Source: http://peractolegal.com/transfer-of-property-act-1882/
Timestamp: 2019-04-20 20:22:55+00:00

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This Act may be called the Transfer of Property Act, 1882.Commencement.—It shall come into force on the first day of July, 1882.
1. Subs. by the A.O. 1950, for the original third paragraph.
2. The application of this Act was barred in the Naga Hills District, including the Mokokchang Sub-Division, the Dibrugarh Frontier Tract, the North Cachar Hills, the Garo Hills, the Khasea and Jaintia Hills and the Mikir Hills Tract, by notification under sec. 2 of the Assam Frontier Tracts Regulation, 1880 (2 of 1880).
The Act has been declared to be in force in Panth Piploda by the Panth Piploda Laws Regulation, 1929 (1 of 1929), sec. 2, and continued in force, with modifications, in the territory transferred to Delhi Province by the Delhi Laws Act, 1915 (7 of 1915), sec. 3 and Sch. III. It has also been partially extended to Berar by the Berar Laws Act, 1941 (4 of 1941).
The Act has been extended with effect from 1st January, 1893, to the whole of the territories, other than the Scheduled Districts, under the administration of the Govt. of Bombay. Sections 54, 107 and 123 have been extended from 6th May, 1925 to all Municipalities in the Punjab and to all notified areas declared and notified under sec. 241 of the Punjab Municipal Act, 1911 (Pun. Act 3 of 1911), see Punjab Gazette, Extra., 1925, p. 27.
These sections and section 129 have been extended to certain areas in Delhi Province, see Notifications No. 198/38-III, dated 30th May, 1939, Gazette of India, 1939, Pt. I, p. 918, and No. 61/40-Judl., dated 16th November, 1940, Gazette of India, 1940, Pt. I, p. 1639, respectively.
The Act has been extended to Manipur by the Union Territories (Laws) Amendment Act, 1956 (68 of 1956).
It has been rep. as to Government Grants by the Government Grants Act, 1895 (15 of 1895) and rep. or modified to the extent necessary to give effect to the provisions of the Madras City Tenants Protection Act, 1921 (Madras 3 of 1921) in the City of Madras; see sec. 13 of that Act.
It has been amended in Bombay by Bombay Act 14 of 1939, and in Uttar Pradesh by Uttar Pradesh Act 24 of 1954. It has been extended to Pondicherry by Act 26 of 1968, sec. 3, Sch., Part I.
3. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “Part B States”.
4. Subs. by the A.O. 1937, for the original paragraph.
5. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “said States”.
6. Subs. by A.O. 1950, for “Provincial Government”.
7. Subs. by Act 3 of 1885, sec. 1, for the original paragraph.
8. The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1920, sec. 2 and Sch. I.
9. Added by Act 3 of 1885, sec. 2 (with retrospective effect). Section 54, paras 2 and 3 and sections 59, 107 and 123 extend to every cantonment—see section 287 of the Cantonment Act, 1924(2 of 1924).
10. Subs. by Act 20 of 1929, sec. 2, for “1877”.
and nothing in the second Chapter of this Act shall be deemed to affect any rule of 1[***] Muhammadan 2[***] law.
1. Added by Act 3 of 1885, sec. 2 (with retrospective effect). Section 54, paras 2 and 3 and sections 59, 107 and 123 extend to every cantonment—see section 287 of the Cantonment Act, 1924(2 of 1924).
2. Subs. by Act 20 of 1929, sec. 2, for “1877”.
6[“a person is said to have notice” of a fact when he actually knows that fact, or when, but for wilful abstention from an enquiry or search which he ought to have made, or gross negligence, he would have known it.
Explanation 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.
The defendants failed to make necessary inquiry in respect of possession of the suit land by going to the site or from neighbouring land owners. Therefore, it has been held that constructive notice of the suit agreement shall have to be imputed to defendants in view of actual possession of the suit land being with the plaintiffs; Murlidhar Bapuji Valve v. Yallappa Lalu Chaugle, AIR 1994 Bom 358.
The word “immovable” means permanent, fixed, not liable to be removed and the property must be attached to immovable property permanently; Shree Arcee Steel P. Ltd. v. Bharat Overseas Bank Ltd., AIR 2005 Kant 287.
1. Ins. by Act 27 of 1926, sec. 2 as amended by Act 10 of 1927, sec. 2 and Sch. I.
2. Subs. by Act 3 of 1951, sec. 3 and sch., for “a Part A State or a Part C State” (w.e.f. 1-4-1951).
3. Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “any State”.
4. See the Indian Registration Act, 1908 (16 of 1908).
5. Ins. by Act 2 of 1900, sec. 2.
6. Subs. by Act 20 of 1929, sec. 4 as amended by Act 5 of 1930, sec. 2 for the original paragraph.
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. Added by Act 3 of 1885, sec. 3.
2. Subs. by Act 20 of 1929, sec. 5, for “1877”.
Right to obtain shares of a company is a “property” and the donee’s right to such shares cannot be thwarted only because such shares in the name of the donee was not entered into the register of the company; Vasudev Ram Chandra Shelat v. P.J. Thakkar, (1974) 2 SCC 323.
1. Ins. by Act 20 of 1929, sec. 6.
If guardian of a minor transfers his property without permission of Court as envisaged under section 8 of the Hindu Minority and Guardianship Act, 1956 and without legal necessity, then a purchaser of property from minor can sue to set aside such sale within 3 years after the minor attains majority; Amritham Kudumbah v. Sarnam Kudumbam, AIR 1991 SC 1256.
2. The words “for compensation for a fraud or for harm illegally caused” omitted by Act 2 of 1900, sec. 3.
3. Ins. by Act 35 of 1934, sec. 2 and Sch.
4. Ins. by Act 10 of 1927, sec. 2 and Sch. I.
5. The word “Government” successively subs. by the A.O. 1937 and the A.O. 1950 to read as above.
6. Subs. by Act 2 of 1900, sec. 3, for “for an illegal purpose”.
7. Added by Act 3 of 1885, sec. 4.
A person’s conduct in collecting rents and managing an estate of the landlord does not empower him to transfer the land as the landlord’s agent; Balai Chandra Mondal v. Indurekha Devi, AIR 1973 SC 782.
Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property and in the legal incidents thereof.Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth; and, where the property is machinery attached to the earth, the moveable parts thereof; and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things provided for permanent use therewith; and, where the property is a debt or other actionable claim, the securities therefor (except where they are also for other debts or claims not transferred to the transferee), but not arrears of interest accrued before the transfer;and, where the property is money or other property yielding income, the interest or income thereof accruing after the transfer takes effect.
