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DAMODARAM SANJIVAYYA NATIONAL LAW UNIVERSITY

VISAKHAPATNAM, A.P., INDIA

SECTIONS 35,36 AND 37 OF TPA

TRANSFER OF PROPERTY

JOGI NAIDU SIR

D.BHUVANESH VARMA

2015033 , V SEMESTER

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ACKNOWLEDGEMENT
I am grateful to our TRANSFER OF PROPERTY LECTURER JOGI NAIDU SIR for his
valuable guidance, significant suggestions and help for accomplishing this project topic
“SECTIONS 35,36 AND 37 OF TPA”. I have tried my best to collect information about the
project in various possible ways to depict clear picture about the given project topic

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CONTENTS
1) INTRODUCTION TO SECTION 35…………………………….6
2) DOCTRINE OF ELECTION……………………………………..7
3) EXCEPTIONS……………………………………………………..10
4) OTHER IMPORTANT CONDITIONS…………………………15
5) INTRODUCTION TO SECTIONS 36 AND 37………………..18
6) SECTIONS 36……………………………………………………..18
7) SECTION 37………………………………………………………25
8) COMPARISION TO ENGLISH LAW………………………….29
9) CONCLUSION…………………………………………………...30

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ABSTRACT

SECTION 35 : DOCTRINE OF ELECTION

The doctrine of election is stated in Sec. 35 of the Transfer of Property Act alongside Section
180 to 190 of the Indian Succession Act.

It states that when a party transfers a property over which he does not hold any right of transfer
and entailed in that transaction is the benefit conferred upon the original owner of the property,
such title-holder must elect his option to either validate such transfer of property or reject it;
upon rejection, the benefit shall be relinquished back to the transferor subject nevertheless :

 “Where the transfer has been through gratuitous means and the transferor has become
incapable of making a new transfer.
 In all cases where the transfer is for consideration”.

SECTION 36 : APPORTIONMENT OF PERIODICAL PAYMENTS DETERMINATION


OF INTEREST OF PERSON ENTITLED

Where there are no provisions provided under the contract for distribution of income
arising from any portion of interest in the property in the form of rents, annuities, pensions,
dividends and other periodical payments, then because there is no provision provided in the
contract in the transfer of property, it shall be divided between persons entitled legally depending
upon their entitlements. The entitled persons being mainly the transferor and the transferee will
be calculated on a day- to- day basis as is divisible between the two or more persons entitled to
it. It shall be payable as per the days appointed for any of the said payments. The distribution
takes place in accordance with apportion-able portions of income accruing to either of the
persons (section 36). Suppose Suresh has sold his property to Ramesh in the middle of the
month. The income of the property in the first half of the month belongs to Suresh and after the
date of selling, which is the latter half of the month, then belongs to Ramesh.

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SECTION 37: APPORTIONMENT OF BENEFIT OF OBLIGATION ON SEVERANCE.

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

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

Nothing in this section applies to leases for agricultural purposes unless and until the state
government by notification in the official gazette so directs.

BY

D.BHUVANESHVARMA

2015033

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INTRODUCTION:

SECTION 35 OF TRANSFER OF PROPERTY ACT :

"Election" maens choosing of one right between two rights, when there is clear intention that
both the rights cannot be enjoyed but only one. The doctrine of election is stated in Sec. 35 of the
Transfer of Property Act alongside Section 180 to 190 of the Indian Succession Act.

Section 35 of the Transfer of the Property Act defines the "Doctrine of Election". The "Doctrine
of Election" is based on the rule in Cooper vs Cooper. If a person transfers some property which
he has no right to transfer, and the same transaction confers any benefit on the owner of the
property, such owner must elect either to confirm such transfer or reject it. If he rejects the
transfer, he shall relinquish the benefit conferred upon him and the property will revert back to
himself or his representative as if it had not been disposed of.

Illustration

A owns a property that is worth Rs 800. B professes to transfer the same to C through the
Rs1000 instrument to A. But the A, the owner opts/elects to retain his property and thus, forfeits
the gift of Rs 1000.

The foundation of the doctrine of election is that the person taking a benefit under an instrument
must also bear the burden. Election is an obligation to choose between two inconsistent or
alternative rights in a case where there is a clear intention of the grantor that the grantee should
not enjoy both. In other words, a person cannot take under and against one and the same
instrument.
If through one instrument, you have two transactions, then you have to accept both the
transactions and none. You can’t accept one and reject other. Example: Goti sells his garden and
bunglow to Kapsa by one instrument. Kapsa only wants to retain bunglow and wants to cancel
the transfer regarding garden, this is not possible. If Kapsa takes bunglow, it means, he has
confirmed the transaction and has to take garden also. According to section 35 of the transfer of
property Act 1882 provide that, Where a person professes to transfer property which he has no
right to transfer, and as part of the same transaction confers any benefit on the owner of the

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property, such owner must elect either to confirm such transfer or to dissent from it; and in the
latter case he shall relinquish the benefit so conferred, and the benefit so relinquished shall revert
to the transferor or his representative as if it had not been disposed of, subject nevertheless.
Where the transfer is gratuitous, and the transferor has, before the election, died or otherwise
become incapable of making a fresh transfer and in all cases where the transfer is for
consideration, to the charge of making good to the disappointed transferee the amount or value of
the property attempted to be transferred to him. i.e. The farm of Sultanpur is the property of C
and worth Rs. 800. A by an instrument of gift professes to transfer it to B, giving by the same
instrument Rs. 1,000 to C. C elects to retain the farm. He forfeits the gift of Rs. 1,000.

