TRANSFER OF PROPERTY
ACT,1882
[Act No. 4 of Year 1882]
An
Act to amend the law relating to the transfer of property by act of
parties
WHEREAS it is expedient to define and
amend certain parts of the law relating to the transfer of property
by act of parties;
It is hereby enacted as follows: -
CHAPTER I :
PRELIMINARY
l. Short title
This Act may be called the Transfer of
Property Act, 1882.
Commencement: It shall come
into force on the first day of July, 1882.
Extent: It extends in the
first instance to the whole of India except the territories which,
immediately before the lst November, 1956, were comprised in Part B
States or in the States of Bombay, Punjab and Delhi.
But this Act or any part thereof may by
notification in the Official Gazette be extended to the whole or any
part of the said territories by the State Government concerned.
And any State Government may 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.
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, 1908 (XVI of 1908), under the power
conferred by the first section of that Act or otherwise.
2. Repeal of Acts-Saving of
certain enactments, incidents, rights, liabilities, etc.
In the territories to which this Act
extends for the time being the enactments specified in the Schedule
hereto annexed shall be repealed to the extent therein mentioned.
But nothing herein contained shall be deemed to affect-
(a) the provisions of any enactment not
hereby expressly repealed;
(b) any terms or incidents of any
contract or constitution of property which are consistent with the
provisions of this Act, and are allowed by the law for the time
being in force;
(c) any right or liability arising out of
a legal relation constituted before this Act comes into force, or
any relief in respect of any such right or liability; or
(d) save as provided by section 57 and
Chapter IV of this Act, any transfer by operation of law or by, or
in execution of, a decree or order of a court of competent
jurisdiction, and nothing in the second Chapter of this Act shall be
deemed to affect any rule of Mohammedan law.
3. Interpretation
clause
In this Act, unless there is something
repugnant in the subject or context,-
" immovable property" does not include
standing timber, growing crops or grass;
"instrument" means a non-testamentary
instrument;
"attested", in relation to an instrument,
means and shall be deemed always to have meant attested by two or
more witnesses each of whom has seen the executant sign or affix his
mark to the instrument, or has seen some other person sign the
instrument in the presence and by the direction of the executant, or
has received from the executant a personal acknowledgement of his
signature or mark, or of the signature of such other person, and
each of whom has signed the instrument in the presence of the
executant; but it shall not be necessary that more than one of such
witnesses shall have been present at the same time, and no
particular form of attestation shall be necessary;
"registered" means registered in any part
of the territories to which this Act extends under the law 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 embedded for
the permanent beneficial enjoyment of that to which it is attached;
"actionable claim" means a claim to any
debt, other than a debt secured by mortgage of immovable property or
by hypothecation or pledge of movable property, or to any beneficial
interest in movable property not in the possession, either actual or
constructive, of the claimant, which the civil courts recognise as
affording grounds for relief, whether such debt or beneficial
interest be existent, accruing, conditional or contingent;
"a person is said to have notice" of a
fact when he actually knows that fact, or when, but for wilful
abstention from an enquiry or search which he ought to have made, or
gross negligence, he would have known it.
Explanation I: Where any
transaction relating to immovable property is required by law to be
and has been effected by a registered instrument, any person
acquiring such property or any part of, or share or interest in,
such property shall be deemed to have notice of such instrument as
from the date of registration or, where the property is not all
situated in one sub-district, or where the registered instrument has
been registered under sub-section (2) of section 30 of the Indian
Registration Act, 1908 (16 of 1908), from the earliest date on which
any memorandum of such registered instrument has been filed by any
Sub-Registrar within whose sub-district any part of the property
which is being acquired, or of the property wherein a share or
interest is being acquired, is situated:
PROVIDED that-
(1) the instrument has been registered
and its registration completed in the manner prescribed by the
Indian Registration Act, 1908 (16 of 1908), and the rules made
thereunder,
(2) the instrument of 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.
4. Enactments relating to
contracts to be taken as part of Contract Act and supplemental to
the Registration Act
The Chapters and sections of this Act
which relate to contracts shall be taken as part of the Indian
Contract Act, 1872 (9 of 1872).
1[And section 54, paragraphs 2
and 3, sections 59, 107 and 123 shall be read as supplemental to the
Indian Registration Act, 2[1908 (16 of 1908)].]
CHAPTER II : OF TRANSFERS
OF PROPERTY BY ACT OF PARTIES
(A) Transfer of property, whether movable or immovable
5. Transfer of property
defined
In the following sections "transfer of
property" means an act by which a living person conveys property, in
present or in future, to one or more other living persons, or to
himself and one or more other living persons; and "to transfer
property" is to perform such act.
In this section "living person includes a
company or association or body of individuals, whether incorporated
or not, but nothing herein contained shall affect any law for the
time being in force relating to transfer of property to or by
companies, associations or bodies of individuals.
6. What may be
transferred
Property of any kind may be transferred,
except as otherwise provided by this Act or by any other law for the
time being in force.
(a) The chance of an heir-apparent
succeeding to an estate, the chance of a relation obtaining a legacy
on the death of a kinsman, or any other mere possibility of a like
nature, cannot be transferred.
(b) A mere right of re-entry for breach
of a condition subsequent cannot be transferred to anyone except the
owner of the property affected thereby.
(c) An easement cannot be transferred
apart from the dominant heritage.
(d) An interest in property restricted in
its enjoyment to the owner personally cannot be transferred by
him.
(dd) A right to future maintenance, in
whatsoever manner arising, secured or determined, cannot be
transferred.
(e) A mere right to sue 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, naval,
air-force and civil pensioners of the government and political
pensions cannot be transferred.
(h) No transfer can be made (1) insofar
as it is opposed to the nature of the interest affected thereby, or
(2) 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.
(i) Nothing in this section shall be
deemed to authorise a tenant having an untransferable right of
occupancy, the farmer of an estate in respect of which default has
been made in paying revenue, or the lessee of an estate, under the
management of a Court of Wards, to assign his interest as such
tenant, farmer or lessee.
7. Persons competent to
transfer
Every person competent to contract and
entitled to transferable property, or authorised to dispose of
transferable property not his own, is competent to transfer such
property either wholly or in part, and either absolutely or
conditionally, in the circumstances, to the extent and in the
manner, allowed and prescribed by any law for the time being in
force.
8. Operation of
transfer
Unless a different intention is expressed
or necessarily implied, a transfer of property passes forthwith to
the transferee all the interest which the transferor is then capable
of passing in the property and in the legal incidents thereof.
Such incidents include, when the property
is land, the easements annexed thereto, the rents and profits
thereof accruing after the transfer, and all things attached to the
earth;
and, where the property is machinery
attached to the earth, the movable parts thereof; and, where the
property is a house, the easements annexed thereto, the rent thereof
accruing after the transfer, and the locks, keys, bars, doors,
windows, and all other things provided for permanent use therewith;
and, where the property is a debtor other
actionable claim, the securities therefor (except where they are
also for other debts or claims not transferred to the transferee),
but not arrears of interest accrued before the transfer;
and, where the property is money or other
property yielding income, the interest or income thereof accruing
after the transfer takes effect.
9. Oral transfer
A transfer of property may be made
without writing in every case in which a writing is not expressly
required by law.
10. Condition restraining
alienation
Where property is transferred subject to
a condition or limitation absolutely restraining the transferee or
any person claiming under him from parting with or disposing of his
interest in the property, the condition or limitation is void,
except in the case of a lease where the condition is for the benefit
of the lessor or those claiming under him:
PROVIDED that property may be transferred
to or for the benefit of a women (not being a Hindu, Muhammadan or
Buddhist), so that she shall not have power during her marriage to
transfer or charge the same or her beneficial interest therein.
11. Restriction repugnant to
interest created
Where, on a transfer of property, an
interest therein is created absolutely in favour of any person, but
the terms of the transfer direct that such interest shall be applied
or enjoyed by him in a particular manner, he shall be entitled to
receive and dispose of such interest as if there were no such
direction.
Where any such direction has been made in
respect of one piece of immovable property for the purpose of
securing the beneficial enjoyment of another piece of such property,
nothing in this section shall be deemed to affect any right which
the transferor may have to enforce such direction or any remedy
which he may have in respect of a breach thereof.
12. Condition making interest
determinable on insolvency or attempted alienation
Where property is transferred subject to
a condition or limitation making any interest therein, reserved or
given to or for the benefit of any person, to cease on his becoming
insolvent or endeavouring to transfer or dispose of the same, such
condition or limitation is void.
Nothing in this section applies to a
condition in a lease for the benefit of the lessor or those claiming
under him.
13. Transfer for benefit of
unborn person
Where, on a transfer of property, an
interest therein is created for the benefit of a person not in
existence at the date of the transfer, subject to a prior interest
created by the same transfer, the interest created for the benefit
of such person shall not take effect, unless it extends to the whole
of the remaining interest of the transferor in the property.
Illustration
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.
14. Rule against
perpetuity
No transfer of property can operate to
create an interest which is to take effect after the life time of
one or more persons living at the date of such transfer, and the
minority of some person who shall be in existence at the expiration
of that period, and to whom, if he attains full age, the interest
created is to belong.
15. Transfer to a class, some of
whom come under sections 13 and 14
If, on a transfer of property, an
interest therein is created for the benefit of a class of persons
with regard to some of whom such interest fails by reason of any of
the rules contained in sections 13 and 14, such interest fails in
regard to those persons only and not in regard to the whole
class.
16. Transfer to take effect on
failure of prior interest
Where, by reason of any of the rules
contained in sections 13 and 14, an interest created for the benefit
of a person or of a class of persons fails in regard to such person
or the whole of such class, any interest created in the same
transaction and intended to take effect after or upon failure of
such prior interest also fails.
17. Direction for
accumulation
(1) Where the terms of a transfer of
property direct that the income arising from the property shall be
accumulated either wholly or in part during a period longer
than-
(a) the life of the transferor, or
(b) a period of eighteen years from the
date of 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.
18. Transfer in perpetuity for
benefit of public
The restrictions in sections 14, 16 and
17 shall not apply in the case of a transfer of property for the
benefit of the public in the advancement of religion, knowledge,
commerce, health, safety or any other object beneficial to
mankind.
19. Vested interest
Where, on a transfer of property, an
interest therein is created in favour of a person without specifying
the time when it is to take effect, or in terms specifying that it
is to take effect forthwith or on the happening of an event which
must happen, such interest is vested, unless a contrary intention
appears from the terms of the transfer.