There may be a presumption that when land is transferred, all things attached to the earth such as trees and shrubs, are also transferred alongwith the land in view of the provisions of section 8 read with section 3 of Transfer of Property Act. But there can be no presumption in a case of vice-versa; Vishwa Nath v. Ramraj, AIR 1991 All 193.
1. Subs. by Act 20 of 1929, sec. 8, for the original paragraph.
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.
A covenant for pre-emption does not offend the rule against perpetuities and cannot be considered void in law; Ram Baran v. Ram Mohit, AIR 1967 SC 747.
It has been held by the Supreme Court that although no interest could be created in favour of an unborn person but if gift was made to a class of series of person some of whom were in existence and some were not, it was valid with regard to the former and invalid as to the latter; Raj Bajrang Bahadur Singh v. Thakurain Bakhtraj Kuer, (1953) SCR 232.
1. Subs. by Act 20 of 1929, sec. 9, for “as regards the whole class”.
1. Subs. by Act 20 of 1929, sec. 10, for the original sections 16 to 18.
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.
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.
(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.
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.
(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.
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.
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.
A case of election arises only when the transferee takes a benefit directly under a transaction. When the transferee derives any benefit indirectly, no question of election arises, as he, in that case, cannot be said to take under the deed; Valliammai v. Nagappa, AIR 1967 SC 1153.
When, in consequence of a transfer, property is divided and held in several shares, and thereupon the benefit of any obligation relating to the property as a whole passes from one to several owners of the property, the corresponding duty shall, in the absence of a contract, to the contrary amongst the owners, be performed in favour of each of such owners in proportion to the value of his share in the property, provided that the duty can be severed and that the severance does not substantially increase the burden of the obligation; but if the duty cannot be severed, or if the severance would substantially increase the burden of the obligation the duty shall be performed for the benefit of such one of the several owners as they shall jointly designate for that purpose:Provided that no person on whom the burden of the obligation lies shall be answerable for failure to discharge it in manner provided by this section, unless and until he has had reasonable notice of the severance.
(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.
1. The words “with the intention of defeating such right” omitted by Act 20 of 1929, sec. 11.
2. Subs. by Act 20 of 1929, sec. 11, for “of such intention”.
3. The illustration omitted by Act 20 of 1929, sec. 11.
1. Subs. by Act 20 of 1929, sec. 12, for “of the latter property or to compel its enjoyment in a particular manner”.
Where a person 1[fraudulently or] erroneously represents that he is authorised to transfer certain immoveable 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.
1. Ins. by Act 20 of 1929, sec. 13.
Where one of two or more co-owners of immoveable property legally competent in that behalf transfers his share of such property or any interest therein, the transferee acquires as to such share or interest, and so far as is necessary to give, effect to the transfer, the transferor’s 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.
Where immoveable property is transferred for consideration to two or more persons and such consideration is paid out of a fund belonging to them in common, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property identical, as nearly as may be, with the interests to which they were respectively entitled in the fund; and, where such consideration is paid out of separate funds belonging to them respectively, they are, in the absence of a contract to the contrary, respectively entitled to interests in such property in proportion to the shares of the consideration which they respectively advanced.In the absence of evidence as to the interests in the fund to which they were respectively entitled, or as to the shares which they respectively advanced, such persons shall be presumed to be equally interested in the property.
In a suit for partition by metes and bounds, partition can be made on the basis of admission of the parties in the Income-tax and Wealth-tax returns with regard to contributions made by each party towards consideration of property in question; Chiranjilal v. Bhagwan Dass, AIR 1991 Del 325.
(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.
When the transferee of immoveable property makes any improvement on the property, believing in good faith that he is absolutely entitled thereto, and he 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.
No man, who knowingfully that he had no title to property, spends money on improving it can be permitted to deprive the original owner of his right to possession of the property except upon the payment for the improvements which were not affected with the consent of that person; Maddahappa v. Chandramma, AIR 1965 SC 1812.
(i) This section comes into existence from the point of the institution of the suit and continues to survive till the satisfaction of the decree. The petitioners were as much bound by the decree and judgement dated 16th August, 1973 and their transferor; Abdul Aziz v. District Judge, AIR 1994 All 167.
(ii) The effect of doctrine of his pendens as embodied in section 52 of Transfer of Property Act is not to annul all voluntary transfers effected by the parties to a suit but only to render it subservient to the rights of the parties thereto under the decree or order which may be made in that suit. Its effect is only to make the decree passed in the suit binding on the transferee if he happens to be third party person even if he is not a party to it. The transfer will remain valid subject, however to the result of the suit; K.A. Khader v. Rajamma John Madathil, AIR 1994 Ker 122.
1. Subs. by Act 20 of 1929, sec. 14, for “active prosecution”.
2. Subs. by the A.O. 1950, for “in the Provinces or established beyond the limits of the Provinces”.
3. Subs. by Act 3 of 1951, sec. 3 and Sch., for “within the limits of Part A States and Part C States” (w.e.f. 1-4-1951).
4. Subs. by the A.O.1937, for “the Governor General in Council”.
5. The words “or the Crown Representative” rep. by the A.O. 1948.
6. Subs. by Act 20 of 1929, sec. 14, for “a contentious”.
7. Ins. by Act 20 of 1929, sec. 14.
1[53. Fraudulent transfer.—(1) Every transfer of immoveable property made with intent to defeat or delay the creditors of the transferor shall be voidable at the option of any creditor so defeated or delayed.Nothing in this sub-section shall impair the rights of a transferee in good faith and for consideration.
1. Subs. by Act 20 of 1929, sec. 15, for the original section.
Under the provisions of section 53A the transferee is entitled to resist any attempt on the part of the transferor to disturb transferee’s lawful possession under the contract of sale and his position either as a plaintiff or as a defendant should make no difference. Contrary interpretation viz, the transferee can use the shield only as a defendant and not as a plaintiff would defeat the very spirit of section 53A for it will be possible for an over-powering transferor to forcibly dispossess the transferee even against the convenants in the contract and compel him to go to the court as plaintiff; Dharmaji v. Jagannath Shankar Jadhav, AIR 1994 Bom 254.
1. Ins. by Act 20 of 1929, sec. 16.
2. The words “the contract, though required to be registered, has not been registered, or,” omitted by Act 48 of 2001, sec. 10 (w.e.f. 24-9-2001).
