The Transfer of Property Act, 1882
THE TRANSFER OF PROPERTY ACT, 1882
PREAMBLE
CHAPTER I
PRELIMINARY
SECTIONS
1. Short title.
Commencement.
Extent.
2. Repeal of Acts.
Saving of certain enactments, incidents,
rights, liabilities, etc.
3. Interpretation-clause.
4. Enactments relating to contracts to
be taken as part of Contract Act and
supplemental to the Registration Act.
CHAPTER II
OF TRANSFERS OF PROPERTY BY ACT OF
PARTIES
(A) Transfer of Property, whether
moveable or immoveable
5. “Transfer of property” defined.
6. What may be transferred.
7. Persons competent to transfer.
8. Operation of transfer.
9. Oral transfer.
10. Condition restraining alienation.
11. Restriction repugnant to interest
cleated.
12. Condition making interest
determinable on insolvency or attempted alienation.
13. Transfer for benefit of unborn
person.
14. Rule against perpetuity.
15. Transfer to class some of whom come
under sections 13 and 14.
16. Transfer to take effect on failure
of prior interest.
17. Direction for accumulation.
18. Transfer in perpetuity for benefit
of public.
19. Vested interest.
20. When unborn person acquires vested
interest on transfer for his benefit.
21. Contingent interest.
SECTIONS
22. Transfer to members of a class who
attain a particular age.
23. Transfer contingent on happening of
specified uncertain event.
24. Transfer to such of certain persons
as survive at some period not specified.
25. Conditional transfer.
26. Fulfilment of condition precedent.
27. Conditional transfer to one person
coupled with transfer to another on failure of prior
disposition.
28. Ulterior transfer conditional on
happening or not happening of specified event.
29. Fulfilment of condition subsequent.
30. Prior disposition not affected by
invalidity of ulterior disposition.
31. Condition that transfer shall cease
to have effect in case specified uncertain event
happens or does not happen.
32. Such condition must not be invalid.
33. Transfer conditional on performance
of act, no time being specified for performance.
34. Transfer conditional on performance
of act, time being specified.
Election
35. Election when necessary.
Apportionment
36. Apportionment of periodical payments
on determination of interest of person entitled.
37. Apportionment of benefit of
obligation on severance.
(B) Transfer of Immoveable Property
38. Transfer by person authorised only
under certain circumstances to transfer.
39. Transfer where third person is
entitled to maintenance.
40. Burden of obligation imposing
restriction on use of land or of obligation annexed to
ownership but not amounting to interest
or easement.
41. Transfer by ostensible owner.
42. Transfer by person having authority
to revoke former transfer.
43. Transfer by unauthorised person who
subsequently acquires interest in property
transferred.
44. Transfer by one co-owner.
45. Joint transfer for consideration.
46. Transfer for consideration by
persons having distinct interests.
47. Transfer by co-owners of share in
common property.
48. Priority of rights created by
transfer.
49. Transferee's right under policy.
50. Rent bona fide paid to holder under
defective title.
SECTIONS
51. Improvements made by bona fide
holders under defective titles.
52. Transfer of property pending suit
relating thereto.
53. Fraudulent transfer.
53A. Part performance.
CHAPTER III
OF SALES OF IMMOVEABLE PROPERTY
54. “Sale” defined.
Sale how made.
Contract for sale.
55. Rights and liabilities of buyer and
seller.
56. Marshalling by subsequent purchaser.
Discharge of Incumbrances on Sale
57. Provision by Court for incumbranc es
and sale freed therefrom.
CHAPTER IV
OFMORTGAGES OF IMMOVEABLE PROPERTY AND
CHARGES
58. “Mortgage”, “mortgagor”,
“mortgagee”, “mortgage-money”and “mortgagedeed”defined.
Simple mortgage.
Mortgage by conditional sale.
Usufructuary mortgage.
English mortgage.
Mortgage by deposit of title-deeds.
Anomalous mortgage.
59. Mortgage when to be by assurance.
59A. References to mortgagors and
mortgagees to include persons deriving title from
them.
Rights and Liabilities of Mortgagor
60. Right of mortgagor to redeem.
Redemption of portion of mortgaged
property.
60A.Obligation to transfer to third
party instead of re -transference to mortgagor.
60B. Right to inspection and production
of documents.
61. Right to redeem separately or
simultaneously.
62. Right of usufructuary mortgagor to
recover possession.
63. Accession to mortgaged property.
Accession acquired in virtue of
transferred ownership.
SECTIONS
63A. Improvements to mortgaged property.
64. Renewal of mortgaged lease.
65. Implied contracts by mortgagor.
65A. Mortgagor’s power to lease.
66. Waste by mortgagor in possession.
Rights and liabilities of Mortgagee
67. Right to foreclosure or sale.
67A. Mortgagee when bound to bring one
suit on several mortgages.
68. Right to sue for mortgage-money.
69. Power of sale when valid.
69A. Appointment of receiver.
70. Accession to mortgaged property.
71. Renewal of mortgaged lease.
72. Rights of mortgagee in possession.
73. Right to proceeds of revenue sale or
compensation on acquisition.
74. [Repealed.].
75. [Repealed.].
76. Liabilities of mortgagee in
possession.
Loss occasioned by his default.
77. Receipts in lieu of interests.
Priority
78. Postponement of prior mortgagee.
79. Mortgage to secure uncertain amount
when maximum is expressed.
80. [Repealed.].
Marshalling and Contribution
81. Marshalling securities.
82. Contribution to mortgage-debt.
Deposit in Court
83. Power to deposit in Court money due
on mortgage.
Right to money deposited by mortgagor.
84. Cessation of interest.
Suits for Foreclosure, Sale or
Redemption
85. [Repealed.].
Foreclosure and Sale
86. [Repealed.].
87. [Repealed.].
88. [Repealed.].
SECTIONS
89. [Repealed.].
90. [Repealed.].
Redemption
91. Persons who may sue for redemption.
92. Subrogation.
93. Prohibition of tacking.
94. Rights of mesne mortgagee.
95. Right of redeeming co-mortgagor to
expenses.
96. Mortgage by deposit of title-deeds.
97. [Repealed.].
Anomalous Mortgages
98. Rights and liabilities of parties to
anomalous mortgages.
99. [Repealed.].
Charges
100. Charges.
101. No merger in case of subsequent
encumbrance.
Notice and Tender
102. Service or tender on or to agent.
103. Notice, etc., to or by person
incompetent to contract.
104. Power to make rules.
CHAPTER V
OF LEASES OF IMMOVEABLE PROPERTY
105. Lease defined.
Lessor, lessee, premium and rent
defined.
106. Duration of certain leases in
absence of written contract or local usage.
107. Leases how made.
108. Rights and liabilities of lessor
and lessee.
A.—Rights and liabilities of the lessor.
B.—Rights and liabilities of the lessee.
109. Rights of lessor’s transferee.
110. Exclusion of day on which term
commences.
Duration of lease for a year.
Option to determine lease.
111. Determination of lease.
112. Waiver of forfeiture.
113. Waiver of notice to quit.
114. Relief against forfeiture for
non-payment of rent.
SECTIONS
114A. Relief against forfeiture in
certain other cases.
115. Effect of surrender and forfeiture
on under-leases.
116. Effect of holding over.
117. Exemption of leases for
agricultural purposes.
CHAPTER VI
OF EXCHANGES
118. “Exchange” defined.
119. Right of party deprived of thing
received in exchange.
120. Rights and liabilities of parties.
121. Exchange of money.
CHAPTER VII
OF GIFTS
122. “Gift” defined.
Acceptance when to be made.
123. Transfer how effected.
124. Gift of existing and future
property.
125. Gift to several, of whom one does
not accept.
126. When gift may be suspended or
revoked.
127. Onerous gifts.
Onerous gift to disqualified person.
128. Universal donee.
129. Saving of donations mortis causa
and Muhammadan law.
CHAPTER VIII
OF TRANSFERS OF ACTIONABLE CLAIMS
130. Transfer of actionable claim.
130A. [Repealed.].
131. Notice to be in writing, signed.
132. Liability of transferee of
actionable claim.
133. Warranty of solvency of debtor.
134. Mortgaged debt.
135. Assignment of rights under policy
of insurance against fire.
135A. [Repealed.].
136. Incapacity of officers connected
with Courts of Justice.
137. Saving of negotiable instruments,
etc.
THE SCHEDULE.
THE TRANSFER OF PROPERTY ACT, 1882
ACT NO. 4 OF 1882
[17th February, 1882.]
An Act to amend the law relating to the
Transfer of Property by act of Parties.
Preamble.—WHEREAS it is expedient to
define and amend certain parts of the law
relating to the transfer of property by
act of parties; It is hereby enacted as follows:—
CHAPTER I
PRELIMINARY
1. Short title.—This Act may be called
the Transfer of Property Act, 1882.
Commencement.—It shall come into force
on the first day of July, 1882.
Extent.— 1
[It extends 2
in the first instance to the whole of
India. except 3
[the
territories which, immediately before
the 1st November, 1956, were comprised in Part B
States or in the States of], Bombay,
Punjab and Delhi.]
[But this Act or any part thereof may by
5 notification in the Official Gazette be
extended to the whole or any part of 6
[the said territories] by the State
Government
concerned.]
7
[And any State Government may 8*** from
time to time, by notification in the Official
Gazette, exempt, either retrospectively
or prospectively, any part of the territories
administered by such State Government
from all or any of the following provisions,
namely:—
Sections 54, paragraphs 2 and 3, 59, 107
and 123.]
1. Subs. by the A.O. 1950, for the third
paragraph.
2. The application of this Act was
barred in the Naga Hills District, including the Mokokchung Sub -division, the
Dibrugarh Frontier Tract, the North
Cachar Hills, the Garo Hills, the Khasi and Jantia Hills and the Mikir hills
Tract, by notification under s. 2 of the
Assam Frontier Tracts Regulation, 1880 (Reg. 2 of 1880).
Partially extended to Berar by Act 4 of
1941. Extended to Manipur by Act 68 of 1956; to Dadra and Nagar Haveli
by Reg. 6 of 1963, s. 2 and Sch. I; to
Goa, Daman and Diu by Reg. 11 of 1963, s. 3 and Sch.; to Lakshadweep by
Reg. 8 of 1965, s. 3 and Sch., to
Pondicherry by Act 26 of 1968, s. 3 and Sch.
It has been amended to Bombay by Bombay
Act 14 of 1939, 57 of 1959, in U.P. by U.P. Act 24 of 1954, 14 of 1970 and 57
of 1976.
Extended to the Union territory of Jammu
and Kashmir and Union territory of Ladakh by Act 34 of 2019, s. 95 and Fifth
Schedule (w.e.f. 31-10-2019).
3. Subs. by the Adaptation of Laws (No.
2) Order, 1956, for “Part B States”.
4. Subs. by the A.O. 1937, for the
original paragraph.
5. The Act has been extended to—
The Presidency of Bombay (except
Scheduled Districts) w.e.f. 1-1-1893; to Mehwassi Estate by Born. Reg. 1
of 1949; and to former princely area
w.e.f. 1-4-1951; now applicable to whole of Maharashtra;
Gujarat (Saurashtra area) by Saurashtra
Ordinance 25 of 1949, and to Kutch area w.e.f. 1-1-1950.
Madhya Pradesh:
Mysore, w.e.f. 1-4-1951;
Rajasthan, w.e.f. 1-7-1952;
the former State of Travancore-Cochin,
w.e.f. 1-5-1952, now applicable to whole of Kerala.
The provisions o( sections 54, 107 and
123 were extended to—
Delhi, w.e.f. 30-5-1939. Section 129 was
extended to certain areas of Delhi w.e.f. 16-11-1940 and to
the remaining areas w.e.f. 1-12-1962.
the remaining provisions were also extended to the Union
territory of Delhi w.e.f. 1-12-1962;
Himachal Pradesh, w.e.f. 7-12-1970:
Punjab, w.e.f. 1-4-1955 and to former
princely area w.e.f. 15-5-1957. (Section 59 was enforced in
Haryana area, w.e.f. 5-8-1967).
The Act has been declared in force in
the Pargana of Manpur by the Manpur Law Regulation, 1926 (Reg. 2 of
1926), in Panth Piploda by the Panth
Piploda Laws Regulation, 1929 (Reg. 1 of 1929), and in the State of
Sikkim on 1.9.1984 vide Notification No.
S.O. 643(E), dated 24-8-1984, Gazette of India, Extraordinary,
Pt. II, sec. 3(0.
The Act has been repealed as to Government
Grants by the Government Grants Act, 1895 (15 of 1895).
The Act has been repealed or modified to
the extent necessary to give effect to the provisions of Madras Act 3
of 1922, in the City of Madras see s. 13
of Madras Act 3 of 1922.
6. Subs. by the Adaptation of Laws (No.
2) Order, 1956, for “said States”.
7. Subs. by Act 3 of 1885, s. 1, for the
original paragraph.
8. The words “with the previous sanction
of the Governor General in Council” omitted by Act 38 of 1920, s. 2 and the
Schedule.
[Notwithstanding anything in the
foregoing part of this section, sections 54, paragraphs 2
and 3, 59, 107 and 123 shall not extend
or be extended to any district or tract of country for the
time being excluded from the operation
of the Indian Registration Act, 2
[1908 (16 of 1908)],
under the power conferred by the first
section of that Act or otherwise.]
2. Repeal of Acts. Saving of certain
enactments, incidents, rights, liabilities, etc.—
In the territories to which this Act
extends for the time being the enactments specified in
the Schedule hereto annexed shall be
repealed to the extent therein mentioned. But nothing
herein contained shall be deemed to
affect—
(a) the provisions of any enactment not
hereby expressly repealed:
(b) any terms or incidents of any
contract or constitution of property which are consistent
with the provisions of this Act, and are
allowed by the law for the time being in force:
(c) any right or liability arising out
of a legal relation constituted before this Act comes into force,
or any relief in respect of any such
right or liability: or
(d) save as provided by section 57 and
Chapter IV of this Act, any transfer by operation
of law or by, or in execution of, a
decree or order of a Court of competent jurisdiction:
and nothing in the second chapter of
this Act shall be deemed to affect any rule of 3*** Muhammadan
4*** law.
3. Interpretation-clause.—In this Act,
unless there is something repugnant in the subject or
context,—
“immoveable property” does not include
standing timber, growing crops or grass:
“instrument”, means a non-testamentary
instrument:
[“attested”, in relation to an
instrument, means and shall be deemed always to have
meant attested by two or more witnesses
each of whom has seen the executant sign or affix
his mark to the instrument, or has seen
some other person sign the instrument in the
presence and by the direction of the
executant, or has received from the executant a personal
acknowledgement of his signature or
mark, or of the signature of such other person, and
each of whom has signed the instrument
in the presence of the executant; but it shall not be
necessary that more than one of such
witnesses shall have been present at the same time, and
no particular form of attestation shall
be necessary:]
“registered” means registered in 6
[
[any part of the territories] to which
this Act extends]
under the law8
for the time being in force regulating
the registration of documents:
“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 imbedded for
the permanent beneficial enjoyment of that to which it
is attached:
9
[“actionable claim” means a claim to any
debt, other than a debt secured by mortgage
of
1. Added by Act 3 of 1885, s. 2 (w.e.f.
1-7-1882).
2. Subs. by Act 20 of 1929, s. 2, for
“1877”.
3. The word “Hindu” omitted by s. 3,
ibid.
4. The words “or Buddhist” omitted by s.
3, ibid.
5. Ins. by Act 27 of 1926, s. 2, as
amended by Act 10 of 1927, s. 2 and Sch. I.
6. Subs. by Act 3 of 1951, s. 3 and the
Schedule, for “a Part A State or a Part C State” (w.e.f. 1 -4-1951).