DOCTRINE OF ELECTION:
Election is an obligation to choose between two inconsistent or alternative rights in a case where
there is a clear intention of the grantor that the grantee should nit enjoy both. The foundation of
the doctrine of election is that the person taking a benefit under an instrument must also bear the
burden. In other words, a person cannot take under and against one and the same instrument.
Suppose, by a deed A gives to B a house belonging to C, and by the same instrument gives other
property belonging to himself to C.C is entitle to A’s property only upon the connection of C’s
con forming to all the provision of the instrument by renouncing the right to his own property
given In favor of B; he must consequently make his choice, or as it is technically termed “he is
put to his election”, to take either under or against the instrument, he must relinquish in favor of
B his property given to B by A; and takes the property which is given to him by A. as stated by
Lord Hather by in Cooper v. Cooper.
Conditions for application of the Doctrine of Election :

The following are the essentials for the application of the Doctrine of Election:

1. The transferor should dispose of the property in which he has no right to transfer.

2. The transferor must confer a benefit to the real owner of the property.

3. Both the benefits conferred and the transfer made must be part of the same transaction or
document.

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4. The owner is now given a choice of election either to accept the benefit and allow the transfer
or to reject both.

Eg:-

"A" transfer "B"'s property worth Rs.100 without his consent or knowledge to "C" and in the
same transaction, "A" gives Rs.1000 to "B".

The basic of this doctrine is that a person who gets the benefits must also bear the burden.
Generally, the benefit is greater in value than the burden. The benefit should be express and
particular. It must be in the same transaction. The silence of the transferee for two years shows
the acceptance of benefit and approval of the transfer of his property to a third person.

The transfer and benefit should be gratutious without money. If the transferor has died or has
become incapable of making a fresh transfer before such election, then the subsequent election
by owner of the property is void. The Doctrine of Election only applies when the two donations
are part of the same transaction.

Section 35. Election when necessary:


According to section 35 of the transfer of property Act 1882 provide that, Where a person
professes to transfer property which he has no right to transfer, and as part of the same
transaction confers any benefit on the owner of the property, such owner must elect either to
confirm such transfer or to dissent from it; and in the latter case he shall relinquish the benefit so
conferred, and the benefit so relinquished shall revert to the transferor or his representative as if
it had not been disposed of, subject nevertheless, Where the transfer is gratuitous, and the
transferor has, before the election, died or otherwise become incapable of making a fresh transfer
and in all cases where the transfer is for consideration, to the charge of making good to the
disappointed transferee the amount or value of the property attempted to be transferred to him.
Illustrations: - The farm of Sultanpur is the property of C and worth Rs. 800. A by an
instrument of gift professes to transfer it to B, giving by the same instrument Rs. 1,000 to C. C
elects to retain the farm. He forfeits the gift of Rs. 1,000.
In the same case, A dies before the election. His representative must out of the Rs. 1,000 pay Rs.
800 to B.

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The rule in the first paragraph of this section applies whether the transferor does or does not
believe that which he professes to transfer to be his own.
A person taking no benefit directly under a transaction, but deriving a benefit under it indirectly,
need not elect.
A person who in his one capacity takes a benefit under the transaction may in another dissent
there from.
Exception to the last preceding four rules: Where a particular benefit is expressed to be
conferred on the owner of the property which the transferor professes to transfer, and such
benefit is expressed to be in lieu of that property, if such owner claims the property, he must
relinquish the particular benefit, but he is not bound to relinquish any other benefit conferred
upon him by the same transaction.
Acceptance of the benefit by the person on whom it is conferred constitutes an election by him to
confirm the transfer, if he is aware of his duty to elect and of those circumstances which would
influence the judgment of a reasonable man in making an election, or if he waives enquiry into
the circumstances.
Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the
person on whom the benefit has been conferred has enjoyed it for two years without doing any
act to express dissent.
Such knowledge or waiver may be inferred from any act of his which renders it impossible to
place the persons interested in the property professed to be transferred in the same condition as if
such act had not been done.
“Where a person professes to property which he has no right to transfer, and as part of the same
transaction confers any benefit on the owner of the property, such owner must elect either to
confirm such transfer or to dissent from it, and in the letter case he shall relinquish the benefit so
conferred.
The rule embodied in the section is explained by an illustration:
The farm of sultanpur is the property of C and worth Rs. 800. A by an instrument of gift
professes to transfer it to B, giving by the same instrument Rs. 1,000 to C. C elects to retain the
farm. He forfeits the gift of Rs. 1,000.

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The doctrine of election may be stated in the classic words of Maitland as follows:-
“He who accepts a benefit under a deed or will or other instrument, must-
A. adopt the whole contents of that instrument;
B. contort to all its provisions; and
C. Renounce all right that is inconsistent with it.

EXCEPTIONS

When the owner who is considering the election between retaining the property and accepting a
particular benefit, chooses the former, he is not bound to relinquish any extraneous benefit that
he gains through the transaction.

The acceptance of the benefit by the original owner shall be deemed to be as election by him to
validate the transfer, if he is aware of his responsibilities and the circumstances that might
influence a prudent man into making an election.

This knowledge of the circumstances can be assumed if the person who gains the benefit enjoys
it for a period of more than two years. Further discussion over this has been made under the
heading of “Modes of Election”.

If the original owner does not elect his option within a year of the transfer of property, the
transferor would require him to elect his choice. Even after the reasonable time, if he still does
not also still elect, the original owner shall be assumed to have elected the validation of the
property transfer as his choice.

