Transfer of Property Act 1882
Extent.—1[It extends2 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.]
4[But this Act or any part thereof may by notification in the Official Gazette be extended to the whole or any part of the 5[said territories] by the 6[State Government] concerned.]
7[And any 6[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:—
Section 54, paragraph 2 and sections 3, 59, 107 and 123.]
9[Notwithstanding anything in the foregoing part of this section, section 54, paragraphs 2 and 3, and sections 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, 10, (16 of 1908), under the power conferred by the first section of that Act or otherwise.]
1. Subs. by the A.O. 1950, for the original third paragraph.
2. The application of this Act was barred in the Naga Hills District, including the Mokokchang Sub-Division, the Dibrugarh Frontier Tract, the North Cachar Hills, the Garo Hills, the Khasea and Jaintia Hills and the Mikir Hills Tract, by notification under sec. 2 of the Assam Frontier Tracts Regulation, 1880 (2 of 1880).
The Act has been declared to be in force in Panth Piploda by the Panth Piploda Laws Regulation, 1929 (1 of 1929), sec. 2, and continued in force, with modifications, in the territory transferred to Delhi Province by the Delhi Laws Act, 1915 (7 of 1915), sec. 3 and Sch. III. It has also been partially extended to Berar by the Berar Laws Act, 1941 (4 of 1941).
The Act has been extended with effect from 1st January, 1893, to the whole of the territories, other than the Scheduled Districts, under the administration of the Govt. of Bombay. Sections 54, 107 and 123 have been extended from 6th May, 1925 to all Municipalities in the Punjab and to all notified areas declared and notified under sec. 241 of the Punjab Municipal Act, 1911 (Pun. Act 3 of 1911), see Punjab Gazette, Extra., 1925, p. 27.
These sections and section 129 have been extended to certain areas in Delhi Province, see Notifications No. 198/38-III, dated 30th May, 1939, Gazette of India, 1939, Pt. I, p. 918, and No. 61/40-Judl., dated 16th November, 1940, Gazette of India, 1940, Pt. I, p. 1639, respectively.
The Act has been extended to Manipur by the Union Territories (Laws) Amendment Act, 1956 (68 of 1956).
It has been rep. as to Government Grants by the Government Grants Act, 1895 (15 of 1895) and rep. or modified to the extent necessary to give effect to the provisions of the Madras City Tenants Protection Act, 1921 (Madras 3 of 1921) in the City of Madras; see sec. 13 of that Act.
It has been amended in Bombay by Bombay Act 14 of 1939, and in Uttar Pradesh by Uttar Pradesh Act 24 of 1954. It has been extended to Pondicherry by Act 26 of 1968, sec. 3, Sch., Part I.
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. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “said States”.
6. Subs. by A.O. 1950, for “Provincial Government”.
7. Subs. by Act 3 of 1885, sec. 1, for the original paragraph.
8. The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1920, sec. 2 and Sch. I.
9. Added by Act 3 of 1885, sec. 2 (with retrospective effect). Section 54, paras 2 and 3 and sections 59, 107 and 123 extend to every cantonment—see section 287 of the Cantonment Act, 1924(2 of 1924).
10. Subs. by Act 20 of 1929, sec. 2, for “1877”.
(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 1[***] Muhammadan 2[***] law.
1. Added by Act 3 of 1885, sec. 2 (with retrospective effect). Section 54, paras 2 and 3 and sections 59, 107 and 123 extend to every cantonment—see section 287 of the Cantonment Act, 1924(2 of 1924).
2. Subs. by Act 20 of 1929, sec. 2, for “1877”.
‘‘instrument” means a non-testamentary instrument;
1[“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 2[3[any part of the territories] to which this Act extends] under the law4 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;
5[“actionable claim” means a claim to any debt, other than a debt secured by mortgage of 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, accruing, conditional or contingent;]
6[“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 immoveable 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, 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:]
(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 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 immovable 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.
Constructive notice of the suit agreement
The defendants failed to make necessary inquiry in respect of possession of the suit land by going to the site or from neighbouring land owners. Therefore, it has been held that constructive notice of the suit agreement shall have to be imputed to defendants in view of actual possession of the suit land being with the plaintiffs; Murlidhar Bapuji Valve v. Yallappa Lalu Chaugle, AIR 1994 Bom 358.
Meaning of word “Immovable”
The word “immovable” means permanent, fixed, not liable to be removed and the property must be attached to immovable property permanently; Shree Arcee Steel P. Ltd. v. Bharat Overseas Bank Ltd., AIR 2005 Kant 287.
1. Ins. by Act 27 of 1926, sec. 2 as amended by Act 10 of 1927, sec. 2 and Sch. I.
2. Subs. by Act 3 of 1951, sec. 3 and sch., for “a Part A State or a Part C State” (w.e.f. 1-4-1951).
3. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “any State”.
4. See the Indian Registration Act, 1908 (16 of 1908).
5. Ins. by Act 2 of 1900, sec. 2.
6. Subs. by Act 20 of 1929, sec. 4 as amended by Act 5 of 1930, sec. 2 for the original paragraph.
1[And section 54, paragraphs 2 and 3, and sections 59, 107 and 123 shall be read as supplemental to the Indian Registration Act, 2[1908 (16 of 1908)].]