7. Subs. by the Adaptation of Laws (No.
2) Order 1956, for “any State”.
8. See the Indian Registration Act, 1908
(16 of 1908).
9. Ins. by Act 2 of 1900, s. 2.
9
immoveable property or by hypothecation
or pledge of moveable property, or to any beneficial
interest in moveable property not in the
possession, either actual or constructive, of the claimant,
which the Civil Courts recognise as
affording grounds for relief, whether such debt or beneficial
interest be existent, accuring,
conditional or contingent:]
1
[“a person is said to have notice”] of a
fact when he actually knows that fact, or when, but for wilful
abstention from an enquiry or search
which he ought to have made, or gross negligence, he would have
known it.
Explanation I.—Where any transaction
relating to immovable property is required by law to be
and has been effected by a registered
instrument, any person acquiring such property or any part of,
or share or interest in, such property
shall be deemed to have notice of such instrument as from the
date of registration or, 2
[where the property is not all situated
in one sub-district, or where the
registered instrument has been
registered under sub-section (2) of section 30 of the Indian
Registration Act, 1908 (16 of 1908),
from the earliest date on which any memorandum of such
registered instrument has been filed by
any Sub-Registrar within whose sub-district any part of the
property which is being acquired, or of
the property wherein a share or interest is being acquired, is
situated]:
Provided that—
(1) the instrument has been registered
and its registration completed in the manner
prescribed by the Indian Registration
Act, 1908 (16 of 1908) and the rules made thereunder,
(2) the instrument 3
[or memorandum] has been duly entered or
filed, as the case may be, in
books kept under section 51 of that Act,
and
(3) the particulars regarding the
transaction to which the instrument relates have been correctly
entered in the indexes kept under
section 55 of that Act.
Explanation II.—Any person acquiring any
immoveable property or any share or interest in
any such property shall be deemed to
have notice of the title, if any, of any person who is for the
time being in actual possession thereof.
Explanation III.—A person shall be
deemed to have had notice of any fact if his agent acquires
notice thereof whilst acting on his
behalf in the course of business to which that fact is material:
Provided that, if the agent fraudulently
conceals the fact, the principal shall not be charged
with notice thereof as against any
person who was a party to or otherwise cognizant of the fraud.]
4. Enactments relating to contracts to
be taken as part of Contract Act and supplemental to the
Registration Act.—The chapters and
sections of this Act which relate to contracts shall be taken as part
of the Indian Contract Act, 1872 (9 of
1872).
4
[And sections 54, paragraphs 2 and 3,
59, 107 and 123 shall be read as supplemental to the Indian
Registration Act,
5
[1908 (16 of 1908)].]
1. Subs. by Act 20 of 1929, s. 4, for
certain words.
2. Subs. by Act 5 of 1930, s. 2, for
certain words.
3. Ins. by s. 2, ibid.
4. Added by Act 3 of 1885, s. 3.
5. Subs. by Act 20 of 1929, s. 5, for
“1877”.
10
CHAPTER II1
OF TRANSFERS OF PROPERTY BYACTOFPARTIES
(A) Transfer of Property, whether
moveable or immoveable
5. “Transfer of property” defined.—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, 2
[or to himself] and one or more other
living persons; and “to transfer property” is to perform
such act.
3
[In this section “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.]
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.
(a) The 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.
(b) A mere right of re-entry for breach
of a condition subsequent cannot be transferred
to any one except the owner of the
property affected thereby.
(c) An easement cannot be transferred
apart from the dominant heritage.
(d) An interest in property restricted
in its enjoyment to the owner personally cannot be
transferred by him.
4
[(dd) A right to future maintenance, in
whatsoever manner arising, secured or determined, cannot
be transferred.]
(e) A mere right to sue 5***cannot be
transferred.
(f) A public office cannot be
transferred, nor can the salary of a public officer, whether before or
after it has become payable.
(g) Stipends allowed to military 6
[,naval], 7
[air-force] and civil pensioners of 8
[Government] and
political pensions cannot be
transferred.
(h) No transfer can be made (1) in so
far as it is opposed to the nature of the interest
affected thereby, or (2)
9
[for an unlawful object or consideration
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].
10[(i) Nothing in this section shall be
deemed to authorise a tenant having an untransferable
right of occupancy, the farmer of an
estate in respect of which default has been made in paying
revenue, or the lessee of an estate
under the management of a Court of Wards, to assign his interest
as such tenant, farmer or lessee.]
7. Persons competent to transfer.—Every
person competent to contract and entitled to transferable
property, or authorised to dispose of
transferable property not his own, is competent to transfer such
property either wholly or in part and
either absolutely or conditionally, in the circumstances, to the extent
and in the manner, allowed and
prescribed by any law for the time being in force.
1. Nothing in Chapter II is to be deemed
to affect any rule of Muhammadan Law—see s. 2, supra
2. Ins. by Act 20 of 1929, s. 6.
3. Added by s. 6, ibid.
4. Ins. by s. 7, ibid.
5. The words “for compensation for a
fraud or for harm illegally caused” omitted by Act 2 of 1900, s. 3.
6. Ins. by Act 35 of 1934, s. 2 and the
Schedule.
7. Ins. by Act 10 of 1927, s. 2 and the
First Schedule.
8. The word “Government” successively
adapted by the A.O. 1937 and A.O. 1950 to read as above.
9. Subs. by Act 2 of 1900, s. 3, for
“for an illegal purpose”.
10. Added by Act 3 of 1885, s. 4.
11
8. Operation of transfer.—Unless a
different intention is expressed or necessarily
implied, a transfer of property passes
forthwith to the transferee all the interest which the
transferor is then capable of passing in
the property, and in the legal incidents thereof.
Such incidents include, where the
property is land, the easements annexed thereto, the rents and
profits thereof accruing after the
transfer, and all things attached to the earth;
and, where the property is machinery
attached to the earth, the moveable parts
thereof;
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;
and, where the property is a debt or
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;
and, where the property is money or
other property yielding income, the interest or income thereof
accruing after the transfer takes
effect.
9. Oral transfer.—A transfer of property
may be made without writing in every case
in which a writing is not expressly
required by law.
10. Condition restraining
alienation.—Where property is transferred subject to a
condition or limitation absolutely
restraining the transfer ee or any person claiming under him
from parting with or disposing of his
interest in the property, the condition or limitation is
void, except in the case of a lease
where the condition is for the benefit of the lessor or those
claiming under him: provided that
property may be transferred to or for the benefit of a
woman (not being a Hindu, Muhammadan or
Buddhist), so that she shall not have power
during her marriage to transfer or
charge the same or her beneficial interest therein.
11. Restriction repugnant to interest
created.—Where, on a transfer of property, an
interest therein is created absolutely
in favour of any person, but the terms of the transfer
direct that such interest shall be
applied or enjoyed by him in a particular manner, he shall be
entitled to receive and dispose of such
interest as if there were no such direction.
1
[Where any such direction has been made
in respect of one piece of immoveable property
for the purpose of securing the
beneficial enjoyment of another piece of such property,
nothing in this section shall be deemed
to affect any right which the transferor may have to
enforce such direction or any remedy
which he may have in respect of a breach thereof.]
12. Condition making interest
determinable on insolvency or attempted alienation.—
Where property is transferred subject to
a condition or limitation making any interest therein,
reserved or given to or for the benefit
of any person, to cease on his becoming insolvent or
endeavouring to transfer or dispose of
the same, such condition or limitation is void.
Nothing in this section applies to a
condition in a lease for the benefit of the lessor or those claiming
under him.
13. Transfer for benefit of 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 person shall not take
effect, unless it extends to the whole of the remaining
interest of the transferor in the
property.
1. Subs. by Act 20 of 1929, s. 8, for
the second paragraph.
12
Illustration
A transfers property of which he is the
owner to B in trust for A and his intended wife succesively for their lives,
and, after
the death of the survivor for the eldest
son of the intended marriage for life, and after his death for A's second son.
The interest so
created for the benefit of the eldest
son does not take effect, because it does not extend to the whole of A's
remaining interest in
the property.
14. Rule against perpetuity.—No transfer
of property can operate to create an interest which is to
take effect after the lifetime of one or
more persons living at the date of such transfer, and the
minority of some person who shall be in
existence at the expiration of that period, and to whom, if he
attains full age, the interest created
is to belong.
15. Transfer to class some of whom come
under sections 13 and 14.—If, on a transfer of property,
an interest therein is created for the
benefit of a class of persons with regard to some of whom such
interest fails by reason of any of the
rules contained in sections 13 and 14; such interest fails 1
[in regard
to those persons only and not in regard
to the whole class].
2
[16. Transfer to take effect on failure
of prior interest.—Where, by reason of any of the
rules contained in sections 13 and 14,
an interest created for the benefit of a person or of a class
of persons fails in regard to such
person or the whole of such class, any interest created in the
same transaction and intended to take
effect after or upon failure of such prior interest also fails.
17. Direction for accumulation.—(1)
Where the terms of a transfer of property direct that the
income arising from the property shall
be accumulated either wholly or in part during a period longer
than—
(a) the life of the transferor, or
(b) a period of eighteen years from the
date of the transfer,
such direction shall, save as
hereinafter provided, be void to the extent to which the period during
which the accumulation is directed
exceeds the longer of the aforesaid periods, and at the end of
such last-mentioned period the property
and the income thereof shall be disposed of as if the
period during which the accumulation has
been directed to be made had elapsed.
(2) This section shall not affect any
direction for accumulation for the purpose of—
(i) the payment of the debts of the
transferor or any other person taking any interest under the
transfer, or
(ii) the provision of portions for
children or remoter issue of the transferor or of any other person
taking any interest under the transfer,
or
(iii) the preservation or maintenance of
the property transferred;
and such direction may be made
accordingly.
18. Transfer in perpetuity for benefit
of public.—The restrictions in sections 14, 16 and
17 shall not apply in the case of a
transfer of property for the benefit of the public in the
advancement of religion, knowledge,
commerce, health, safety, or any other object beneficial to
mankind.]
19. 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.
Explanation.—An intention that an
interest shall not be vested is not to be inferred merely-from
a provision whereby the enjoyment
thereof is postponed, or whereby a prior interest in the same
property is given or reserved to some
other person, or whereby income arising from the property is
1. Subs. by Act 20 of 1929, s. 9, for
“as regards the whole class”.
2. Subs. by s. 10, ibid., for s. 16, 17
and 18.
13
directed to be accumulated until the
time of enjoyment arrives, or from a provision that if a
particular event shall happen the
interest shall pass to another person.
20. When unborn person acquires vested
interest on transfer for his benefit.—Where, on
a transfer of property, an interest
therein is created for the benefit of a person not then living, he
acquires upon his birth, unless a
contrary intention appear from the terms of the transfer, a vested
interest, although he may not be
entitled to the enjoyment thereof immediately on his birth.
21. 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.
Exception.—Where, under a transfer of
property, a person becomes entitled to an interest
therein upon attaining a particular age,
and the transferor also gives to him absolutely the income
to arise from such interest before he
reaches that age, or directs the income or so much thereof as
may be necessary to be applied for his
benefit, such interest is not contingent.
22. Transfer to members of a class who
attain a particular age.—Where, on a transfer of
property, an interest therein is created
in favour of such members only of a class as shall attain a
particular age, such interest does not
vest in any member of the class who has not attained that age.
23. Transfer contingent on happening of
specified uncertain event.—Where, on a transfer of
property, an interest therein is to
accrue to a specified person if a specified uncertain event shall
happen, and no time is mentioned for the
occurrence of that event, the interest fails unless such
event happens before, or at the same
time as, the intermediate or precedent interest ceases to exist.
24. Transfer to such of certain persons
as survive at some period not specified.—Where, on
a transfer of property, an interest
therein is to accrue to such of certain persons as shall be surviving
at some period, but the exact period is
not specified, the interest shall go to such of them as shall be
alive when the intermediate or precedent
interest ceases to exist, unless a contrary intention appears
from the terms of the transfer.
Illustration
A transfers property to B for life, and
after his death to C and D, equally to be divided between them, or to the
survivor of them. C dies during the life
of B. D survives B. At B's death the property passes to D.
25. Conditional transfer.—An interest
created on a transfer of property and dependent upon a
condition fails if the fulfilment of the
condition is impossible, or is forbidden by law, or is of such a
nature that, if permitted, it would
defeat the provisions of any law, or is fraudulent, or involves or
implies injury to the person or property
of another, or the Court regards it as immoral or opposed to
public policy.
Illustrations
(a) A lets a farm to B on condition that
he shall walk a hundred miles in an hour. The lease is void.
(b) A gives Rs. 500 to B on condition
that he shall marry A's daughter C. At the date of the transfer C was dead. The
transfer is void.
(c) A transfers Rs. 500 to B or
condition that she shall murder C. The transfer is void.
(d) A transfers Rs. 500 to his niece C
if she will desert her husband. The transfer is void.
26. Fulfilment of condition
precedent.—Where the terms of a transfer of property impose a
condition to be fulfilled before a
person can take an interest in the property, the condition shall be deemed
to have been fulfilled if it has been
substantially complied with.
Illustrations
(a) A transfers Rs. 5,000 to B on
condition that he shall marry with the consent of C, D, and E. E dies. B
marries with
the consent of C and D. B is deemed to
have fulfilled the condition.
(b) A transfers Rs. 5,000 to B on
condition that he shall marry with the consent of C, D and E. B marries without
the
consent of C, D and E, but obtains their
consent after the marriage. B has not fulfilled the condition.
14
27. Conditional transfer to one person
coupled with transfer to another on failure of prior
disposition.—Where, on a transfer of
property, an interest therein is created in favour of one person, and
by the same transaction an ulterior disposition
of the same interest is made in favour of another, if the
prior disposition under the transfer
shall fail, the ulterior disposition shall take effect upon the failure of
the prior disposition, although the
failure may not have occurred in the manner contemplated by the
transferor.
But, where the intention of the parties
to the transaction is that the ulterior disposition shall take effect
only in the event of the prior
disposition failing in a particular manner, the ulterior disposition shall not
take effect unless the prior disposition
fails in that manner.
Illustrations
(a) A transfers Rs. 500 to B on
condition that he shall execute a certain lease within three months after A’s
death, and,
if he should neglect to do so, to C. B
dies in A's life-time. The disposition in favour of C takes effect.
(b) A transfers property to his wife;
but, in case she should die in his life-time, transfers to B that which he had
transferred to her. A and his wife
perish together, under circumstances which make it impossible to prove that she
died
before him. The disposition in favour of
B does not take effect.
28. Ulterior transfer conditional on
happening or not happening of specified event.—On a
transfer of property an interest therein
may be created to accrue to any person with the condition
superadded that in case a specified
uncertain event shall happen such interest shall pass to another person,
or that in case a specified uncertain
event shall not happen such interest shall pass to another person. In
each case the dispositions are subject
to the rules contained in sections 10, 12, 21, 22, 23, 24, 25 and 27.
29. Fulfilment of condition
subsequent.—An ulterior disposition of the kind contemplated by the
last preceding section cannot take
effect unless the condition is strictly fulfilled.
Illustration
A transfers Rs. 500 to B, to be paid to
him on his attaining his majority or marrying, with a proviso that, if B dies a
minor or marries without C's consent,
the Rs. 500 shall go to D. B marries when only 17 years of age, without C's
consent.
The transfer to D takes effect.
30. Prior disposition not affected by
invalidity of ulterior disposition.—If the ulterior disposition
is not valid, the prior disposition is
not affected by it.
Illustration
A transfers a farm to B for her life,
and, if she do not desert her husband to C. B is entitled to the farm during
her life as
if no condition had been inserted.
31. Condition that transfer shall cease
to have effect in case specified uncertain event happens
or does not happen.—Subject to the
provisions of section 12, on a transfer of property an interest therein
may be created with the condition
superadded that it shall cease to exist in case a specified uncertain
event shall happen, or in case a
specified uncertain event shall not happen.