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

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Case Law under section 35

Section 35:Doctrine of Election: –


The foundation of the doctrine of election is that person taking the benefit of an instrument must
also bear the burden, imposed thereby and that he cannot take under against the same instrument.
It is a breach to the general rule that no one may approbate or reprobate. The doctrine is based on
intended intention to this extent that the law presumes that the author of an instrument intended
to give effect to every part of it. There is an obligation on him who takes a benefit under a will or
other instrument intended to give full effect to that instrument under which it was beyond the
power of the donor or settler to dispose on him who takes the benefit, the obligation of carrying
the instrument into full and complete force and effect. Of an instrument is in valid in part, what
remains is sufficient to put a person to his election if he claims a benefit under it. Muhammad
Kader Ali Fokir vs. Fakir Lakman Hakim.
Doctrine of election:- the beneficiary must give effect to the instrument as a whole.
The foundation of the doctrine of election is that a person taking the benefit under an instrument
must also bear the burden imposed by it and that he cannot take under against the same
instrument. It is, therefore, a breach of the general rule that no one may approbate or reprobate.
The doctrine is based on intention to this extent that the law presumes that the author of an
instrument intended to give effect to every part of it.
The same principle is stated in White and Tudor’s Leading case in Equity, as follows:-
Election is the obligation imposed upon a party by court of Equity to choose between two
inconsistent or alternative rights of climes in case where there is clear intention of the person
from who derives one that the he should not enjoy both. That he who accepts a benefit under a
deed or will must adopt the whole contents of the instrument.”
The India courts have applied this doctrine in several cases. In Ramakottaya v.
viraghavayya, it was observed that a person cannot approbate and reprobate the same
transaction the supreme court has also considered the doctrine in Bhau Ram v. Baij Nath
Singhand Beepathuma v. Velasari Shankaranarayana Kadamguliaya.

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Analysis of the section: - (1) the transferor must profess to transfer a property which he has
no right to transfer. It is immaterial whether in doing so he knows or does not know it to be lost
his property;
(2) He must confer a benefit on the owner whose property he purports to transfer to another
person;
(3) The two things (viz, the transfer and conferring of the benefit) must form parts of the some
transaction.
(4) The benefit must be directly conferred upon the owner of the property. For instance suppose
A by a deed makes a gift of B property to C and gives Rs. 10,000 to B son B, will not be put to
election for nothing is being given to B which may be supposed to be in compensation for his
loss.
(5) The benefit must be conferred on his in the same capacity in which he is the owner of the
property. For example, in the above illustration, suppose B is the guardian of his son, B may
keep his won property, and also take as his guardian, Rs. 1,000.
Effect of election against the transfer:-
Where the owner dissents from the transfer of property-
(1) He must relinquish the benefit;
(2) The benefit intended for him would then revert to the transfer.
Illustration: - A gives a gift to C of a property which belongs to B and by the same deed gives
Rs.5, 000 to B. dose not agree to the transfer of his property to C, he cannot claim Rs.5, 000
which reverts to A.
Compensation to disappoint transferee:-

Where the transfer is gratuitous and the transferor has before the election died or otherwise
become incapable of making a fresh transfer, the case is closely analogous to that of a will; it is
accordingly governed by same rules and the disappointed transferee has a claim for
compensation. And in every case where he has given consideration for the transfer which is
defeated by the election, the matter is one of contract and he similarly has a consequent claim for
compensation. Subject only to these claims, it is provided that the benefit which the person who
being put to his election and preferring to retain his own property, declines to accept “shall revert
to the transferor or his representative as if had not been disposed of.”

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Difference between English Law and the Indian Law Perspective :

The English law depends upon the principle of compensation which means that if the original
owner does not choose to validate the transfer, he can keep the property and also the benefit
accrued, subject to compensation provided to the donee, to the extent of the property he had
suffered a loss for. In this respect the English Law is different because there the donee electing
against the instrument does not incur a forfeiture of the benefit conferred on him by it, but in
merely bound to make compensation out of it to the person disappointed by his election.

But in the Indian law context, this doctrine is influenced by the principle of forfeiture which
states that if the original owner does not choose to validate the transfer, the donee incurs a
forfeiture of the conferred benefit which goes back to the transferor.

Where election limited to part of benefit:-


An exception to the general rule that if a person elects against the instrument, he will forfeit the
whole o the benefit received under it. For instance, suppose A transfers a property X belonging
to B and by the same instrument confers benefits, a, b, and c on B and it is expressly stated that
the benefit c is given to B in lieu of property X, then, if B elects to retain X, he will not be bound
to relinquish all the benefits conferred on him by the instrument but only c which is expressed to
be lieu of X.
Mode of Election :

Election must be divide into two :

1. Direct Election or

2. Indirect Election.

1. Direct Election :

There is no prescribed form. A letter, telegram, oral words of transferor or any other sign by the
person which conveys the intention of the transferor is enough.

2. Indirect Election :

There are three types of Indirect Election.

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They are :-

1. Acceptance of benefit without knowledge of duty to elect

2. Enjoyment for two years and

3. Status quo cannot be restored.

1. Acceptance of benefit without knowledge of duty to elect :

If the donee accepts the benefit conferred upon him by the transfer, then such acceptance on his
part constitutes election by him. But the acceptance must be made with full knowledge of his
duty to elect and all matters about such benefits.

If the donee accepts the benefits without knowledge, then the representatives of the donee may
revoke the election. If the election is made under mistake of fact, it may be revoked by the
elector or his representatives. But if the donee willfully abstains from inquring into the
circumstances under which the benefit is conferred upon him and makes an election, such an
election is binding on him and his representatives.

2. Enjoyment for two years : [ Section 188(1) of the Indian Succession Act ]

If a person who has to elect knows that he is under a duty to elect, he must express his dissent, if
he retains the property for some time and not interested to elect in favour of the proposal. If he
keeps the property for two years, without expressing that he is not in favour of the election, then
it is presumed that the person so retaining the property is doing so with knowledge and
acceptance of the document.

3. Status quo cannot be restored :

In the case of property which is exhaustible by consumption or use, if he once starts consuming
the property, election in his favour is persumed. No period of consumption is necessary for this
presumption.