1. Added by Act 3 of 1885, sec. 3.
2. Subs. by Act 20 of 1929, sec. 5, for “1877”.
Right to Property
Right to obtain shares of a company is a “property” and the donee’s right to such shares cannot be thwarted only because such shares in the name of the donee was not entered into the register of the company; Vasudev Ram Chandra Shelat v. P.J. Thakkar, (1974) 2 SCC 323.
1. Ins. by Act 20 of 1929, sec. 6.
(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) All interest in property restricted in its enjoyment to the owner personally cannot be transferred by him;
1[(dd) A right to future maintenance, in whatsoever manner arising, secured or determined, cannot be transferred;]
(e) A mere right to sue 2[***] 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 3[naval], 4[air-force] and civil pensioners of the 5[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) 6[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;
7[(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.]
If guardian of a minor transfers his property without permission of Court as envisaged under section 8 of the Hindu Minority and Guardianship Act, 1956 and without legal necessity, then a purchaser of property from minor can sue to set aside such sale within 3 years after the minor attains majority; Amritham Kudumbah v. Sarnam Kudumbam, AIR 1991 SC 1256.
1. Ins. by Act 20 of 1929, sec. 6.
2. The words “for compensation for a fraud or for harm illegally caused” omitted by Act 2 of 1900, sec. 3.
3. Ins. by Act 35 of 1934, sec. 2 and Sch.
4. Ins. by Act 10 of 1927, sec. 2 and Sch. I.
5. The word “Government” successively subs. by the A.O. 1937 and the A.O. 1950 to read as above.
6. Subs. by Act 2 of 1900, sec. 3, for “for an illegal purpose”.
7. Added by Act 3 of 1885, sec. 4.
A person’s conduct in collecting rents and managing an estate of the landlord does not empower him to transfer the land as the landlord’s agent; Balai Chandra Mondal v. Indurekha Devi, AIR 1973 SC 782.
There may be a presumption that when land is transferred, all things attached to the earth such as trees and shrubs, are also transferred alongwith the land in view of the provisions of section 8 read with section 3 of Transfer of Property Act. But there can be no presumption in a case of vice-versa; Vishwa Nath v. Ramraj, AIR 1991 All 193.
1. Subs. by Act 20 of 1929, sec. 8, for the original paragraph.
A transfers property of which he is the owner to B in trust for A and his intended wife successively 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.
A covenant for pre-emption does not offend the rule against perpetuities and cannot be considered void in law; Ram Baran v. Ram Mohit, AIR 1967 SC 747.
It has been held by the Supreme Court that although no interest could be created in favour of an unborn person but if gift was made to a class of series of person some of whom were in existence and some were not, it was valid with regard to the former and invalid as to the latter; Raj Bajrang Bahadur Singh v. Thakurain Bakhtraj Kuer, (1953) SCR 232.
1. Subs. by Act 20 of 1929, sec. 9, for “as regards the whole class”.
1. Subs. by Act 20 of 1929, sec. 10, for the original sections 16 to 18.
(b) a period of eighteen years from the date of 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 transferor; 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.
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 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.
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.
(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 on 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.
(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.
(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, transfer 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.
(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, transfer 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.
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 as 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.
A transfers a farm to B for her life, and, if she does not desert her husband to C. B is entitled to the farm during her life as if no condition had been inserted.
(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.
where the transfer is gratuitous, and the transferor has, before the election, died or otherwise become incapable of making a fresh transfer,and in all cases where the transfer is for consideration,to the charge of making good to the disappointed transferee the amount or value of the property attempted to be transferred to him.
The 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 claims the property, he must relinquish the particular benefit, but he is not bound to relinquish any other benefit conferred upon him by the same transaction.
Acceptance of the benefit by the person on whom it is conferred constitutes an election by him to confirm the transfer, if he is aware of his duty to elect and of those circumstances which would influence the judgment of a reasonable man in making an election, or if he waives enquiry into the circumstances.
Such knowledge or waiver shall, in the absence of evidence to the contrary, be presumed, if the person on whom the benefit has been conferred has enjoyed it for two years without doing any act to express dissent.
Such knowledge or waiver may be inferred from any act of his which renders it impossible to place the persons interested in the property professed to be transferred in the same condition as if such act had not been done.
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.
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.
When question of election arises
A case of election arises only when the transferee takes a benefit directly under a transaction. When the transferee derives any benefit indirectly, no question of election arises, as he, in that case, cannot be said to take under the deed; Valliammai v. Nagappa, AIR 1967 SC 1153.
Nothing in this section applies to leases for agricultural purposes unless and until the State Government by notification in the Official Gazette so directs.
(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. 7.50 to C, and Rs. 7.50 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.
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.
1. The words “with the intention of defeating such right” omitted by Act 20 of 1929, sec. 11.
2. Subs. by Act 20 of 1929, sec. 11, for “of such intention”.
3. The illustration omitted by Act 20 of 1929, sec. 11.
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, not against such property in his hands.
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.
1. Subs. by Act 20 of 1929, sec. 12, for “of the latter property or to compel its enjoyment in a particular manner”.
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.
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.