‘‘Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.Sale how made.—3Such transfer, in the case of tangible immoveable property of the value of one hundred rupees and upwards, or in the case of a reversion or other intangible thing, can be made only by a registered instrument.
1In the case of tangible immoveable property of a value less than one hundred rupees, such transfer may be made either by a registered instrument or by delivery of the property.
Contract for sale.—A contract for the sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties.
Section 54 includes the settlement of the terms between the parties as one of the conditions essential for the completion of a contract. There was no concluded contract between the parties, as the appellant was a contracting party, he was only acting on behalf of third person and hence unless the third person i.e. the party agreed to the terms and conditions there could be no concluded contract; Satya Prakash Goel v. Ram Krishna Mission, AIR 1991 All 343.
A contract for sale of immoveable property is a contract that a sale of such property shall take place on terms settled between the parties. It does not, of itself create any interest in or charge on such property. An agreement for sale is merely a document creating a right to obtain another document of sale on fulfilment of terms and conditions specified therein. On the strength of such an agreement a buyer does not become the owner of the property. The ownership remains with the seller. It will be transferred to the buyer only on the execution of sale deed by the seller. The buyer obtains only a right to get the sale deed executed in his favour. It has been held that the cancellation of the agreement took place before possession could be given to the purchasers, hence there was no sale of the flats; Crest Hotel Ltd. v. Assistant Superintendent of Stamps, AIR 1994 Bom 228.
1. As to limitation to the territorial operation of paragraphs 2 and 3 of section 54, see section 1, supra. These paragraphs extend to every cantonment see section 287 of the CantonmentsAct, 1924 (2 of 1924).
(b) where the ownership of the property has passed to the buyer before payment of the whole of the purchase-money, to a charge upon the property in the hands of the buyer, 1[any transferee without consideration or any transferee with notice of the non-payment], for the amount of the purchase-money, or any part thereof remaining unpaid, and for interest on such amount or part 1[from the date on which possession has been delivered].
(b) unless he has improperly declined to accept delivery of the property, to a charge on the property, as against the seller and all persons claiming under him, 2[* * *] to the extent of the seller’s interest in the property, for the amount of any purchase-money properly paid by the buyer in anticipation of the delivery and for interest on such amount; and, when he properly declines to accept the delivery, also for the earnest (if any) and for the costs (if any) awarded to him of a suit to compel specific performance of the contract or to obtain a decree for its rescission.
1. Ins. by Act 20 of 1929, sec. 17.
2. The words “with notice of the payment” omitted by Act 20 of 1929, sec. 17.
1. Subs. by Act 20 of 1929, sec. 18, for the original section.
(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.
(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.
(d) Usufructuary mortgage.—Where the mortgagor delivers possession 1[or expressly or by implication binds himself to deliver possession] of the mortgaged property to the mortgagee, and authorises him to retain such possession until payment of the mortgage-money, and to receive the rents and profits accruing from the property 2[or any part of such rents and profits and to appropriate the same] in lieu of interest, or in payment of the mortgage-money, or partly in lieu of interest 3[or] partly in payment of the mortgage-money, the transaction is called an usufructuary mortgage and the mortgagee an usufructuary mortgagee.
(e) English mortgage.—Where the mortgagor binds himself to repay the mortgage-money on a certain date, and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso that he will re-transfer it to the mortgagor upon payment of the mortgage-money as agreed, the transaction is called an English mortgage.
4[(f) Mortgage by deposit of title-deeds.—Where a person in any of the following towns, namely, the towns of Calcutta, Madras, 5[and Bombay], 6[* * *] and in any other town7 which the 8[State Government concerned] may, by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent documents of title to immoveable property, with intent to create a security thereon, the transaction is called a mortgage by deposit of title-deeds.
(i) The mortgagor had borrowed Rs. 1000 from the mortgagee and the possession of the building was handed over to the mortgagor. The mortgage money was to be repaid within a period of six months and in case of default the mortgagee had the right to bring the property to sale and realise the amount. The document therefore which was described as usufructuary mortgage was held to be anomalous mortgage and not usufructuary mortgage as it had character of a simple mortgage too as mortgagee was given the right to sell the property to realise the mortgaged amount; Hathika v. Puthiyapurayil Padmanathan, AIR 1994 Ker 141.
(ii) Where a mortgagee is continuing in possession of suit land as mortgagee for a continuous period of not less than fifty years, mere increase in the mortgage money, induction of a co-mortgagee, non-defining of their shares, would not alter the situation; Narayana Pillai Raghavan Pillai v. Narayani Amma Ponnamma, AIR 1992 SC 146.
1. Ins. by Act 20 of 1929, sec. 19.
2. Subs. by Act 20 of 1929, sec. 19, for “and to appropriate them”.
3. Subs. by Act 20 of 1929, sec. 19, for “and”.
4. Added by Act 20 of 1929, sec. 19.
5. Subs. by the A.O. 1948, for “Bombay and Karachi”. The word “and” had been ins. by the A.O. 1937.
6. The words “Rangoon, Moulmein, Bassein and Akyab” omitted by the A.O. 1937.
7. For notifications relating to the towns of—Ahmedabad, see Gazette of India, 1935, Pt. I, p. 936, Bandra, Kurla and Ghathkoper Kirol, see Gazette of India, 1924, Pt.I, p.1064, Cawnpore, Allahabad and Lucknow, see Gazette of India, 1938, Pt. I, p. 158. Coimbatore, Madura, Cocanada and Cochin, see Gazette of India, 1935, Pt. I, p. 526.
8. The words “Governor General in Council”, successively amended by the A.O. 1937 and the A.O. 1950 to read as above.
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.
1. The third paragraph was omitted by Act 20 of 1929, sec. 20.
1. Ins. by Act 20 of 1929, sec. 21.
1. As to limitation to the territorial operation of section 59, see section 1, supra, section 59, extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).
2. Ins. by Act 20 of 1929, sec. 20.
3. Subs. by Act 6 of 1904, sec. 3, for “an instrument”.
At any time after the principal money has become 1[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 2[to the mortgagor the mortgage-deed and all documents relating to the mortgaged property which are in the possession or power of the mortgagee], (b) where the mortgagee is in possession of the mortgaged property, to deliver possession thereof to the mortgagor, and (c) at the cost of the mortgagor either to re-transfer the mortgaged property to him or to such third person as he may direct, or to execute and (where the mortgage has been effected by a registered instrument) to have registered an acknowledgement in writing that any right in derogation of his interest transferred to the mortgagee has been extinguished:Provided that the right conferred by this section has not been extinguished by act of the parties or by 3[decree] of a Court.