A vested interest is not defeated by the
death of the transferee before he obtains possession.
Explanation : An intention
that an interest shall not be vested is not to be inferred merely
from a provision whereby the enjoyment thereof is postponed, or
whereby a prior interest in the same property is given or reserved
to some other person, or whereby income arising from the property is
directed to be accumulated until the time of enjoyment arrives, or
from a provision that if a particular event shall happen the
interest shall pass to another person.
20. When unborn person acquires
vested interest on transfer for his benefit
Where, on a transfer of property, an
interest therein is created for the benefit of a person not then
living, he acquires upon his birth, unless a contrary intention
appears from the terms of the transfer, a vested interest, although
he may not be entitled to the enjoyment thereof immediately on his
birth.
21. Contingent
interest
Where, on a transfer of property, an
interest therein is created in favour of a person to take effect
only on the happening of a specified uncertain event, or if a
specified uncertain event shall not happen, such person thereby
acquires a contingent interest in the property. Such interest
becomes a vested interest, in the former case, on the happening of
the event, in the latter, when the happening of the event becomes
impossible.
Exception : Where, under a
transfer of property, a person becomes entitled to an interest
therein upon attaining a particular age, and the transferor also
gives to him absolutely the income to arise from such interest
before he reaches that age, or directs the income or so much thereof
as may be necessary to be applied for his benefit, such interest is
not contingent.
22. Transfer to members of a
class who attain a particular age
Where, on a transfer of property, an
interest therein is created in favour of such members only of a
class as shall attain a particular age, such interest does not vest
in any member of the class who has not attained that age.
23. Transfer contingent on
happening of specified uncertain event
Where, on a transfer of property, an
interest therein is to accrue to a specified person if a specified
uncertain event shall happen, and no time is mentioned for the
occurrence of that event, the interest fails unless such event
happens before, or at the same time as, the intermediate or
precedent interest ceases to exist.
24. Transfer to such of certain
persons as survive at some period not specified
Where, on a transfer of property, an
interest therein is to accrue to such of certain persons as shall be
surviving at some period, but the exact period is not specified, the
interest shall go to such of them as shall be alive when the
intermediate or precedent interest ceases to exist, unless a
contrary intention appears from the terms of the transfer.
Illustration
A transfers property to B for life, and
after his death to C and D, equally to be divided between them, or
to the survivor of them. C dies during the lifetime of B. D survives
B. At B's death the property passes to D.
25. Conditional
transfer
An interest created on a transfer of
property and dependent upon a condition fails if the fulfilment of
the condition is impossible, or is forbidden by law, or is of such a
nature that, if permitted, it would defeat the provisions of any
law, or is fraudulent, or involves or implies injury to the person
or property of another, or the court regards it as immoral or
opposed to public policy.
Illustrations
(a) A lets a farm to B on condition that
he shall walk a hundred miles in an hour. The lease is void.
(b) A gives Rs. 500 to B on condition
that he shall marry A's daughter C. At the date of the transfer C
was dead. The transfer is void.
(c) A transfers Rs. 500 to B 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.
26. Fulfilment of condition
precedent
Where the terms of a transfer of property
impose a condition to be fulfilled before a person can take an
interest in the property, the condition shall be deemed to have been
fulfilled if it has been substantially complied with.
Illustrations
(a) A transfers Rs. 5000 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. 5000 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.
27. Conditional transfer to one
person coupled with transfer to another on failure of prior
disposition
Where, on a transfer of property, an
interest therein is created in favour of one person, and by the same
transaction an ulterior disposition of the same interest is made in
favour of another, if the prior disposition under the transfer shall
fail, the ulterior disposition shall take effect upon the failure of
the prior disposition, although the failure may not have occurred in
the manner contemplated by the transferor.
But, where the intention of the parties
to the transaction is that the ulterior disposition shall take
effect only in the event of the prior disposition failing in a
particular manner, the ulterior disposition shall not take effect
unless the prior disposition fails in that manner.
Illustrations
(a) A transfers Rs. 500 to B on condition
that he shall execute a certain lease within three months after A's death, and, if he should
neglect to do so, to C. B
dies in A's life-time. The disposition in favour of C takes
effect.
(b) A transfers property to his wife;
but, in case she should die in his life-time, 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.
28. Ulterior transfer conditional
on happening or not happening of specified event
On a transfer of property an interest
therein may be created to accrue to any person with the condition
superadded that in case a specified uncertain event shall happen
such interest shall pass to another person, or that in case a
specified uncertain event shall not happen such interest shall pass
to another person. In each case the dispositions are subject to the
rules contained in sections 10, 12, 21, 22, 23, 24, 25 and 27.
29. Fulfilment of condition
subsequent
An ulterior disposition of the kind
contemplated by the last preceding section cannot take effect unless
the condition is strictly fulfilled.
Illustration
A transfers Rs. 500 to B, to be paid to
him on his attaining his majority or marrying, with a proviso that,
if B dies as minor or marries without C's consent, Rs. 500 shall go
to D. B marries when only 17 years of age, without C's consent. The
transfer to D takes effect.
30. Prior disposition not
affected by invalidity of ulterior disposition
If the ulterior disposition is not valid,
the prior disposition is not affected by it.
Illustration
A transfers a farm to B for her life,
and, if she does not desert her husband to C. B is entitled to the
farm during her life as if no condition had been inserted.
31. Condition that transfer shall
cease to have effect in case specified uncertain event happens or
does not happen
Subject to the provisions of section 12,
on a transfer of property an interest therein may be created with
the condition superadded that it shall cease to exist in case a
specified uncertain event shall happen, or in case a specified
uncertain event shall not happen.
Illustrations
(a) A transfers a farm to B for his life,
with a proviso that, in case B cuts down a certain wood, the
transfer shall cease to have any effect. B cuts down the wood. He
loses his life-interest in the farm.
(b) A transfers a farm to B, provided
that, if B shall not go to England within three years after the date
of the transfer, his interest in the farm shall cease. B does not go
to England within the term prescribed. His interest in the farm
ceases.
32. Such condition must not be
invalid
In order that a condition that an
interest shall cease to exist may be valid, it is necessary that the
event to which it relates be one which could legally constitute the
condition of the creation of an interest.
33. Transfer conditional on
performance of act, no time being specified for
performance
Where, on a transfer of property, an
interest therein is created subject to a condition that the person
taking it shall perform a certain act, but no time is specified for
the performance of the act, the condition is broken when he renders
impossible, permanently or for an indefinite period, the performance
of the act.
34. Transfer conditional on
performance of act, time being specified
Where an act is to be performed by a
person either as a condition to be fulfilled before an interest
created on a transfer of property is enjoyed by him, or as a
condition on the non-fulfilment of which the interest is to pass
from him to another person, and a time is specified for the
performance of the act, if such performance within the specified
time is prevented by the fraud of a person who would be directly
benefited by non-fulfilment of the condition, such further time
shall as against him be allowed for performing the act as shall be
requisite to make up for the delay caused by such fraud. But if no
time is specified for the performance of the act, then, if its
performance is by the fraud of a person interested in the
non-fulfilment of the condition rendered impossible or indefinitely
postponed, the condition shall as against him be deemed to have been
fulfilled.
ELECTION
35. Election when
necessary
Where a person professes to transfer
property which he has no right to transfer, and as part of the same
transaction confers any benefit on the owner of the property, such
owner must elect either to confirm such transfer or to dissent from
it; and in the latter case he shall relinquish the benefit so
conferred, and the benefit so relinquished shall revert to the
transferor or his representative as if it had not been disposed of,
subject nevertheless,
where the transfer is gratuitous, and the
transferor has, before the election, died or otherwise become
incapable of making a fresh transfer,
and in all cases where the transfer is
for consideration,
to the charge of making good to the
disappointed transferee the amount or value of the property
attempted to be transferred to him.
Illustrations
The farm of Sultanpur is the property of
C and worth Rs. 800. A by an instrument of gift professes to
transfer it to B, giving by the same instrument Rs. 1,000 to C. C
elects to retain the farm. He forfeits the gift of Rs. 1,000. In the
same case, A dies before the election. His representative must out
of the Rs. 1,000 pay Rs. 800 to B.
The rule in the first paragraph of this
section applies whether the transferor does or does not believe that
which he professes to transfer to be his own.
A person taking no benefit directly under
a transaction, but deriving a benefit under it indirectly, need not
elect.
A person who in his own 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 judgement 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.
Illustration
A transfers to B an estate to which C is
entitled, and as part of the same transaction gives C a coal-mine. C
takes possession of the mine and exhausts it. He has thereby
confirmed the transfer of the estate to B.
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.
APPORTIONMENT
36. Apportionment of periodical
payments on determination of interest of person entitled
In the absence of a contract or local
usage to the contrary, all rents, annuities, pensions, dividends and
other periodical payments in the nature of income shall, upon the
transfer of the interest of the person entitled to receive such
payments, be deemed, as between the transferor and the transferee,
to accrue due from day to day, and to be apportionable accordingly,
but to be payable on the days appointed for the payment
thereof.
37. Apportionment of benefit of
obligation on severance
When, in consequence of a transfer,
property is divided and held in several shares, and thereupon the
benefit of any obligation relating to the property as a whole passes
from one to several owners of the property, the corresponding duty
shall, in the absence of a contract, to the contrary amongst the
owners, be performed in favour of each of such owners in proportion
to the value of his share in the property, provided that the duty
can be severed and that the severance does not substantially
increase the burden of the obligation; but if the duty cannot be
severed, or if the severance would substantially increase the burden
of the obligation the duty shall be performed for the benefit of
such one of the several owners as they shall jointly designate for
that purpose:
PROVIDED that no person on whom the
burden of the obligation lies shall be answerable for failure to
discharge it in the manner provided by this section, unless and
until he has had reasonable notice of the severance.
Nothing in this section applies to leases
for agricultural purposes unless and until the State Government by
notification in the Official Gazette so directs.
Illustrations
(a) A sells to B, C and D a house
situated in a village and leased to E at an annual rent of Rs. 30
and delivery of one fat sheep, B having provided half the
purchase-money and C and D one quarter each. E, having notice of
this, must pay Rs. 15 to B, Rs. 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.