1. Ins. by Act 20 of 1929, sec. 13.
In a suit for partition by metes and bounds, partition can be made on the basis of admission of the parties in the Income-tax and Wealth-tax returns with regard to contributions made by each party towards consideration of property in question; Chiranjilal v. Bhagwan Dass, AIR 1991 Del 325.
(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. 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 the 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. 400.
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.
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.
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.
No man, who knowingfully that he had no title to property, spends money on improving it can be permitted to deprive the original owner of his right to possession of the property except upon the payment for the improvements which were not affected with the consent of that person; Maddahappa v. Chandramma, AIR 1965 SC 1812.
(i) This section comes into existence from the point of the institution of the suit and continues to survive till the satisfaction of the decree. The petitioners were as much bound by the decree and judgement dated 16th August, 1973 and their transferor; Abdul Aziz v. District Judge, AIR 1994 All 167.
(ii) The effect of doctrine of his pendens as embodied in section 52 of Transfer of Property Act is not to annul all voluntary transfers effected by the parties to a suit but only to render it subservient to the rights of the parties thereto under the decree or order which may be made in that suit. Its effect is only to make the decree passed in the suit binding on the transferee if he happens to be third party person even if he is not a party to it. The transfer will remain valid subject, however to the result of the suit; K.A. Khader v. Rajamma John Madathil, AIR 1994 Ker 122.
1. Subs. by Act 20 of 1929, sec. 14, for “active prosecution”.
2. Subs. by the A.O. 1950, for “in the Provinces or established beyond the limits of the Provinces”.
3. Subs. by Act 3 of 1951, sec. 3 and Sch., for “within the limits of Part A States and Part C States” (w.e.f. 1-4-1951).
4. Subs. by the 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, sec. 14, for “a contentious”.
7. Ins. by Act 20 of 1929, sec. 14.
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.
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. Subs. by Act 20 of 1929, sec. 15, for the original section.
then, notwithstanding that 2[***] 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.]
Under the provisions of section 53A the transferee is entitled to resist any attempt on the part of the transferor to disturb transferee’s lawful possession under the contract of sale and his position either as a plaintiff or as a defendant should make no difference. Contrary interpretation viz, the transferee can use the shield only as a defendant and not as a plaintiff would defeat the very spirit of section 53A for it will be possible for an over-powering transferor to forcibly dispossess the transferee even against the convenants in the contract and compel him to go to the court as plaintiff; Dharmaji v. Jagannath Shankar Jadhav, AIR 1994 Bom 254.
1. Ins. by Act 20 of 1929, sec. 16.
2. The words “the contract, though required to be registered, has not been registered, or,” omitted by Act 48 of 2001, sec. 10 (w.e.f. 24-9-2001).
1In 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.
Section 54 includes the settlement of the terms between the parties as one of the conditions essential for the completion of a contract. There was no concluded contract between the parties, as the appellant was a contracting party, he was only acting on behalf of third person and hence unless the third person i.e. the party agreed to the terms and conditions there could be no concluded contract; Satya Prakash Goel v. Ram Krishna Mission, AIR 1991 All 343.
Contract for sale
A contract for 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. An agreement for sale is merely a document creating a right to obtain another document of sale on fulfilment of terms and conditions specified therein. On the strength of such an agreement a buyer does not become the owner of the property. The ownership remains with the seller. It will be transferred to the buyer only on the execution of sale deed by the seller. The buyer obtains only a right to get the sale deed executed in his favour. It has been held that the cancellation of the agreement took place before possession could be given to the purchasers, hence there was no sale of the flats; Crest Hotel Ltd. v. Assistant Superintendent of Stamps, AIR 1994 Bom 228.
1. As to limitation to the territorial operation of paragraphs 2 and 3 of section 54, see section 1, supra. These paragraphs extend to every cantonment see section 287 of the CantonmentsAct, 1924 (2 of 1924).
(a) to disclose to the buyer any material defect in the property 1[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;
(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 encumbrances on such property due on such date, and, except where the property is sold subject to encumbrances, to discharge all encumbrances 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 encumbered 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 buye 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;
(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 encumbrances, the buyer may retain out of the purchase-money the amount of any encumbrances 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 encumbrances 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, 2[* * *] 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.
1. Ins. by Act 20 of 1929, sec. 17.
2. The words “with notice of the payment” omitted by Act 20 of 1929, sec. 17.
1. Subs. by Act 20 of 1929, sec. 18, for the original section.
(2) in any other case of a capital sum charged on the property—of the amount sufficient to meet the encumbrance and any 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 investment, 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 large additional amount.
(b) Thereupon the Court may, if it thinks fit, and after notice to the encumbrance, 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 encumbrance, and make any order for conveyance, or vesting order, 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.
(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 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.
(e) English mortgage.—Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.
4[(f) Mortgage by deposit of title-deeds.—Where a person in any of the following towns, namely, the towns of Calcutta, Madras, 5[and Bombay], 6[* * *] and in any other town7 which the 8[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.]
(i) The mortgagor had borrowed Rs. 1000 from the mortgagee and the possession of the building was handed over to the mortgagor. The mortgage money was to be repaid within a period of six months and in case of default the mortgagee had the right to bring the property to sale and realise the amount. The document therefore which was described as usufructuary mortgage was held to be anomalous mortgage and not usufructuary mortgage as it had character of a simple mortgage too as mortgagee was given the right to sell the property to realise the mortgaged amount; Hathika v. Puthiyapurayil Padmanathan, AIR 1994 Ker 141.