When a mortgagee acquires a portion of the equity of redemption, the mortgage is not extinguished completely. There can be only a pro tanto extinguishment of the mortgage right to the extent of the mortgagee acquiring the mortgagor’s interest and so far as the other sharer of the equity of redemption is concerned, the mortgage will subsist; Madhavan Nair v. Ramankutty Menon, AIR 1994 Ker 75.
During the continuation of tenancy if a contract of mortgage is created, the contract of lease would not get merged into contract of mortgage. On redemption of mortgage the leasehold rights get revived; M.C. Venkateshappa v. K.N. Sadashivaiah, AIR 2004 Kant 438.
Redemption of portion of mortgaged property.—Nothing in this section shall entitle a person interested in a share only of the mortgaged property to redeem his own share only, on payment of a proportionate part of the amount remaining due on the mortgage, except 4[only] where a mortgagee, or, if there are more mortgagees than one, all such mortgagees, has or have acquired, in whole or in part, the share of a mortgagor.
1. Subs. by Act 20 of 1929, sec. 22, for “payable”.
2. Subs. by Act 20 of 1929, sec. 22, for “the mortgage-deed, if any to the mortgagor”.
3. Subs. by Act 20 of 1929, sec. 22, for “order”.
4. Ins. by Act 20 of 1929, sec. 22.
1[60A. Obligation to transfer to third party instead of re-transference to mortgagor.—(1) Where a mortgagor is entitled to redemption, then, on the fulfilment of any conditions on the fulfilment of which he would be entitled to require a re-transfer, he may require the mortgagee, instead of re-transferring the property, to assign the mortgage-debt and transfer the mortgaged property to such third person as the mortgagor may direct; and the mortgagee shall be bound to assign and transfer accordingly.(2) The rights conferred by this section belong to and may be enforced by the mortgagor or by any encumbrancer notwithstanding an intermediate encumbrance; but the requisition of any 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.
1. Sections 60A and 60B ins. by Act 20 of 1929, sec. 23.
1. Subs. by Act 20 of 1929, sec. 24, for the original section.
(b) where the mortgagee is authorised to pay himself from such rents and profits2[or any part thereof a part only of the mortgage-money],—when the term (if any) prescribed for the payment of the mortgage-money has expired and the mortgagor pays or tenders to the mortgagee 3[the mortgage-money or the balance thereof] or deposits it in Court as hereinafter provided.
1. Ins. by Act 20 of 1929, sec. 25.
2. Subs. by Act 20 of 1929, sec. 25, for “the interest of the principal money”.
3. Subs. by Act 20 of 1929, sec. 25, for “the principal money”.
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.Accession acquired in virtue of transferred ownership.—Where such accession has been acquired at the expense of the mortgagee, and is capable of separate possession or enjoyment without detriment to the principal property, the mortgagor desiring to take the accession must pay to the mortgagee the expense of acquiring it. If such separate possession or enjoyment is not possible, the accession must be delivered with the property; the mortgagor being liable, in the case of an acquisition necessary to preserve the property from destruction, forfeiture or sale, or made with his assent, to pay the proper cost thereof, as an addition to the principal money, 1[with interest at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine per cent per annum].
1. Subs. by Act 20 of 1929, sec. 26, for “at the same rate of interest”.
1. Ins. by Act 20 of 1929, sec. 27.
1. The words “for a term of years” omitted by Act 20 of 1929, sec. 28.
(e) and, where the mortgage is a second or subsequent encumbrance on the property, that the mortgagor will pay the interest from time to time accruing due on each prior encumbrance as and when it becomes due, and will at the proper time discharge the principal money due on such prior incumbrance.
1. The words “for a term of years” omitted by Act 20 of 1929, sec. 29.
2. Certain words omitted by Act 20 of 1929, sec. 29.
1. Ins. by Act 20 of 1929, sec. 30.
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.
In the absence of a contract to the contrary, the mortgagee has, at any time after the mortgage-money has become 1[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 2[a decree] that the mortgagor shall be absolutely debarred of his right to redeem the property, or 2[a decree] that the property be sold.A suit to obtain 2[a decree] that a mortgagor shall be absolutely debarred of his right to redeem the mortgaged property is called a suit for foreclosure.
1. Subs. by Act 20 of 1929, sec. 31, for “payable”.
2. Subs. by Act 20 of 1929, sec. 31, for “an order”.
3. Subs. by Act 20 of 1929, sec. 31, for the original clause.
1. Ins. by Act 20 of 1929, sec. 32.
1. Subs. by Act 20 of 1929, sec. 33, for the original section.
15[(b)] some interest under the mortgage amounting at least to five hundred rupees is in arrear and unpaid for three months after becoming due.
16[(3)] When a sale has been made in professed exercise of such a power, the title of the purchaser shall not be impeachable on the ground that no case had arisen to authorise the sale, or that due notice was not given, or that the power was otherwise improperly or irregularly exercised; but any person damnified by an unauthorised or improper or irregular exercise or the power shall have his remedy in damages against the person exercising the power.
17[(4)] The money which is received by the mortgagee, arising from the sale, after discharge of prior encumbrances, if any, to which the sale is not made subject, or after payment into Court under section 57 of a sum to meet any prior encumbrance, shall, in the absence of a contract to the contrary, be held by him in trust to be applied by him, first, in payment of all costs, charges and expenses properly incurred by him as incident to the sale or any attempted sale; and, secondly, in discharge of the mortgage-money and costs and other money, if any, due under the mortgage; and the residue of the money so received shall be paid to the person entitled to the mortgaged property, or authorised to give receipts for the proceeds of the sale thereof.
If the mortgagee exercises his or her power of sale bona fide for the purpose of realising his/her debt and without the collusion with the purchaser, the court will not interfere even though the sale be very disadvantageous, unless the price is so low as to be evidence of fraud. Held that the sale should be set aside as the value received after sale was only 35% of the actual price and greater portion of the bidders had been kept away because of the unattractive terms in which the property was depicted in the sale proclamation and there was definite collusion between the mortgagee and purchasers; Satyapal v. Rukayyabai, AIR 1993 Bom 203.