Illustrations
(a) A transfers a farm to B for his
life, with a proviso that, in case B cuts down a certain wood, the transfer
shall cease
to have any effect. B cuts down the
wood. He loses his life-interest in the farm.
(b) A transfers a farm to B, provided
that, if B shall not go to England within three years after the date of the
transfer,
his interest in the farm shall cease. B
does not go to England within the term prescribed. His interest in the farm
ceases.
32. Such condition must not be
invalid.—In order that a condition that an interest shall cease to
exist may be valid, it is necessary that
the event to which it relates be one which could legally constitute
the condition of the creation of an
interest.
33. Transfer conditional on performance
of act, no time being specified for
performance.—Where, on a transfer of
property, an interest therein is created subject to a condition that
the person taking it shall perform a
certain act, but no time is specified for the performance of the act, the
condition is broken when he renders
impossible, permanently or for an indefinite period, the performance
of the act.
34. Transfer conditional on performance
of act, time being specified.—Where an act is to be
performed by a person either as a
condition to be fulfilled before an interest created on a transfer of
15
property is enjoyed by him, or as a
condition on the non-fulfillment of which the interest is to pass from
him to another person, and a time is
specified for the performance of the act, if such performance within
the specified time is prevented by the
fraud of a person who would be directly benefited by non-fulfilment
of the condition, such further time
shall as against him be allowed for performing the act as shall be
requisite to make up for the delay
caused by such fraud. But if no time is specified for the performance of
the act, then, if its performance is by
the fraud of a person interested in the non-fulfilment of the condition
rendered impossible or indefinitely
postponed, the condition shall as against him be deemed to have been
fulfilled.
Election
35. Election when necessary.—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.
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
therefrom.
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
claim 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 of 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.
Illustration
A transfers to B an estate to which C is
entitled, and as part of the same transaction gives C a coal-mine. C takes
possession
of the mine and exhausts it. He has
thereby confirmed the transfer of the estate to B.
16
If he does not within one year after the
date of the transfer signify to the transferor or his
representatives his intention to confirm
or to dissent from the transfer, the transferor or his representative
may, upon the expiration of that period,
require him to make his election; and, if he does not comply with
such requisition within a reasonable
time after he has received it, he shall be deemed to have elected to
confirm the transfer.
In case of disability, the election
shall be postponed until the disability ceases, or until the election is
made by some competent authority.
Appointment
36. 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.
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.
Illustrations
(a) A sells to B, C and D a house
situated in a village and leased to E at an annual rent of Rs. 30 and delivery
of one fat
sheep, B having provided half the
purchase-money and C and D one quarter each. E, having notice of this, must pay
Rs. 15 to B,
Rs. 7½ to C, and Rs. 7½ to D, and must
deliver the sheep according to the Joint direction of B, C and D.
(b) In the same case, each house in the
village being bound to provide ten days' labour each year on a dyke to prevent
inundation, E had agreed as a term of
his lease to perform this work for A. B, C and D severally require E to perform
the ten
days' work due on account of the house
of each. E is not bound to do more than ten days' work in all, according to
such directions
as B, C and D may join in giving.
(B) Transfer of Immovable property
38. Transfer by person authorised only
under certain circumstances to transfer.—Where any
person, authorised only under
circumstances in their nature variable to dispose of immoveable property,
transfers such property for
consideration, alleging the existence of such circumstances, they shall, as
between the transferee on the one part
and the transferor and other persons (if any) affected by the transfer
on the other part, be deemed to have
existed, if the transferee, after using reasonable care to ascertain the
existence of such circumstances, has
acted in good faith.
Illustration
A, a Hindu widow, whose husband has left
collateral heirs, alleging that the property held by her as such is insufficient
for
her maintenance, agrees, for purposes
neither religious nor charitable, to sell a field, part of such property, to B.
B satisfies
himself by reasonable enquiry that the
income of the property is insufficient for A's maintenance, and that the sale
of the field is
necessary, and acting in good faith,
buys the field from A. As between B on the one part and A and the collateral
heirs on the
other part, a necessity for the sale
shall be deemed to have existed.
39. Transfer where third person is entitled
to maintenance.—Where a third person has a right to receive
maintenance, or a provision for
advancement or marriage, from the profits of immoveable property, and such
property is transferred 1*** the right
may be enforced against the transferee, if he has notice 2
[thereof] or if the
1. The words “with the intention of
defeating such right” omitted by Act 20 of 1929, s. 11.
2. Subs. by s. 11, ibid., for “of such
intention”.
17
transfer is gratuitous; but not against
a transferee for consideration and without notice of the right, nor against
such
property in his hands.
1* * * * *
40. Burden of obligation imposing
restriction on use of land.—Where, for the more beneficial
enjoyment of his own immoveable
property, a third person has, independently of any interest in the
immoveable property of another or of any
easement thereon, a right to restrain the enjoyment2
[in a
particular manner of the latter
property], or
or of obligation annexed to ownership
but not amounting to interest or easement.—where a third
person is entitled to the benefit of an
obligation arising out of contract and annexed to the ownership of
immoveable property, but not amounting
to an interest therein or easement thereon,
such right or obligation may be enforced
against a transferee with notice thereof or a gratuitous
transferee of the property affected
thereby, but not against a transferee for consideration and without
notice of the right or obligation, nor
against such property in his hands.
Illustration
A contracts to sell Sultanpur to B.
While the contract is still in force he sells Sultanpur to C, who has notice of
the contract.
B may enforce the contract against C to
the same extent as against A.
41. Transfer by ostensible owner.—Where,
with the consent, express or implied, of the persons
interested in immoveable property, a
person is the ostensible owner of such property and transfers the
same for consideration, the transfer
shall not be violable on the ground that the transferor was not
authorised to make it:
Provided that the transferee, after
taking reasonable care to ascertain that the transferor had power to
make the transfer, has acted in good
faith.
42. Transfer by person having authority
to revoke former transfer.—Where a person transfers
any immoveable property, reserving power
to revoke the transfer, and subsequently transfers the property
for consideration to another transferee,
such transfer operates in favour of such transferee (subject to any
condition attached to the exercise of
the power) as a revocation of the former transfer to the extent of the
power.
Illustration
A lets a house to B, and reserves power
to revoke the lease if, in the opinion of a specified surveyor, B should make a
use of
it detrimental to its value. Afterwards
A, thinking that such a use has been made, lets the house to C. This operates
as a
revocation of B's lease subject to the
opinion of the surveyor as to B's use of the house having been detrimental to its
value.
43. Transfer by unauthorised person who
subsequently acquires interest in property
transferred.—Where a person 3
[fraudulently or] erroneously represents
that he is authorised to transfer
certain immovable property and professes
to transfer such property for consideration, such transfer shall,
at the option of the transferee, operate
on any interest which the transferor may acquire in such property at
any time during which the contract of
transfer subsists.
Nothing in this section shall impair the
right of transferees in good faith for consideration without
notice of the existence of the said
option.
Illustration
A, a Hindu who has separated from his
father B, sells to C three fields, X, Y and Z, representing that A is
authorised to
transfer the same. Of these fields Z
does not belong to A, it having been retained by B on the partition; but on B's
dying A as heir
obtains Z.C, not having rescinded the
contract of sale, may require A to deliver Z to him .
44. Transfer by one co-owner.—Where one
of two or more co-owners of immoveable property
legally competent in that behalf
transfers his share of such property or any interest therein, the transferee
acquires as to such share or interest,
and so far as is necessary to give effect to the transfer, the transferor's
1. The Illustrations omitted by Act 20
of 1929, s. 11.
2. Subs. by s. 12, ibid., for “of the
latter property or to compel its enjoyment in a particular manner”.
3. Ins. by s. 13, ibid.
18
right to joint possession or other
common or part enjoyment of the property, and to enforce a partition of
the same, but subject to the conditions
and liabilities affecting, at the date of the transfer, the share or
interest so transferred.
Where the transferee of a share of a
dwelling-house belonging to an undivided family is not a
member of the family, nothing in this
section shall be deemed to entitle him to joint possession or other
common or part enjoyment of the house.
45. Joint transfer for
consideration.—Where immoveable property is transferred for consideration
to two or more persons and such
consideration is paid out of a fund belonging to them in common, they
are, in the absence of a contract to the
contrary, respectively entitled to interests in such property
identical, as nearly as may be, with the
interests to which they were respectively entitled in the fund; and,
where such consideration is paid out of
separate funds belonging to them respectively, they are, in the
absence of a contract to the contrary,
respectively entitled to interests in such property in proportion to the
shares of the consideration which they
respectively advanced.
In the absence of evidence as to the
interests in the fund to which they were respectively entitled, or
as to the shares which they respectively
advanced, such persons shall be presumed to be equally interested
in the property.
46. Transfer for consideration by
persons having distinct interests.—Where immoveable property
is transferred for consideration by persons
having distinct interests therein, the transferors are, in the
absence of a contract to the contrary,
entitled to share in the consideration equally, where their interests in
the property were of equal value, and,
where such interests were of unequal value, proportionately to the
value of their respective interests.
Illustration
(a) A, owing a moiety, and B and C, each
a quarter share, of mauza Sultanpur, exchange an eighth share of that mauza for
a
quarter share of mauza Lalpura. There
being no agreement to the contrary, A is entitled to an eighth share in
Lalpura, and B and
C each to a sixteenth share in that
mauza.
(b) A, being entitled to a life-interest
in mauza Atrali and B and C to the reversion, sell the mauza for Rs. 1,000. A's
life-interest is ascertained to be worth
Rs. 600, the reversion Rs. 400. A is entitled to receive Rs. 600 out of the
purchase-money.
B and C to receive Rs. 4000.
47. Transfer by co-owners of share in
common property.—Where several co-owners of
immoveable property transfer a share
therein without specifying that the transfer is to take effect on
any particular share or shares of the
transferors, the transfer, as among such transferors, takes effect
on such shares equally where the shares
were equal, and, where they were unequal, proprotionately to
the extent of such shares.
Illustration
A, the owner of an eight-anna share, and
B and C, each the owner of a four-anna share, in mauza Sultanpur, transfer a
two-anna share in the mauza to D,
without specifying from which of their several shares the transfer is made. To
give
effect to the transfer one-anna share is
taken from the share of A, and half-an-anna share from each of the shares of
B and C.
48. Priority of rights created by
transfer.—Where a person purports to create by transfer at
different times rights in or over the
same immoveable property, and such rights cannot all exist or be
exercised to their full extent together,
each later created right shall, in the absence of a special contract or
reservation binding the earlier
transferees, be subject to the rights previously created.
49. Transferee’s right under
policy.—Where immoveable property is transferred for consideration,
and such property or any part thereof is
at the date of the transfer insured against loss or damage by fire,
the transferee, in case of such loss or
damage, may, in the absence of a contract to the contrary, require
any money which the transferor actually receives
under the policy, or so much thereof as may be
necessary, to be applied in reinstating
the property.
50. Rent bona fide paid to holder under
defective title.—No person shall be chargeable with
any rents or profits of any immoveable
property, which he has in good faith paid or delivered to any
person of whom he in good faith held
such property, notwithstanding it may afterwards appear that the
person to whom such payment or delivery
was made had no right to receive such rents or profits.
19
Illustration
A lets a field to B at a rent of Rs. 50,
and then transfers the field to C. B, having no notice of the transfer, in good
faith pays
the rent to A. B is not chargeable with
the rent so paid.
51. Improvements made by bona fide
holders under defective titles.—When the transferee of
immoveable property makes any
improvement on the property, believing in good faith that he is
absolutely entitled thereto, and he is
subsequently evicted there from by any person having a better
title, the transferee has a right to
require the person causing the eviction either to have the value of the
improvement estimated and paid or
secured to the transferee, or to sell his interest in the property to the
transferee at the then market value
thereof, irrespective of the value of such improvement.
The amount to be paid or secured in
respect of such improvement shall be the estimated
value thereof at the time of the
eviction.
When, under the circumstances aforesaid,
the transferee has planted or sown on the property
crops which are growing when he is
evicted therefrom, he is entitled to such crops and to free
ingress and egress to gather and carry
them.
52. Transfer of property pending suit
relating thereto.—During the 1
[pendency] in any
Court having authority 2
[
3
[within the limits of India excluding
the State of Jammu and Kashmir]
or established beyond such limits] by 4
[the Central Government 5 ***], of 6
[any] suit or
proceeding 7
[which is not collusive and] in. which
any right to immoveable property is directly
and specifically in question, the
property cannot be transferred or otherwise dealt with by any
party to the suit or proceeding so as to
affect the rights of any other party thereto under any
decree or order which may be made
therein, except under the authority of the Court and on such
terms as it may impose.
7
[Explanation.—For the purposes of this
section, the pendency of a suit or proceeding shall be
deemed to commence from the date of the
presentation of the plaint or the institution of the
proceeding in a Court of competent
jurisdiction, and to continue until the suit or proceeding has
been disposed of by a final decree or
order and complete satisfaction or discharge of such decree
or order, has been obtained, or has
become unobtainable by reason of the expiration of any period
of limitation prescribed for the
execution thereof by any law for the time being in force.]
8
[53. Fraudulent transfer.—(1) Every
transfer of immoveable 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 immoveable
property made without consideration with intent to defraud a
subsequent transferee shall be voidable
at the option of such transferee.
1. Subs. by Act 20 of 1929, s.14, for
“active prosecution”.
2. Subs. by A.O. 1950, for “in the
Provinces or established beyond the limits of the Provinces”.
3. Subs. by Act 3 of 1951, s. 3 and the
Schedule, for “within the limits of Part A States and Part C States”
(w.e.f. 1-4-1951).
4. Subs. by A.O. 1937, for “the Governor
General in Council”.
5. The words “or the Crown
Representative” Rep. by the A.O. 1948.
6. Subs. by Act 20 of 1929, s. 14, for
“a contentious ”.
7. Ins. by s. 14, ibid
8. Subs. by s. 15, ibid., for s. 53.
20
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.]
1
[53A. Part performance.—Where any person
contracts to transfer for consideration any
immoveable 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,
and the transferee has performed or is
willing to perform his part of the contract,
then, notwithstanding that 2***, 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.]
CHAPTER III
OF SALES OF IMMOVEABLE PROPERTY
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 immoveable 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 immoveable
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 immoveable 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 immoveable 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.
STATE AMENDMENTS
Assam.
Amendment of section 54 of the Central
Act 4 of 1882.—In Section 54 of the principal Act, in
para 2, for the expression “by a
registered instrument” the following expression shall be substituted,
namely: —
“by an instrument registered in the
State of Assam, notwithstanding anything contained in the India
Registration Act, 1908 (Act 16 of 1908)
to the contrary.”
[Vide Assam Act 10 of 1976, s. 2.]
55. Rights and liabilities of buyer and
seller.—In the absence of a contract to the contrary,
the buyer and the seller of immoveable
property respectively are subject to the liabilities, and have the
rights, mentioned in the rules next
following, or such of them as are applicable to the property sold:
(1) The seller is bound—
(a) to disclose to the buyer any
material defect in the property 3
[or in the seller’s title thereto] of
which the seller is, and the buyer is
not, aware, and which the buyer could not with ordinary care
discover;
1. Ins. by Act 20 of 1929, s. 16.
2. The words “the contract though
required to be registered, has not been registered, or” omitted by Act 48 of
2001, s. 10 (w.e.f.
24-9-2001).