(B) Transfer of immovable property
38. Transfer by person authorised
only under certain circumstances to transfer
Where any person, authorised only under
circumstances in their nature variable to dispose of immovable
property, transfers such property for consideration, alleging the
existence of such circumstances, they shall, as between the
transferee on the one part and the transferor and other persons (if
any) affected by the transfer on the other part, be deemed to have
existed, if the transferee, after using reasonable care to ascertain
the existence of such circumstances, has acted in good faith.
Illustration
A, a Hindu widow, whose husband has left
collateral heirs, alleging that the property held by her as such is
insufficient for her maintenance, agrees, for purposes neither
religious nor charitable to sell a field, part of such property, to
B. B satisfies himself by reasonable enquiry that the income of the
property is insufficient for A's maintenance, and that the sale of
the field is necessary, and acting in good faith, buys the field
from A. As between B on the one part and A and the collateral heirs
on the other part, a necessity for the sale shall be deemed to have
existed.
39. Transfer where third person
is entitled to maintenance
Where a third person has a right to
receive maintenance, or a provision for advancement or marriage,
from the profits of immovable property, and such property is
transferred, the right may be enforced against the transferee, if he
has notice thereof or if the transfer is gratuitous; but not against
a transferee for consideration and without notice of the right, nor
against such property in his hands.
40. Burden of obligation imposing
restriction on use of land
Where, for the more beneficial enjoyment
of his own immovable property, a third person has, independently of
any interest in the immovable property of another or of any easement
thereon, a right to restrain the enjoyment in a particular manner of
the latter property, or
Or
of obligation annexed to ownership but not amounting to interest or
easement : Where a third person is entitled to the benefit of an
obligation arising out of contract and annexed to the ownership of
immovable property, but not amounting to an interest therein or
easement thereon,
such right or obligation may be enforced
against a transferee with notice thereof or a gratuitous transferee
of the property affected thereby, but not against a transferee for
consideration and without notice of the right or obligation, nor
against such property in his hands.
Illustration
A contracts to sell Sultanpur to B. While
the contract is still in force he sells Sultanpur to C, who has
notice of the contract. B may enforce the contract against C to the
same extent as against A.
41. Transfer by ostensible
owner
Where, with the consent, express or
implied, of the persons interested in immovable property, a person
is the ostensible owner of such property and transfers the same for
consideration, the transfer shall not be voidable on the ground that
the transferor was not authorised to make it:
PROVIDED that the transferee, after
taking reasonable care to ascertain that the transferor had power to
make the transfer, has acted in good faith.
42. Transfer by person having
authority to revoke former transfer
Where a person transfers any immovable
property, reserving power to revoke the transfer, and subsequently
transfers the property for consideration to another transferee, such
transfer operates in favour of such transferee (subject to any
condition attached to the exercise of the power) as a revocation of
the former transfer to the extent of the power.
Illustration
A lets a house to B, and reserves power
to revoke the lease if, in the opinion of a specified surveyor, B
should make a use of it detrimental to its value. Afterwards A,
thinking that such a use has been made, lets the house to C. This
operates as a revocation of B's lease subject to the opinion of the
surveyor as to B's use of the house having been detrimental to its
value.
43. Transfer by unauthorised
person who subsequently acquires interest in property
transferred
Where a person fraudulently or
erroneously represents that he is authorised to transfer certain
immovable property and professes to transfer such property for
consideration, such transfer shall, at the option of the transferee,
operate on any interest which the transferor may acquire in such
property at any time during which the contract of transfer
subsists.
Nothing in this section shall impair the
right of transferees in good faith for consideration without notice
of the existence of the said option.
Illustration
A, a Hindu who has separated from his
father B, sells to C three fields, X, Y and Z, representing that A
is authorised to transfer the same. Of these fields Z does not
belong to A, it having been retained by B on the partition; but on
B's dying A as heir obtains Z. C, not having rescinded the contract
of sale, may require A to deliver Z to him.
44. Transfer by one
co-owner
Where one of two or more co-owners of
immovable property legally competent in that behalf transfers his
share of such property or any interest therein, the transferee
acquires, as to such share or interest, and so far as is necessary
to give, effect to the transfer, the transferor's right to joint
possession or other common or part enjoyment of the property, and to
enforce a partition of the same' but subject to the conditions and
liabilities affecting at the date of the transfer, the share or
interest so transferred.
Where the transferee of a share of a
dwelling-house belonging to an undivided family is not a member of
the family, nothing in this section shall be deemed to entitle him
to joint possession or other common or part enjoyment of the
house.
45. Joint transfer for
consideration
Where immovable property is transferred
for consideration to two or more persons and such consideration is
paid out of a fund belonging to them in common, they are, in the
absence of a contract to the contrary, respectively entitled to
interests in such property identical, as nearly as may be, with the
interests to which they were respectively entitled in the fund; and,
where such consideration is paid out of separate funds belonging to
them respectively, they are, in the absence of a contract to the
contrary, respectively entitled to interests in such property in
proportion to the shares of the consideration which they
respectively advanced.
In the absence of evidence as to the
interests in the fund to which they were respectively entitled, or
as to the shares which they respectively advanced, such persons
shall be presumed to be equally interested in the property.
46. Transfer for consideration by
persons having distinct interests
Where immovable property is transferred
for consideration by persons having distinct interests therein, the
transferors are, in the absence of a contract to the contrary,
entitled to share in the consideration equally, where their
interests in the property were of equal value, and, where such
interests were of unequal value, proportionately to the value of
their respective interests.
Illustrations
(a) A, owning a moiety, and B and C, each
a quarter share, of mauza Sultanpur, exchange an eighth share of
that mauza for a quarter share of mauza Lalpura. There being no
agreement to the contrary, A is entitled to an eighth share in
Lalpura, and B and C each to a sixteenth share in 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.
47. Transfer by co-owners of
share in common property
Where several co-owners of immovable
property transfer a share therein without specifying that the
transfer is to take effect on any particular share or shares of the
transferors, the transfer, as among such transferors, takes effect
on such shares equally where the shares were equal, and, where they
were unequal, proportionately to the extent of such shares.
Illustration
A, the owner of an eight-anna share, and
B and C, each the owner of a four-anna share, in mauza Sultanpur,
transfer a two-anna share in the mauza to D, without specifying from
which of their several shares the transfer is made. To give effect
to the transfer one-anna share is taken from the share of A, and
half-an-anna share from each of the shares of B and C.
48. Priority of rights created by
transfer
Where a person purports to create by
transfer at different times rights in or over the same immovable
property, and such rights cannot all exist or be exercised to their
full extent together, each later created right shall, in the absence
of a special contract or reservation binding the earlier
transferees, be subject to the rights previously created.
49. Transferee's right under
policy
Where immovable property is transferred
for consideration, and such property or any part thereof is at the
date of the transfer insured against loss or damage by fire, the
transferee, in case of such loss or damage, may, in the absence of a
contract to the contrary, require any money which the transferor
actually receives under the policy, or so much thereof as may be
necessary, to be applied in reinstating the property.
50. Rent bona fide paid to holder
under defective title
No person shall be chargeable with any
rents or profits of any immovable property, which he has in good
faith paid or delivered to any person of whom he in good faith held
such property, notwithstanding it may afterwards appear that the
person to whom such payment or delivery was made had no right to
receive such rents or profits.
Illustration
A lets a field to B at a rent of Rs. 50,
and then transfers the field to C. B, having no notice of the
transfer, in good faith pays the rent to A. B is not chargeable with
the rent so paid.
51. Improvements made by bona
fide holders under defective titles
When the transferee of immovable property
makes any improvement on the property, believing in good faith that
he is absolutely entitled thereto, and he is subsequently evicted
therefrom by any person having a better title, the transferee has a
right to require the person causing the eviction either to have the
value of the improvement estimated and paid or secured to the
transferee, or to sell interest in the property to the transferee at
the then market value thereof, irrespective of the value of such
improvement.
The amount to be paid or secured in
respect of such improvement shall be the estimated value thereof at
the time of the eviction.
When, under the circumstances aforesaid,
the transferee has planted or sown on the property crops which are
growing when he is evicted therefrom, he is entitled to such crops
and to free ingress and egress to gather and carry them.
52. Transfer of property pending
suit relating thereto
During the pendency in any court having
authority 3[4[within the limits of India
excluding the State of Jammu and Kashmir] Government or established
beyond such limits] by the Central Government of any suit or
proceedings which is not collusive and in which any right to
immovable property is directly and specifically in question, the
property cannot be transferred or otherwise dealt with by any party
to the suit or proceeding so as to affect the rights of any other
party thereto under any decree or order which may be made therein,
except under the authority of the court and on such terms as it may
impose.
Explanation : For the
purposes of this section, the pendency of a suit or proceeding shall
be deemed to commence from the date of the presentation of the
plaint or the institution of the proceeding in a court of competent
jurisdiction, and to continue until the suit or proceeding has been
disposed of by a final decree or order and complete satisfaction or
discharge of such decree or order has been obtained, or has become
unobtainable by reason of the expiration of any period of limitation
prescribed for the execution thereof by any law for the time being
in force.
53. Fraudulent
transfer
(1) Every transfer of immovable property
made with intent to defeat or delay the creditors of the transferor
shall be voidable at the option of any creditor so defeated or
delayed.
Nothing in this sub-section shall impair
the rights of a transferee in good faith and for consideration.
Nothing in this sub-section shall affect
any law for the time being in force relating to insolvency.
A suit instituted by a creditor (which
term includes a decree-holder whether he has or has not applied for
execution of his decree) to avoid a transfer on the ground that it
has been made with intent to defeat or delay the creditors of the
transferor shall be instituted on behalf of, or for the benefit of,
all the creditors.
(2) Every transfer of immovable property
made without consideration with intent to defraud a subsequent
transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, no
transfer made without consideration shall be deemed to have been
made with intent to defraud by reason only that a subsequent
transfer for consideration was made.
53A. Part performance
Where any person contracts to transfer
for consideration any immovable property by writing signed by him or
on his behalf from which the terms necessary to constitute the
transfer can be ascertained with reasonable certainty,
and the transferee has, in part
performance of the contract, taken possession of the property or any
part thereof, or the transferee, being already in possession,
continues in possession in part performance of the contract and has
done some act in furtherance of the contract,
and the transferee has performed or is
willing to perform his part of the contract,
then, notwithstanding that the contract,
though required to be registered, has not been registered, or, where
there is an instrument of transfer, that the transfer has not been
completed in the manner prescribed therefor by the law for the time
being in force, the transferor or any person claiming under him
shall be debarred from enforcing against the transferee and persons
claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right
expressly provided by the terms of the contract:
PROVIDED that nothing in this section
shall affect the rights of a transferee for consideration who has no
notice of the contract or of the part performance thereof.