1. Section 69 re-numbered as sub-section (1) of that section, by Act 20 of 1929, sec. 34.
2. Subs. by Act 20 of 1929, sec. 34, for certain words.
3. The words and figures “Notwithstanding anything contained in the Trustees’ and Mortgagees’ Powers Act, 1866″ omitted by Act 48 of 1952, sec. 3 and Sch. II.
4. Ins. by Act 3 of 1885, sec. 5.
5. The words “the L.G., with the previous sanction of the G.G. in C” successively amended by the A.O. 1937 and the A.O. 1950 to read as above.
6. Ins. by Act 20 of 1929, sec. 34.
7. The words “the Secretary of State for India in Council” successively amended by the A.O. 1937 and the A.O. 1950 to read as above.
8. Subs. by Act 20 of 1929, sec. 34, for “is”.
9. The word “Karachi” omitted by the A.O. 1948.
10. The words “or Rangoon” have been successively amended by Acts 6 of 1904, 11 of 1915, 20 of 1929, the A.O. 1937 and the A.O. 1950 to read as above.
11. For notifications relating to the towns of— Ahmedabad, see Gazette of India 1935, Pt. I, p. 936. Bandra, Kurla and Ghatkoper-Kirol, see Gazette of India, 1924, Pt. I, p. 1964. Cawnpore, Allahabad and Lucknow, see Gazette of India, 1933, Pt. I, p. 158. Coimbatore, Mudura, Cocanada and Cochin, see Gazette of India, 1935, Pt. I, p. 526. Delhi (Contonment), see Gazette of India, 1963, Pt. II, Section 3, Sub-section (1), p. 1020.
12. Second paragraph re-numbered as sub-section (2) by Act 20 of 1929, sec. 34.
13. The word “But” omitted by Act 20 of 1929, sec. 34.
14. Clause (1) was lettered (a) by Act 20 of 1929, sec. 34.
15. Clause (2) was lettered (b) by Act 20 of 1929, sec. 34.
16. Third paragraph numbered as sub-section (3) by Act 20 of 1929, sec. 34.
17. Fourth paragraph numbered as sub-section (4) by Act 20 of 1929, sec. 34.
18. Subs. by Act 20 of 1929, sec. 34, for the original fifth paragraph.
19. Original last paragraph omitted by Act 20 of 1929, sec. 34.
1[69A. Appointment of receiver.—(1) A mortgagee having the right to exercise a power of sale under section 69 shall, subject to the provisions of sub-section (2), be entitled to appoint, by writing signed by him or on his behalf, a receiver of the income of the mortgaged property or any part thereof.(2) Any person who has been named in the mortgage-deed and is willing and able to act as receiver may be appointed by the mortgagee.
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.
(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.
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.
1. Ins. by Act 20 of 1929, sec. 35.
1. The words “for a term of years” omitted by Act 20 of 1929, sec. 36.
Where the property is by its nature insurable, the mortgagee may also, in the absence of a contract to the contrary, insure and keep insured against loss or damage by fire the whole or any part of such property, and the premiums paid for any such insurance shall be 5[added to the principal money with interest at the same rate as is payable on the principal money or, where no such rate is fixed, at the rate of nine per cent. per annum]. But the amount of such insurance shall not exceed the amount specified in this behalf in the mortgage-deed or (if no such amount is therein specified) two-thirds of the amount that would be required in case of total destruction to reinstate the property insured.
1. Subs. by Act 20 of 1929, sec. 37, for “When, during the continuance of the mortgage, the mortgagee takes possession of the mortgaged property, he”.
2. Clause (a) omitted by Act 20 of 1929, sec. 37.
3. Subs. by Act 20 of 1929, sec. 37, for “its preservation”.
4. Ins. by Act 20 of 1929, sec. 37.
5. Subs. by Act 20 of 1929, sec. 37, for certain original words.
1[73. Right to proceeds of revenue sale or compensation on acquisition.—(1) Where the mortgaged property or any part thereof or any interest therein is sold owing to failure to pay arrears of revenue or other charges of a public nature or rent due in respect of such property, and such failure did not arise from any default of the 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 immoveable property, the mortgagee shall be entitled to claim payment of the mortgage-money, in whole or in part, out of the amount due to the mortgagor as compensation.
1. Subs. by Act 20 of 1929, sec. 38, for the original section.
(i) when the mortgagor tenders, or deposits in the manner hereinafter provided, the amount for the time being due on the mortgage, the mortgagee must, notwithstanding the provisions in the other clauses of this section, account for his 3[***] receipts from the mortgaged property from the date of the tender or from the earliest time when he could take such amount out of court, as the case may be 1[and shall not be entitled to deduct any amount therefrom on account of any expenses incurred after such date or time in connection with the mortgaged property].
Loss occasioned by his default.—If the mortgagee fails to perform any of the duties imposed upon him by this section, he may, when accounts are taken in pursuance of a decree made under this Chapter, be debited with the loss, if any, occasioned by such failure.
1. Ins. by Act 20 of 1929, sec. 40.
2. The words “on the mortgage-money” omitted by Act 20 of 1929, sec. 40.
3. The word “gross” omitted by Act 20 of 1929, sec. 40.
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.
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.
A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account with them to the extent of Rs.10,000. A then mortgages Sultanpur to C, to secure Rs.10,000, C having notice of the mortgage to B & Co., and C gives notice to B & Co. of the second mortgage. At the date of the second mortgage, the balance due to B & Co. does not exceed Rs. 5,000. B & Co. subsequently advance to A sums making the balance of the account against him exceed the sum of Rs.10,000. B & Co. are entitled, to the extent of Rs.10,000, to priority over C.
1. Subs. by Act 20 of 1929, sec. 42, for the original section.
1[Where property subject to a mortgage belongs to two or more persons having distinct and separate rights of ownership therein, the different shares in or parts of such property owned by such persons are, in the absence of a contract to the contrary, liable to contribute rateably to the debt secured by the mortgage, and, for the purpose of determining the rate at which each such share or part shall contribute, the value thereof shall be deemed to be its value at the date of the mortgage after deduction of the amount of any other mortgage or charge to which it may have been subject on that date.]Where, of two properties belonging to the same owner, one is mortgaged to secure one debt and then both are mortgaged to secure another debt, and the former debt is paid out of the former property, each property is, in the absence of a contract to the contrary, liable to contribute rateably to the latter debt after deducting the amount of the former debt from the value of the property out of which it has been paid.
Nothing in this section applies to a property liable under section 81 to the claim of the 2[subsequent] mortgagee.
