Transfer of Property Act, 1882 Test 4 — Questions & Solutions
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A mortgages immovable property to B by a registered deed which provides that on default B will become the absolute owner of the property. Sixty years after the due date A sues to redeem. B resists, claiming he became absolute owner on default. Which principle best decides the suit?
aThe clause is void as a clog on the equity of redemption — 'once a mortgage always a mortgage' — and A may redeem
bB became absolute owner because the deed expressly so provided and limitation has long expired
cThe mortgage automatically converted into an English mortgage on default
dRedemption is barred because A never tendered the mortgage money within the stipulated period
Answer: A
A condition turning a mortgage into an absolute conveyance on default is a clog on the equity of redemption; the rule 'once a mortgage always a mortgage' keeps the right of redemption alive (Gopi Lal v Abdul Hamid).
Q2Mortgages (S58–104)
Under Section 58 of the Transfer of Property Act, what does a mortgagee actually acquire under a mortgage transaction?
aAbsolute ownership of the property subject only to a covenant to reconvey
bAn interest in specific immovable property, which can only be immovable and not movable property
cA mere personal right to payment out of the property with no right in rem
dA licence to enter and enjoy the usufruct until the debt is discharged
Answer: B
A mortgage is the transfer of an interest in specific immovable property; what the mortgagee acquires is a mortgagee's interest in that specific immovable property, which can only be immovable property (Prahlad Dalsukhrai v Maganlal Muljibhai).
Q3Mortgages (S58–104)
After the 1929 amendment to Section 58(c), a transaction will be treated as a mortgage by conditional sale only if the condition of reconveyance is:
aRegistered separately within four months of the sale deed
bProved by oral evidence of the parties' real intention
cEmbodied in the same document which effects or purports to effect the sale
dAccompanied by delivery of possession to the mortgagee
Answer: C
The amended Section 58(c) requires the condition (reconveyance/defeasance) to be contained in the same document that effects the sale; a separately retained reconveyance agreement no longer qualifies as a mortgage by conditional sale.
Q4Mortgages (S58–104)
A is liable on a debt and mortgages his property to B (first), C (second) and D (third). D pays off and redeems B. As against C, what is D's position?
aB's mortgage is wholly extinguished and C is promoted to first mortgagee
bD may recover only a rateable share of B's debt from C
cD acquires no rights because a puisne mortgagee cannot redeem a prior mortgage
dD is subrogated to B's rights, so C remains subject to B's mortgage now held by D
Answer: D
A puisne mortgagee who redeems a prior mortgage is subrogated to the prior mortgagee's rights; thus D steps into B's shoes and C continues subject to that security (doctrine of subrogation, s92).
Q5Mortgages (S58–104)
A, who is personally liable on a first mortgage to B, himself redeems B (rather than a junior mortgagee doing so). C and D are subsequent mortgagees. What is the effect?
aA is not subrogated; the interest acquired enures for the benefit of C and D, enlarging their security
bA is subrogated to B's rights and can enforce them against C and D
cA can set up B's discharged charge as a defence against C and D
dC and D's mortgages are automatically discharged along with B's
Answer: A
A mortgagor personally liable who pays off a prior mortgage cannot set up that charge against subsequent encumbrancers; the redemption enures for the benefit of the later mortgagees and enlarges their security (Manjappa v Krishnayya).
Q6Mortgages (S58–104)
Fanny Skinner borrowed money on a simple mortgage from a bank. On the bank's liquidation the liquidator executed an UNREGISTERED agreement purporting to transfer the mortgage debt to a trust, then himself sued to enforce the mortgage. The mortgagor argued the bank had lost the debt but kept the security. How was this decided?
aThe bank lost the debt but retained the security and so could not sue
bAs no transfer had been effected (the agreement was incomplete/unregistered), the liquidator was entitled to sue
cThe trust alone could sue, having taken the debt by the agreement
dBoth the bank and the trust had to sue jointly to enforce the mortgage
Answer: B
In Fanny Skinner v Bank of Upper India the unregistered agreement effected no transfer of the mortgage debt, so the security and debt remained with the bank and the liquidator could enforce the mortgage.
Q7Mortgages (S58–104)
Regarding assignment of a debt secured by a mortgage by deposit of title-deeds (equitable mortgage), the better view (Elumalai v Balakrishna) is that:
aMere endorsement of the secured promissory note always carries the security with it
bNo writing at all is needed because the mortgage itself required no registration
cThe assignment of the debt does NOT pass the security in the absence of a registered assignment of the mortgage
dThe security passes only if possession of the title-deeds is also handed over
Answer: C
Elumalai v Balakrishna held that assignment of a debt secured by deposit of title-deeds does not pass the security without a registered assignment of the mortgage, dissenting from the contrary dictum that endorsement of the note carries the security.