Comment: Since the appellant's claims is
founded on Section 53-A, it goes without saying that he admits by
implication that he came into possession of the land lawfully under
the agreement and continued to remain in possession till date of the
suit. Thereby the plea of adverse possession is not available to the
appellant. Mohan Lal v. Mira Abdul Gaffar AIR 1996 SUPREME COURT
910
CHAPTER III : OF SALES OF
IMMOVABLE PROPERTY
54. "Sale" defined
"Sale" is a transfer of ownership in
exchange for a price paid or promised or part-paid and
part-promised.
Sale how made: Such
transfer, in the case of tangible immovable property of the value of
one hundred rupees and upwards, or in the case of a reversion or
other intangible thing, can be made only by a registered
instrument.
In the case of tangible immovable
property of a value less than one hundred rupees, such transfer may
be made either by a registered instrument or by delivery of the
property.
Delivery of tangible immovable property
takes place when the seller places the buyer, or such person as he
directs, in possession of the property.
Contract for sale: A
contract for the sale of immovable property is a contract that a
sale of such property shall take place on terms settled between the
parties.
It does not, of itself, create any
interest in or charge on such property.
55. Rights and liabilities of
buyer and seller
In the absence of a contract to the
contrary, the buyer and the seller of immovable property
respectively are subject to the liabilities, and have the rights,
mentioned in the rules next following or such of them as are
applicable to the property sold:
(1) The seller is bound-
(a) to disclose to the buyer any material
defect in the property 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 buyers of the lot of greatest value is
entitled to such documents.
But in case (a) the seller, and in case
(b) the buyer, of the lot of greatest value, is bound, upon every
reasonable request by the buyer, or by any of the other buyers, as
the case may be, and at the cost of the person making the request,
to produce the said documents and furnish such true copies thereof
or extracts therefrom as he may require; and in the meantime, the
seller, or the buyer of the lot of greatest value, as the case may
be, shall keep the said documents safe, uncancelled and undefaced,
unless prevented from so doing by fire or other inevitable
accident.
(4) The seller is entitled-
(a) to the rents and profits of the
property till the ownership thereof passes to the buyer;
(b) where the ownership of the property
has passed to the buyer before payment of the whole of the
purchase-money, to a charge upon the property in the hands of the
buyer, 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 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, 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.
56. Marshalling by subsequent
purchaser
If the owner of two or more properties
mortgages them to one person and then sells one or more of the
properties to another person, the buyer is, in the absence of a
contract to the contrary, entitled to have the mortgage-debt
satisfied out of the property or properties not sold to him, so far
as the same will extend, but not so as to prejudice the rights of
the mortgagee or persons claiming under him or of any other person
who has for consideration acquired an interest in any of the
properties.
DISCHARGE OF ENCUMBRANCES
ON SALE
57. Provision by court for
encumbrances and sale freed therefrom
(a) Where immovable property subject to
any encumbrances, whether immediately payable or not, is sold by the
court or in execution of a decree, or out of court, the court may,
if it thinks fit, on the application of any party to the sale,
direct or allow payment into court,-
(1) in case of an annual or monthly sum
charged on the property, or of a capital sum charged on a
determinable interest in the property-of such amount as, when
invested in securities of the Central Government, the court
considers will be sufficient, by means of the interest thereof, to
keep down or otherwise provide for that charge, and
(2) in any other case of a capital sum
charged on the property- of the amount sufficient to meet the
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 encumbrances, 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.
CHAPTER IV : OF MORTGAGES
OF IMMOVABLE PROPERTY AND CHARGES
58. "Mortgage", "mortgagor",
"mortgagee", "mortgage-money" and "mortgaged" defined.
(a) A mortgage is the transfer of an
interest in specific immoveable property for the purpose of securing
the payment of money advanced or to be advanced by way of loan, an
existing or future debt, or the performance of an engagement which
may give rise to a pecuniary liability.
The transferor is called a mortgagor, the
transferee a mortgagee; the principal money and interest of which
payment is secured for the time being are called the mortgage-money,
and the instrument (if any) by which the transfer is effected is
called a mortgage-deed.
(b) Simple mortgage-Where,
without delivering possession of the mortgaged property, the
mortgagor binds himself personally to pay the mortgage-money, and
agrees, expressly or impliedly, that, in the event of his failing to
pay according to his contract, the mortgagee shall have a right to
cause the mortgaged property to be sold and the proceeds of sale to
be applied, so far as may be necessary, in payment of the
mortgage-money, the transaction is called a simple mortgage and the
mortgagee a simple mortgagee.
(c) Mortgage by conditional
sale-Where, the mortgagor ostensibly sells the mortgaged
property-
on condition that on default of payment
of the mortgage-money on a certain date the sale shall become
absolute, or
on condition that on such payment being
made the sale shall become void, or
on condition that on such payment being
made the buyer shall transfer the property to the seller,
the transaction is called a mortgage by
conditional sale and the mortgagee a mortgagee by conditional
sale:
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 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 or any part of such rents and profits and
to appropriate the same in lieu of interest or in payment of the
mortgage-money, or partly in lieu of interest or partly in payment
of the mortgage-money, the transaction is called a usufructuary
mortgage and the mortgagee a usufructuary mortgagee.
(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.
(f) Mortgage by deposit of
title-deeds-Where a person in any of the following towns,
namely, the towns of Calcutta, Madras, and Bombay, and in any other
town which the State Government concerned may, by notification in
the Official Gazette, specify in this behalf, delivers to a creditor
or his agent documents of title to immovable property, with intent
to create a security thereon, the transaction is called a mortgage
by deposit of title-deeds.
(g) Anomalous mortgage-A
mortgage which is not a simple mortgage, a mortgage by conditional
sale, a usufructuary mortgage, an English mortgage or a mortgage by
deposit of title-deeds within the meaning of this section is called
an anomalous mortgage.
59. Mortgage when to be by
assurance
Where the principal money secured is one
hundred rupees or upwards, a mortgage other than a mortgage by
deposit of title deeds can be effected only by a registered
instrument signed by the mortgagor and attested by at least two
witnesses.
Where the principal money secured is less
than one hundred rupees, a mortgage may be effected either by a
registered instrument signed and attested as aforesaid or (except in
the case of a simple mortgage) by delivery of the property.
59A. References to mortgagors and
mortgagees to include persons deriving title from them
Unless otherwise expressly provided,
references in this Chapter to mortgagors and mortgagees shall be
deemed to include references to persons deriving title from them
respectively.
RIGHTS AND LIABILITIES OF
MORTGAGOR
60. Right of mortgagor to redeem
At any time after the principal money has
become due, the mortgagor has a right, on payment or tender, at a
proper time and place, of the mortgage-money, to require the
mortgagee (a) to deliver to the mortgagor the mortgage-deed and all
documents relating to the mortgaged property which are in the
possession or power of the mortgagee, (b) where the mortgagee is in
possession of the mortgaged property, to deliver possession thereof
to the mortgagor, and (c) at the cost of the mortgagor either to
re-transfer the mortgaged property to him or to such third person as
he may direct, or to execute and (where the mortgage has been
effected by a registered instrument) to have registered an
acknowledgement in writing that any right in derogation of his
interest transferred to the mortgagee has been extinguished:
PROVIDED that the right conferred by this
section has not been extinguished by the act of the parties or by
decree of a court.
The right conferred by this section is
called a right to redeem and a suit to enforce it is called a suit
for redemption.
Nothing in this section shall be deemed
to render invalid any provision to the effect that, if the time
fixed for payment of the principal money has been allowed to pass or
no such time has been fixed, the mortgagee shall be entitled to
reasonable notice before payment or tender of such money.
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 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.
60A. Obligation to transfer to
third party instead of re-transference to mortgagor
(1) Where a mortgagor is entitled to
redemption, then, on the fulfilment of any conditions of the
fulfilment of which he would be entitled to require a retransfer, he
may require the mortgagee, instead of re-transferring the property,
to assign the mortgage debt and transfer the mortgaged property to
such third person as the mortgagor may direct; and the mortgagee
shall be bound to assign and transfer accordingly.
(2) The rights conferred by this section
belong to and may be enforced by the mortgagor or by any
encumbrancer notwithstanding an intermediate encumbrance; but the
requisition of any encumbrance shall prevail over a requisition of
the mortgagor and, as between encumbrancers, the requisition of a
prior encumbrancer shall prevail over that of a subsequent
encumbrancer.
(3) The provisions of this section do not
apply in the case of a mortgagee who is or has been in
possession.
60B. Right to inspection and
production of documents
A mortgagor, as long as his right of
redemption subsists, shall be entitled at all reasonable times, at
his request and at his own cost, and on payment of the mortgagee's
cost and expenses in this behalf, to inspect and make copies or
abstracts of, or extracts from, documents of title relating to the
mortgaged property which are in the custody or power of the
mortgagee.
61. Right to redeem separately or
simultaneously
A mortgagor who has executed two or more
mortgages in favour of the same mortgagee shall, in the absence of a
contract to the contrary, when the principal money of any two or
more of the mortgages has become due, be entitled to redeem any one
such mortgage separately, or any two or more of such mortgages
together.
62. Right of usufructuary
mortgagor to recover possession
In the case of a usufructuary mortgage,
the mortgagor has a right to recover possession of the property
together with the mortgage-deed and all documents relating to the
mortgaged property which are in the possession or power of the
mortgagee,-
(a) where the mortgagee is authorised to
pay himself the mortgage-money from the rents and profits of the
property,-when such money is paid;
(b) where the mortgagee is authorised to
pay himself from such rents and profits 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 the mortgage-money or the balance
thereof or deposits it in court hereinafter provided.
63. Accession to mortgaged
property
Where mortgaged property in possession of
the mortgagee has, during the continuance of the mortgage, received
any accession, the mortgagor, upon redemption shall, in the absence
of a contract to the contrary, be entitled as against the mortgagee
to such accession.
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.
63A. Improvements to mortgaged
property
(1) Where mortgaged property in
possession of the mortgagee has, during the continuance of the
mortgage, been improved, the mortgagor, upon redemption, shall, in
the absence of a contract to the contrary, be entitled to the
improvement; and the mortgagor shall not, save only in cases
provided for in sub-section (2), be liable to pay the cost
thereof.