1. Subs. by Act 20 of 1929, sec. 43, for the original paragraph.
2. Subs. by Act 20 of 1929, sec. 43, for “second”.
At any time after the principal money 1[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 law2 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 3[and all documents in his possession or power relating to the mortgaged property], apply for and receive the money, and the mortgage-deed, 4[and all such other documents] so deposited shall be delivered to the mortgagor or such other person as aforesaid.
1. Subs. by Act 20 of 1929, sec. 44, for “has become payable”.
2. See the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order VI, rule 15.
3. Subs. by Act 20 of 1929, sec. 44, for “if then in his possession or power”.
4. Ins. by Act 20 of 1929, sec. 44. 5. Ins. by Act 20 of 1929, sec. 44.
Nothing in this section or in section 83 shall be deemed to deprive the mortgagee of his right to interest when there exists a contract that he shall be entitled to reasonable notice before payment or tender of the mortgage-money 3[and such notice has not been given before the making of the tender or deposit, as the case may be].
1. Ins. by Act 20 of 1929, sec. 45.
2. Subs. by Act 20 of 1929, sec. 45, for “as the case may be”.
3. Added by Act 20 of 1929, sec. 45.
1. Subs. by Act 20 of 1929, sec. 46, for the original section.
1[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.
The payment of mortgage money after the preliminary decree has been passed will not make any difference to the right of the respondents for subrogation when all the requirements of section 92 are in existence; Kadanba Sugar Industries Pvt. Ltd. v. Devru Ganapathi Hegde Bahairi, AIR 1993 Kant 288.
1. Ins. by Act 20 of 1929, sec. 47. Original sections 92 were repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. Ins. by Act 20 of 1929, sec. 47. Original sections 93 were repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. Ins. by Act 20 of 1929, sec. 47. Original sections 94 were repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. Subs. by Act 20 of 1929, sec. 48, for the original section 95. Original section 96 was repealed by Act 5 of 1908, sec. 156 and Sch.V.
1. For the repealed provisions as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order XXXIV, rules 12 and 13.
The mortgagee was given the right to sell the property in his possession for the realisation of mortgage debt in the case the mortgagor defaulted in payment of mortgage debt. The mortgagee had to pay a monthly sum of Rs.85 towards “excess profits” after adjusting the balance towards interest on the mortgage amount. It has been held that payment of Rs. 85 was not rent for the property and the mortgagee was not a lessee, but the mortgage was an anomalous mortgage and rights and liabilities of the mortgagee were to be determined according to section 98 of Transfer of Property Act; Hathika v. Puthiyapurayil Padmanabhan, AIR 1994 Ker 141.
1. Subs. by Act 20 of 1929, sec. 49, for “a mortgage, not being a simple mortgage, a mortgage by conditional sale, an usufructuary mortgage or an English mortgage or a combination of the first and third, or the second and third, of such forms”.
1. For the repealed provisions as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order XXXIV, rule 14.
Where immoveable property of one person is by act of parties or operation of law made security for the payment of money to another, and the transaction does not amount to a mortgage, the latter person is said to have a charge on the property; and all the provisions hereinbefore contained 1[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, 2[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].
1. Subs. by Act 20 of 1929, sec. 50, for “as to a mortgagor shall, so far as may be, apply to the owner of such property, and the provisions of sections 81 and 82 shall, so far as may be, apply to the person having such charge”.
2. Added by Act 20 of 1929, sec. 50.
1. Subs. by Act 20 of 1929, sec. 51, for the original section.
3[Where no person or agent to whom such tender should be made can be found or is known] to the person desiring to make the tender, the latter person may deposit 4[in any Court in which a suit might be brought for redemption of the mortgaged property] the amount sought to be tendered, and such deposit shall have the effect of a tender of such amount.
1. Subs. by Act 20 of 1929, sec. 52, for “Where the person or agent on whom such notice should be served cannot be found in the said district, or is unknown”.
2. Ins. by Act 20 of 1929, sec. 52.
3. Subs. by Act 20 of 1929, sec. 52, for “Where the person or agent to whom such tender should be made cannot be found within the said district or is unknown”.
4. Subs. by Act 20 of 1929, sec. 52, for “in such Court as last aforesaid”.
1. Ins. by Act 20 of 1929, sec. 53.
2. As to persons competent to contract, see sections 11 and 12 of the Indian Contract Act, 1872 (9 of 1872).
3. Subs. by Act 20 of 1929, sec. 53, for “Chapter XXXI of the Code of Civil Procedure”.
A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered periodically or on specified occasions to the transferor by the transferee, who accepts the transfer on such terms.Lessor, lessee, premium and rent defined.—The transferor is called the lessor, the transferee is called the lessee, the price is called the premium, and the money, share, service or other thing to be so rendered is called the rent.
A lessee of a property has a right to possession and enjoyment of the devise to the exclusion of the lessor whereas a licensee does not have such a right. Since the appellant had the right to exclusive possession and enjoyment of the disputed property, he was a lessee and not a licensee; Ajab Singh v. Shital Puri, AIR 1993 All 138.
(i) If the agreement between the parties shows an intention to create an interest in the property in favour of the grantee what results is said to be a lease. A licensee on the other hand does not create an interest in property; Mrs. Karuna Manoharlal Ohri v. Vipinbhai U. Sanghani, AIR 1993 Bom 177.
(ii) The furniture and fittings and the tools and implements which have been given alongwith the shop were not meant for the beneficial use of the shop but were meant exclusively for running of the hair dressing saloon, thus creating a lease of the business and not a lease of the shop; Vidya Wati v. Hansraj, AIR 1993 Del 187.
The Corporation had all the supervisory powers to regulate the running of the refreshment stall. No exclusive right was created in favour of the caterer to run the refreshment stall in the manner the caterer choose to do so. Since there is no transfer of interest in the stall and as per the terms of agreement, the document can be termed as licence only and not a lease; Udai Pratap Singh v. Collector Varanasi, AIR 1991 All 104.
1[106. Duration of certain leases in absence of written contract or local usage.—(1) In the absence of a contract or local law or usage to the contrary, a lease of immovable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice; and a lease of immovable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice.(2) Notwithstanding anything contained in any other law for the time being in force, the period mentioned in sub-section (1) shall commence from the date of receipt of notice.