The paragraph which follow provide for the mode of election. According to the term of these
paragraphs, election may be expressed or implied by conduct. Where, the election is made in
express words, it is final and conclusive. Where, however, it is not so made, but the transferee (1)
being aware of his duty to elect, and (2) having a full knowledge of such matters as the value of

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properties, accepts the benefit given to him by the transaction, such action on his part constitutes
an election in favor of the transaction.
Hence it follows that if a person’s act through ignorance or mistake, the doctrine gives way.
Presumption as election:-
The question as to whether the benefit was accepted with the knowledge of the circumstances
would be a question of fact subject to the following rules:-
(a) If the benefit has been enjoyed for two years without doing any act to express dissent, it shall
be presumed that he had the knowledge or he waived enquiry.
(b) If he has done any act which renders it impossible to place the person interested in the property
professed to be transferred in the same condition as if such act had not been done. For example,
if A transfers to B an estate to which C is entitle, and as part of the same transaction gives C a
coal-mine, C takes possession of the coal-mind and exhausts it. C must be presumed to have
confirmed the transfer of his estate by A to B.
Requisition to election:-
The last but on the paragraph provides a special procedure by which the person put to his
election may be compelled by the transferor to elect. Upon the expiration of one year from the
transfer, if an election has not taken place, the transferor may compel him to make his election. If
he fails to comply with this requisition with in a reasonable time, he shall be deemed to have
elected to confirm the transaction.
Suspension of election:-
The ninth and the last paragraph lays down that where the done suffers from some disability by
reason of infancy, lunacy and so forth, the election shall be postponed until the disability ceases
or until the election is made by the some competent authority, e.g., a guardian of minor.

OTHER IMPORTANT CONDITIONS

Proprietary Interest

Election over a property is not asked to made by a person unless he holds a proprietary interest
which are disposed off in derogation of the person’s rights.

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So, election cannot take place if the property that is decided by the transferor to be disposed
does not happen to be owned by any individual to whom an interest is being provided through
the transfer. Also, it cannot take place if the transferor does not provide any benefit on the
individual who is the original owner of the property.

“As part of the same transaction”

One cardinal condition for the doctrine of election to be executed is that the benefit conferred
upon the original owner should be as part of the same contract by which he transfers the property
over which he holds no right to transfer.

In the landmark case of Ramayyar v. Mahalaxmi, a widow had given a gift in excess of her
powers and had then provided a will which stated that “ excluding the properties which I have
already given away, I will make the following dispositions”. The Court ordered that the plaintiff
under the will was not excluded from the election doctrine from contesting the previous gift
which wasn’t the issue of the will at all.

It is to be noted that different nature of two properties is not a bar to election by the owner like in
the case of Ammalu v. Ponnammal where a person who was managing the properties of the
daughter of his deceased brother, died leaving a will bequeathing a portion of it to B. It was held
that the doctrine of election did apply for the niece.

Donor’s Intention

In order to create a situation of election, it is important that the intention of the testator should be
clear with regard to disposing of the property which he does not own. Parol evidence is not
acceptable and thus the intention must be prima facie clear.

Indirect Benefit

The benefit that the original owner is conferred with has to be direct in nature and if indirect, he
does not need to elect. This principle is explained in Section 184 of Indian Succession Act, 1925

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and states that “when the devisee who claims derivatively through another does not take under
the deed, and is not bound by the equity attaching thereto.”

Difference in Capacity

An individual can in one capacity utilize a benefit while can dissent or reject that benefit in
another capacity. It means to explain that it is possible to facilitate two roles of an individual
wherein he can for example, accept legacy for an estate while in his personal competence, he
could retain the property.

Modes of Election

The election by the owner can either be direct or indirect. In direct election, it is simply through
communication about the elected choice or option. Though, in case of an indirect election, “the
acceptance of the benefit by the original owner is subject to two conditions:

1. He has to be aware of his duty to elect, and


2. There must be proof of knowledge of circumstances which would influence the judgment
of a reasonable man in making an election :

Enjoyment for two years of the benefit by the person on whom it is conferred with any
dissent. The election shall be presumed when the donee acts in such a manner with the
property gifted to him that it becomes impossible to return it to the original owner in its
original state.

COMPENSATION

Estimated cost of the property which is attempted to be transferred towards the transferee is the
approximation of the compensation that he shall receive. However, in context of immovable
properties, there arises the issue of changing value of the property according to the lapse of time.
Thus, this valuation is to take place at the date of the instrument becoming operational rather
than at the time of election.

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INTRODUCTION :

SECTION 36 AND 37 OF TRANSFER OF PROPERTY ACT

Apportionment in the Transfer of Property Act, 1882 is explained under sections 36 and 37. It is
one of the principles in the transfer of immovable and movable property which requires
consideration. Apportionment has dual meanings: 1) distribution of a common property among
many people and, 2) contribution made by different people holding different rights to carry out a
common cause. The TOPA, 1882 is concerned with only the first type of apportionment; it is
divided into two types: apportionment by time and apportionment by estate.

An example of apportionment by time is suppose X has let his house on rent of Rs. 200 which
payable monthly on the last day. If X sells his house to Z in the middle of the month, then at the
end of the month, X shall receive Rs. 100 as rent and so shall Z. Where X’s rent will be from the
beginning of the month till the middle and Z will receive rent from the mid month till the end.

In apportionment by estate, X has rented his house for Rs. 200 monthly. If he sells half of the
house to Z and gives the tenant responsible notice of the sale, the tenant is obliged to pay Rs. 100
to X and Rs. 100 to Z from the date of the sale.