(ii) Where a mortgagee is continuing in possession of suit land as mortgagee for a continuous period of not less than fifty years, mere increase in the mortgage money, induction of a co-mortgagee, non-defining of their shares, would not alter the situation; Narayana Pillai Raghavan Pillai v. Narayani Amma Ponnamma, AIR 1992 SC 146.
1. Ins. by Act 20 of 1929, sec. 19.
2. Subs. by Act 20 of 1929, sec. 19, for “and to appropriate them”.
3. Subs. by Act 20 of 1929, sec. 19, for “and”.
4. Added by Act 20 of 1929, sec. 19.
5. Subs. by the A.O. 1948, for “Bombay and Karachi”. The word “and” had been ins. by the A.O. 1937.
6. The words “Rangoon, Moulmein, Bassein and Akyab” omitted by the A.O. 1937.
7. For notifications relating to the towns of—Ahmedabad, see Gazette of India, 1935, Pt. I, p. 936, Bandra, Kurla and Ghathkoper Kirol, see Gazette of India, 1924, Pt.I, p.1064, Cawnpore, Allahabad and Lucknow, see Gazette of India, 1938, Pt. I, p. 158. Coimbatore, Madura, Cocanada and Cochin, see Gazette of India, 1935, Pt. I, p. 526.
8. The words “Governor General in Council”, successively amended by the A.O. 1937 and the A.O. 1950 to read as above.
1. The third paragraph was omitted by Act 20 of 1929, sec. 20.
1. Ins. by Act 20 of 1929, sec. 21.
1. As to limitation to the territorial operation of section 59, see section 1, supra, section 59, extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).
2. Ins. by Act 20 of 1929, sec. 20.
3. Subs. by Act 6 of 1904, sec. 3, for “an instrument”.
4. The third paragraph omitted by Act 20 of 1929, sec. 20
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.
Extinguishment of mortgage right
When a mortgagee acquires a portion of the equity of redemption, the mortgage is not extinguished completely. There can be only a pro tanto extinguishment of the mortgage right to the extent of the mortgagee acquiring the mortgagor’s interest and so far as the other sharer of the equity of redemption is concerned, the mortgage will subsist; Madhavan Nair v. Ramankutty Menon, AIR 1994 Ker 75.
Redemption of mortgage
During the continuation of tenancy if a contract of mortgage is created, the contract of lease would not get merged into contract of mortgage. On redemption of mortgage the leasehold rights get revived; M.C. Venkateshappa v. K.N. Sadashivaiah, AIR 2004 Kant 438.
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 4[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 mortgagor.
1. Subs. by Act 20 of 1929, sec. 22, for “payable”.
2. Subs. by Act 20 of 1929, sec. 22, for “the mortgage-deed, if any to the mortgagor”.
3. Subs. by Act 20 of 1929, sec. 22, for “order”.
4. Ins. by Act 20 of 1929, sec. 22.
(3) The provisions of this section do not apply in the case of a mortgagee who is or has been in possession.
1. Sections 60A and 60B ins. by Act 20 of 1929, sec. 23.
1. Subs. by Act 20 of 1929, sec. 24, for the original section.
(b) where the mortgagee is authorised to pay himself from such rents and profits2[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 3[the mortgage-money or the balance thereof] or deposits it in Court as hereinafter provided.
1. Ins. by Act 20 of 1929, sec. 25.
2. Subs. by Act 20 of 1929, sec. 25, for “the interest of the principal money”.
3. Subs. by Act 20 of 1929, sec. 25, for “the principal money”.
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 so expended.
1. Subs. by Act 20 of 1929, sec. 26, for “at the same rate of interest”.
1. Ins. by Act 20 of 1929, sec. 27.
1. The words “for a term of years” omitted by Act 20 of 1929, sec. 28.
(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 1[***], 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 indemnify the mortgagee against all the claims sustained by reason of the non-payment of the said rent or the non-performance or non-observance of the said conditions and contracts;
(e) and, where the mortgage is a second or subsequent encumbrance on the property, that the mortgagor will pay the interest from time to time accruing due on each prior encumbrance as and when it becomes due, and will at the proper time discharge the principal money due on such prior incumbrance.
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.
1. The words “for a term of years” omitted by Act 20 of 1929, sec. 29.
2. Certain words omitted by Act 20 of 1929, sec. 29.
(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 with 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 with 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.]
1. Ins. by Act 20 of 1929, sec. 30.
Nothing in this section shall be deemed—
3[(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 mortgagees have, with the consent of the mortgagor, severed their interests under the mortgage.
1. Subs. by Act 20 of 1929, sec. 31, for “payable”.
2. Subs. by Act 20 of 1929, sec. 31, for “an order”.
3. Subs. by Act 20 of 1929, sec. 31, for the original clause.
1. Ins. by Act 20 of 1929, sec. 32.
(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.]
