grants to another, or to a definite number of other
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, he unlawful, and such right does not amount to an
easement or an interest in the property, the right is called a licence.

Decisions of the Supreme Court in Associated Hotels of India Ltd. vs.


R.N. Kapoor [AIR 1959 SC 1262] summed the concept of License as if
a document gives only a right to use the property in particular way or
under certain terms while it remains in the possession and control of the
owner thereof, it will be a license. The legal possession, thereof,
continues to be with the owner of the property, but the licensee is
permitted to make use of the premises for a particular purpose. But for
the permission, his occupation would be unlawful. It does not create in
licensee's favour any estate or interest in the property.

ESSENTIAL FEATURES OF LICENSE : It important to take note of


essential features of license as under :
1. A license is not connected with the ownership of land / property but
creates only a personal right or obligation;
2. A license cannot be transferred or assigned;
3. License is purely permissive right arising only by permission,
express or implied, and not by adverse exercise or in any other way;
4. It only legalize a certain act which would otherwise be unlawful and
does not confer any interest in the property itself in or upon or over
which such act is allowed to be done;

DISTINCTION BETWEEN LEASE AND LICENSE : The main test for


deciding whether a person is a licensee of a property or a lessee is that
of exclusive possession, though it may not be the only test. If the right
granted conveys to the grantee an exclusive right of possession, though

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subject to certain reservations, if shall be a lease as opposed to license.


But where the grantee can only use the property in a certain way and on
certain terms while the property remains in the possession and control of
the owner, the right granted shall be a license.
1. A lease gives an exclusive interest in the property whereas license
does not;
2. A lease can be assigned to a third person, while a license being a
personal right cannot be so assigned / transferred;
3. A lessee can bring an action for trespass in his own name but a
licensee cannot do the same. He must do so in the name of the
licensor after obtaining his permission.
4. A lease is not revocable whereas a license is revocable except in
two case mentioned in Section 60 of Indian Easement Act, 1882.

Transferability Of License : A license other than a license to attend a


place of public entertainment cannot be transferred by the licensee or by
his servants or agents.

Implications Of Sale Of License Property By Licensor : Section 59 of


Indian Easements Act, 1882 in the event that licensor sells his property
in which he has granted a license in favour of licensee, transferee shall
not be bound by such license. However it has been held that if the
license has become irrevocable in the time of the licensor, the mere fact
that the licensor transfers his interest in the land would not extinguish
the license.

REVOCATION OF LICENSE : As general rule, License is always revocable


at will of licensor. However Section 60 of Indian Easements Act, 1882
places two restrictions on this general rule :
(A) If the license is coupled with a transfer of property and such
transfer is in force;
(B) If the licensee acting upon the license, has executed a work of
permanent character and incurred expenses in the execution.
Note that the fact that the license was granted for a consideration or
for an agreed term cannot affect the revocability of bare license. In
such cases the licensee can claim compensation for breach of contract.

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(A) A bare license is something different from a license coupled with


the transfer of property and when such license exists in a valid form, it
operates as a contract, or a gift or a grant and becomes irrevocable.
Illustration : A allows B to come to A's park to hunt there and to
take away the game. If A merely allowed B to enter the park and
to hunt in the park, it would be a case of bare license. However,
here A allowed B not only to hunt in the park but also to take
away the game. So it can NOT be said to be a case of bare
license. The license in such a case would be coupled with a
transfer of property, viz., the game hunted.

(B) The prohibition against the revocation of a license as contained in


Section 60 becomes applicable when a licensee acting upon the
license makes constructions. This means where a license is granted
for building purposes necessary for the enjoyment of the license, the
license becomes irrevocable when constructions are made in
pursuance thereof.
Now the term work of permanent character shall denote some
work which is not merely temporary nature. It is also not
necessary to prove that a large sum of money was spent on the
construction.

Licensees Remedy Against Improper Revocation :


A bare license may be revoked at the instance of licensor at any
time he likes and it is true that there is no provision under the law
for issue of any notice, as in the case of leases, before a license can
be revoked. But the licensee, should in proper cases, have
reasonable notice of such revocation and after revocation he must
have reasonable time quit the land and remove his chattels which
he has been licenses to put there. However, if he is thrust off
without such notice or before such reasonable time, though he is
not entitled to an injunction restraining the licensor from adopting
such improper course, yet he may get such damages as may have
been caused to him thereby.
Similarly where a license is granted valuable consideration and
before the licensee has had full enjoyment of it, it is revoked in

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breach of an express or implied contract the licensees remedy lies


only in an action for damages for breach of contract or implied
covenant not to revoke.

Go To Module-4 Questions.
Go To Contents.

SUGGESTED READING :
Mulla, Transfer of Property Act, Universal Delhi
Subbarao, Transfer of Property Act,
C. Subbiah Chetty, Madras B. Sivaramayya, The equalities and the Law,
Eastern Book Co. Lucknow.
P.C. Sen. The General Principles of Hindu, Jurisprudence (reprint) Allahabad
Law Agency.
B.H. Baden-Powell, Land Systems of British India, Vol. 1 to 3 (1892), Oxford
V. P. Sarthy, Transfer of Property, Eastern Book Company, Lucknow.
Vepa P. Sarathi: Law of Transfer of Property, Eastern Book Company
T. R. Desai : The Indian Easements Act, 1982
B. B. Katiyar : Easements and Licences, Universal Law Publishing Co.
Sanjiva Row : The Indian Easements Act
K. Joshi : Easements and Licences Peacock : The Law relating to Easements

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