(2) Where any such improvement was
effected at the cost of the mortgagee and was necessary to preserve
the property from destruction or deterioration or was necessary to
prevent the security from becoming insufficient, or was made in
compliance with the lawful order of any public servant or public
authority, the mortgagor shall, in the absence of a contract to the
contrary, be liable to pay the proper cost thereof as an addition to
the principal money with interest at the same rate as is payable on
the principal, or, where no such rate is fixed, at the rate of nine
per cent per annum, and the profits, if any, accruing by reason of
the improvement shall be credited to the mortgagor.
64. Renewal of mortgaged
lease
Where mortgaged property is a lease, and
the mortgagee obtains a renewal of the lease, the mortgagor, upon
redemption, shall, in the absence of a contract by him to the
contrary, have the benefit of the new lease.
65. Implied contracts by
mortgagor
In the absence of a contract to the
contrary, the mortgagor shall be deemed to contract with the
mortgagee,-
(a) that the interest which the mortgagor
professes to transfer to the mortgagee subsists, and that the
mortgagor has power to transfer the same;
(b) that the mortgagor will defend, or,
if the mortgagee be in possession of the mortgaged property, enable
him to defend, the mortgagor's title. thereto;
(c) that the mortgagor will, so long as
the mortgagee is not in possession of the mortgaged property, pay
all public charges accruing due in respect of the property;
(d) and, where the mortgaged property is
a lease, 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 such prior
encumbrance as and when it becomes due, and will at the proper time
discharge the principal money due on such prior encumbrance.
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.
65A. Mortgagor's power to
lease
(1) Subject to the provisions of
sub-section (2), a mortgagor, while lawfully in possession of the
mortgaged property, shall have power to make leases thereof which
shall be binding on the mortgagee.
(2) (a) Every such lease shall be such as
would be made in the ordinary course of management of the property
concerned, and in accordance with any local law, custom or
usage.
(b) Every such lease shall reserve the
best rent that can reasonably be obtained, and no premium shall be
paid or promised and no rent shall be payable in advance.
(c) No such lease shall contain a
covenant for renewal.
(d) Every such lease shall take effect
from a date not later than six months from the date on which it is
made.
(e) In the case of a lease of buildings,
whether leased 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.
66. Waste by mortgagor in
possession
A mortgagor in possession of the
mortgaged property is not liable to the mortgagee for allowing the
property to deteriorate; but he must not commit any act which is
destructive or permanently injurious thereto, if the security is
insufficient or will be rendered insufficient by such act.
Explanation: A security is insufficient
within the meaning of this section unless the value of the mortgaged
property exceeds by one-third, or, if consisting of buildings,
exceeds by one-half, the amount for the time being due on the
mortgage.
RIGHTS AND LIABILITIES OF
MORTGAGEE
67. Right to foreclosure or
sale
In the absence of a contract to the
contrary, the mortgagee has, at any time after the mortgage- money
has become due to him, and before a decree has been made for the
redemption of the mortgaged property, or the mortgage-money has been
paid or deposited as hereinafter provided, a right to obtain from
the court a decree that the mortgagor shall be absolutely debarred
of his right to redeem the property, or a decree that the property
be sold.
A suit to obtain a decree that a
mortgagor shall be absolutely debarred of his right to redeem the
mortgaged property is called a suit for foreclosure.
Nothing in this section shall be
deemed-
(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 a 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.
67A. Mortgagee when bound to
bring one suit on several mortgages
A mortgagee who holds two or more
mortgages executed by the same mortgagor in respect of each of which
he has a right to obtain the same kind of decree under section 67,
and who sues to obtain such decree on any one of the mortgages,
shall, in the absence of a contract to the contrary, be bound to sue
on all the mortgages in respect of which the mortgage-money has
become due.
68. Right to sue for
mortgage-money
(1) The mortgagee has a right to sue for
the mortgage-money in the following cases and no others,
namely,-
(a) where the mortgagor binds himself to
repay the same;
(b) where, by any cause other than the
wrongful act or default of the mortgagor or mortgagee, the mortgaged
property is wholly or partially destroyed or the security is
rendered insufficient within the meaning of section 66, and the
mortgagee has given the mortgagor a reasonable opportunity of
providing further security enough to render the whole security
sufficient, and the mortgagor has failed to do so;
(c) where the mortgagee is deprived of
the whole or part of his security by or in consequence of the
wrongful act or default of the mortgagor;
(d) where, the mortgagee being entitled
to possession of the mortgaged property, the mortgagor fails to
deliver the same to him, or to secure the possession thereof to him
without disturbance by the mortgagor or any person claiming under a
title superior to that of the mortgagor:
PROVIDED that, in the case referred to in
clause (a), a transferee from the mortgagor or from his legal
representative shall not be liable to be sued for the
mortgage-money.
(2) Where a suit is brought under clause
(a) or clause (b) of sub-section (1), the court may, at its
discretion, stay the suit and all proceedings therein,
notwithstanding any contract to the contrary, until the mortgagee
has exhausted all his available remedies against the mortgaged
property or what remains of it, unless the mortgagee abandons his
security and, if necessary, re-transfers the mortgaged
property.
69. Power of sale when
valid
(1) 5[***] A mortgagee, or any
person acting on his behalf, shall, subject to the provisions of
this section have power to sell or concur in selling the mortgaged
property or any part thereof, in default of payment of the
mortgage-money, without the intervention of the court, in the
following cases and in no others, namely,-
(a) where the mortgage is an English
mortgage, and neither the mortgagor nor the mortgagee is a Hindu,
Mohammedan or Buddhist or a member of any other race, sect, tribe or
class from time to time specified in this behalf by the State
Government, in the Official Gazette;
(b) where a power of sale without the
intervention of the court is expressly conferred on the mortgagee by
the mortgage-deed and the mortgagee is the government;
(c) where 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
was, on the date of the execution of the mortgage-deed, situate
within the towns of Calcutta, Madras, Bombay, or in any other town
or area which the State Government may, be notification in the
Official Gazette, specify in this behalf.
(2) No such power shall be exercised
unless and until-
(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
(b) some interest under the mortgage
amounting at least to five hundred rupees is in arrear and unpaid
for three months after becoming due.
(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 of the power shall have his remedy in damages against the
person exercising the power.
(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.
(5) Nothing in this section or in section
69A applies to powers conferred before the first day of July,
1882.
69A. Appointment of
receiver
(1) A mortgagee having the right to
exercise a power of sale under section 69 shall, subject to the
provisions of sub-section (2), be entitled to appoint, by writing
signed by him or on his behalf, a receiver of the income of the
mortgaged property or any part thereof.
(2) Any person who has been named in the
mortgage-deed and is willing and able to act as receiver may be
appointed by the mortgagee.
If no person has been so named, or if all
persons named are unable or unwilling to act, or are dead, the
mortgagee may appoint any person to whose appointment the mortgagor
agrees; failing such agreement, the mortgagee shall be entitled to
apply to the court for the appointment of a receiver, and any person
appointed by the court shall be deemed to have been duly appointed
by the mortgagee.
A receiver may at any time be removed by
writing signed by or on behalf of the mortgagee and the mortgagor,
or by the court on application made by either party and on due cause
shown.
A vacancy in the office of receiver may
be filled in accordance with the provisions of this
sub-section.
(3) A receiver appointed under the powers
conferred by this section shall be deemed to be the agent of the
mortgagor, and the mortgagor shall be solely responsible for the
receiver's 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 the 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 of 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) Applications may be made, without
the institution of a suit, to the court for its opinion, advice or
direction on any present question respecting the management or
administration of the mortgaged property, other than questions of
difficulty or importance not proper in the opinion of the court for
summary disposal, A copy of such application shall be served upon,
and the hearing thereof may be attended by such of the persons
interested in the application as the court may think fit.
The costs of every application under this
sub-section shall be in the discretion of the court.
(11) In this section, "the court" means
the court which would have jurisdiction in a suit to enforce the
mortgage.
70. Accession to mortgaged
property
If, after the date of a mortgage, any
accession is made to the mortgaged property, the mortgagee, in the
absence of a contract to the contrary, shall, for the purposes of
the security, be entitled to such accession.
Illustrations
(a) A mortgages to B a certain field
bordering on a river. The field is increased by alluvion. For the
purposes of his security, B is entitled to the increase.
(b) A mortgages a certain plot of
building land to B and afterwards erects a house on the plot. For
the purposes of his security, B is entitled to the house as well as
the. plot.
71. Renewal of mortgaged
lease
When the mortgaged property is a lease
and the mortgagor obtains a renewal of the lease, the mortgagee, in
the absence of a contract to the contrary, shall, for the purposes
of the security, be entitled to the new lease.
72. Rights of mortgagee, in
possession
A mortgagee may spend such money as is
necessary-
(a) 6[***]
(b) for 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 percent per annum: '
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 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 amounts
in which the mortgagee is hereby authorised to insure.
73. Right to proceeds of revenue
sale or compensation on acquisition
(1) Where the mortgaged property or any
part thereof or any interest therein is sold owing to failure to pay
arrears or revenue or other charges of a public nature or rent due
in respect of such property, and such failure did not arise from any
default of the mortgagee, the mortgagee shall be entitled to claim
payment of the mortgage-money, in whole or in part, out of any
surplus of the sale-proceeds remaining after payment of the arrears
and of all charges and deductions directed by law.
(2) Where the mortgaged property or any
part thereof or any interest therein is acquired under the Land
Acquisition Act, 1894 (1 of 1894), or any other enactment for the
time being in force providing for the compulsory acquisition of
immovable property, the mortgagee shall be entitled to claim payment
of the mortgage-money, in whole or in part, out of the amount due to
the mortgagor as compensation.
(3) Such claims shall prevail against all
other claims except those of prior encumbrances, and may be enforced
notwithstanding the principal money on the mortgage has not become
due.
74. Right of subsequent mortgagee
to pay off prior mortgagee
[Repealed by the Transfer of Property (Amendment) Act,
1929.]
75. Rights of mesne mortgagee
against prior and subsequent mortgagees
[Repealed by the Transfer of Property (Amendment) Act,
1929.]
76. Liabilities of mortgagee in
possession
When, during the continuance of the
mortgage, the mortgagee takes possession of the mortgaged property,
-
(a) he must manage the property as a
person of ordinary prudence would manage it if it were his own;
(b) he must try 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 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 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 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
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, 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.