3. Ins. by Act 20 of 1929, s. 17.
21
(b) to produce to the buyer on his
request for examination all documents of title relating to the
property which are in the seller's
possession or power;
(c) to answer to the best of his
information all relevant questions put to him by the buyer in
respect to the property or the title
thereto;
(d) on payment or tender of the amount
due in respect of the price, to execute a proper
conveyance of the property when the
buyer tenders it to him for execution at a proper time and place;
(e) between the date of the contract of
sale and the delivery of the property, to take as much care
of the property and all documents of
title relating thereto which are in his possession as an owner of
ordinary prudence would take of such
property and documents;
(f) to give, on being so required, the
buyer, or such person as he directs, such possession of the
property as its nature admits;
(g) to pay all public charges and rent
accrued due in respect of the property up to the
date of the sale, the interest on all
incumbrances on such property due on such date, and,
except where the property is sold
subject to incumbrances, to discharge all incumbrances
on the property then existing.
(2) The seller shall be deemed to
contract with the buyer that the interest which the seller
professes to transfer to the buyer
subsists and that he has power to transfer the same:
Provided that, where the sale is made by
a person in a fiduciary character, he shall be
deemed to contract with the buyer that
the seller has done no act whereby the property is
incumbered or whereby he is hindered
from transferring it.
The benefit of the contract mentioned in
this rule shall be annexed to, and shall go
with, the interest of the transferee as
such, and may be enforced by every person in whom
that interest is for the whole or any
part thereof from time to time vested.
(3) Where the whole of the
purchase-money has been paid to the seller, he is also bound to
deliver to the buyer all documents of
title relating to the property which are in the seller’s
possession or power:
Provided that, (a) where the seller
retains any part of the property comprised in such
documents, he is entitled to retain them
all, and, (b) where the whole of such property is sold
to different buyers the buyers, of the
lot of greatest value is entitled to such documents. But in
case (a) the seller, and in case (b) the
buyer, of the lot of greatest value, is bound, upon every
reasonable request by the buyer, or by
any of the other buyers, as the case may be, and at the
cost of the person making the request,
to produce the said documents and furnish such true
copies thereof or extracts therefrom as
he may require; and in the meantime, the seller, or the
buyer of the lot of greatest value, as
the case may be, shall keep the said documents safe,
uncancelled and undefaced, unless
prevented from so doing by fire or other inevitable accident.
(4) The seller is entitled—
(a) to the rents and profits of the
property till the ownership thereof passes to the
buyer;
(b) where the ownership of the property
has passed to the buyer before payment of the
whole of the purchase-money, to a charge
upon the property in the hands of the buyer,
1
[any transferee without consideration or
any transferee with notice of the non-payment,]
for the amount of the purchase-money, or
any part thereof remaining unpaid, and for
interest on such amount or part 1
[from the date on which possession has
been delivered].
(5) The buyer is bound—
(a) to disclose to the seller any fact
as to the nature or extent of the seller’s interest in the
property of which the buyer is aware,
but of which he has reason to believe that the seller is
not aware, and which materially
increases the value of such interest;
1. Ins. by Act 20 of 1929, s. 17.
22
(b) to pay or tender, at the time and
place of completing the sale, the purchase-money to
the seller or such person, as he
directs: provided that, where the property is sold free from
incumbrances, the buyer may retain out
of the purchase-money the amount of any
incumbrances on the property existing at
the date of the sale, and shall pay the amount so retained to
the persons entitled thereto;
(c) where the ownership of the property
has passed to the buyer, to bear any loss arising from the
destruction, injury or decrease in value
of the property not caused by the seller;
(d) where the ownership of the property
has passed to the buyer, as between himself and the
seller, to pay all public charges and
rent which may become payable in respect of the property,
the principal moneys due on any
incumbrances subject to which the property is sold, and the
interest thereon afterwards accruing
due.
(6) The buyer is entitled—
(a) where the ownership of the property
has passed to him, to the benefit of any improvement
in, or increase in value of, the
property, and to the rents and profits thereof;
(b) unless he has improperly declined to
accept delivery of the property, to a charge on the
property, as against the seller and all
persons claiming under him 1*** to the extent of the
seller's interest in the property, for
the amount of any purchase-money properly paid by the
buyer in anticipation of the delivery
and for interest on such amount; and, when he properly
declines to accept the delivery, also
for the earnest (if any) and for the costs (if any) awarded to
him of a suit to compel specific
performance of the contract or to obtain a decree for its
rescission.
An omission to make such disclosures as
are mentioned in this section, paragraph (1), clause (a), and
paragraph (5), clause (a), is
fraudulent.
2
[56. Marshalling by subsequent
purchaser.—If the owner of two or more properties
mortgages them to one person and then
sells one or more of the properties to another person, the
buyer is, in the absence of a contract
to the contrary, entitled to have the mortgage -debt satisfied
out of the property or properties not
sold to him, so far as the same will extend, but not so as to
prejudice the rights of the mortgagee or
persons claiming under him or any other person who has
for consideration acquired an interest
in any of the properties.]
Discharge of Incumbrances on Sale
57. Provision by Court for incumbrances
and sale freed therefrom.—(a) Where immoveable
property subject to any incumbrance,
whether immediately payable or not, is sold by the Court or in
execution of a decree, or out of Court,
the Court may, if it thinks fit, on the application of any party
to the sale, direct or allow payment
into Court,—
(1) in case of an annual or monthly sum
charged on the property, or of a capital sum charged on a
determinable interest in the property—of
such amount as, when invested in securities of the Central
Government, the Court considers will be
sufficient, by means of the interest thereof, to keep down or
otherwise provide for that charge, and
(2) in any other case of a capital sum
charged on the property—of the amount sufficient to meet
the incumbrance and an interest due
thereon.
But in either case there shall also be
paid into Court such additional amount as the Court
considers will be sufficient to meet the
contingency of further costs, expenses and interest, and any
other contingency, except depreciation
of investments, not exceeding one -tenth part of the original
amount to be paid in, unless the Court
for special reasons (which it shall record) thinks fit to
require a larger additional amount.
(b) Thereupon the Court may, if it
thinks fit, and after notice to the incumbrancer, unless the
Court, for reasons to be recorded in
writing, thinks fit to dispense with such notice, declare the
property to be freed from the
incumbrance, and make any order for conveyance, or vesting order,
1. The words “with notice of the
payment” omitted by Act 20 of 1929, s. 17.
2. Subs. by s. 18, ibid., for s. 56.
23
proper for giving effect to the sale,
and give directions for the retention and investment of the
money in Court.
(c) After notice served on the persons
interested in or entitled to the money or fund in
Court, the Court may direct payment or
transfer thereof to the persons entitled to receive or
give a discharge for the same, and
generally may give directions respecting the application or
distribution of the capital or income
thereof.
(d) An appeal shall lie from any
declaration, order or direction under this section as if the same were
a decree.
(e) In this section “Court” means (1) a
High Court in the exercise of its ordinary or
extraordinary original civil
jurisdiction, (2) the Court of a District Judge within the local limits
of whose jurisdiction the property or
any part thereof is situate, (3) any other Court which the
State Government may, from time to time,
by notification in the Official Gazette, declare to be
competent to exercise the jurisdiction
conferred by this section.
CHAPTER IV
OF MORTGAGES OF IMMOVEABLE PROPERTY AND
CHARGES
58. “Mortgage”, “mortgagor”,
“mortgagee”, “mortgage-money” and “mortgage-deed”
defined.—(a) A mortgage is the transfer
of an interest in specific immoveable property for the
purpose of securing the payment of money
advanced or to be advanced by way of loan, an
existing or future debt, or 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 of which payment is secured for
the time being arc called the mortgage-money, and
the instrument (if any) by which the
transfer is effected is called a mortgage -deed.
(b) Simple 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 transaction is called a
simple mortgage and the mortgagee a
simple mortgagee.
(c) Mortgage by conditional sale.—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:
1
[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.]
(d) Usufructuary mortgage.—Where the
mortgagor delivers possession 1
[or expressly or by
implication binds himself to deliver
possession] of the mortgaged property to the mortgagee, and
authorises him to retain such possession
until payment of the mortgage-money, and to receive
the rents and profits accruing from the
property 2
[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 3
[or] partly in payment of the
mortgage-money, the transaction is called an
usufructuary mortgage and the mortgagee
an usufructuary mortgagee.
1. Added b y A c t 2 0 o f 1 9 2 9 , s .
1 9 .
2. Subs. by s. 19, ibid., for “and to
appropriate them”.
3. Subs. by s. 19, ibid., for “and”.
24
(e) English mortgage.—Where the
mortgagor binds himself to re-pay 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.
1
[(f) Mortgage by deposit of
title-deeds.—Where a person in any of the following towns,
namely, the towns of Calcutta, Madras,
2
[and Bombay], 3*** and in any other town
which the
4
[State Government concerned] may, by
notification in the Official Gazette, specify in this behalf,
delivers to a creditor or his agent
documents of title to immoveable property, with intent to create
a security thereon, the transaction is
called a mortgage by deposit of title-deeds.
(g) Anomalous mortgage.—A mortgage which
is not a simple mortgage, a mortgage by
conditional sale, an usufructuary
mortgage, an English mortgage or a mortgage by deposit of
title-deeds within the meaning of this
section is called an anomalous mortgage.]
59. Mortgage when to be by
assurance.—Where the principal money secured is one hundred
rupees or upwards, a mortgage 5
[other than a mortgage by deposit of
title-deeds] can be effected only
by a registered instrument signed by the
mortgagor and attested by at least two witnesses.
Where the principal money secured is
less than one hundred rupees, a mortgage may be
effected either by 6
[a registered instrument] signed and
attested as aforesaid, or (except in the
case of a simple mortgage) by delivery
of the property.
7* * * *
8
[59A. References to mortgagors and
mortgagees to include persons deriving title from
them.—Unless otherwise expressly
provided, references in this Chapter to mortgagors and
mortgagees shall be deemed to include
references to persons deriving title from them
respectively.]
Rights and Liabilities of Mortgagor
60. Right of mortgagor to redeem.—At any
time after the principal money has become 9
[due],
the mortgagor has a right, on payment or
tender, at a proper time and place, of the mortgage -
money, to require the mortgagee (a) to
deliver 10 [to the mortgagor the mortgage-deed and all
documents relating to the mortgaged
property which are in the possession or power of the
mortgagee], (b) where the mortgagee is
in possession of the mortgaged property, to deliver
possession thereof to the mortgagor, and
(c) at the cost of the mortgagor either to re-transfer the
mortgaged property to him or to such
third person as he may direct, or to execute and (where the
mortgage has been effected by a
registered instrument) to have registered an acknowledgement in
writing that any right in derogation of
his interest transferred to the mortgagee has been extinguished:
Provided that the right conferred by
this section has not been extinguished by act of the parties or by
11[decree] of a Court.
The right conferred by this section is
called a right to redeem and a suit to enforce it is called a suit
for redemption.
Nothing in this section shall be deemed
to render invalid any provision to the effect that, if
the time fixed for payment of the
principal money has been allowed to pass or no such time has
been fixed, the mortgagee shall be
entitled to reasonable notice before payment or tender of
such money.
1. Added by Act 20 of 1929, s. 19.
2. Subs. by A.O. 1948, for “Bombay and
Karachi”. The word “and” had been ins. by A.O. 1937.
3. The words “Rangoon, Moulmein, Bassein
and Akyab” omitted by A.O. 1937.
4. The words “Governor General in
Council” successively amended by A.O. 1937 and the A.O. 1950 to read as
above.
5. Ins. by Act 20 of 1929, s. 20.
6. Subs. by Act 6 of 1904, s. 3, for “an
instrument”.
7. Third paragraph omitted by Act 20 of
1929, s. 20.
8. Ins. by s. 21, ibid.
9. Subs. by s. 22, ibid., for “payable”.
10. Subs. by s. 22, ibid., for “the
mortgage-deed, if any, to the mortgagor”.
11. Subs. by Act 20 of 1929, s. 22, for
“order”.
25
Redemption of portion of mortgaged
property.—Nothing in this section shall entitle a
person interested in a share only of the
mortgaged property to redeem his own share only, on
payment of a proportionate part of the
amount remaining due on the mortgage, except 1
[only]
where a mortgagee, or, if there are more
mortgagees than one, all such mortgagees, has or have
acquired, in whole or in part, the share
of a mortgager.
2
[60A. Obligation to transfer to third
party instead of re-transference to mortgagor.—
(1) Where a mortgagor is entitled to
redemption, then, on the fulfilment of any conditions on the
fulfilment of which he would be entitled
to require a re-transfer, he may require the mortgagee,
instead of re-transferring the property,
to assign the mortgage-debt and transfer the mortgaged
property to such third person as the
mortgagor may direct; and the mortgagee shall be bound to
assign and transfer accordingly.
(2) The rights conferred by this section
belong to and may be enforced by the mortgagor or
by any encumbrancer notwithstanding an
intermediate encumbrance; but the requisition of any
encumbrancer shall prevail over a
requisition of the mortgagor and, as between encumbrancers,
the requisition of a prior encumbrancer
shall prevail over that of a subsequent encumbrancer.
(3) The provisions of this section do
not apply in the case of a mortgagee who is or has been in
possession.
60B. Right to inspection and production
of documents.—A mortgagor, as long as his right
of redemption subsists, shall be entitled
at all reasonable times, at his request and at his own
cost, and on payment of the mortgagee’s
costs and expenses in this behalf, to inspect and make
copies or abstracts of, or extracts
from, documents of title relating to the mortgaged property
which are in the custody or power of the
mortgagee.]
3
[61. Right to redeem separately or
simultaneously.—A mortgagor who has executed two
or more mortgages in favour of the same
mortgagee shall, in the absence of a contract to the
contrary, when the principal money of
any two or more of the mortgages has become due, be
entitled to redeem any one such mortgage
separately, or any two or more of such mortgages
together.]
62. Right of usufructuary mortgagor to
recover possession.—In the case of a usufructuary
mortgage, the mortgagor has a right to
recover possession of the property 4
[together with the mortgagedeed and all
documents relating to the mortgaged property which are in the possession or
power of the
mortgagee],—
(a) where the mortgagee is authorised to
pay himself the mortgage-money from the
rents and profits of the property.—when
such money is paid:
(b) where the mortgagee is authorised to
pay himself from such rents and profits 5
[or
any part thereof a part only of the
mortgage -money],—when the term (if any), prescribed
for the payment of the mortgage-money
has expired and the mortgagor pays or tenders to
the mortgagee 6
[the mortgage-money or the balance
thereof] or deposits it in Court as
hereinafter provided.
63. Accession to mortgaged property.—Where
mortgaged property in possession of the
mortgagee has, during the continuance of
the mortgage, received any accession, the mortgagor, upon redemption, shall, in
the absence of a contract to the contrary, be entitled as
against the mortgagee to such accession.
1. Ins. by Act 20 of 1929, s. 22.
2. S. 60A and 60B ins. by s. 23, ibid.
3. Subs. by s. 24, ibid., for s. 61.
4. Ins. by s. 25, ibid.
5. Subs. by s. 25, ibid., for “the
interest of the principal money”.
6. Subs. by s. 25, ibid., for “the
principal money”.
26
Accession acquired in virtue of
transferred ownership.—Where such accession has
been acquired at the expense of the
mortgagee, and is capable of separ ate possession or
enjoyment without detriment to the
principal property, the mortgagor desiring to take the
accession must pay to the mortgagee the
expense of acquiring it. If such separate possession
or enjoyment is not possible, the
accession must be delivered with the property; the
mortgagor being liable, in the case of
an acquisition necessary to preserve the property from
destruction, forfeiture or sale, or made
with his assent, to pay the proper cost thereof, as an
addition to the principal money, 1
[with interest at the same rate as is
payable on the
principal, or, where no such rate is
fixed, at the rate of nine per cent. per annum].
In the case last mentioned the profits,
if any, arising from the accession shall be credited to the
mortgagor.
Where the mortgage is usufructuary and
the accession has been acquired at the expense
of the mortgagee, the profits, if any,
arising from the accession shall, in the absence of a
contract to the contrary, be set off
against interest, if any, payable on the money s o
expended.