If any person claims to the contrary that the lease was for a fixed term or to be a yearly lease instead of a lease from month to month he has to prove by legal, valid and reliable evidence. Therefore the burden lay upon the defendant to prove his contrary claim that lease was for a fixed term of five years and the lease would be entered at the option and wish of the lessee; Punjab National Bank v. Ganga Narain Kapur, AIR 1994 All 221.
Notice sent on correct address to addressee who refused to accept it. Presumption lies with regard to notice on addressee/defendant. It is addressee/defendant who has to prove that either notice was not sent on correct address or same was not served upon him; Kali Ram v. Mirza Wakar Ali, AIR 2005 NOC 296 (UP).
1. Subs. by Act 3 of 2003, sec. 2, for section 106 (w.e.f. 31-12-2002).
In the absence of a contract or local law or usage to the contrary, a lease of immoveable property for agricultural or manufacturing purposes shall be deemed to be a lease from year to year, terminable, on the part of either lessor or lessee, by six months’ notice expiring with the end of a year of the tenancy; and a lease of immoveable property for any other purpose shall be deemed to be a lease from month to month, terminable, on the part of either lessor or lessee, by fifteen days’ notice expiring with the end of a month of the tenancy.
Every notice under this section must be in writing, signed by or on behalf of the person giving it, and either be sent by post to the party who is intended to be bound by it or be tendered or delivered personally to such party, or to one of his family or servants at his residence, or (if such tender or delivery is not practicable) affixed to a conspicuous part of the property”.
1107. Leases how made.—A lease of immoveable property from year to year, or for any term exceeding one year or reserving a yearly rent, can be made only by a registered instrument.2[All other leases of immoveable property may be made either by a registered instrument or by oral agreement accompanied by delivery of possession.
The legislature intended that a lease of immoveable property for a period of more than one year should be made by a registered deed. But if a lease of immoveable property for a term of more than one year is not made by a registered deed or is made orally, then in such cases the presumption about the duration of lease under section 106 will apply; Punjab National Bank v. Ganga Narain Kapur, AIR 1994 All 221.
Principle of section 107 which envisage mode in which lease is to be made do not apply to agricultural lease; Atar Singh v. Jiledar Singh, AIR 2005 MP 157.
If a lease agreement is neither a registered document nor an oral argeement accompanied by delivery of possession, it cannot create lessor and lessee relationship. Such document shall not effect any immoveable property nor be received as evidence of any transaction affecting such property; Chemical Sales Agencies v. Naraini Newar, AIR 2005 Del 76.
1. As to limitation to the territorial operation of section 107, see section 1, supra, section 107 extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).
2. Subs. by Act 6 of 1904, sec. 5, for the original paragraph.
3. Ins. by Act 20 of 1929, sec. 55.
4. The words “with the previous sanction of the Governor General in Council” omitted by the A.O. 1937.
(i) Under clause (o) the lessee must not use or permit another to use the property for a purpose other than that for which it was leased. The premises were let out to the tenant for sugarcane juice business but was using the premises for selling readymade clothes thereby contravening the provisions of the Act; Dashrath Baburao Sangale v. Kashinath Bhaskar Datta, AIR 1993 SC 2646.
(ii) The respondent is liable to be evicted on the ground of wilful denial of title and wilful default in the payment of rent; Kanuthi Madalichamy v. Thangarathina Nadar, AIR 1991 Mad 229.
1. Ins. by Act 20 of 1929, sec. 56.
2. Subs. by Act 20 of 1929, sec. 56, for “during the continuance of the lease”.
3. Ins. by Act 20 of 1929, sec. 56.
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.
When right, title and interest in immoveable property stand transferred by operation of law, the spirit behind section 109 would apply and successor in interest would be entitled to the rights of the predecessor. Therefore the suit filed for ejectment filed by the successor Board was competent; Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port of Bombay, AIR 1991 SC 14.
It appears from section 109 that provision stands only in the absence of any contract to the contrary; Nemai Basak v. Kalyani Rakshit, AIR 2005 Cal 163.
Duration of lease for a year.—Where the time so limited is a year or a number of years, in the absence of an express agreement to the contrary, the lease shall last during the whole anniversary of the day from which such time commences.
Option to determine lease.—Where the time so limited is expressed to be terminable before its expiration, and the lease omits to mention at whose option it is so terminable, the lessee, and not the lessor, shall have such option.
The doctrine of merger is attracted when a leasehold and revision coincide. If the lessee purchases the lessor’s interest, the lease is relinquished as the same person cannot at the same time be both landlord and tenant. The doctrine of merger is based on the principle of union of two conflicting interests which cannot be held by one person at the same time. Therefore, the leasehold rights in favour of the appellants stand extinguished; Ramesh Kumar Jhambh v. Official Assignee, High Court Bombay, AIR 1993 Bom 374.
There can be implied surrender, if the lessor grants a new lease to a third person with the assent of the lessee under the existing lease who delivers the possession to such person or where the lessee directs his sub-tenant to pay the rent directly to the lessor. Since the respondents had by executing the agreement impliedly surrendered their leasehold rights, they were no longer lessees; P.M.C. Kunhiraman Nair v. C.R. Nagaratha Iyer, AIR 1993 SC 307.
Clause (1) of section 111(g) has no application as there was no covenant prohibiting sale or on its breach, of the right of re-entry. Clause (2) of section 111(g) is also of no avail to the landlord for forfeiture because there is no unequivocal and clear disclaimer of title of the landlord. Therefore neither clause (1) nor (2) of section 111(g) are of any avail for forfeiture; Guru Amarjit Singh v. Rattan Chand, AIR 1994 SC 227.
The statement by the tenant that he was not aware of as to who was his landlord cannot be held to be denial of title of landlord and no eviction decree by forfeiture was granted; Munisami Naidu v. C. Ranganathan, AIR 1991 SC 492.
It has been held that the Board was entitled to institute proceedings against the tenant as the notice period had expired; Vasant Kumar Radhakishan Vora v. The Board of Trustees of the Port of Bombay, AIR 1991 SC 14.
1. The words “or the lease shall become void” omitted by Act 20 of 1929, sec. 57.
2. Ins. by Act 20 of 1929, sec. 57.
3. Subs. by Act 20 of 1929, sec. 57, for “either case”.
4. Subs. by Act 20 of 1929, sec. 57, for “does some act showing”.
(i) Section 114 affords protection to the tenant against forfeiture. While the tenant enjoys the immunity from eviction for default in the payment of rent, the landlord gets the corresponding benefit of recovery even such arrears as are not legally recoverable. Such an equitable provision as is engrafted in section 114 of Transfer of Property Act, shall govern only to such an extent which does not run counter to any specific statutory provisions; Shyam Bhagwan Dubey v. Shaikh Nizam, AIR 1994 MP 52.