SECTION 36

Section 36 of the Transfer of Property Act, 1882 states that

“ Apportionment of periodical payments determination of interest of


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

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Section 36 is based on the principle of apportionment by time. For example, a property whose
rent is payable on the last date of the month is sold off in the middle of the month. In such a case,
in the absence of any contract which states the contrary, the seller of the property will be entitled
to rent payable for the first half of the month before the sale was made and the buyer will receive
the rent for the half of the month after the sale was made. As for the tenant, he will continue the
pay the rent on the last date of the month.

Principle of apportionment by time is derived from the English Apportionment Act, 1870. In the
old English Common law system, apportionment by time was only recognised on the condition
that there should be an express stipulation for the same. It was based on the rule that the whole
contract could not be subjected to apportionment but was only applicable to periodical payments
which became due on fixed intervals and not payments like interests which the creditor could
collect when he desires. Apportionment by time was not recognised except for in the case of
interest lent money. Hence, there was no apportionment of periodical payments like rent as each
part of the rent agreement was considered as a separate contract. This disallowed any
apportionment of the rent in case the lesser transferred his rights to receive such rent between the
two days which were allotted to collect such rent. However, since the principle of equity applies
to apportionment exceptions were made to this common law rule in case of certain annuities as
would be deemed fit for the concertinaed situation. Consequently, in 1870, the Apportionment
Act, section 2 was introduced in Britain in order to make proper provisions for such situations.

Section 8 of the TOPA provides that day to day incomes like interest shall be divided among the
transferor and the transferee however this section becomes void when income is not incurred on
a di die in diem basis. It also does not apply to cases partition of property as it is not a transfer of
property and the person to whom the portion is allotted always maintains his right over the
portion.

Section 36 applies only to transfers between a transferor and transferee and cannot be applicable
in cases of landlord and tenant. This was verified in the case Smt. Satyabhamadevi Choubey
v. Ramkishore Pandey1

1 Smt. Satyabhamadevi Choubey v. Ramkishore Pandey, AIR 1975 MP 115.

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“What is, however, pertinent to note is that this section is applicable
only as between the transferor and the transferee. It does not affect the
liability of the tenant which must be determined independent of it. Since
the rent for the entire month of June fell due on the 1st of July, the
tenant was liable to pay the rent for the whole month to the plaintiff
even though the vendor may be entitled to claim apportionment under
Section 36 of the Transfer of Property Act from the plaintiff.”

This section is applicable to transfers in the interest of the beneficiary and not to the
interest of the one who is paying, the person who pays the rent has no claim to
apportion it between the assignee and the landlord. This was clarified in the case
Satyendra v. Nilkanta.2

It also does not apply to transfers which are done by operation of law since they are not included
by section 2(d) of the Act.

The clause ‘other periodical payments’ has been explained in the case Jones v. Ogle where Lord
Selbourne held that such payments must be those that are periodic in nature and recurring at
fixed time intervals and not due through the discretion of one or multiple persons but from some
“antecedent obligation” and must be in the nature of an income i.e. it should be in some form of
investment. It is understood ejusdem generis with annuities, rents, dividends etc. Partnership is
not included in this clause as the profits are made only after the accounts of the partners have
been adjusted.

In case of rents section 36 of the Transfer of Property works in connection to section 8. Section 8
says that along with the transfer of property, the transferee also gains all the interest which
comes with the property is and is in a position to be transferred. This section comes into play for
payments like rents which are accrued after the transfer has been made and are considered as a
day to day payment. The transferee is entitled to the rent that is accrued between the date of
transfer and the day the rent is paid. In Nand Kishore v. Ram Sarup3 a piece of land the rent
for which was payable in two instalments on 1st December (10 annas) and 1st May (6 annas) was
transferred on 20th February. The court held that the transferee was entitled to only the 6 annas

2 Satyendra v. Nilkanta, 21 C 838.


3 Nand Kishore v. Ram Sarup, AIR1927All569.

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instalments after the date of the transfer as it was incurred on a de die in diem from December 1
to May 1. Apportionment in such an agricultural case is to be done on the rent for the season in
which the crop is grown and not for the whole year. Poongavanam Pillai v. V. Subramanya
Pillai4 set some clarifications regarding rent in section 36. It said that rent in arrears are not legal
parts of the transferred property and are an actionable claim and ought to be assigned separately
from the property. However, if at the time of transfer of the property a different intention is
expressed then it would be heeded to and section 36 would not be applicable. In cases where no
such intention is expressed but by the actions of the transfer or the transferee such intention is
implied, then again section 36 shall be inapplicable and the implied intension shall be complied
with. If no such intensions exist, then the rent shall be appropriated between the transferor and
the transferee where the transferee gains the rent after the date of the transfer and the transferor
will get the rents before the transfer of property.

Section 36 is inapplicable in transfer of interest of a lesser. In S.K.G. Sugar Mills v. D.G.


Mehta5 there was a lease for running the concerned sugar mill the rent for which was to be paid
in instalments. The mill was sold by the order of the court and it was held that the lessee was
liable to pay rent for the mill till the date of the sale even though there was no crushing of
sugarcane done till the time of the sale.

A co-owner cannot split up the tenancy in estate or in rent on his own. He cannot ask the tenant
to vacate his portion of the rented property and neither can he sure the tenant for his share of the
rent. Such separation of property can only be done when all the co-owners and co-lesser agree to
do so. In such a case, the property is split severally and each co-owner becomes an individual
owner of the split property and can deal with their portion and the tenant on an individual basis.
The tenant does not have the authority prevent the owners from splitting the property but he does
have the right to move the court to prove that the partition was mala fide.6

Apportionment also does not affect the date of the payment. If the assignment of the property
takes place in the middle of the year and the lessee is supposed to pay the rent at the end of the
year then the date of his due payment still remains unchanged though he will have to pay

4 Poongavanam Pillai v. V. Subramanya Pillai, AIR1951Mad601.


5 S.K.G. Sugar Mills v. D.G. Mehta, AIR1964Pat258.
6 Sk. Sattar Sk. Mohd. Choudhari v. Gundappa AMabadas Bukate, AIR 1997 SC 998.