2
[63A. Improvements to mortgaged
property.—(1) Where mortgaged property in
possession of the mortgagee has, during
the continuance of the mortgage, been improved, the
mortgagor, upon redemption, shall, in
the absence of a contract to the contrary, be entitled to
the improvement; and the mortgagor shall
not, save only in cases provided for in
sub-section (2), be liable to pay the
cost thereof.
(2)Where any such improvement was
effected at the cost of the mortgagee and was
necessary to preserve the property from
destruction or deterioration or was necessary to
prevent the security from becoming
insufficient, or was made in compliance with the
lawful order of any public servant or
public authority, the mortgagor shall, in the absence
of a contract to the contrary, be liable
to, pay the proper cost thereof as an addition to the
principal money with interest at the
same rate as is payable on the principal, or, where no
such rate is fixed, at the rate of nine
per cent. per annum, and the profits, if any, accruing
by reason of the improvement shall be
credited to the mortgagor.]
64. Renewal of mortgaged lease.—Where
the mortgaged property is a lease 3***, and
the mortgagee obtains a renewal of the
lease, the mortgagor, upon redemption, shall, in the
absence of a contract by him to the
contrary, have the benefit of the new lease.
65. Implied contracts by mortgagor.—In
the absence of a contract to the contrary, the
mortgagor shall be deemed to contract
with the mortgagee,—
(a) that the interest which the
mortgagor professes to transfer to the mortgagee
subsists, and that the mortgagor has
power to transfer the same;
(b) that the mortgagor will defend, or,
if the mortgagee be in possession of the
mortgaged property, enable him to
defend, the mortgagor’s title thereto;
(c) that the mortgagor will, so long as
the mortgagee is not in possession of the
mortgaged property, pay all public
charges accruing due in respect of the property;
(d) and, where the mortgaged property is
a lease 4***, that the rent payable under the lease,
the conditions contained therein, and
the contracts binding on the lessee have been paid,
performed and observed down to the
commencement of the mortgage; and that the mortgagor
will, so long as the security exists and
the mortgagee is not in possession of the mortgaged
property, pay the rent reserved by the
lease, or, if the lease be renewed, the renewed lease,
perform the conditions contained therein
and observe the contracts binding on the lessee, and
1. Subs. by Act 20 of 1929, s. 26, for
“at the same rate of interest”.
2. Ins. by s. 27, ibid.
3. The words “for a term of years”
omitted by s. 28, ibid.
4. The words “for a term of years”
omitted by s. 29, ibid.
27
indemnify the mortgagee against all
claims sustained by reason of the non-payment of the said
rent or the a non-performance or
non-observance of the said conditions and contracts;
(e) and, where the mortgage is a second
or subsequent incumbrance on the property, that
the mortgagor will pay the interest from
time to time accruing due on each prior incumbrance
as and when it becomes due, and will at
the proper time discharge the principal money due on
such prior incumbrance.
1* * * * *.
The benefit of the contracts mentioned
in this section shall be annexed to and shall go with the
interest of the mortgagee as such, and
may be enforced by every person in whom that interest is
for the whole or any part thereof from
time to time vested.
2
[65A. Mortgagor’s power to lease.—(1)
Subject to the provisions of sub-section (2), a mortgagor,
while lawfully in possession of the
mortgaged property, shall have power to make leases thereof which
shall be binding on the mortgagee.
(2) (a) Every such lease shall be such
as would be made in the ordinary course of management of the
property concerned, and in accordance
with any local law, custom or usage.
(b) Every such lease shall reserve the
best rent that can reasonably be obtained, and no premium
shall be paid or promised and no rent
shall be payable in advance.
(c) No such lease shall contain a
covenant for renewal.
(d) Every such lease shall take effect
from a date not later than six months from the date on which it
is made.
(e) In the case of a lease of buildings,
whether leased it or without the land on which they
stand, the duration of the lease shall
in no case exceed three years, and the lease shall contain a
covenant for payment of the rent and a
condition of re-entry on the rent not being paid within a
time therein specified.
(3) The provisions of sub-section (1)
apply only if and as far as a contrary intention is not
expressed in the mortgage-deed; and the
provisions of sub-section (2) may be varied or extended by
the mortgage-deed and, as so varied and
extended, shall, as far as may be, operate in like manner and
with all like incidents, effects and
consequences, as if such variations or extensions were contained in
that sub-section.]
66. Waste by mortgagor in possession.—A
mortgagor in possession of the mortgaged
property is not liable to the mortgagee
for allowing the property to deteriorate; but he must not
commit any act which is destructive or
permanently injurious thereto, if the security is
insufficient or will be rendered
insufficient by such act.
Explanation.—A security is insufficient
within the meaning of this section unless the value of the
mortgaged property exceeds by one-third,
or, if consisting of buildings, exceeds by one-half, the amount
for the time being due on the mortgage.
Rights and Liabilities of Mortgagee
67. Right to foreclosure or sale.—In the
absence of a contract to the contrary, the mortgagee
has, at any time after the
mortgage-money has become 3
[due] to him, and before a decree has
been
made for the redemption of the mortgaged
property, or the mortgage-money has been paid or
deposited as hereinafter provided, a
right to obtain from the Court 4
[a decree] that the mortgagor
shall be absolutely debarred of his
right to redeem the property, or 4
[a decree] that the property be
sold.
A suit to obtain 4
[a decree] that a mortgagor shall be
absolutely debarred of his right to redeem the
mortgaged property is called a suit for
foreclosure.
1. Certain words omitted by Act 20 of
1929, s. 29.
2. Ins. by s. 30, ibid.
3. Subs. by s. 31, ibid., for “payable”.
4. Subs. by s. 31, ibid., for “an
order”.
28
Nothing in this section shall be deemed—
1
[(a) to authorise any mortgagee other
than a mortgagee by conditional sale or a
mortgagee under an anomalous mortgage by
the terms of which he is entitled to foreclose, to
institute a suit for foreclosure, or an
usufructuary mortgagee as such or a mortgagee by
conditional sale as such to institute a
suit for sale; or]
(b) to authorise a mortgagor who holds
the mortgagee's rights as his trustee or legal
representative, and who may sue for a
sale of the property, to institute a suit for foreclosure;
or
(c) to authorise the mortgagee of a
railway, canal or other work in the maintenance of which the
public are interested, to institute a
suit for foreclosure or sale; or
(d) to authorise a person interested in
part only of the mortgage-money to-institute a suit
relating only to a corresponding part of
the mortgaged property, unless the mortga gees have,
with the consent of the mortgagor,
severed their interests under the mortgage.
2
[67A. Mortgagee when bound to bring one
suit on several mortgages.—A mortgagee who
holds two or more mortgages executed by
the same mortgagor in respect of each of which he has a
right to obtain the same kind of decree
under section 67, and who sues to obtain such decree on
any one of the mortgages, shall, in the
absence of a contract to the contrary, be bound to sue on all
the mortgages in respect of which the
mortgage-money has become due.]
3
[68. Right to sue for
mortgage-money.—(1) The mortgagee has a right to sue for the mortgagemoney in
the following cases and no others, namely:—
(a) where the mortgagor binds himself to
repay the same;
(b) where by any cause other than the
wrongful act or default of the mortgagor or
mortgagee, the mortgaged property is
wholly or partially destroyed or the security is rendered
insufficient within the meaning of
section 66, and the mortgagee has given the mortgagor a
reasonable opportunity of providing
further security enough to render the whole security
sufficient, and the mortgagor has failed
to do so;
(c) where the mortgagee is deprived of
the whole or part of his security by or in consequence of
the wrongful act or default of the
mortgagor;
(d) where, the mortgagee being entitled
to possession of the mortgaged property, the mortgagor
fails to deliver the same to him, or to
secure the possession thereof to him without disturbance by the
mortgagor or any person claiming under a
title superior to that of the mortgagor:
Provided that, in the case referred to
in clause (a), a transferee from the mortgagor or from
his legal representative shall not be
liable to be sued for, the mortgage -money.
(2) Where a suit is brought under clause
(a) or clause (b) of sub-section (1), the Court may,
at its discretion, stay the suit and all
proceedings therein, notwithstanding any contract to the
contrary, until the mortgagee has
exhausted all his available remedies against the mortgaged
property or what remains of it, unless
the mortgagee abandons his security and, if necessary,
re-transfers the mortgaged property.]
69. Power of sale when valid.—4
[(1)] 5
[
6*** A mortgagee, or any person acting
on his
behalf, shall, subject to the provisions
of this section, have power to sell or, concur in selling the
mortgaged property, or any part thereof,
in default of payment of the mortgage -money, without
the intervention of the Court, in the
following cases and in no others, namely:—]
1. Subs. by Act 20 of 1929, s. 31, for
clause (a).
2. Ins. by s. 32, ibid.
3. Subs. by s. 33, ibid., for s. 68.
4. Section 69 re-numbered as sub-section
(1) of that section by Act 20 of 1929, s. 34.
5. Subs. by s. 34, ibid., for certain
words.
6. The words and figures
“Notwithstanding anything contained in the Trustees’ and Mortgagees’ Powers
Act, 1866 (28 of 1866)”
omitted by Act 48 of 1952, s. 3 and the
Second Schedule.
29
(a) where the mortgage is an English
mortgage, and neither the mortgagor nor the
mortgagee is a Hindu, Muhammadan or
Buddhist 1
[or a member of any other race, sect,
tribe
or class from time to time specified in
this behalf by 2
[the State Government], in the Official
Gazette];
(b) where 3
[a power of sale without the
intervention of the Court is expressly conferred
on the mortgagee by the mortgage-deed
and] the mortgagee is 4
[the Government];
(c) where 3
[a power of sale without the
intervention of the Court is expressly conferred
on the mortgagee by the mortgage-deed
and] the mortgaged property or any part thereof
5
[was, on the date of the execution of
the mortgage -deed], situate within the towns of
Calcutta, Madras, Bombay, 6 *** 7
[or in any other town or area which the
State
Government may, by notification in the
Official Gazette, specify in this behalf].
8
[(2)] 9*** No such power shall be
exercised unless and until—
10 [(a)] notice in writing requiring
payment of the principal money has been served on the
mortgagor, or, one of several
mortgagors, and default has been made in payment of the principal
money, or of part thereof, for three
months after such service; or
11[(b)] some interest under the mortgage
amounting at least to five hundred rupees is
in arrear and unpaid for three months
after becoming due.
12[(3)] When a sale has been made in
professed exercise of such a power, the title of the
purchaser shall not be impeachable on
the ground that no case had arisen to authorize the sale,
or that due notice was not given, or that
the power was otherwise improperly or irregularly
exercised; but any person damnified by
an unauthorised or improper or irregular exercise of the
power shall have his remedy in damages
against the person exercising the power.
13[(4)] The money which is received by
the mortgagee, arising from the sale, after discharge of
prior incumbrances, if any, to which the
sale is not made subject, or after payment into Court under
section 57 of a sum to meet any prior
incumbrance, shall, in the absence of a contract to the contrary,
be held by him in trust to be applied by
him, first, in payment of all costs, charges and expenses
properly incurred by him as incident to
the sale or any attempted sale; and, secondly, discharge of the
mortgage-money and costs and other
money, if any, due under the mortgage; and the residue of the
money so received shall be paid to the
person entitled to the mortgaged property, or authorised to
give receipts for the proceeds of the
sale thereof.
14[(5) Nothing in this section or in
section 69A applies to powers conferred before the first day of
July, 1882.]
15* * * * *
1. Ins. by Act 3 of 1885, s. 5.
2. The words “the L.G., with the
previous sanction of the G. G. in C.” successively amended by A.O. 1937 and
A.O. 1950 to read
as above.
3. Ins. by Act 20 of 1929, s. 34.
4. The words “the Secretary of State for
India in Council” successively amended by A.O. 1937 and A.O. 1950 to read
as above.
5. Subs. by Act 20 of 1929, s. 34, for
“is”.
6. The word “Karachi” omitted by A.O.
1948.
7. The words “or Rangoon” have been
successively amended by Acts 6 of 1904, 11 of 1915, 20 of 1929, the A.O. 1937
and the
A.O. 1950 to read as above.
8. Second paragraph numbered as
sub-section (2) by Act 20 of 1929, s. 34.
9. The word “'But” omitted by s. 34, ibid.
10. Clause (1) was lettered (a) by s.
34, ibid.
11. Clause (2) was lettered (b) by s.
34, ibid.
12. Third paragraph numbered as
sub-section (3) by s. 34, ibid.
13. Fourth paragraph numbered as
sub-section (4) by Act 20 of 1929, s. 34.
14. Subs. by s. 34, ibid., for fifth
paragraph.
15. The last paragraph of this section
omitted by s. 34, ibid.
30
1
[69A. Appointment of receiver.—(1) A
mortgagee having the right to exercise a power of
sale under section 69 shall, subject to
the provisions of sub-section (2), be entitled to appoint, by
writing signed by him or on his behalf,
a receiver of the income of the mortgaged property or any
part thereof.
(2) Any person who has been named in the
mortgage-deed and is willing and able to act as receiver
may be appointed by the mortgagee.
If no person has been so named, or if
all persons named are unable or unwilling to act, or are
dead, the mortgagee may appoint any
person to whose appointment the mortgagor agrees; failing
such agreement, the mortgagee shall be
entitled to apply to the Court for the appointment of a
receiver, and any person appointed by
the Court shall be deemed to have been duly appointed by
the mortgagee.
A receiver may at any time be removed by
writing signed by or on behalf of the mortgagee
and the mortgagor, or by the Court on
application made by either party and on due cause shown.
A vacancy in the office of receiver may
be filled in accordance with the provisions of this
sub-section.
(3) A receiver appointed under the
powers conferred by this section shall be deemed to be the agent
of the mortgagor; and the mortgagor
shall be solely responsible for the receiver's acts or defaults, unless
the mortgage-deed otherwise provides or
unless such acts or defaults are due to the improper intervention
of the mortgagee.
(4) The receiver shall have power to
demand and recover all the income of which he is
appointed receiver, by suit, execution
or otherwise, in the name either of the mortgagor or of the
mortgagee to the full extent of the
interest which the mortgagor could dispose of, and to give
valid receipts accordingly for the same,
and to exercise any powers which may have been
delegated to him by the mortgagee in
accordance with the provisions of this section.
(5) A person paying money to the receiver
shall not be concerned to inquire if the appointment of the
receiver was valid or not.
(6) The receiver shall be entitled to
retain out of any money received by him, for his remuneration,
and in satisfaction of all costs,
charges and expenses incurred by him as receiver, a commission at such
rate not exceeding five per cent. on the
gross amount of all money received as is specified in his
appointment, and, if no rate is so
specified, then at the rate of five per cent. on that gross
amount, or at such other rate as the
Court thinks fit to allow, on application made by him for
that purpose.
(7) The receiver shall, if so directed
in writing by the mortgagee, insure to the extent, if
any, to which the mortgagee might have
insured, and keep insured against loss or damage by
fire, out of the money received by him,
the mortgaged property or any part thereof being of an
insurable nature.
(8) Subject to the provisions of this
act as to the application of insurance money, the
receiver shall apply all money received by
him as follows, namely ,—
(i) in discharge of all rents, taxes,
land revenue, rates and outgoings whatever affecting the
mortgaged property;
(ii) in keeping down all annual sums or
other payments, and the interest on all
principal sums, having priority to the
mortgage in right whereof he is receiver;
(iii) in payment of his commission, and
of the premiums on fire, life or other
insurances, if any, properly payable
under the mortgage -deed or under this Act, and the
cost of executing necessary or proper
repairs directed in writing by the mortgagee;
(iv) in payment of the interest falling
due under the mortgage;
1. Ins. by Act 20 of 1929, s. 35.
31
(v) in or towards discharge of the
principal money, if so directed in writing by the
mortgagee;
and shall pay the residue, if any, of
the money received by him to the person who, but for the
possession of the receiver, would have
been entitled to receive the income of which he is
appointed receiver, or who is otherwise
entitled to the mortgaged property.