Q8Mortgages (S58–104)
Although a mortgage debt is immovable property under the Transfer of Property Act, how is it treated when attached and sold in execution under the Code of Civil Procedure?
aIt cannot be attached at all, being immovable property
bIt can be sold only after a fresh registered mortgage is executed in the purchaser's favour
cThe purchaser gets the debt but loses the right to enforce the security
dIt is treated as movable property; the purchaser acquires the debt and the right to enforce the mortgage
Answer: D
Though immovable property under the TP Act, a mortgage debt is treated as movable under O XXI rr 45 and 54 CPC; on attachment and sale the purchaser acquires both the debt and the right to realise it by enforcing the mortgage (Elumalai v Balakrishna).
Q9Mortgages (S58–104)
A simple mortgagee files a suit for sale on his mortgage but does NOT implead a subsequent mortgagee D in those proceedings. A final decree for sale is passed and the property purchased at the court sale. What is D's position regarding redemption?
aD's right of redemption remains intact because he was not impleaded as a defendant in that suit
bD's right of redemption is extinguished by the court sale even though he was not a party
cD can only claim a money decree, not redemption, against the purchaser
dD must redeem within thirty days of the court sale or lose the right
Answer: A
A subsequent mortgagee not made a party to the prior mortgagee's sale suit retains his right of redemption notwithstanding the court sale (Amulya Krishna v Raruli Pioneer Co-operative Bank).
Q10Mortgages (S58–104)
A executes a simple mortgage in favour of P, then sells part of the mortgaged property to X by a registered sale deed; the mortgage deed happens to be registered on a date later than the sale. X claims to be a transferee for value without notice protected under the second paragraph of Section 40. Is X protected against the mortgage?
aYes, because the sale deed was registered before the mortgage deed
bNo, because a mortgage under Section 58 creates an interest in property, taking it outside the protection of Section 40's second paragraph
cYes, provided X actually had no knowledge of the mortgage
dNo, but only if the mortgagee files suit within twelve years
Answer: B
A mortgage under s58 creates an interest in property, not a mere contractual obligation; it therefore falls outside the second paragraph of s40, so the later-registered sale does not defeat it (KR Varadaraja Iyengar v T Laxminarayana Setty).
Q11General principles of transfer (S5–37)
A transfers his field to B with a proviso that if B does not within a year set fire to C's haystack, the field shall belong to D. Applying Sections 25 and 30, what is the position?
aBoth the interest of B and the ulterior interest of D are valid
bBoth interests fail because the condition is unlawful
cThe ulterior disposition to D is invalid, but B's interest is not affected
dB's interest fails but D takes the field absolutely
Answer: C
The condition is unlawful under Section 25, so the ulterior disposition to D is invalid; but under Section 30, where the ulterior (subsequent) disposition is invalid, the prior disposition to B is not affected.
Q12General principles of transfer (S5–37)
By one instrument of gift, A professes to transfer C's farm (worth Rs 800) to B, and by the same instrument gives Rs 1,000 to C. C elects to retain his own farm. Under the doctrine of election in Section 35, what follows?
aC keeps both the farm and the Rs 1,000
bC must give up the farm to B and keep the Rs 1,000
cThe entire gift is void, so C keeps the farm and B and C get nothing
dC forfeits the Rs 1,000, and if A had died, A's representative must pay Rs 800 out of it to B
Answer: D
Under Section 35, one who takes a benefit under an instrument must confirm the whole; electing to keep his own farm, C forfeits the Rs 1,000, and where the transferor has died the representative must make good to the disappointed transferee B the value (Rs 800) of the property attempted to be given.
Q13General principles of transfer (S5–37)
A lets his house at Rs 100 payable on the last day of each month, then sells the house to B on 15 June. On 30 June, applying Section 36 (apportionment by time), the rent for June is:
aapportioned as Rs 50 to A (1st–15th) and Rs 50 to B (15th–30th), payable on 30 June
bwholly payable to B, as transferee of the house
cwholly payable to A, as the rent fell due after the sale
dnot apportionable, since rent does not accrue from day to day
Answer: A
Section 36 deems periodical payments like rent to accrue from day to day and to be apportionable between transferor and transferee, while remaining payable on the appointed day; hence A and B each take Rs 50, payable on 30 June.