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different amounts to the transferor and the transferee. In re United Club and Hotel co. case7 a
company was occupying a property which was under lease and was rented out to them the rent
for which was payable on the usual quarter days. At the time of winding up of business, it was
held that the lesser was not liable to the rent which was not due yet.

Apportionment by time can be set aside by the use a contract on the contrary in the absence of
which section 36 would apply. In E.D. Sassoon and Company Ltd. v. The Commissioner of
Income-tax, Bombay City8 the appellant firm was the managing agent of various companies
and under an agreement transferred their managing agencies to other companies. The income
tax department accused the appellant of escaping payment on tax. The tribunal asked the
question that under the given circumstances was the appellant’s commission apportionable
between the assessee company and the assignee. The supreme court held that the commission
was not apportionable because 1) the managing agents are not co-shares and hence do not have
any share in the profits, 2) there is no grounds by which the relationship between the company
and the managing agents was that of trusteeship therefore the managing agents do not have any
rights to earn commission unless the accounts are balanced at the yearend and the commission
due to the agents is ascertained from the net profits, 3) The managing agency commission had
not been accrued to the plaintiff on the date of the concerned transfers.

In case of a partition of a joint family, the court held in W.N. Mammad Kunhi v. W.N.
Ibrayani Haji and Ors.9 that section 36 is not applicable. If there is no contract to the contrary
or any contrary intentions it is presumed that any profit or rent accrued to the joint family, even
that accrued before partition, and which has not been realised yet will be of the co-sharers to
whom the interest from which profit or rent arises has been allotted. Same can be said when
regard to local customs and usage which can prohibit the application of apportionment by time in
the concerned area.

An annuity is a yearly payment secure by a personal agreement or a prayer bond which may be
granted for life or for some agreed number of years. For a payment to be considered as annuity,
the annual payment should be in the form of income. For instance, when one purchases income

7 In re United Club and Hotel Co.,(1898) 67 LJQB 517 (518).


8 E.D. Sassoon and Company Ltd. v. The Commissioner of Income-tax, Bombay City, AIR 1954 SC 470.
9 W.N. Mammad Kunhi v. W.N. Ibrayani Haji and Ors, AIR 1959 Ker 208.

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and the capital ceases to exist, the principal is converted into annuity but not in the case when the
capital can be paid back in annual instalments.

Dividends are payments which are made under that name or which are given out of the
revenue of a trading or public companies and which can be divided among all and any member
of that company. These payments are assumed to be made on a day to day basis and do not
include those payment which are reimbursement of capital or are in the nature of returns.
Profits from a private venture and those arising from the sale of new shares of a company
(even if they divisible among the shareholders) are not considered dividends and in the first
case are not apportionable. It was held in Co-operative Company, Ltd. v. Bhagwan Das and
Co.10 that when there is a transfer of shares which no explicit concern to dividends (since a
sale of shares need not always include sale of dividend), the transferors shall be entitled to
dividends before the time of transfer of shares. It was also held that dividend that is declared
after the transfer of shares does not have any effect on the rights of the transferor.

A royalty is “a sum paid to a patentee for the use of a patent or to an author or composer for each
copy of a book sold or for each public performance of a work”. Royalty is not considered to be
given at the end of a particular time period and is not treated the same as rent. This is because the
amount which is to be paid depends upon external factors and not fixed. This was held in
Byomkesh v. Madhabji11 where royalty at a given rate was to be paid on coal but there was no
specification as to when it shall be payable. The court said that the royal shall be paid within a
reasonable period of time and in the given case three months were considered an adequate period
of time

Since the Indian law is very limited in its view of apportionment, cases which stand outside of
the preview of this law shall be judged on the basis of equity, justice and good conscience and
the application of the English common law. Based on this, the principle has been applied to cases
relating to devolution of interest by succession: in Mamad Kunhi v. Ibrayani Haji12, it was
held that section 36 does not apply to cases of partition and voluntary transfers, devolution of
interest by succession and execution sales are to be treated alike. For instance, in Phirozshaw v.

10 Co-operative Company, Ltd. v. Bhagwan Das and Co.,AIR 1930 All 615.
11 Byomkesh v. Madhabji, AIR 1940 Pat 60.
12 Mamad Kunhi v. Ibrayani Haji, AIR 1959 KER 208,

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Bai Goolabi13 in accordance with a settlement deed, successive estates were created and the
income from the investments and other settled property in the form of rents and shares was
allotted to the these successive estates. The conflict was whether the income was apportionalbe
de die in diem between the deceased settler’s estate who had life interest and the person who was
entitled under the settlement. The Privy Council held that in the absence of any law in India
which dealt with such a situation, the English common law would apply according to which there
would be no apportionment of discontinuous payments.

Another instance of the application of section 36 to cases out of its defined boundaries is in
Shivaprasad Singh v.Prayagkumari Debee14 where the issue was regarding the inheritance of
an impartibly estate between the said heirs and the son who intervened as executor de son tort.
The court held that on the basis of the principle of equity the son was not the rightful heir to the
estate and that the plaintiff is entitled to rents and royalties only up to the death of the original
property holder.

In Y.S. David v. Bangaru Rangaraju15 section 36 was applied to sales in execution though the
section is not applicable to such sales. This was done on the basis of equity, justice and good
conscience. The court held that when a property which is pending a mortgage suit is allotted to a
receiver who leases out the property, and on the day of the execution of the suit the property is in
the possession of the lessee, then on the instance of the auction- purchase the rent subsequent to
the date of the sale can be apportioned between the receiver and the purchaser.