(9) The provisions of sub-section (1)
apply only if and as far as a contrary intention is not
expressed in the mortgage-deed; and the
provisions of sub-sections (3) to (8) inclusive may be
varied or extended by the mortgage-deed,
and, as so varied or extended, shall, as far as may be,
operate in like manner and with all the
like incidents, effects and consequences, as if such
variations or extensions were contained
in the said sub-sections.
(10) Application may be made, without
the institution of a suit, to the Court for its opinion,
advice or direction on any present
question respecting the management or administration of the
mortgaged property, other than questions
of difficulty or importance not proper in the opinion of
the Court for summary disposal. A copy
of such application shall be served upon, and the hearing
thereof may be attended by, such of the
persons interested in the application as the Court may
think fit.
The costs of every application under
this sub-section shall be in the discretion of the Court.
(11) In this section, “the Court” means
the Court which would have jurisdiction in a suit to enforce
the mortgage.]
70. Accession to mortgaged property.—If,
after the date of a mortgage, any accession is
made to the mortgaged property, the
mortgagee, in the absence of a contract to the contrary,
shall, for the purposes of the security,
be entitled to such accession.
Illustrations
(a) A mortgages to B a certain field
bordering on a river. The field is increased by alluvion. For the purposes of
his
security, B is entitled to the increase.
(b) A mortgages a certain plot of
building land to B and afterwards erects a house on the plot. For the purposes
of his
security, B is entitled to the house as
well as the plot.
71. Renewal of mortgaged lease.—When the
mortgaged property is a lease 1***, and the
mortgagor obtains a renewal of the
lease, the mortgagee, in the absence of a contract to the
contrary, shall, for the purposes of the
security, be entitled to the new lease.
72. Rights of mortgagee in possession.—2
[A mortgagee] may spend such money as is
necessary—
3* * * * *
(b) for 4
[the preservation of the mortgaged
property] from destruction, forfeiture or
sale;
(c) for supporting the mortgagor's title
to the property;
(d) for making his own title thereto
good against the mortgagor; and
(e) when the mortgaged property is a
renewable lease-hold, for the renewal of the lease;
and may, in the absence of a contract to
the contrary, add such money to the principal
money, at the rate of interest payable
on the principal, and, where no such rate is fixed, at
the rate of nine per cent. per annum:
1. The words “for a term of years”
omitted by Act 20 of 1929, s. 36.
2. Subs. by s. 37, ibid., for certain
words.
3. Clause (a) omitted by s. 37, ibid.
4. Subs. by s. 37, ibid., for “its
preservation”.
32
1
[Provided that the expenditure of money
by the mortgagee under clause (b) or
clause (c) shall not be deemed to be
necessary unless the mortgagor has been called upon
and has failed to take proper and timely
steps to preserve the property or to support the
title.]
Where the property is by its nature
insurable, the mortgagee may also, in the abs ence
of a contract to the contrary, insure
and keep insured against loss or damage by fire the
whole or any part of such property; and
the premiums paid for any such insurance shall be
2
[added to the principal money with
interest at the same rate as is payable on the principal
money or, where no such rate is fixed,
at the rate of nine per cent. per annum]. But the
amount of such insurance shall not
exceed the amount specified in this behalf in the
mortgage-deed or (if no such amount is
therein specified) two-thirds of the amount that
would be required in case of total
destruction to reinstate the property insured.
Nothing in this section shall be deemed
to authorise the mortgagee to insure when an
insurance of the property is kept up by
or on behalf of the mortgagor to the amount in which
the mortgagee is hereby authorised to
insure.
3
[73. Right to proceeds of revenue sale
or compensation on acquisition.—(1) Where the
mortgaged property or any part thereof
or any interest therein is sold owing to failure to pay
arrears of revenue or other charges of a
public nature or rent due in respect of such property,
and such failure did not arise from any
default of the mortgage e, the mortgagee shall be
entitled to claim payment of the
mortgage-money, in whole or in part, out of any surplus of
the sale proceeds remaining after
payment of the arrears and of all charges and deductions
directed by law.
(2) Where the mortgaged property or any
part thereof or any interest therein is acquired
under the Land Acquisition Act, 1894 (1
of 1894), or any other enactment for the time being
in force providing for the compulsory
acquisition of immoveable property, the mortgagee
shall be entitled to claim payment of
the mortgage-money, in whole or in part, out of the
amount due to the mortgagor as
compensation.
(3) Such claims shall prevail against
all other claims except those of prior encumbrances, and
may be enforced notwithstanding that the
principal money on the mortgage has not become due.]
74. [Right of subsequent mortgagee to
pay off prior mortgagee.] Rep. by the Transfer of
Property (Amendment) Act, 1929 (20 of
1929), s. 39.
75. [Rights of mesne mortgagee against
and subsequent mortgagees.] Rep. by s. 39,
ibid.
76. Liabilities of mortgagee in
possession.—When, during the continuance of the mortgage, the
mortgagee takes possession of the mortgaged
property,—
(a) he must manage the property as a
person of ordinary prudence would manage it if it were his
own;
(b) he must use his best endeavours to
collect the rents and profits thereof;
(c) he must, in the absence of a
contract to the contrary, out of the income of the property,
pay the Government-revenue, all other
charges of a public nature 4
[and all rent] accruing due in
respect thereof during such possession,
and any arrears of rent in default of payment of which
the- property may be summarily sold;
(d) he must, in the absence of a
contract to the contrary, make such necessary repairs of the
property as he can pay for out of the
rents and profits thereof after deducting from such rents and
profits the payments mentioned in clause
(c)and the interest on the principal money;
(e) he must not commit any act which is
destructive or permanently injurious to the property;
1. Ins. by Act 20 of 1929, s. 37.
2. Subs. by s. 37, ibid., for certain
words.
3. Subs. by s. 38, ibid., for s. 73.
4. Ins. by s. 40, ibid.
33
(f) where he has insured the whole or
any part of the property against loss or damage by fire,
he must, in case of such loss or damage,
apply any money which he actually receives under the
policy or so much thereof as may be
necessary, in reinstating the property, or, if the mortgagor so
directs, in reduction or discharge of
the mortgage-money;
(g) he must keep clear, full and
accurate accounts of all sums received and spent by him as
mortgagee, and, at any time during the
continuance of the mortgage, give the mortgagor, at his
request and cost, true copies of such
accounts and of the vouchers by which they are
supported;
(h) his receipts from the mortgaged
property, or, where such property is personally occupied
by him a fair occupation-rent in respect
thereof shall, after deducting the expenses 1
[properly
incurred for the management of the
property and the collection of rents and profits and the other
expenses] mentioned in clauses (c) and (d),
and interest thereon, be debited against him in
reduction of the amount (if any) from
time to time due to him on account of interest 2*** and, so
far as such receipts exceed any interest
due, in reduction or discharge of the mortgage-money; the
surplus, if any, shall be paid to the
mortgagor;
(i) when the mortgagor tenders, or
deposits in manner hereinafter provided, the amount for the
time being due on the mortgage, the
mortgagee must, notwithstanding the provisions in the other
clauses of this section, account for his
3*** receipts from the mortgaged property from the date of
the tender or from the earliest time
when he could take such amount out of Court, as the case may be
1
[and shall not be entitled to deduct any
amount therefrom on account of any expenses incurred after
such date or time in connection with the
mortgaged property].
Loss occasioned by his default.—If the
mortgagee fail to perform any of the duties imposed
upon him by this section, he may, when
accounts are taken in pursuance of a decree made
under this Chapter, be debited with the
loss, if any, occasioned by such failure.
77. Receipts in lieu of
interest.—Nothing in section 76, clauses (b), (d), (g) and (h), applies
to cases where there is a contract
between the mortgagee and the mortgagor that the receipts
from the mortgaged property shall, so
long as the mortgagee is in possession of the property, be
taken in lieu of interest on the
principal money, or in lieu of such interest and defined portions of
the principal.
Priority
78. Postponement of prior
mortgagee.—Where, through the fraud, misrepresentation or
gross neglect of a prior mortgagee,
another person has been induced to advance money on the
security of the mortgaged property, the
prior mortgagee shall be postponed to the subsequent
mortgagee.
79. Mortgage to secure uncertain amount
when maximum is expressed.—If a mortgage
made to secure future advances, the
performance of an engagement or the balance of a ru nning
account, expresses the maximum to be
secured thereby, a subsequent mortgage of the same
property shall, if made with notice of
the prior mortgage, be postponed to the prior mortgage
in respect of all advances or debits not
exceeding the maximum, though made or allowed with
notice of the subsequent mortgage.
Illustration
A mortgages Sultanpur to his bankers, B
& Co., to secure the balance of his account with them to the extent
of Rs. 10,000. A then mortgages
Sultanpur to C, to secure Rs. 10,000, C having notice of the mortgage to B
&
Co., and C gives notice to B & Co.
of the second mortgage. At the date of the second mortgage, the balance due to
B & Co. does not exceed Rs. 5,000. B
& Co. subsequently advance to A sums making the balance of the ac count
against him exceed the sum of Rs.
10,000. B & Co. are entitled, to the extent of Rs. 10,000, to priority over
C.
80. [Tacking abolished.] Rep. by the
Transfer of Property (Amendment) Act, 1929 (20 of
1929), s. 41.
1. Ins. by Act 20 of 1929, s. 40.
2. The words “on the mortgage-money”
omitted by s. 40, ibid.
3. The word “gross” omitted by s. 40,
ibid.
34
Marshalling and Contribution
1
[81. Marshalling securities.—If the
owner of two or more properties mortgages them to
one person and then mortgages one or
more of the properties to another person, the subsequent
mortgagee is, in the absence of a
contract to the contrary, entitled to have the prior mortgagedebt satisfied out
of the property or properties not mortgaged to him, so far as the same will
extend, but not so as to prejudice the
rights of the prior mortgagee or of any other person who
has for consideration acquired an
interest in any of the properties.]
82. Contribution to mortgage-debt.—2
[Where property subject to a mortgage
belongs to
two or more persons having distinct and
separate rights of ownership therein, the different
shares in or parts of such property
owned by such persons are, in the absence of a contract to
the contrary, liable to contribute
rateably to the debt secured by the mortgage, and, for the
purpose of determining the rate at which
each such share or part shall contribute, the value
thereof shall be deemed to be its value
at the date of the mortgage after deduction of the
amount of any other mortgage or charge
to which it may have been subject on that date.]
Where, of two properties belonging to
the same owner, one is mortgaged to secure one
debt and then both are mortgaged to
secure another debt, and the former debt is paid out of
the former property, each property is,
in the absence of a contract to the contrary, liable to
contribute rateably to the latter debt
after deducting the amount of the former debt from the
value of the property out of which it
has been paid.
Nothing in this section applies to a
property liable under section 81 to the claim of the 3
[subsequent]
mortgagee.
Deposit in Court
83. Power to deposit in Court money due
on mortgage.—At any time after the principal
money 4
[payable in respect of any mortgage has
become due] and before a suit for redemption
of the mortgaged property is barred, the
mortgagor, or any other person entitled to institute such
suit, may deposit, in any Court in which
he might have instituted such suit, to the account of the
mortgagee, the amount remaining due on
the mortgage.
Right to money deposited by
mortgagor.—The Court shall thereupon cause written notice
of the deposit to be served on the
mortgagee, and the mortgagee may, on presenting a petition
(verified in manner prescribed by 5
law for the verification of plaints)
stating the amount then
due on the mortgage, and his willingness
to accept the money so deposited in full discharge of
such amount, and-on depositing in the
same Court the mortgage-deed 6
[and all documents in
his possession or power relating to the
mortgaged property], apply for and receive the money,
and the mortgage-deed, 7
[and all such other documents], so
deposited shall be delivered to the
mortgagor or such other person as
aforesaid.
7
[Where the mortgagee is in possession of
the mortgaged. property, the Court shall, before
paying to him the amount so deposited,
direct him to deliver possession thereof to the
mortgagor and at the cost of the
mortgagor either to re-transfer the mortgaged property to the
mortgagor or to such third person as the
mortgagor may direct or to execute and (where the
mortgage has been effected by a
registered instrument) have registered an acknowledgment in
writing that any right in derogation of
the mortgagor's interest transferred to the mortgagee has
been extinguished.]
1. Subs. by Act 20 of 1929, s. 42, for
s. 81.
2. Subs by s. 43, ibid., for the first
paragraph.
3. Subs. by s. 43, ibid., for “second”.
4. Subs. by s. 44, ibid., for “has
become payable”.
5. See the Code of Civil Procedure, 1908
(5 of 1908), Sch. I, Order VI, rule 15.
6. Subs. by Act 20 of 1929, s. 44, for
“if then in his possession or power ”.
7. Ins. by s. 44, ibid.
35
84. Cessation of interest.—When the
mortgagor or such other person as aforesaid has
tendered or deposited in Court under
section 83 the amount remaining due on the mortgage,
interest on the principal money shall
cease from the date of the tender or 1
[in the case of a
deposit, where no previous tender of
such amount has be en made] as soon as the mortgagor or
such other person as aforesaid has done
all that has to be done by him to enable the mortgagee
to take such amount out of Court, 2
[and the notice required by section 83
has been served on
the mortgagee:
Provided that, where the mortgagor has
deposited such amount without having made a
previous tender thereof and has
subsequently withdrawn the same or any part thereof, interest
on the principal money shall be payable
from the date of such withdrawal .]
Nothing in this section or in section 83
shall be deemed to deprive the mortgagee of his
right to interest when there exists a
contract that he shall be entitled to reasonable notice
before payment or tender of the
mortgage-money 3
[and such notice has not been given
before
the making of the tender or deposit, as
the case may be].
4
Suits for Foreclosure, Sale or
Redemption
85.[Parties to suits for foreclosure,
sale and redemption.] Rep. by the Code of Civil Procedure, 1908
(5 of 1908), s. 156 and V Schedule.
Foreclosure and Sale4
86. [Decree of foreclosure suit.] Rep.
by the Code of Civil Procedure, 1908 (5 of 1908),
s. 156 and V Schedule.
87. [Procedure in case of payment of
amount due.] Rep. by s. 156 and the fifth Schedule,
ibid.
88. [Decree of sale.] Rep. by s. 156 and
V Schedule, ibid.
89. [Procedure when defendant pay amount
due.] Rep. by s. 156 and V Schedule, ibid.
90. [Recovery of balance due on
mortgage.] Rep. by s. 156 and V Schedule, ibid.
Redemption
5
[91. Persons who may sue for
redemption.—Besides the mortgagor, any of the following persons
may redeem, or institute a suit for
redemption of, the mortgaged property, namely:—
(a) any person (other than the mortgagee
of the interest sought to be redeemed) who has any
interest in, or charge upon, the
property mortgaged or in or upon the right to redeem the same;
(b) any surety for the payment of the
mortgage -debt or any part thereof; or
(c) any creditor of the mortgagor who
has in a suit for the administration of his estate obtained a
decree for sale of the mortgaged
property.]
6
[92. Subrogation.—Any of the persons
referred to in section 91 (other than the mortgagor) and
any co-mortgagor shall, on redeeming
property subject to the mortgage, have, so far as regards
redemption, foreclosure or sale of such
property, the same rights as the mortgagee whose mortgage he
redeems may have against the mortgagor
or any other mortgagee.
The right conferred by this section is
called the right of subrogation, and a person acquiring the same
is said to be subrogated to the rights
of the mortgagee whose mortgage he redeems.
1. Ins. by Act 20 of 1929, s. 45.
2. Subs. by s. 45, ibid., for “as the
case may be”.