77. Receipts in lieu of
interest
Nothing in section 76, clauses (b), (d),
(g) and (h), applies to cases where there is a contract between the
mortgagee and the mortgagor that the receipts from the mortgaged
property shall, so long as the mortgagee is in possession of the
property, be taken in lieu of interest on the principal money, or in
lieu of such interest and defined portions of the principal.
PRIORITY
78. Postponement of prior
mortgagee
Where, through the fraud,
misrepresentation or gross neglect of prior mortgagee, another
person has been induced to advance money on the security of the
mortgaged property, the prior mortgagee shall be postponed to the
subsequent mortgagee.
79. Mortgage to secure uncertain
amount when maximum is expressed
If a mortgage made to secure future
advances, the performance of an engagement or the balance of a
running account, expresses the maximum to be secured thereby, a
subsequent mortgage of the same property shall, if made with notice
of the prior mortgage, be postponed to the prior mortgage in respect
of all advances or debits not exceeding the maximum, though made or
allowed with notice of the subsequent mortgage.
Illustration
A mortgages Sultanpur to his bankers, B
& Co., to secure the balance of his account with them to the
extent of Rs. 10,000. A then mortgages Sultanpur to C, to secure Rs.
10,000, C having notice of the mortgage to B & Co., and C gives
notice to B & Co. of the second mortgage. At the date of the
second mortgage, the balance due to B & Co. does not exceed Rs.
5,000. B & Co. subsequently advance to A sums making the balance
of the 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.
80. Tacking abolished
[Repealed by the Transfer of Property (Amendment) Act, 1929
(20 of 1929).]
MARSHALLING
AND CONTRIBUTION
81. Marshalling
securities
If the owner of two or more properties
mortgages them to one person and then mortgages one or more of the
properties to another person, the subsequent mortgage is, in the
absence of a contract to the contrary, entitled to have the prior
mortgage-debt satisfied out of the property or properties not
mortgaged to him, so far as the same will extend, but not so as to
prejudice the rights of the prior mortgagee or of any other person
who has for consideration acquired an interest in any of the
properties.
82. Contribution to
mortgage-debt
Where property subject to a mortgage
belongs to two or more persons having distinct and separate rights
of ownership therein, the different shares in or parts of such
property owned by such persons are, in the absence of a contract to
the contrary, liable to contribute rateably to the debt secured by
the mortgage, and, for the purpose of determining the rate at which
each such share or part shall contribute, the value thereof shall be
deemed to be its value at the date of the mortgage after deduction
of the amount of any other mortgage or charge to which it may have
been subject on that date.
Where, of two properties belonging to the
same owner, one is mortgaged to secure one debt and then both are
mortgaged to secure another debt, and the former debt is paid out of
the former property, each property is, in the absence of a contract
to the contrary, liable to contribute rateably to the latter debt
after deducting the amount of former debt from the value of the
property out of which it has been paid.
Nothing in this section applies to a
property liable under section 81 to the claim of the subsequent
mortgage.
DEPOSIT IN
COURT
83. Power to deposit in court
money due on mortgage
At any time after the principal money
payable in respect of any mortgage has become due and before a suit
for redemption of the mortgaged property is barred, the mortgagor,
or any other person entitled to institute such suit, may deposit, in
any court in which he might have instituted such suit, to the
account of the mortgagee, the amount remaining due on the
mortgage.
Right to money deposited by
mortgagor-The court
shall thereupon cause written notice of the deposit to be served on
the mortgagee, and the mortgagee may, on presenting a petition
(verified in manner prescribed by law for the verification of
plaints) stating the amount then due on the mortgage, and his
willingness to accept the money so deposited in full discharge of
such amount, and on depositing in the same court the mortgage-deed
and all documents in his possession or power relating to the
mortgaged property, apply for and receive the money, and the
mortgage-deed, and all such other documents so deposited shall be
delivered to the mortgagor or such other person as aforesaid
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.
84. Cessation of
interest
When the mortgagor or such other person
as aforesaid has tendered or deposited in court under section 83 the
amount remaining due on the mortgage, interest on the principal
money shall cease from the date of the tender or in the case of a
deposit, where no previous tender of such amount has been made as
soon as the mortgagor or such other person as aforesaid has done all
that has to be done by him to enable the mortgagee to take such
amount out of court, and the notice required by section 83 has been
served on the mortgagee:
PROVIDED that, where the mortgagor has
deposited such amount without having made a previous tender thereof
and has subsequently withdrawn the same or any part thereof,
interest on the principal money shall be payable from the date of
such withdrawal.
Nothing in this section or in section 83
shall be deemed to deprive the mortgagee of his right to interest
when there exists a contract that he shall be entitled to a
reasonable notice before payment or tender of the mortgage-money and
such notice has not been given before the making of the tender or
deposit, as the case may be.
SUITS FOR FORECLOSURE,
SALE OR REDEMPTION
85. Parties to suits for
foreclosure, sale and redemption
[Repealed by the Code of Civil Procedure, 1908 (5 of
1908).]
FORECLOSURE AND SALE
Sections 86 to 90 -
[Repealed by the Code of Civil
Procedure, 1908 (5 of 1908).]
REDEMPTION
91. Persons who may sue for
redemption
Besides the mortgagor, any of the
following persons may redeem, or institute a suit for redemption of,
the mortgaged property, namely,-
(a) any person (other than the mortgagee
of the interest sought to be redeemed) who has any interest in, or
charge upon, the property mortgaged or in or upon the right to
redeem the same;
(b) any surety for the payment of the
mortgage-debt or any part thereof; or
(c) any creditor of the mortgagor who has
in a suit for the administration of his estate obtained a decree for
sale of the mortgaged property.
92. Subrogation
Any of the persons referred to in section
91 (other than the mortgagor) and any co-mortgagor shall, on
redeeming property subject to the mortgage, have, so far as regards
redemption, foreclosure or sale of such property, the same rights as
the mortgagee whose mortgage he redeems may have against the
mortgagor or any other mortgagee.
The right conferred by this section is
called the right of subrogation, and a person acquiring the same is
said to be subrogated to the rights of the mortgagee whose mortgage
he redeems.
A person who has advanced to a mortgagor
money with which the mortgage has been redeemed shall be subrogated
to the rights of the mortgagee whose mortgage has been redeemed, if
the mortgagor has by a registered instrument agreed that such
persons shall be so subrogated. .
Nothing in this section shall be deemed
to confer a right of subrogation on any person unless the mortgage
in respect of which the right is claimed has been redeemed in
full.
93. Prohibition of
tacking
No mortgagee paying off a prior mortgage,
whether with or without notice of an intermediate mortgage, shall
thereby acquire any priority in respect of his original security;
and, except in the case provided for by section 79, no mortgagee
making a subsequent advance to the mortgagor, whether with or
without notice of an intermediate mortgage, shall thereby acquire
any priority in respect of his security for such subsequent
advance.
94. Rights of mesne
mortgagee
Where a property is mortgaged for
successive debts to successive mortgagees, a mesne mortgagee has the
same rights against mortgagees posterior to himself as he has
against the mortgagor.
95. Right of redeeming
co-mortgagor to expenses
Where one of several mortgagors redeems
the mortgaged property, he shall, in enforcing his right of
subrogation under section 92 against his co-mortgagors, be entitled
to add to the mortgage money recoverable from them such proportion
of the expenses properly incurred in such redemption as is
attributable to their share in the property.
96. Mortgage by deposit of
title-deeds
The provisions hereinbefore contained
which apply to a simple mortgage shall, so far as may be, apply to a
mortgage by deposit of title-deeds.
97. Application of
proceeds
[Repealed by the Code of Civil Procedure, 1908 (5 of
1908)]
ANOMALOUS MORTGAGES
98. Rights and liabilities of
parties to anomalous mortgage
In the case of an anomalous mortgage the
rights and liabilities of the parties shall be determined by their
contract as evidenced in the mortgage-deed, and, so far as such
contract does not extend by local usage.
ATTACHMENT OF MORTGAGED PROPERTY
99. Attachment of mortgaged
property
[Repealed by the Code of Civil Procedure, 1908 (5 of
1908).]
CHARGES
100. Charges
Where immovable property of one person is
by act of parties or operation of law made security for the payment
of money to another, and the transaction does not amount to a
mortgage, the latter person is said to have a charge on the property
and all the provisions hereinbefore contained which apply to a
simple mortgage shall, so far as may be, apply to such charge.
Nothing in this section applies to the
charge of a trustee on the trust-property for expenses properly
incurred in the execution of his trust, and, save as otherwise
expressly provided by any law for the time being in force, no charge
shall be enforced against any property in the hands of a person to
whom such property has been transferred for consideration and
without notice of the charge.
101. No merger in case of
subsequent encumbrance
Any mortgagee of, or person having a
charge upon, immovable property, or any transferee from such
mortgagee or charge-holder, may purchase or otherwise acquire the
rights in the property of the mortgagor or owner, as the case may
be, without thereby causing the mortgage or charge to be merged as
between himself and any subsequent mortgagee of, or person having a
subsequent charge upon, the same property; and no such subsequent
mortgagee or charge-holder shall be entitled to foreclose or sell
such property without redeeming the prior mortgage or charge, or
otherwise than subject thereto.
NOTICE AND TENDER
102. Service or tender on or to
agent
Where the person on or to whom any notice
or tender is to be served or made under this Chapter does not reside
in the district in which the mortgaged property or some part thereof
is situate, service or tender on or to an agent holding a general
power of attorney from such person or otherwise duly authorised to
accept such service or tender shall be deemed sufficient.
Where no person or agent on whom such
notice should be served can be found or is known to the person
required to serve the notice, the latter person may apply to any
court in which a suit might be brought for redemption of the
mortgaged property, and such court shall direct in what manner such
notice shall be served, and any notice served in compliance with
such direction shall be deemed sufficient:
PROVIDED that, in the case of a notice
required to section 83, in the case of a deposit, the application
shall be made to the court in which the deposit has been made.
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 in any
court in which a suit might be brought for redemption of the
mortgaged property the amount sought to be tendered, and such
deposit shall have the effect of a tender of such amount.