1. Subs. by Act 20 of 1929, sec. 33, for the original section.
(b) where 6[a power of sale without the intervention of the court is expressly conferred on the mortgagee by the mortgage-deed and] the mortgagee is 7[the Government];
(c) where 6[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 8[was, on the date of the execution of the mortgage-deed], situate within the towns of Calcutta, Madras, Bombay, 9[***] 10[or in any other town11 or area which the State Government may, by notification in the Official Gazette, specify in this behalf.]
12[(2)] 13[***] No such power shall be exercised unless and until—
14[(a)] notice in writing requiring payment of the principal money has been served on the mortgagor, or on 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
15[(b)] some interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due.
16[(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 authorise 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 or the power shall have his remedy in damages against the person exercising the power.
17[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of prior encumbrances, 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 encumbrance, 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, in 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.
18[(5) Nothing in this section or in section 69A applies to powers conferred before the first day of July, 1882.]
If the mortgagee exercises his or her power of sale bona fide for the purpose of realising his/her debt and without the collusion with the purchaser, the court will not interfere even though the sale be very disadvantageous, unless the price is so low as to be evidence of fraud. Held that the sale should be set aside as the value received after sale was only 35% of the actual price and greater portion of the bidders had been kept away because of the unattractive terms in which the property was depicted in the sale proclamation and there was definite collusion between the mortgagee and purchasers; Satyapal v. Rukayyabai, AIR 1993 Bom 203.
1. Section 69 re-numbered as sub-section (1) of that section, by Act 20 of 1929, sec. 34.
2. Subs. by Act 20 of 1929, sec. 34, for certain words.
3. The words and figures “Notwithstanding anything contained in the Trustees’ and Mortgagees’ Powers Act, 1866″ omitted by Act 48 of 1952, sec. 3 and Sch. II.
4. Ins. by Act 3 of 1885, sec. 5.
5. The words “the L.G., with the previous sanction of the G.G. in C” successively amended by the A.O. 1937 and the A.O. 1950 to read as above.
6. Ins. by Act 20 of 1929, sec. 34.
7. The words “the Secretary of State for India in Council” successively amended by the A.O. 1937 and the A.O. 1950 to read as above.
8. Subs. by Act 20 of 1929, sec. 34, for “is”.
9. The word “Karachi” omitted by the A.O. 1948.
10. 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.
11. For notifications relating to the towns of— Ahmedabad, see Gazette of India 1935, Pt. I, p. 936. Bandra, Kurla and Ghatkoper-Kirol, see Gazette of India, 1924, Pt. I, p. 1964. Cawnpore, Allahabad and Lucknow, see Gazette of India, 1933, Pt. I, p. 158. Coimbatore, Mudura, Cocanada and Cochin, see Gazette of India, 1935, Pt. I, p. 526. Delhi (Contonment), see Gazette of India, 1963, Pt. II, Section 3, Sub-section (1), p. 1020.
12. Second paragraph re-numbered as sub-section (2) by Act 20 of 1929, sec. 34.
13. The word “But” omitted by Act 20 of 1929, sec. 34.
14. Clause (1) was lettered (a) by Act 20 of 1929, sec. 34.
15. Clause (2) was lettered (b) by Act 20 of 1929, sec. 34.
16. Third paragraph numbered as sub-section (3) by Act 20 of 1929, sec. 34.
17. Fourth paragraph numbered as sub-section (4) by Act 20 of 1929, sec. 34.
18. Subs. by Act 20 of 1929, sec. 34, for the original fifth paragraph.
19. Original last paragraph omitted by Act 20 of 1929, sec. 34.
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 act 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;
(v) in or towards discharge of the principal money, if so directed in writing by the mortgagee,
and shall pay the residue, of 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.]
1. Ins. by Act 20 of 1929, sec. 35.
(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.
1. The words “for a term of years” omitted by Act 20 of 1929, sec. 36.
(b) for 3[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:
4[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 absence 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 5[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.
1. Subs. by Act 20 of 1929, sec. 37, for “When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he”.
2. Clause (a) omitted by Act 20 of 1929, sec. 37.
3. Subs. by Act 20 of 1929, sec. 37, for “its preservation”.
4. Ins. by Act 20 of 1929, sec. 37.
5. Subs. by Act 20 of 1929, sec. 37, for certain original words.
(3) Such claims shall prevail against all other claims except those of prior encumbrancers, and may be enforced notwithstanding that the principal money on the mortgage has not become due.]
1. Subs. by Act 20 of 1929, sec. 38, for the original section.
(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 1[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;
(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 the 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 fails 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.
1. Ins. by Act 20 of 1929, sec. 40.
2. The words “on the mortgage-money” omitted by Act 20 of 1929, sec. 40.
3. The word “gross” omitted by Act 20 of 1929, sec. 40.
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 account against him exceed the sum of Rs.10,000. B & Co. are entitled, to the extent of Rs.10,000, to priority over C.
1. Subs. by Act 20 of 1929, sec. 42, for the original section.
Nothing in this section applies to a property liable under section 81 to the claim of the 2[subsequent] mortgagee.
1. Subs. by Act 20 of 1929, sec. 43, for the original paragraph.
2. Subs. by Act 20 of 1929, sec. 43, for “second”.
5[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 acknowledgement 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, sec. 44, for “has become payable”.