3. Added by s. 45, ibid.
4. For the repealed provisions, as
re-enacted, see (Act 5 of 1908), Sch. I, Order XXXIV.
5. Subs. by Act 20 of 1929, s. 46, for
s. 91.
6. Ins. by s. 47, ibid. Original ss. 92
to 94 were rep. by Act 5 of 1908, s. 156 and the fifth Schedule.
36
A person who has advanced to a mortgagor
money with which the mortgage has been redeemed
shall be subrogated to the rights of the
mortgagee whose mortgage has been redeemed, if the
mortgagor has by a registered instrument
agreed that such persons shall be so subrogated.
Nothing in this section shall be deemed
to confer a right of subrogation on any person unless
the mortgage in respect of which the right
is claimed has been redeemed in full.
93. Prohibition of tacking.—No mortgagee
paying off a prior mortgage, whether with or
without notice of an intermediate
mortgage, shall thereby acquire any priority in respect of his
original security; and, except in the
case provided for by section 79, no mortgagee making a
subsequent advance to the mortgagor,
whether with or without notice of an intermediate mortgage,
shall thereby acquire any priority in
respect of his security for such subsequent advance.
94. Rights of mesne mortgagee.—Where a
property is mortgaged for successive debts to successive
mortgagees, a mesne mortgagee has the
same rights against mortgagees posterior to himself as he has
against the mortgagor.]
1
[95. Right of redeeming co-mortgagor to
expenses.—Where one of several mortgagors
redeems the mortgaged property, he
shall, in enforcing his right of subrogation under section 92
against his co-mortgagors, be entitled
to add to the mortgage-money recoverable from them such
proportion of the expenses properly
incurred in such redemption as is attributable to their share in the
property.
96. Mortgage by deposit of
title-deeds.—The provisions hereinbefore contained which apply to a
simple mortgage shall, so far as may be,
apply to a mortgage by deposit of title-deeds.]
297. [Application of proceeds.] Rep. by
the Code of Civil Procedure, 1908 (5 of 1908), s. 156 and V
Schedule.
Anomalous Mortgages
98. Rights and liabilities of parties to
anomalous mortgages.—In the case of 3
[an anomalous
mortgage] the rights and liabilities of
the parties shall be determined by their contract as evidenced
in the mortgage-deed, and, so far as
such contract does not extend, by local usage.
99. [Attachment of mortgaged property.]
Rep. by the Code of Civil Procedure, 1908 (5 of 1908), s.
156 and V Schedule.
Charges
100. Charges.—Where immoveable property
of one person is by act of parties or operation of law
made security for the payment of money
to another, and the transaction does not amount to a mortgage,
the latter person is said to have a
charge on the property; and all the provisions hereinbefore contained
4
[which apply to a simple mortgage shall,
so far as may be, apply to such charge].
Nothing in this section applies to the
charge of a trustee on the trust property for expenses
properly incurred in the execution of
his trust, 5
[and, save as otherwise expressly
provided by any
law for the time being in force, no
charge shall be enforced against any property in the hands of a
person to whom such property has been
transferred for consideration and without notice of the
charge].
6
[101. No merger in case of subsequent
encumbrance.—Any mortgagee of, or person having
a charge upon, immoveable property, or
any transferee from such mortgagee or charge-holder, may
purchase or otherwise acquire the rights
in the property of the mortgagor or owner, as the case may
be, without thereby causing the mortgage
or charge to be merged as between himself and any
subsequent mortgagee of, or person
having a subsequent charge upon, the same property; and no
1. Subs. by Act 20 of 1929, s. 48, for
s. 95. Original s. 96 was rep. by Act 5 of 1908, s. 156 and Sch. V.
2. For the repealed provisions, as
re-enacted, see (Act 5 of 1908), Sch. I, Order XXXIV, rules 12 and 13.
3. Subs. by Act 20 of 1929, s. 49, for
certain words.
5. Subs. by Act 20 of 1929, s. 50, for
certain words.
6. Added by s. 50, ibid.
7. Subs. by s. 51, ibid., for s. 101.
37
such subsequent mortgagee or
charge-holder shall be entitled to for close or sell such property
without redeeming the prior mortgage or
charge, or otherwise than subject thereto.]
Notice and Tender
102. Service or tender on or to
agent.—Where the person on or to whom any notice or tender
is to be served or made under this
Chapter does not reside in the district in which the mortgaged
property or some part thereof is
situate, service or tender on or to an agent holding a general
power-of-attorney from such person or
otherwise duly authorised to accept such service or tender
shall be deemed sufficient.
1
[Where no person or agent on whom such
notice should be served can be found or is known] to
the person required to serve the notice,
the latter person may apply to any Court in whi ch a suit
might be brought for redemption of the
mortgaged property, and such Court shall direct in what
manner such notice shall be served, and
any notice served in compliance with such direction shall
be deemed sufficient:
2
[Provided that, in the case of a notice
required by section 83, in the case of a deposit, the application
shall be made to the Court in which the
deposit has been made.]
3
[Where no person or agent to whom such
tender should be made can be found or is
known] to the person desiring to make
the tender, the latter person may deposit 4
[in any Court in which a
suit might be brought for redemption of
the mortgaged property] the amount sought to be tendered, and
such deposit shall have the effect of a
tender of such amount.
103. Notice, etc., to or by person
incompetent to contract.—Where, under the provisions of
this Chapter, a notice is to be served
on or by, or a tender or deposit made or accepted or taken out
of Court by, any person incompetent to
contract, such notice may be served 5
[on or by], or tender or
deposit made, accepted or taken by, the
legal curator of the property of such person; but where there
is no such curator, and it is requisite
or desirable in the interests of such person that a notice should
be served or a tender or deposit made
under the provisions of this Chapter, application may be made
to any Court in which a suit might be
brought for the redemption of the mortgage to appoint a
guardian ad litem for the purpose of
serving or receiving service of such notice, or making or
accepting such tender, or making or
taking out of Court such deposit, and for the performance of all
consequential acts which could or ought
to be done by such person if he were competent to contract;
and the provisions of 6
[Order XXXII in the First Schedule to
the Code of Civil Procedure, 1908 (5 of
1908)] shall, so far as may be, apply to
such application and to the parties thereto and to the
guardian appointed thereunder.
104. Power to make rules.—The High Court
may, from time to time, make rules consistent
with this Act for carrying out, in
itself and in the Courts of Civil Judicature subject to its
superintendence, the provisions
contained in this Chapter.
CHAPTER V
OF LEASES OF IMMOVEABLE PROPERTY
105. Lease defined.—A lease of
immoveable 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.
1. Subs. by Act 20 of 1929, s. 52, for
certain words.
2. Ins. by s. 52, ibid.
3. Subs. by Act 20 of 1929, s. 52, for
certain words.
4. Subs. by s. 52, ibid., for “in such
Court as last aforesaid”.
5. Ins. by s. 53, ibid.
6. Subs. by s. 53, ibid., for “Chapter
XXXI of the Code of Civil Procedure”.
38
1
[106. Duration of certain leases in
absence of written contract or local usage.—(1) In the
absence of a contract or local law or
usage to the contrary, a lease of immovable property for agricultural
or manufacturing purposes shall be
deemed to be a lease from year to year, terminable, on the part of
either lessor or lessee, by six months’
notice; and a lease of immovable property for any other purpose
shall be deemed to be a lease from month
to month, terminable, on the part of either lessor or lessee, by
fifteen days’ notice.
(2) Notwithstanding anything contained
in any other law for the time being in force, the period
mentioned in sub-section (1) shall
commence from the date of receipt of notice.
(3) A notice under sub-section (1) shall
not be deemed to be invalid merely because the period
mentioned therein falls short of the
period specified under that sub-section, where a suit or proceeding is
filed after the expiry of the period
mentioned in that sub-section.
(4) Every notice under sub-section (1)
must be in writing, signed by or on behalf of the person giving
it, and either be sent by post to the
party who is intended to be bound by it or be tendered or delivered
personally to such party, or to one of
his family or servants at his residence, or (if such tender or delivery
is not practicable) affixed to a
conspicuous part of the property.]
107. Leases how made.—A lease of
immoveable property from year to year, or for any term
exceeding one year, or reserving a
yearly rent, can be made only by a registered instrument.
2
[All other leases of immoveable property
may be made either by a registered instrument or by oral
agreement accompanied by delivery of
possession.
3
[Where a lease of immoveable property is
made by a registered instrument, such
instrument or, where there are more
instruments than one, each such instrument shall be
executed by both the lessor and the
lessee:]
Provided that the State Government may,
4 *** from time to time, by notification in the
Official Gazette, direct that leases of
immoveable property, other than leases from year to year,
or for any term exceeding one year, or
reserving a yearly rent, or any class of such leases, may
be made by unregistered instrument or by
oral agreement without delivery of possession.]
108. Rights and liabilities of lessor
and lessee.— In the absence of a contract or local
usage to the contrary, the lessor and
the lessee of immoveable property, as against one another,
respectively, possess the rights and are
subject to the liabilities mentioned in the rules next
following, or such of them as are
applicable to the property leased:—
(A) Rights and liabilities of the lessor
(a) the lessor is bound to disclose to
the lessee any material defect in the property, with reference
to its intended use, of which the former
is and the latter is not aware, and which the latter could not
with ordinary care discover:
(b) the lessor is bound on the lessee’s
request to put him in possession of the property:
(c) the lessor shall be deemed to
contract with the lessee that, if the latter pays the rent
reserved by the lease and performs the
contracts binding on the lessee, he may hold the
property during the time limited by the
lease without interruption.
The benefit of such contract shall be
annexed to and go with the lessee’s interest as such, and may
be enforced by every person in whom that
interest is for the whole or any part thereof from time to
time vested;
(B) Rights and Liabilities of the Lessee
(d) if during the continuance of the
lease any accession is made to the property, such accession
(subject to the law relating to alluvion
for the time being in force) shall be deemed to be comprised in
the lease:
(e) if by fire, tempest or flood, or
violence of an army or of a mob, or other irresistible
force, any material part of the property
be wholly destroyed or rendered substantially and
1. Subs. by Act 3 of 2003, s. 2, for s.
106 (w.e.f. 31-12-2002).
2. Subs. by Act 6 of 1904, s. 5, for the
Second paragraph.
3. Ins. by Act 20 of 1929, s. 55.
4. The words “with the previous sanction
of the Governor General in Council” omitted by A. O. 1937.
39
permanently unfit for the purposes for
which it was let, the lease shall, at the option of the
lessee, be void:
Provided that, if the injury be
occasioned by the wrongful act or default of the lessee,
he shall not be entitled to avail
himself of the benefit of this provision:
(f) if the lessor neglects to make,
within a reasonable time after notice, any repairs which
he is bound to make to the property, the
lessee may make the same himself, and deduct the
expense of such repairs with interest
from the rent, or otherwise recover it from the lessor:
(g) if the lessor neglects to make any
payment which he is bound to make, and which, if not
made by him, is recoverable from the
lessee or against the property, the lessee may make such
payment himself, and deduct it with
interest from the rent, or otherwise recover it from the
lessor:
(h) the lessee may 1
[even after the determination of the
lease] remove, at any time 2
[whilst he is
in possession of the property leased but
not afterwards], all things which he has attached to the earth:
provided he leaves the property in the
state in which he received it:
(i) when a lease of uncertain duration
determines by any means except the fault of the lessee, he
or his legal representative is entitled
to all the crops planted or sown by the lessee and growing upon
the property when the lease determines,
and to free ingress and egress to gather and carry them:
(j) the lessee may transfer absolutely
or by way of mortgage or sub-lease the whole or any part of
his interest in the property, and any
transferee of such interest or part may again transfer it. The lessee
shall not, by reason only of such
transfer, cease to be subject to any of the liabilities attaching to the
lease:
nothing in this clause shall be deemed
to authorise a tenant having an un-transferable right of
occupancy, the farmer of an estate in
respect of which default has been made in paying revenue, or
the lessee of an estate under the management
of a Court of Wards, to assign his interest as such
tenant, farmer or lessee:
(k) the lessee is bound to disclose to
the lessor any fact as to the nature or extent of the interest
which the lessee is about to take, of
which the lessee is, and the lessor is not, aware, and which
materially increases the value of such
interest:
(l) the lessee is bound to pay or
tender, at the proper time and place, the premium or rent to the
lessor or his agent in this behalf:
(m) the lessee is bound to keep, and on
the termination of the lease to restore, the property
in as good condition as it was in at the
time when he was put in possession, subj ect only to the
changes caused by reasonable wear and
tear or irresistible force, and to allow the lessor and his
agents, at all reasonable times during
the term, to enter upon the property and inspect the
condition thereof and give or leave
notice of any defect in such condition; and, when such
defect has been caused by any act or
default on the part of the lessee, his servants or agents, he
is bound to make it good within three
months after such notice has been given or left:
(n) if the lessee becomes aware of any
proceeding to recover the property or any part
thereof, or of any encroachment made
upon, or any interference with, the lessor’s rights
concerning such property, he is bound to
give, with reasonable diligence, notice thereof to the
lessor:
(o) the lessee may use the property and
its products (if any) as a person of ordinary prudence
would use them if they were his own; but
he must not use, or permit another to use, the property
for a purpose other than that for which
it was leased, or fell 1
[or sell] timber, pull down or
damage buildings 1
[belonging to the lessor, or] work mines
or quarries not open when the lease
was granted, or commit any other act
which is destructive or permanently injurious thereto:
1. Ins. by Act 20 of 1929, s. 56.
2. Subs. by s. 56, ibid., for “during
the continuance of the lease”.
40
(p) he must not, without the lessor’s
consent, correct on the property any permanent structure,
except for agricultural purposes:
(q) on the determination of the lease,
the lessee is bound to put the lessor into possession of the
property.
109. Rights of lessor’s transferee.—If the
lessor transfers the property leased, or any part thereof, or
any part of his interest therein, the
transferee, in the absence of a contract to the contrary, shall possess all
the rights and, if the lessee so elects,
be subject to all the liabilities of the lessor as to the property or part
transferred so long as he is the owner
of it; but the lessor shall not, by reason only of such transfer, cease
to be subject to any of the liabilities
imposed upon him by the lease, unless the lessee elects to treat the
transferee as the person liable to him:
Provided that the transferee is not
entitled to arrears of rent due before the transfer, and that,
if the lessee, not having reason to
believe that such transfer has been made, pays rent to the
lessor, the lessee shall not be liable
to pay such rent over again to the transferee.
The lessor, the transferee and the
lessee may determine what proportion of the premium or
rent reserved by the lease is payable in
respect of the part so transferred, and, in case they
disagree, such determination may be made
by any Court having jurisdiction to entertain a suit for
the possession of the property leased.
110. Exclusion of day on which term
commences.—Where the time limited by a lease of
immoveable property is expressed as
commencing from a particular day, in computing that time such
day shall be excluded. Where no day of
commencement is named, the time so limited begins from the
making of the lease.
Duration of lease for a year.—Where the
time so limited is a year or a number of years, in
the absence of an express agreement to
the contrary, the lease shall last during the whole
anniversary of the day from which such
time commences.
Option to determine lease.—Where the
time so limited is expressed to be terminable before its
expiration, and the lease omits to
mention at whose option it is so terminable, the lessee, and not the
lessor, shall have such option.