103. Notice, etc., to or by
person incompetent to contract
Where, under the provisions of this
Chapter, a notice is to be served on or by, or a tender or deposit
made or accepted or taken out of court by, any person incompetent to
contract, such notice may be s erved on or by or tender or deposit
made, accepted or taken, by the legal curator of the property of
such person; but where there is no such curator, and it is requisite
or desirable in the interests of such person that a notice should be
served or a tender or deposit made under the provisions of this
Chapter, application may be made to any court in which a suit might
be brought for the redemption of the mortgage to appoint a guardian
ad litem for the purpose of serving or receiving service of such
notice, or making or accepting such tender, or making or taking out
of court such deposit, and for the performance of all consequential
acts which could or ought to be done by such person if he were
competent to contract; and the provisions of order XXXII in the
Schedule I to the Code of Civil Procedure, 1908 (5 of 1908) shall,
so far as may be, apply to such application and to parties thereto
and to the guardian appointed thereunder.
104. Power to make
rules
The High Court may, from time to time,
make rules consistent with this Act for carrying out, in itself and
in the Court of Civil Judicature subject to its superintendence, the
provisions contained in this Chapter.
CHAPTER V : OF LEASES OF
IMMOVABLE PROPERTY
105. Lease defined
A lease of immovable property is a
transfer of a right to enjoy such property, made for a certain time,
express or implied, or in perpetuity, in consideration of a price
paid or promised, or of money, a share of crops, service or any
other thing of value, to be rendered periodically or on specified
occasions to the transferor by the transferee, who accepts the
transfer on such terms.
Lessor, lessee, premium and rent
defined : The transferor is called the lessor, the transferee is
called the lessee, the price is called the premium, and the money,
share, service or other thing to be so rendered is called the
rent.
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 immovable property for
agricultural or manufacturing purposes shall be deemed to be a lease
from year to year, terminable, on the part of either lessor or
lessee, by six months' notice expiring with the end of a year of the
tenancy; and a lease of immovable property for any other purpose
shall be deemed to be a lease from month to month, terminable, on
the part of either lessor or lessee, by fifteen days' notice
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.
107. Leases how made
A lease of immovable property from year
to year, or for any term exceeding one year or reserving a yearly
rent, can be made only by a registered instrument.
All other leases of immovable property
may be made either by a registered instrument or by oral agreement
accompanied by delivery of possession.
Where a lease of immovable 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 from
time to time, by notification in the Official Gazette, direct that
leases of immovable property, other than leases from year to year,
or for any term exceeding one year, or reserving a yearly rent, or
any class of such leases, may be made by unregistered instrument or
by oral agreement without delivery of possession.
108. Rights and liabilities of
lessor and lessee
In the absence of a contract or local
usage to the contrary, the lessor and the lessee of immovable
property, as against one another, respectively, possess the rights
and are subject to the liabilities mentioned in the rules next
following, or such of them as are applicable to the property
leased:-
(A) Rights and liabilities of the lessor
(a) The lessor is bound to disclose to
the lessee any material defect in the property, with reference to
its intended use, of which the former is and the latter is not
aware, and which the latter could not with ordinary care
discover;
(b) the lessor is bound on the lessee's
request to put him in possession of the property;
(c) the lessor shall be deemed to
contract with the lessee that, if the latter pays the rent reserved
by the lease and performs the contracts binding on the lessee, he
may hold the property during the time limited by the lease without
interruption.
The benefit of such contract shall be
annexed to and go with the lessee's interest as such, and may be
enforced by every person in whom that interest is for the whole or
any part thereof from time to time vested.
(B) Rights and liabilities of the lessee
(d) If during the continuance of the
lease any accession is made to the property, such accession (subject
to the law relating to alluvion for the time being in force) shall
be deemed to be comprised in the lease;
(e) if by fire, tempest or flood, or
violence of an army or of a mob, or other irresistible force, any
material part of the property be wholly destroyed or rendered
substantially and 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 inquiry be
occasioned by the wrongful act or default of the lessee, he shall 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 even after the
determination of the lease remove, at any time 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;
(1) 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 or sell timber, pull down or damage buildings
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.
109. Rights of lessor's
transferee
If the lessor transfers the property
leased, or any part thereof, or any part of his interest therein,
the transferee, in the absence of a contract to the contrary, shall
possess all the rights, and, if the lessee so elects, be subject to
all the liabilities of the lessor as to the property or part
transferred so long as he is the owner of it; but the lessor shall
not, by reason only of such transfer cease to be subject to any of
the liabilities imposed upon him by the lease, unless the lessee
elects to treat the transferee as the person liable to him:
PROVIDED that the transferee is not
entitled to arrears of rent due before the transfer, and that, if
the lessee, not having reason to believe that such transfer has been
made, pays rent to the lessor, the lessee shall not be liable to pay
such rent over again to the transferee.
The lessor, the transferee and the lessee
may determine what proportion of the premium or rent reserved by the
lease is payable in respect of the part so transferred, and, in case
they disagree, such determination may be made by any court having
jurisdiction to entertain a suit for the possession of the property
leased.
110. Exclusion of day on which
term commences
Where the time limited by a lease of
immovable property is expressed as commencing from a particular day,
in computing that time such day shall be excluded. Where no day of
commencement is named, the time so limited begins from the making of
the lease.
Duration of lease for a year:
Where the time so limited is a year or a number of years, in the
absence of an express agreement to the contrary, the lease shall
last during the whole anniversary of the day from which such time
commences.
Option to determine lease:
Where the time so limited is expressed to be terminable before
its expiration, and the lease omits to mention at whose option it is
so terminable, the lessee, and not the lessor, shall have such
option.
111. Determination of
lease
A lease of immovable property
determines-
(a) by efflux of the time limited
thereby,
(b) where such time is limited
conditionally on the happening of some event-by the happening of
such event,
(c) where the interest of the lessor in
the property terminates on, or his power to dispose of the same
extends only to, the happening of any event-by the happening of such
event,
(d) in case the interests of the lessee
and the lessor in the whole of the property become vested at the
same time in one person in the same right,
(e) by express surrender, that is to say,
in case the lessee yields up his interest under the lease to the
lessor, by mutual agreement between them,
(f) by implied surrender,
(g) by forfeiture; that is to say, (1) in
case the lessee breaks an express condition which provides that, on
breach thereof, the lessor may re-enter; 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; 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 in any of these cases
the lessor or his transferee gives notice in writing to the lessee
of his intention to determine the lease,
(h) on the expiration of a notice to
determine the lease, or to quit, or of intention to quit, the
property leased, duly given by one party to the other.
Illustration to clause (f)
A lessee accepts from his lessor a new
lease of the property leased, to take effect during the continuance
of the existing lease. This is an implied surrender of the former
lease, and such lease determines thereupon.
112. Waiver of
forfeiture
A forfeiture under section 111, clause
(g) is waived by acceptance of rent which has become due since the
forfeiture, or by distress for such rent, or by any other act on the
part of the lessor showing an intention to treat the lease as
subsisting:
PROVIDED that the lessor is aware that
the forfeiture has been incurred:
PROVIDED FURTHER that, where rent is
accepted after the institution of a suit to eject the lessee on the
ground of forfeiture, such acceptance is not a waiver.
113. Waiver of notice to
quit
A notice given under section 111, clause
(h), is waived, with the express or implied consent of the person to
whom it is given, by any act on the part of the person giving it
showing an intention to treat the lease as subsisting.
Illustrations
(a) A, the lessor, gives B, the lessee,
notice to quit the property leased. The notice expires. B tenders
and A accepts, rent which has become due in respect of the property
since the expiration of the notice. The notice is waived.
(b) A, the lessor, gives B, the lessee,
notice to quit the property leased. The notice expires, and B
remains in possession. A gives to B as lessee a second notice
to quit. The first notice is waived.
114. Relief against forfeiture
for non-payment of rent
Where a lease of immovable property has
been determined by forfeiture for non-payment of rent, and the
lessor sues to eject the lessee, if, at the hearing of the suit, the
lessee pays or tenders to the lessor the rent in arrear, together
with interest thereon and his full costs of the suit, or gives such
security as the court thinks sufficient for making such payment
within fifteen days, the court may, in lieu of making a decree for
ejectment, pass an order relieving the lessee against the
forfeiture; and thereupon the lessee shall hold the property leased
as if the forfeiture had not occurred.
114A. Relief against forfeiture
in certain other cases
Where a lease of immovable property has
been determined by forfeiture for a breach of an express condition
which provides that on breach thereof the lessor may re-enter, no
suit for ejectment shall lie unless and until the lessor has served
on the lessee a notice in writing-
(a) specifying the particular breach
complained of; and
(b) if the breach is capable of remedy,
requiring the lessee to remedy the breach,
and the lessee fails, within a reasonable
time from the date of the service of the notice, to remedy the
breach, if it is capable of remedy.
Nothing in this section shall apply to an
express condition against the assigning, 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.
115. Effect of surrender and
forfeiture on underleases
The surrender, express or implied, of a
lease of immovable property does not prejudice an under lease of the
property or any part thereof previously granted by the lessee, on
terms and conditions substantially the same (except as regards the
amount of rent) as those of the original lease; but, unless the
surrender is made for the purpose of obtaining a new lease, the rent
payable by, and the contracts binding on, the underlessee shall be
respectively payable to and enforceable by the lessor.
The forfeiture of such a lease annuls all
such underleases, except where such forfeiture has been procured by
the lessor in fraud of the underlessees, or relief against the
forfeiture is granted under section 114.
116. Effect of holding
over
If a lessee or underlessee of property
remains in possession thereof after the determination of the lease
granted to the lessee, and the lessor or his legal representative
accepts rent from the lessee or underlessee, or otherwise assents to
his continuing in possession, the lease is, in the absence of an
agreement to the contrary, renewed from year to year, or from month
to month, according to the purpose for which the property is leased,
as specified in section 106.
Illustrations
(a) A lets a house to B for five years. B
underlets the house to C at a monthly rent of Rs. 100. The five
years expire, but C continues in possession of the house and pays
the rent to A. C's lease is renewed from month to month.
(b) A lets a farm to B for the life of C.
C dies, but B continues in possession with A's assent. B's lease is
renewed from year to year.
117. Exemption of leases for
agricultural purposes
None of the provisions of this Chapter
apply to leases for agricultural purposes, except insofar as the
State Government may, by notification published in the Official
Gazette, declare all or any of such provisions to be so applicable
in the case of all or any of such leases, together with, or subject
to, those of the local law, if any, for the time being in
force.
Such notification shall not take effect
until the expiry of six months from the date of its
publication.
CHAPTER VI : OF
EXCHANGES
118. "Exchange"
defined
When two persons mutually transfer the
ownership of one thing for the ownership of another, neither thing
or both things being money only, the transaction is called an
"exchange".