2. See the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order VI, rule 15.
3. Subs. by Act 20 of 1929, sec. 44, for “if then in his possession or power”.
4. Ins. by Act 20 of 1929, sec. 44. 5. Ins. by Act 20 of 1929, sec. 44.
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].
1. Ins. by Act 20 of 1929, sec. 45.
2. Subs. by Act 20 of 1929, sec. 45, for “as the case may be”.
3. Added by Act 20 of 1929, sec. 45.
(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.]
1. Subs. by Act 20 of 1929, sec. 46, for the original section.
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.]
The payment of mortgage money after the preliminary decree has been passed will not make any difference to the right of the respondents for subrogation when all the requirements of section 92 are in existence; Kadanba Sugar Industries Pvt. Ltd. v. Devru Ganapathi Hegde Bahairi, AIR 1993 Kant 288.
1. Ins. by Act 20 of 1929, sec. 47. Original sections 92 were repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. Ins. by Act 20 of 1929, sec. 47. Original sections 93 were repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. Ins. by Act 20 of 1929, sec. 47. Original sections 94 were repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. Subs. by Act 20 of 1929, sec. 48, for the original section 95. Original section 96 was repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. Subs. by Act 20 of 1929, sec. 48, for the original section 95. Original section 96 was repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. For the repealed provisions as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order XXXIV, rules 12 and 13.
The mortgagee was given the right to sell the property in his possession for the realisation of mortgage debt in the case the mortgagor defaulted in payment of mortgage debt. The mortgagee had to pay a monthly sum of Rs.85 towards “excess profits” after adjusting the balance towards interest on the mortgage amount. It has been held that payment of Rs. 85 was not rent for the property and the mortgagee was not a lessee, but the mortgage was an anomalous mortgage and rights and liabilities of the mortgagee were to be determined according to section 98 of Transfer of Property Act; Hathika v. Puthiyapurayil Padmanabhan, AIR 1994 Ker 141.
1. Subs. by Act 20 of 1929, sec. 49, for “a mortgage, not being a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage or an English mortgage or a combination of the first and third, or the second and third, of such forms”.
1. For the repealed provisions as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order XXXIV, rule 14.
1. Subs. by Act 20 of 1929, sec. 50, for “as to a mortgagor shall, so far as may be, apply to the owner of such property, and the provisions of sections 81 and 82 shall, so far as may be, apply to the person having such charge”.
2. Added by Act 20 of 1929, sec. 50.
1. Subs. by Act 20 of 1929, sec. 51, for the original section.
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.
1. Subs. by Act 20 of 1929, sec. 52, for “Where the person or agent on whom such notice should be served cannot be found in the said district, or is unknown”.
2. Ins. by Act 20 of 1929, sec. 52.
3. Subs. by Act 20 of 1929, sec. 52, for “Where the person or agent to whom such tender should be made cannot be found within the said district or is unknown”.
4. Subs. by Act 20 of 1929, sec. 52, for “in such Court as last aforesaid”.
1. Ins. by Act 20 of 1929, sec. 53.
2. As to persons competent to contract, see sections 11 and 12 of the Indian Contract Act, 1872 (9 of 1872).
3. Subs. by Act 20 of 1929, sec. 53, for “Chapter XXXI of the Code of Civil Procedure”.
A lessee of a property has a right to possession and enjoyment of the devise to the exclusion of the lessor whereas a licensee does not have such a right. Since the appellant had the right to exclusive possession and enjoyment of the disputed property, he was a lessee and not a licensee; Ajab Singh v. Shital Puri, AIR 1993 All 138.
(i) If the agreement between the parties shows an intention to create an interest in the property in favour of the grantee what results is said to be a lease. A licensee on the other hand does not create an interest in property; Mrs. Karuna Manoharlal Ohri v. Vipinbhai U. Sanghani, AIR 1993 Bom 177.
(ii) The furniture and fittings and the tools and implements which have been given alongwith the shop were not meant for the beneficial use of the shop but were meant exclusively for running of the hair dressing saloon, thus creating a lease of the business and not a lease of the shop; Vidya Wati v. Hansraj, AIR 1993 Del 187.
The Corporation had all the supervisory powers to regulate the running of the refreshment stall. No exclusive right was created in favour of the caterer to run the refreshment stall in the manner the caterer choose to do so. Since there is no transfer of interest in the stall and as per the terms of agreement, the document can be termed as licence only and not a lease; Udai Pratap Singh v. Collector Varanasi, AIR 1991 All 104.
(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.]
If any person claims to the contrary that the lease was for a fixed term or to be a yearly lease instead of a lease from month to month he has to prove by legal, valid and reliable evidence. Therefore the burden lay upon the defendant to prove his contrary claim that lease was for a fixed term of five years and the lease would be entered at the option and wish of the lessee; Punjab National Bank v. Ganga Narain Kapur, AIR 1994 All 221.
Service of notice
Notice sent on correct address to addressee who refused to accept it. Presumption lies with regard to notice on addressee/defendant. It is addressee/defendant who has to prove that either notice was not sent on correct address or same was not served upon him; Kali Ram v. Mirza Wakar Ali, AIR 2005 NOC 296 (UP).