In James C.P. Fernandez v. Ramakrishna Marthoba Rao Kesbekar16 the court stated that
the defendant was in possession of the concerned property only up to the date of partition and till
that date he would be liable to pay rent however after the date of partition, the property shall be
enjoyed severally. Section 36 is applicable in cases where an assignee of a lessee seeks
apportionment of rent. If the assignment is the same size as that in the lease then the rent should
not be more that in this assignment. However, if it is a question of tenancy over a long period of
time then the assignee can ask for apportionment of rent.

13 Phirozshaw v. Bai Goolabi, 50 IA 276.


14 Shivaprasad Singh v.Prayagkumari Debee, AIR 1935 Cal 39.
15 Y.S. David v. Bangaru Rangaraju, AIR 1944 Mad 56.
16 C.P. Fernandez v. Ramakrishna Marthoba Rao Kesbekar, AIR 1940 Mad 21.

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SECTION 37

This section applies the principle of apportion by estate. Before the TOPA was enacted, when a
property was sold among many people jointly, the tenement was supposed to pay the rent jointly
unless the property holders decided to appropriate the rent. The for need for this principle arises
when a property is divided into multiple shares and the benefit arising from the property also
requires to be divided among the many shareholders in accordance to the amount of share held
by each person. It is presumed that while applying this section there was some obligation relating
to the property before the transfer took place. Upon the break up of the property among the
various owners, the benefits from the obligation is also distributed among them

There are three conditions to this rule:

1. The person upon whom the burden of carrying out the obligations falls must be provided
with a reasonable notice of severance of the property and such a notice be given at an
earlier time by the assignor or the assignees. If no such notice is given, the executor of
the obligation cannot be held liable for the failure to discharge the obligation severally.
Further, if he has already discharged the obligation towards the transferor, the new
owners cannot ask him to do it a second time.
2. The obligation itself must be of a nature that can be severed and be performed in favour
of each shareholder. If the obligation cannot be severed, it shall be done towards one
owner which all the joint owners choose.
3. The severance of the property must also not result in the increase in the burden of the
obligation which needs to be carried out by the person in charge of the act. If the
severance provides an additional burden on the whole of the property then it should be
performed as if the obligation cannot be severed.
4. This section goes along with section 30 of the Easement Act, 1882 which states similarly
to section 37

“Partition of dominant heritage.- Where a dominant heritage is


divided between two or more persons, the easement becomes annexed

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to each of the shares, but not so as to increase substantially the burden
on the servient heritage:

Provided that such annexation is consistent with the terms of the


instrument, decree or revenue proceeding (if any) under which the
division was made, and, in the case of prescriptive rights, with the user
during the prescriptive period.”

Notice- Any person who holds the burden of obligation is not liable under section 37 for
improper discharge of obligation unless he has been given a reasonable notice of severance. This
is section as well as section 30 of Easements Act, 1882 are applicable to section 50 and section
109. In Peary Lal v. Madhoji17 the court held that it is immaterial who sends out the notice,
either the assignee or the assignor. What is relevant is that the payment pleaded by the tenant to
the assignor is bona fide. It was submitted by the court in Prem Chand v. Mokshoda Devi18
that just a notice is enough to convert a person’s obligation towards a singular person to
performing obligations for all of the several shareholders. However, in case of a suit all the co-
sharers will be required to form parties and only then can apportionment of rent take place which
shall include future rent as well as arrears.

Benefit of any obligation- The obligations in this sections are limted to an active nature which
require some action to perform. For this reason easements are not included in this section as they
are not of an active nature. To make provision for this, a similar clause as this section has been
included in the Easement Act, 1882. When a property is sold by a lesser, the obligations that are
attached to the property are also transferred and the lessee is obliged to perform them for all the
sharers.

In Badri Prasad v. Shyam Lal19 Ramaswami C.J. held that in cases of partition when the
property is in the possession of the lessee, the lessee’s obligation to pay rent to one single lesser
gets converted to paying rent to all the new owners individually. There lesser can also file

17 Peary Lal v. Madhoji, 17 CLJ 372.


18 Prem Chand v. Mokshoda Devi, 1187 14 Cal 201.
19 Badri Prasad v. Shyam Lal, AIR 1963 Pat. 85.

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individual suits against the lessee on the failure of payment of the rent if he has received the
notice for partition or has been paying rent severally. Such cases of partition will be ruled by
section 37 and section 109 of the TOPA. Same was also held in Sri Raja Simhadri v.
Prattipatti20.

No substantial increase of burden- There should be no substantial burden on the person


performing the obligation without his consent. The Easement Act, 1882 too has a similar
provision in section 30 which states that the there should be no increase in the burden on the
servient heritage when the shares of the dominant heritage are split. In Saddu v. Bihari21 an
agricultural holding was partitioned and the fields went to one sharer while the house of the
tenant went to the other. The court held that the tenant was entitled to occupy the house free of
rent as before the partition the tenant was allowed to use the house rent free and the partition
cannot impose new obligations on the tenant and so the other co-sharer could not earn rent from
him.

Property divided and held in shares- This section is not applicable where there is no division
of the property. Hence, in case of when there is a transfer of shares in a tenure let out wholly to a
tenant has no effect on the severance of the tenure and the first half of the section cannot be
applied. In such cases, 22 the apportionment of rent is done by agreement between all parties and
if there is no such agreement then it is done by a suit for apportionment like in the case of
Shyama Charan Das v. Jogesh Chandra Roy23 where the co sharer sued the tenant for rent for
his share of land. The court held that “on the absence of separate collection of rent, a co-sharer
can, of course, maintain a suit for the entire rent due to all the co-sharers making them parties to
the suit, and there is such a prayer in the plaint.”