A transfer of property in completion of
an exchange can be made only in manner provided for the transfer of
such property by sale.
119. Right of party deprived of
thing received in exchange
If any party to an exchange or any person
claiming through or under such party is by reason of any defect in
the title of the other party deprived of the thing or any part of
the thing received by him in exchange, then, unless a contrary
intention appears from the terms of the exchange, such other party
is liable to him or any person claiming through or under him for
loss caused thereby, or at the option of the person so deprived, for
the return of the thing transferred, if still in the possession of
such other party or his legal representative or a transferee from
him without consideration.
120. Rights and liabilities of
parties
Save as otherwise provided in this
Chapter, each party has the rights and is subject to the liabilities
of a seller as to that which he gives, and has the rights and is
subject to the liabilities of a buyer as to that which he
takes.
121. Exchange of
money
On an exchange of money, each party
thereby warrants the genuineness of the money given by him.
CHAPTER VII : OF
GIFTS
122. "Gift" defined
"Gift" is the transfer of certain
existing movable or immovable property made voluntarily and without
consideration, by one person, called the donor, to another, called
the donor, and accepted by or on behalf of the donee.
Acceptance when to be made-Such
acceptance must be made during the lifetime of the donor and
while he is still capable of giving.
If the donee dies before acceptance, the
gift is void.
123. Transfer how
effected
For the purpose of making a gift of
immovable property, the transfer must be effected by a registered
instrument signed by or on behalf of the donor, and attested by at
least two witnesses.
For the purpose of making a gift of
movable property, the transfer may be effected either by a
registered instrument signed as aforesaid or by delivery.
Such delivery may be made in the same way
as goods sold may be delivered.
124. Gift of existing and future
property
A gift comprising both existing and
future property is void as to the latter.
125. Gift to several of whom one
does not accept
A gift of a thing to two or more donees,
of whom one does not accept it, is void as to the interest which he
would have taken had he accepted.
126. When gift may be suspended
or revoked
The donor and donee may agree that on the
happening of any specified event which does not depend on the will
of the donor a gift shall be suspended or revoked; but a gift which
the parties agree shall be revocable wholly or in part, at the mere
will of the donor, is void wholly or in part, as the case may
be.
A gift may also be revoked in any of the
cases (save want or failure of consideration) in which, if it were a
contract, it might be rescinded.
Save as aforesaid, a gift cannot be
revoked.
Nothing contained in this section shall
be deemed to affect the rights of transferees for consideration
without notice.
Illustrations
(a) A gives a field to B, reserving to
himself, with B's assent, the right to take back the field in case B
and his descendants 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.
127. Onerous gifts
Where a gift in the form of a single
transfer to the same person of several things of which one is, and
the others are not burdened by an obligation, the donee can take
nothing by the gift unless he accepts it fully.
Where a gift is in the form of two or
more separate and independent transfers to the same person of
several things, the donee is at liberty to accept one of them and
refuse the others, although the former may be beneficial and the
latter onerous.
Onerous gift to disqualified
person: A donee not competent to contract and accepting
property burdened by any obligation is not bound by his acceptance.
But if, after becoming competent to contract and being aware of the
obligation, he retains the property given, he becomes so bound.
Illustrations
(a) A has shares in X, a prosperous joint
stock company, and also shares in Y, a joint stock company in
difficulties. Heavy calls are expected in respect of the 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.
128. Universal donee
Subject to the provisions of section 127,
where a gift consists of the donor's whole property, the donee is
personally liable for all the debts due by and liabilities of the
donor at the time of the gift to the extent of the property
comprised therein.
129. Saving of donations mortis
causa and Mohammedan Law
Nothing in this Chapter relates to gifts
of moveable property made in contemplation of death, or shall be
deemed to affect any rule of Mohammedan law.
CHAPTER VIII : OF
TRANSFERS OF ACTIONABLE CLAIMS
130. Transfer of actionable
claim
(1) The transfer of an actionable claim
whether with or without consideration shall be effected only by the
execution of an instrument in writing signed by the transferor or
his duly authorised agent, shall be complete and effectual upon the
execution of such instruments, and thereupon all the rights and
remedies of the transferor, whether by way of damages or otherwise,
shall vest in the transferee, whether such notice of the transfer as
is hereinafter provided be given or not:
PROVIDED that every dealing with the
debtor other actionable claim by the debtor or other person from or
against whom the transferor would, but for such instrument of
transfer as aforesaid, have been entitled to recover or enforce such
debt or other actionable claim, shall (save where the debtor or
other person is a party to the transfer or has received express
notice thereof as hereinafter provided) be valid as against such
transfer.
(2) The transferee of an actionable claim
may, upon the execution of such instrument of transfer as aforesaid,
sue or institute proceedings for the same in his own name without
obtaining the transferor's consent to such suit or proceeding and
without making him a party thereto.
Exception : Nothing in this
section applies to the transfer of a marine or fire policy of
insurance or affects the provisions of section 38 of the Insurance
Act, 1938 (4 of 1938).
Illustrations
(i) A owes money to B, who transfers the
debt to C. B then demands
the debt from A, who, not having received notice of the transfer, as
prescribed in section 131, pays B. The payment is valid, and C
cannot sue A for the debt.
(ii) A effects a policy on his own life
with an insurance company and assigns it to a bank for securing the
payment of an existing or future debt. If A dies, the bank is
entitled to receive the amount of the policy and to sue on it
without the concurrence of A's executor, subject to the proviso in
sub-section (1) of section 130 and to provisions of section
132.
130A. Transfer of policy of
marine insurance
[Repealed by the Marine Insurance Act, 1963 (11 of 1963),
w.e.f. 1-8-1963.]
131. Notice to be in writing,
signed
Every notice of transfer of an actionable
claim shall be in writing, signed by the transferor or his agent
duly authorised in this behalf, or, in case the transferor refuses
to sign, by the transferee or his agent, and shall state the name
and address of the transferee.
132. Liability of transferee of
actionable claim
The transferee of an actionable claim
shall take it subject to all the liabilities and equities and to
which the transferor was subject in respect thereof at the date of
the transfer.
THE SCHEDULE
(a) STATUES
| Year
and Chapter |
Subject |
Extent of
repeal |
| 27 Hen.
VIII,c.10 |
Uses |
The whole |
| 13 Eliz.,
c.5 |
Fraudulent
conveyances |
The whole |
| 27 Eliz.,c.4 |
Fraudulent
conveyances |
The whole |
| 4 Wm. and Mary,
c.16 |
Clandestine
mortgages |
The whole |
(b) ACT OF THE GOVERNOR GENERAL IN
COUNCIL
| Number
and Year |
Subject |
Extent of
repeal |
| IX of 1842 |
Lease and
re-lease |
The whole |
| XXXI of 1854 |
Modes of
conveying land |
Section 17 |
| XI of 1855 |
Mesne profits and
improvements |
Section 1; in the
title, the words "to mesne profits and ", and in the preamble
" to limit the liability for mesne profits and" |
| XXVII of
1866 |
Indian Trustee
Act |
Section 31 |
| IV of 1872 |
Punjab Laws
Act |
So far as it
relates to Bengal Regulations I of 1798 and XVII of 1806 |
| XX of 1875 |
Central Provinces
Laws Act |
So far as it
relates to Bengal Regulations I of 1798 and XVII of 1806 |
| XVII of 1876 |
Oudh Laws
Act |
So far as it
relates to Bengal Regulations XVII of 1806 |
| 1 of 1877 |
Specific
Relief |
In ss. 35 and 36,
the words "in writing" |
(c) REGULATIONS
| Number
and Year |
Subject |
Extent of
repeal |
| Bengal Regulation
I of 1798 |
Conditional
Sales |
The whole
Regulation |
| Bengal Regulation
XVII of 1806 |
Redemption |
The whole
Regulation |
| Bombay Regulation
V of 1827 |
Acknowledgement
of debts; interest; mortgages in possession |
Section 15 |
Illustrations
(i) A transfers to C a debt due to him by
B, A being then indebted to B. C sues B for the debt due
by B to A. In such suit B is entitled to set off the debt due by A
to him; although C was unaware of it at the date of such
transfer.
(ii) A executed a bond in favour of B
under circumstances entitling the former to have it delivered up and
cancelled. B assigns the bond to C for value and without notice of
such circumstances. C cannot enforce the bond against A.
133. Warranty of solvency of
debtor
Where the transferor of a debt warrants
the solvency of the debtor, the warranty, in the absence of a
contract to the contrary, applies only to his solvency at the time
of the transfer, and is limited, where the transfer is made for
consideration, to the amount or value of such consideration.
134. Mortgaged debt
Where a debt is transferred for the
purpose of securing an existing or future debt, the debt so
transferred, if received by the transferor or recovered by the
transferee, is applicable, first, in payment of the costs of such
recovery; secondly, in or towards satisfaction of the amount for the
time being secured by the transfer, and the residue, if any, belongs
to the transferor or other person entitled to receive the same.
135. Assignment of rights under
policy of insurance against fire
Every assignee by endorsement or other
writing, of a policy of insurance against fire, in whom the property
in the subject insured shall be absolutely vested at the date of
assignment, shall have transferred and vested in him all rights of
suit as if the contract contained in the policy has been made with
himself.
135A. Assignment of rights under
policy of marine insurance
[Repealed by the Marine Insurance Act, 1963 (11 of 1963),
w.e.f. 1-8-1963.]
136. Incapacity of officers
connected with courts of justice
No judge, legal practitioner or officer
connected with any court of justice shall buy or traffic in, or
stipulate for, or agree to receive any share of, or interest in, any
actionable claim, and no court of justice shall enforce, at his
instance, or at the instance of any person claiming by or through
him, any actionable claim so dealt with by him as aforesaid.
137. Saving of negotiable
instruments, etc.
Nothing in the foregoing sections of this
Chapter applies to stocks, shares or debentures, or to instruments
which are for the time being, by law or custom, negotiable, or to
any mercantile document of title to goods.
Explanation : The expression
"mercantile document of title to goods" includes a bill of lading,
dock-warrant, warehouse-keeper's certificate, railway receipt,
warrant or order for the delivery of goods, and any other document
used in the ordinary course of business as proof of the possession
or control of goods, or authorising or purporting to authorise,
either by endorsement or by delivery, the possessor of the document
to transfer or receive goods thereby represented.