1. Subs. by Act 3 of 2003, sec. 2, for section 106 (w.e.f. 31-12-2002).
Section 106, before substitution, stood as under: “106. Duration of certain leases in absence of written contract or local usage.—
In the absence of a contract or local law or usage to the contrary, a lease of immoveable 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 expiring with the end of a year of the tenancy; and a lease of immoveable 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 expiring with the end of a month of the tenancy.
Every notice under this section 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”.
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 may4[***] 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.]
Lease of immoveable property
The legislature intended that a lease of immoveable property for a period of more than one year should be made by a registered deed. But if a lease of immoveable property for a term of more than one year is not made by a registered deed or is made orally, then in such cases the presumption about the duration of lease under section 106 will apply; Punjab National Bank v. Ganga Narain Kapur, AIR 1994 All 221.
Lease not to apply agricultural lease
Principle of section 107 which envisage mode in which lease is to be made do not apply to agricultural lease; Atar Singh v. Jiledar Singh, AIR 2005 MP 157.
Nature of lease
If a lease agreement is neither a registered document nor an oral argeement accompanied by delivery of possession, it cannot create lessor and lessee relationship. Such document shall not effect any immoveable property nor be received as evidence of any transaction affecting such property; Chemical Sales Agencies v. Naraini Newar, AIR 2005 Del 76.
1. As to limitation to the territorial operation of section 107, see section 1, supra, section 107 extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).
2. Subs. by Act 6 of 1904, sec. 5, for the original paragraph.
3. Ins. by Act 20 of 1929, sec. 55.
4. The words “with the previous sanction of the Governor General in Council” omitted by the A.O. 1937.
(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 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 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;
(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, subject 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 3[or sell] timber, pull down or damage buildings 3[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;
(p) he must not, without the lessor’s consent, erect 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.
(i) Under clause (o) the lessee must not use or permit another to use the property for a purpose other than that for which it was leased. The premises were let out to the tenant for sugarcane juice business but was using the premises for selling readymade clothes thereby contravening the provisions of the Act; Dashrath Baburao Sangale v. Kashinath Bhaskar Datta, AIR 1993 SC 2646.
(ii) The respondent is liable to be evicted on the ground of wilful denial of title and wilful default in the payment of rent; Kanuthi Madalichamy v. Thangarathina Nadar, AIR 1991 Mad 229.
1. Ins. by Act 20 of 1929, sec. 56.
2. Subs. by Act 20 of 1929, sec. 56, for “during the continuance of the lease”.
3. Ins. by Act 20 of 1929, sec. 56.
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.
Successor in interest
When right, title and interest in immoveable property stand transferred by operation of law, the spirit behind section 109 would apply and successor in interest would be entitled to the rights of the predecessor. Therefore the suit filed for ejectment filed by the successor Board was competent; Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port of Bombay, AIR 1991 SC 14.
Absence of contract
It appears from section 109 that provision stands only in the absence of any contract to the contrary; Nemai Basak v. Kalyani Rakshit, AIR 2005 Cal 163.
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.
(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 event]; and in3[any of these cases] the lessor or his transferee4[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.
Doctrine of merger
The doctrine of merger is attracted when a leasehold and revision coincide. If the lessee purchases the lessor’s interest, the lease is relinquished as the same person cannot at the same time be both landlord and tenant. The doctrine of merger is based on the principle of union of two conflicting interests which cannot be held by one person at the same time. Therefore, the leasehold rights in favour of the appellants stand extinguished; Ramesh Kumar Jhambh v. Official Assignee, High Court Bombay, AIR 1993 Bom 374.
There can be implied surrender, if the lessor grants a new lease to a third person with the assent of the lessee under the existing lease who delivers the possession to such person or where the lessee directs his sub-tenant to pay the rent directly to the lessor. Since the respondents had by executing the agreement impliedly surrendered their leasehold rights, they were no longer lessees; P.M.C. Kunhiraman Nair v. C.R. Nagaratha Iyer, AIR 1993 SC 307.
Clause (1) of section 111(g) has no application as there was no covenant prohibiting sale or on its breach, of the right of re-entry. Clause (2) of section 111(g) is also of no avail to the landlord for forfeiture because there is no unequivocal and clear disclaimer of title of the landlord. Therefore neither clause (1) nor (2) of section 111(g) are of any avail for forfeiture; Guru Amarjit Singh v. Rattan Chand, AIR 1994 SC 227.
The statement by the tenant that he was not aware of as to who was his landlord cannot be held to be denial of title of landlord and no eviction decree by forfeiture was granted; Munisami Naidu v. C. Ranganathan, AIR 1991 SC 492.
It has been held that the Board was entitled to institute proceedings against the tenant as the notice period had expired; Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port of Bombay, AIR 1991 SC 14.
1. The words “or the lease shall become void” omitted by Act 20 of 1929, sec. 57.
2. Ins. by Act 20 of 1929, sec. 57.
3. Subs. by Act 20 of 1929, sec. 57, for “either case”.
4. Subs. by Act 20 of 1929, sec. 57, for “does some act showing”.
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.
(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.