111. Determination of lease.—A lease of
immoveable property determines—
(a) by efflux of the time limited
thereby:
(b) where such time is limited
conditionally on the happening of some event—by the happening
of such event:
(c) where the interest of the lessor in
the property terminates on, or his power to dispose of
the same extends only to, the happening
of any event—by the happening of such event:
(d) in case the interests of the lessee
and the lessor in the whole of the property become vested at
the same time in one person in the same
right:
(e) by express surrender; that is to
say, in case the lessee yields up his interest under the lease to
the lessor, by mutual agreement between
them:
(f) by implied surrender:
(g) by forfeiture; that is to say, (1)
in case the lessee breaks an express condition which provides
that, on breach thereof, the lessor may
re-enter 1***; or (2) in case the lessee renounces his character
as such by setting up a title in a third
person or by claiming title in himself; 2
[or (3) the lessee is
adjudicated an insolvent and the lease
provides that the lessor may re-enter on the happening of such
1. The words “or the lease shall become
void” omitted by Act 20 of 1929, s. 57.
2. Ins. by s. 57, ibid.
41
event]; and in 1
[any of these cases] the lessor or his
transferee 2
[gives notice in writing to the lessee
of] his intention to determine the
lease:
(h) on the expiration of a notice to
determine the lease, or to quit, or of intention to quit, the
property leased, duly given by one party
to the other.
Illustration to clause (f)
A lessee accepts from his lessor a new
lease of the property leased, to take effect during the
continuance of the existing lease. This
is an implied surrender of the former lease, and such lease
determines thereupon.
112. Waiver of forfeiture.—A forfeiture
under section 111, clause (g) is waived by
acceptance of rent which has become due
since the forfeiture, or by distress for such rent, or by
any other act on the part of the lessor
showing an intention to treat the lease as subsisting:
Provided that the lessor is aware that
the forfeiture has been incurred:
Provided also that, where rent is
accepted after the institution of a suit to eject the lessee on the
ground of forfeiture; such acceptance is
not a waiver.
113. Waiver of notice to quit.—A notice
given under section 111, clause (h), is waived, with the
express or implied consent of the person
to whom it is given, by any act on the part of the person giving
it showing an intention to treat the
lease as subsisting.
Illustrations
(a) A, the lessor, gives B, the lessee,
notice to quit the property leased. The notice expires. B tenders, and A
accepts, rent which has become due in
respect of the property since the expiration of the notice. The notice is
waived.
(b) A, the lessor, gives B, the lessee,
notice to quit the property leased. The notice expires, and B
remains in possession. A gives to B as
lessee a second notice to quit. The first notice is waived.
114. Relief against forfeiture for
non-payment of rent.—Where a lease of immoveable
property has determined by forfeiture
for non-payment of rent, and the lessor sues to eject the
lessee, if, at the hearing of the suit,
the lessee pays or tenders to the lessor the rent in arrear,
together with interest thereon and his
full costs of the suit, or gives such security as the Court
thinks sufficient for making such
payment within fifteen days, the Court may, in lieu of making a
decree for ejectment, pass an order
relieving the lessee against the forfeiture; and thereupon the
lessee shall hold the property leased as
if the forfeiture had not occurred.
3
[114A. Relief against forfeiture in
certain other cases.—Where a lease of immoveable property
has determined by forfeiture for a
breach of an express condition which provides that on breach thereof
the lessor may re-enter, no suit for ejectment
shall lie unless and until the lessor has served on the lessee
a notice in writing—
(a) specifying the particular breach
complained of; and
(b) if the breach is capable of remedy,
requiring the lessee to remedy the breach;
and the lessee fails, within a
reasonable time from the date of the service of the notice, to remedy the
breach, if it is capable of remedy.
Nothing in this section shall apply to
an express condition against the assigning, underletting, parting with the
possession, or disposing, of the property leased, or to an express
condition relating to forfeiture in case
of non-payment of rent.]
115. Effect of surrender and forfeiture
on under-leases.—The surrender, express or implied,
of a lease of immoveable property does
not prejudice an under-lease of the property or any part
thereof previously granted by the
lessee, on terms and conditions substantially the same (except as
regards the amount of rent) as those of
the original lease; but, unless the surrender is made for the
purpose of obtaining a new lease, the
rent payable by, and the contracts binding on, the under-lessee
shall be respectively payable to and
enforceable by the lessor.
1. Subs. by Act 20 of 1929, s. 57, for
“either case”.
2. Subs. by s. 57, ibid., for “does some
act showing”.
3. Ins. by s. 58, ibid.
42
The forfeiture of such a lease annuls
all such under-leases, except where such forfeiture has been
procured by the lessor in fraud of the
under-lessees, or relief against the forfeiture is granted under
section 114.
116. Effect of holding over.—If a lessee
or under-lessee of property remains in possession
thereof after the determination of the
lease granted to the lessee, and the lessor or his legal
representative accepts rent from the
lessee or under-lessee, or otherwise assents to his continuing in
possession, the lease is, in the absence
of an agreement to the contrary, renewed from year to year, or
from month to month, according to the
purpose for which the property is leased, as specified in
section 106.
Illustrations
(a) A lets a house to B for five years.
B underlets the house to C at a monthly rent of Rs. 100. The five years
expire, but C continues in possession of
the house and pays the rent to A. C's lease is renewed from month to
month.
(b) A lets a farm to B for the life of
C. C dies, but B continues in possession with A's assent. B's lease is renewed
from
year to year.
117. Exemption of leases for
agricultural purposes.—None of the provisions of this
Chapter apply to leases for agricultural
purposes, except in so far as the State Government
1 *** may by notification published in
the Official Gazette, declare all or any of such
provisions to be so applicable 2
[in the case of all or any such leases],
together with, or subject
to, those of the local law, if any, for
the time being in force.
Such notification shall not take effect
until the expiry of six months from the date of its
publication.
CHAPTER VI
OF EXCHANGES
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”.
A transfer of property in completion of
an exchange can be made only in manner
provided for the transfer of such
property by sale.
3
[119. Right of party deprived of thing
received in exchange.—If any party to an
exchange or any person claiming through
or under such party is by reason of any defect in the
title of the other party deprived of the
thing or any part of the thing received by him in
exchange, then, unless a contrary
intention appears from the terms of the exchange, such other
party is liable to him or any person
claiming through or under him for loss caused thereby, or
at the option of the person so deprived,
for the return of the thing transferred, if still in the
possession of such other party or his
legal representative or a transferee from him without
consideration.]
120. Rights and liabilities of
parties.—Save as otherwise provided in this Chapter,
each party has the rights and is subject
to the liabilities of a seller as to that which he
gives, and has the rights and is subject
to the liabilities of a buyer as to that which he
takes.
121. Exchange of money.—On an exchange
of money, each party thereby warr ants
the genuineness of the money given by
him.
1. The words “with the previous sanction
of the Governor General in Council” omitted by Act 38 of 1920, s. 2 and I
Schedule.
2. Ins. by Act 6 of 1904, s. 6.
3. Subs. by Act 20 of 1929, s. 59, for
s. 119.
43
CHAPTER VII
OF GIFTS
122. “Gift” defined.—“Gift” is the
transfer of certain existing moveable or
immoveable 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 till capable
of giving,
If the donee dies before acceptance, the
gift is void.
123. Transfer how effected.—For the
purpose of making a gift of immoveable
property, the transfer must be effected
by a registered instrument signed by or on behalf of
the donor, and attested by at least two
witnesses.
For the purpose of making a gift of
moveable property, the transfer may be effected
either by a registered instrument signed
as aforesaid or by delivery.
Such delivery may be made in the same
way as goods sold may be delivered.
124. Gift of existing and future
property.—A gift comprising both existing and future
property is void as to the latter.
125. Gift to several, of whom one does
not accept.—A gift of a thing to two or more
donees, of whom one does not accept it,
is void as to the interest which he would have
taken had he accepted.
126. When gift may be suspended or
revoked.—The donor and donee may agree that
on the happening of any specified event
which does not depend on the will of the donor a
gift shall be suspended or revoked; but
a gift which the parties agree shall be revocable
wholly or in part, at the mere will of
the donor, is void wholly or in part, as the case may
be.
A gift may also be revoked in any of the
cases (save want or failure of consideration) in
which, if it were a contract, it might
be rescinded.
Save as aforesaid, a gift cannot be
revoked.
Nothing contained in this section shall
be deemed to affect the rights of transferees for
consideration without notice.
Illustrations
(a) A gives a field to B, reserving to
himself, with B’s assent, the right to take back the field in case B
and his descendants dies before A. B
dies without descendants in A’s lifetime. A may take back the field.
(b) A gives a lakh of rupees to B,
reserving to himself, with B’s assent, the right to take back at
pleasure Rs. 10,000 out of the lakh. The
gift holds good as to Rs. 90,000, but is vo id as to Rs.10,000, which
continue to belong to A.
127. Onerous gifts.—Where a gift is in
the form of a single transfer to the same person
of several things of which one is, and
the others are not, burdened by an obligation, the
donee can take nothing by the gift
unless he accepts it fully.
Where a gift is in the form of two or
more separate and independent transfers to the
same person of several things, the donee
is at liberty to accept one of them and refuse the
others, although the former may be
beneficial and the latter onerous.
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.
44
Illustrations
(a) A has shares in X, a prosperous
joint stock company, and also shares in Y, a joint stock company, in
difficulties. Heavy calls are expected
in respect of the s hares in Y. A gives B all his shares in joint stock
companies. B refuses to accept the
shares in Y. He cannot take the shares in X.
(b) A, having a lease for a term of
years of a house at a rent which he and his representatives are bound
to pay during the term, and which is
more than the house can be let for, given to B the lease, and also, as a
separate and independent transaction, a
sum of money. B refuses to accept the lease. He does not by his
refusal forfeit the money.
128. Universal donee.—Subject to the
provisions of section 127, where a gift consists
of the donor’s whole property, the done
is personally liable for all the debts due by 1
[and
liabilities of] the donor at the time of
the gift to the extent of the property comprised
therein.
129. Saving of donations mortis causa
and Muhammadan law.—Nothing in this
Chapter related to gifts of moveable
property made in contemplation of death, or shall be
deemed to affect any rule of Muhammadan
law 2***.
3
[CHAPTER VIII
OF TRANSFERS OF ACTIONABLE CLAIMS
130. Transfer of actionable claim.—(1)
The transfer of an actionable claim 4
[whether with
or without consideration] shall be
effected only by the execution of an instrument in writing
signed by the transferor or his duly
authorised agent, 5*** shall be complete and effectual upon
the execution of such instrument, 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:
Provided that every dealing with the
debt or 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 proceedings and without making him a party
thereto.
Exception.—Nothing in this section
applies to the transfer of a marine or fire policy of
insurance 6
[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 the
provisions of section 132.
7
[130A. Transfer of policy of marine
insurance.] Rep. by the Marine Insurance Act, 1963 (11 of
1963), s. 92 (w.e.f. 1-8-1963).
1. Ins. by Act 20 of 1929, s. 60.
2. The words and figures “or, save as
provided by s. 123, any rule of Hindu or Buddhist law” omitted by Act 20 of
1929,
s. 61.
3. Subs. by Act 2 of 1900, s. 4, for the
original Chapter VIII.
4. Ins. by Act 20 of 1929, s. 62.
5. The words and figures “and
notwithstanding anything contained in section 123” ins. by Act 38 of 1925, s.
2, omitted
by Act 20 of 1929, s. 62.
6. Added by Act 4 of 1938, s. 121
(w.e.f. 1-7-1939).
7. Ins. by Act 6 of 1944, s. 2.
45
131. Notice to be in writing,
signed.—Every notice of transfer of an actionable claim shall
be in writing, signed by the transferor
or his agent duly authorised in this behalf, or, in case the
transferor refuses to sign, by the
transferee or his agent, and shall state the name and address of
the transferee.
132. Liability of transferee of
actionable claim.—The transferee of an actionable claim shall
take it subject to all the liabilities
and equities to which the transferor was subject in respect
thereof at the date of the transfer.
Illustrations
(i) A transfers to C a debt due to him
by B, A being then indebted to B. C sues B for the debt
due by B to A. In such suit B is
entitled to set off the debt due by A to him;
although C was unaware of it at the date
of such transfer.
(ii) A executed a bond in favour of B
under circumstances entitling the former to have it
delivered up and cancelled. B assigns
the bond to C for value and without notice of such
circumstances. C cannot enforce the bond
against A.
133. Warranty of solvency of
debtor.—Where the transferor of a debt warrants the solvency of
the debtor, the warranty, in the absence
of a contract to the contrary, applies only to his solvency at
the time of the transfer, and is
limited, where the transfer is made for consideration, to the amount or
value of such consideration.
134. Mortgaged debt.—Where a debt is
transferred for the purpose of securing an existing or
future debt, the debt so transferred, if
received by the transferor or recovered by the transferee, is
applicable, first, in payment of the
costs of such recovery: secondly, in or towards satisfaction of the
amount for the time being secured by the
transfer; and the residue, if any, belongs to the transferor
or other person entitled to receive the
same.
1
[135. Assignment of rights under policy
of insurance against fire.—Every assignee by
endorsement or other writing, of a
policy of insurance against fire, in whom the property in the subject
insured shall be absolutely vested at
the date of the assignment, shall have transferred and vested in him
all rights of suit as if the contract
contained in the policy had been made with himself.]
2
[135A. [Assignment of rights under
policy of marine insurance.] Rep. by the Marine Insurance Act,
1963 (11 of 1963), s. 92 (w.e.f.
1-8-1963).
136. Incapacity of officers connected
with Courts of Justice.—No Judge, legal practitioner or
officer connected with any Court of Justice
shall buy or traffic in, or stipulate for, or agree to receive any
share of, or interest in, any actionable
claim, and no Court of Justice shall enforce, at his instance, or at
the instance of any person claiming by
or through him, any actionable claim so dealt with by him as
aforesaid.
137. Saving of negotiable instruments,
etc.—Nothing in the foregoing sections of this
Chapter applies to stocks, shares or
debentures, or to instruments which are for the time being, by
law or custom, negotiable, or to any
mercantile document of title to goods.
Explanation.—The expression “mercantile
document of title to goods” includes a bill of lading,
dock-warrant, warehouse keeper's
certificate, railway receipt, warrant or order for the delivery of
goods, and any other document used in
the ordinary course of business as proof of the possession or
control of goods, or authorising or
purporting to authorise, either by endorsement or by delivery, the
possessor of the document to transfer or
receive goods thereby represented.]
1. Subs. by Act 6 of 1944, s. 3, for s.
135.
2. Ins. by s. 4, ibid.
46
THE SCHEDULE
(a) STATUTES
Year and Chapter Subject Extent of
repeal
27 Hen Year VIII, c. 10 Uses. . . The
whole.
13 Eliz., c. 5.. . . Fraudulent
conveyances The whole.
27 Eliz., c. 4.. . . Fraudulent
conveyances The whole.
4 Mm., and Mary, c. 16 Clandestine
mortgages The whole.
(b) ACTS OF THE GOVERNOR GENERAL IN
COUNCIL
Number and year Subject Extent of repeal
IX of 1842 …… Lease and release . The
whole.
XXXI of 1854…. Modes of conveying
land.
Section 17.
XI of 1855… Mesne profits and
improvements.
Section 1; in the title, the words
“to mesne profits and”, and in
the preamble “to limit the
liability for mesne profitand”.
XXVII of 1866….. Indian Trustee Act
Section 31.
IV of 1872…… Punjab Laws Act
So far as it relates
to Bengal
Regulations I of 1798 and XVII of
1806.
XX of 1875….
Central Provinces Laws
Act
So far as it relates to
Bengal Regulations I of
1798 and XVII of 1806.
XVIII of 1876 ….. Oudh Laws Act
So far as it
relates to Bengal
Regulation XVII of 1806.
I of 1877…… Specific Relief In sections
35 and 36, the word “in
writing”.
(c) REGULATIONS
Number and year Subject Extent of repeal
Bengal Regulation I of
1798 Conditional sales The whole
Regulation.
Bengal Regulation
XVII of 1806. Redemption The whole
Regulation.
Bombay Regulation V
of 1827.
Acknowledgment of
debts; Interest;
Mortgagees in
possession.
Section 15.
_____________
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