(ii) The right of the landlord to get the tenant evicted is restricted under the Rent Act. As the law restricts the power of the landlord to evict the tenant except in accordance with the provisions of Rent Act section 114 is not attracted. Once the requirements of Rent legislation are satisfied, the tenant cannot claim the double protection of invoking the provision of Transfer of Property Act; Prithivichand Ramchand Sablok v. S.Y. Shinde, AIR 1993 SC 1929.
(b) if the breach is capable of remedy, requiring the lessee to remedy the breach, and the lessee fails, within a reasonable time from the date of the service of the notice, to remedy the breach, if it is capable of remedy.
1. Ins. by Act 20 of 1929, sec. 58.
The surrender, express or implied, of a lease of immoveable property does not prejudice an under-lease of the property or any part thereof previously granted by the lessee, on terms and conditions substantially the same (except as regards the amount of rent) as those of the original lease; but, unless the surrender is made for the purpose of obtaining a new lease, the rent payable by, and the contracts binding on, the under-lessee shall be respectively payable to and enforceable by the lessor.The forfeiture of such a lease annuls all such under-leases, except where such forfeiture has been procured by the lessor in fraud of the under-lessees, or relief against the forfeiture is granted under section 114.
(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.
A person who is a tenant at sufferance has no estate or interest in the leasehold property. A tenant holding after the expiry of his term is a tenant at sufferance, which is a term useful to distinguish a possession rightful in its inception but wrongful in its continuance from a trespass which is wrongful both in its inception and in its continuance. A co-owner can maintain a suit by himself in ejectment of a trespasser or a tenant at sufferance; B. Valsala v. Sundram Nadar Bhaskaran, AIR 1994 Ker 164.
None of the provisions of this Chapter apply to leases for agricultural purposes, except in so far as the State Government 1[***] may by notification published in the Official Gazette declare all or any of such provisions to be so applicable 2[in the case of all or any 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.
1. The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1920, sec. 2 and Sch. I. 2. Ins. by Act 6 of 1904, sec. 6.
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.
Plot over which ownership and possession vested in ‘R’ was wrongly recorded in the name of ‘G’ in Land Survey entries. Document executed between parties acknowledging factum of possession of their correct plot numbers. There was no exchange of ownership or transfer of property. Said document would be construed as acknowledgement of possession and not as exchange. It would be admissible without being registered; Md. Uddin @ Mohammadin v. Asibun Nissa, AIR 2005 Jhar 1.
The first respondent admitted that he received no rent from the appellant and that the appellant was his lessee-at-will is a false story. Therefore the respondent is liable to return the land to that extent; Jattu Ram v. Hakama Singh, AIR 1994 SC 1653.
1. Subs. by Act 20 of 1929, sec. 59, for the original section.
“Gift” is the transfer of certain existing moveable or immoveable property made voluntarily and without consideration, by one person, called the donor, to another, called the donee, and accepted by or on behalf of the donee.Acceptance when to be made.—Such acceptance must be made during the lifetime of the donor and while he is still capable of giving.
Gift deed executed by defendant in favour of plaintiff with respect of property of her deceased husband. Defendant was not legally wedded wife of deceased. She being concubine was not entitled to inherit property. Gift deed executed by her is not valid; P. Jayaramaiah v. Aragonda Munemma, AIR 2005 AP 26.
1123. Transfer how effected.—For the purpose of making a gift of immoveable property, the transfer must be effected by a registered instrument signed by or on behalf of the donor, and attested by at least two witnesses.For the purpose of making a gift of moveable property, the transfer may be effected either by a registered instrument signed as aforesaid or by delivery.
Under section 123 a gift of immoveable property cannot pass any title to the donee if it is not registered. Any oral gift of immoveable property cannot be made in view of the provision of section 123 of the Act, mere delivery of possession without written instrument cannot confer any title; R.N. Dawar v. Ganga Ram Saran Dhama, AIR 1993 Del 19.
1. As to limitation to the territorial operation of section 123, see section 1, supra, section 123 extends to every cantonment—see section 287 of the Cantonments Act, 1924 (2 of 1924).
A gift comprising both existing and future property is void as to the latter.
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.
(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.
Where a gift is in the form of a single transfer to the same person of several things of which one is, and the others are not burdened by an obligation, the donee can take nothing by the gift unless he accepts it fully.Where a gift is in the form of two or more separate and independent transfers to the same person of several things, the doneee 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.
1. Ins. by Act 20 of 1929, sec. 60.
1. The words and figures “or, save as provided by section 123, any rule of Hindu or Buddhist law” omitted by Act 20 of 1929, sec. 61.
(1) The transfer of an actionable claim 1[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, 2[***] 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 debt or other actionable claim by the debtor or other person from or against whom the transferor would, but for such instrument of transfer as aforesaid, have been entitled to recover or enforce such debt or other actionable claim, shall (save where the debtor or other person is a party to the transfer or has received express notice thereof as hereinafter provided) be valid as against such transfer.
Exception.—Nothing in this section applies to the transfer of a marine or fire policy of insurance 3[or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)].
(ii) A effects a policy on his own life with an Insurance Company and assigns it to a Bank for securing the payment of an existing or future debt. If A dies, the Bank is entitled to receive the amount of the policy and to sue on it without the concurrence of A’s executor, subject to the proviso in sub-section (1) of section 130 and to provisions of section 132.
1. Ins. by Act 20 of 1929, sec. 62.
2. The words and figures “and notwithstanding anything contained in section 123” ins. by Act 38 of 1925, sec. 2 and omitted by Act 20 of 1929, sec. 62.
3. Added by Act 4 of 1938, sec. 121 (w.e.f. 1-7-1939).
1. Ins. by Act 6 of 1944, sec. 2.
Where a debt is transferred for the purpose of securing an existing or future debt, the debt so transferred, if received by the transferor or recovered by the transferee, is applicable, first, in payment of the costs of such recovery; secondly, in or towards satisfaction of the amount for the time being secured by the transfer; and the residue, if any, belongs to the transferor or other person entitled to receive the same.
1. Subs. by Act 6 of 1944, sec. 3, for the original section.
1. Section 135A ins. by Act 6 of 1944, sec. 4.
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.
In section 35 and 36, the word “in writing”.

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