(i) Section 114 affords protection to the tenant against forfeiture. While the tenant enjoys the immunity from eviction for default in the payment of rent, the landlord gets the corresponding benefit of recovery even such arrears as are not legally recoverable. Such an equitable provision as is engrafted in section 114 of Transfer of Property Act, shall govern only to such an extent which does not run counter to any specific statutory provisions; Shyam Bhagwan Dubey v. Shaikh Nizam, AIR 1994 MP 52.
(ii) The right of the landlord to get the tenant evicted is restricted under the Rent Act. As the law restricts the power of the landlord to evict the tenant except in accordance with the provisions of Rent Act section 114 is not attracted. Once the requirements of Rent legislation are satisfied, the tenant cannot claim the double protection of invoking the provision of Transfer of Property Act; Prithivichand Ramchand Sablok v. S.Y. Shinde, AIR 1993 SC 1929.
(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, under-letting, 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.]
1. Ins. by Act 20 of 1929, sec. 58.
(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
Tenant at sufferance
A person who is a tenant at sufferance has no estate or interest in the leasehold property. A tenant holding after the expiry of his term is a tenant at sufferance, which is a term useful to distinguish a possession rightful in its inception but wrongful in its continuance from a trespass which is wrongful both in its inception and in its continuance. A co-owner can maintain a suit by himself in ejectment of a trespasser or a tenant at sufferance; B. Valsala v. Sundram Nadar Bhaskaran, AIR 1994 Ker 164.
1. The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1920, sec. 2 and Sch. I. 2. Ins. by Act 6 of 1904, sec. 6.
Exchange of ownership
Plot over which ownership and possession vested in ‘R’ was wrongly recorded in the name of ‘G’ in Land Survey entries. Document executed between parties acknowledging factum of possession of their correct plot numbers. There was no exchange of ownership or transfer of property. Said document would be construed as acknowledgement of possession and not as exchange. It would be admissible without being registered; Md. Uddin @ Mohammadin v. Asibun Nissa, AIR 2005 Jhar 1.
Right of Party
The first respondent admitted that he received no rent from the appellant and that the appellant was his lessee-at-will is a false story. Therefore the respondent is liable to return the land to that extent; Jattu Ram v. Hakama Singh, AIR 1994 SC 1653.
1. Subs. by Act 20 of 1929, sec. 59, for the original section.
If the donee dies before acceptance, the gift is void.
Validity of gift
Gift deed executed by defendant in favour of plaintiff with respect of property of her deceased husband. Defendant was not legally wedded wife of deceased. She being concubine was not entitled to inherit property. Gift deed executed by her is not valid; P. Jayaramaiah v. Aragonda Munemma, AIR 2005 AP 26.
Such delivery may be made in the same way as goods sold may be delivered.
Unregistered gift of immovable property
Under section 123 a gift of immoveable property cannot pass any title to the donee if it is not registered. Any oral gift of immoveable property cannot be made in view of the provision of section 123 of the Act, mere delivery of possession without written instrument cannot confer any title; R.N. Dawar v. Ganga Ram Saran Dhama, AIR 1993 Del 19.
1. As to limitation to the territorial operation of section 123, see section 1, supra, section 123 extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).
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.
(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 die 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 goods as to Rs. 90,000, but is void as to Rs. 10,000, which continue to belong to A.
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.
(a) A shares in X, prosperous joint stock company, and also shares in Y, a joint stock company in difficulties. Heavy calls are expected in respect of the shares in Y. A gives B all his shares in joint stock companies. 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, gives to B the lease, and also, as a separate and independent transaction, a sum of money. B refuses to accept the lease. He does not by this refusal forfeit the money.
1. Ins. by Act 20 of 1929, sec. 60.
1. The words and figures “or, save as provided by section 123, any rule of Hindu or Buddhist law” omitted by Act 20 of 1929, sec. 61.
(2) The transferee of an actionable claim may, upon the execution of such instrument of transfer as aforesaid, sue or institute proceedings for the same in his own name without obtaining the transferor’s consent to such suit or proceeding and without making him a party thereto.
Exception.—Nothing in this section applies to the transfer of a marine or fire policy of insurance 3[or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)].
(i) A owes money to B, who transfers the debt to C. B then demands the debt from A, who, not having received notice of the transfer, as prescribed in section 131, pays B. The payment is valid, and C cannot sue A for the debt.
(ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for securing the payment of an existing or future debt. If A dies, the Bank is entitled to receive the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in sub-section (1) of section 130 and to provisions of section 132.
1. Ins. by Act 20 of 1929, sec. 62.
2. The words and figures “and notwithstanding anything contained in section 123” ins. by Act 38 of 1925, sec. 2 and omitted by Act 20 of 1929, sec. 62.
3. Added by Act 4 of 1938, sec. 121 (w.e.f. 1-7-1939).
1. Ins. by Act 6 of 1944, sec. 2.
(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.
1. Subs. by Act 6 of 1944, sec. 3, for the original section.
135A. Assignment of rights under policy of marine insurance.—
1[135A. Assignment of rights under policy of marine insurance.—[Rep. by the Marine Insurance Act, 1963 (11 of 1963), sec.92, (w.e.f. 1-8-1963)].]
1. Section 135A ins. by Act 6 of 1944, sec. 4.
(B) ACT OF THE GOVERNOR GENERAL IN COUNCIL