In cases where any part of a leased property is transferred under application of section 109, the
property cannot be held to be divided into several shared among the co-sharers. This means that
the tenant is not liable to apportion his rent. Here too the apportionment can only be done upon
the agreement by all the parties. In Sardarilal v. Narayanlal24 when there is only a fractional

20 Sri Raja Simhadri v. Prattipatti, (1908) 29 Mad 29.


21 Saddu v. Bihari, (1908) 30 AllWN 282.
22 Harapali Sarkar and Ors. v. Syed Rajabali Mia and Anr. and Annapurna Dassya , AIR 1919 Cal 998
23 Shyama Charan Das v. Jogesh Chandra Roy, 14Ind. Cas.29.
24 Sardarilal v. Narayanlal ,AIR 1980 MP 8.

27 | P a g e
share is transferred, the transferee of the lease property will become a co- owner with the lesser
as he would gain the all the rights of a lesser with regard to the shares.

Partition- In Durga Rani Devi v. Mohiu-ddin25 it was held that section 37 and section 109 of
the Transfer of Property Act are not applicable when as a result of partition, reversion of land is
not possible anymore. Instead, they apply to the cases of assignment or severance of the
reversion of land which may result as consequence of partition.

In Sk. Sattar Sk. Mohd. Choudhari v. Gundappa AMabadas Bukate26 it was held that
tenancy cannot be split either in estate, rent or any other obligation by a one sided act of a one of
the co-sharers. A single co-sharer also cannot evict a tenant or sure him for rent. But if all the co-
owners split the property in a definite and identifiable manner by metes through mutual
agreement, they become individual owners of that part of the property and can practice
individual rights as given in section 109. The tenant in this matter cannot prevent the co- owners
from partitioning the property but can move the court to prove that the partition was not bona
fide.

But the apportion be estate rule is not absolute and does not exclude the authority of the joint
property holders to not divide the property or, if divided, perform the obligation as if the property
was not divided. It is also not applicable in case of agricultural property when divided among
several oweners. This is done on so as to not create difficulties for the agriculturalists. Here, the
person has to pay rent to one person who is appointed by the joint land holders. But the state
governments can remove this exception if notified by the Official Gazette. This section is also
not applicable in cases of involuntary transfers or cases of succession where for instance, upon
the death of a creditor, all his separate heirs can only jointly enforce the right which he could
have enforced if he were alive: "that when, upon the death of the obligee of a money bond, the
right to realise the money has devolved in specific shares upon his heirs, each of such heirs
cannot maintain a separate suit for recovery of his share of the money due on the bond."

This is the same in the English common law where in Decharms v. Hoewood27 the court held
that regardless the numbers of shareholders of an indivisible property, it has one heir on the basis

25 Durga Rani Devi v. Mohiu-ddin, (1950) 86 Cal LJ 198.


26 Sk. Sattar Sk. Mohd. Choudhari v. Gundappa AMabadas Bukate ,AIR 1997 SC 998.
27 Decharms v. Hoewood ,10 Bing 562.

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of unity of interest and unity of title. Just a singular person cannot lay claim on the property
without all the others joining in.

COMPARISON TO THE ENGLISH LAW

The Indian law on apportionment and its provisions are much narrow compared to the English
Apportionment Act, 1870. There are two main points of distinction between the two:

1. The Indian law is limited to inter vivos transfers and cannot be applied in cases of
transfers by operation of law. The English law is not limited to transfers only, instead it
lays down provisions which can be applied anywhere where they are necessity.
2. The Indian law is applicable only between the transferor and the transferee of the
property which yields some form of income. It does not affect the date of payment or the
liability of the tenant. The English law on the other hand applies when the right to receive
payments is transferee, when there is a transfer of the liability of payment of rent and also
when any other periodical payment is transferred. Apart from this within the whole
Indian legal framework, apportionment occupies only these two sections of the Transfer
of Property Act, 1882. The English law on the other hand has a whole Act dedicated to
the purpose of apportionment. This can be seen as reflective of the poor Indian property
laws which have always been a source of great confusion and a large number of court
cases.
Snell’s law of equity forms the basis of apportionment. While in India it is limited to sections 36
and 37, in the USA apportionment issued mostly in the sense of tax obligations of takers under a
will, trust beneficiaries, between a trust and a probate estate and between trusts. In England, the
law of equity is applied in cases of state taking over the role of the trustee in a discretionary trust.

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CONCLUSION
Section 35 of the Transfer of Property Ac, 1882 explains the concept of the Doctrine of Election.
This project tries to deal with the various nuances involved in the doctrine through the usage of
various landmark judgments. Herein, special emphasis has been placed upon providing a clear
understanding of the conditions necessary for the election by the original owner to take place.
The differences between the Indian Law perspective as well as the English Law perspective is
brought out through critical analysis of the provisions i.e. Principle of forfeiture and Principle of
compensation. Various aspects such as Proprietary Interest, Compensation estimated, indirect
benefit, the intention of the donor etc have been dealt and explained for the enhanced
understanding over the model of Doctrine of Election.

Apportionment is a very fundamental concept under the law relating to property. However, there
are various problems that have arisen as a result of this subject. The division of property can
have different meanings when taken in different senses, and even be of various types.

Through the course of this research paper, the concept of apportionment has been explored under
the two different sections given in the Transfer of Property Act, 1882. Section 36 applies to
apportionment when it entails periodical payments once the person in whom the interest lies is
determined. On the other hand, Section 37 applies to those situations where a severance has
happened, and apportionment of benefit of obligation needs to be done. The researcher has found
that in these sections provide the two types of apportionments, that is, by time and by estate.

The researcher has also concluded the different ways in which the law related to apportionments
is applicable to the Indian law of property and how the sections and their provisios are flexible
and can be applied to different situations. Thus the researcher concludes that the law related to
apportionments is a chief component of the law on property and yet, it is inadequate in India
when compared to the English law from which it has been derived.

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