Q14General principles of transfer (S5–37)
A, a Hindu owning separate property, dies leaving a widow B and a brother C, C being entitled to succeed only if he survives B. For consideration paid by A during his lifetime, C executes a deed releasing his right to succeed to A's property. After A's and later B's death, C claims the property. Which statement is correct under the Transfer of Property Act, 1882?
aThe release is valid because consideration was paid for it
bThe release is void as a transfer of a spes successionis, and C can still claim the property
cC is permanently estopped because he accepted consideration
dThe release operates as a valid family arrangement binding on C
Answer: B
Under section 6(a), the chance of an heir-apparent succeeding (spes successionis) cannot be transferred; such a transfer/release is void in the case of a Hindu reversioner, so C may still claim (Amrit Narayan v Gaya Singh).
Q15General principles of transfer (S5–37)
A reversioner, who has only a chance of succeeding, fraudulently represents to a purchaser that he is the absolute owner and transfers the property for value; he later actually acquires title to it. Which provision allows the bona fide purchaser to claim the after-acquired interest, notwithstanding the bar in section 6(a)?
aSection 41 (transfer by ostensible owner)
bSection 53A (part performance)
cSection 43 (feeding the grant by estoppel)
dSection 6(b) (right of re-entry)
Answer: C
In Jumma Masjid v Kadimaniandra Devaiah the Supreme Court held section 43 (feeding the estoppel) applies where a reversioner fraudulently represents absolute title and later acquires it, in favour of a transferee who did not know the true facts.
Q16General principles of transfer (S5–37)
Under section 6 of the Transfer of Property Act, 1882, which of the following may validly be transferred?
aA mere right of re-entry for breach of a condition subsequent, to a stranger
bA right to future maintenance, in whatsoever manner arising
cAn easement, apart from the dominant heritage
dThe right of a transferee, along with the property, to recover damages in respect of that property
Answer: D
Clauses (b), (c) and (dd) of section 6 bar transfer of a mere right of re-entry, an easement apart from the dominant heritage, and a right to future maintenance; but where property is transferred along with the right to recover damages in respect of that property, the assignment is valid (Murlidhar Agarwalla v Rupendra Methere).
Q17General principles of transfer (S5–37)
A sells land to B by registered sale deed and, by a separate registered instrument forming part of the same transaction, B covenants that B and his heirs shall never alienate the land except back to A at the same price. The condition is challenged. What is the legal position under section 10?
aThe condition is void as an absolute restraint on alienation
bThe condition is valid as a partial restraint
cThe condition is valid only against the heirs, not against B
dThe condition is valid because it merely regulates the mode of alienation
Answer: A
A condition compelling the transferee to sell only back to the transferor at a fixed (low) price is in substance an absolute restraint and void under section 10 (cf. Re Rosher, Rosher v Rosher), as the test is one of substance not form.
Q18General principles of transfer (S5–37)
Which of the following restraints/conditions attached to a transfer is VALID under the Transfer of Property Act, 1882?
aA condition in an absolute gift that the donee shall not alienate the property at all
bA condition in a permanent lease that the lessee's right shall be heritable but not transferable
cA condition in a transfer making the interest cease if the transferee becomes insolvent
dA direction in an absolute sale that the buyer shall not cut down the trees
Answer: B
Leases are an exception to the rule against restraints (section 10, proviso); a condition in a perpetual lease that the lessee's right is heritable but not transferable is valid. (a) is void under s.10, (b) void under s.12, (d) void for repugnancy under s.11.
Q19General principles of transfer (S5–37)
A makes an absolute gift of a house to B but the deed directs that B shall reside in the house. As to the direction, which statement reflects the correct position under section 11?
aThe gift fails because the direction is repugnant
bThe direction is valid and B must reside in the house
cThe gift is absolute and the direction is void; B may live in it or not as he pleases
dThe direction converts the gift into a life estate
Answer: C
Where an absolute interest is created, a direction restricting the manner of enjoyment is void under section 11; the transferee takes the interest as if there were no such direction (illustration to s.11).
Under the exception to section 21 TPA, a transfer to a person on his attaining a particular age, which would otherwise be contingent, is treated as NOT contingent when:
aThe transferor directs that the income from another fund be applied for his maintenance until that age
bA guardian is appointed for him during his minority
cThe transfer is made by way of trust rather than directly
dThe transferor gives him absolutely the income to arise from that very interest before he reaches that age, or directs such income to be applied for his benefit
Answer: D
The exception to section 21 (cf. ISA s.120 ills. xii & xiii) requires a gift, or direction to apply, the income of that same interest for his benefit before the age; income from a different fund (ill. xiii) does not attract the exception, and the interest remains contingent.
An interest is created in favour of such members ONLY of a class as shall attain the age of 18, with a direction that the income of each presumptive share be applied for the maintenance of children under 18. What is the position of a child of the class who has not yet attained 18?
aHe takes no vested interest until he attains 18; the exception to section 21 does not apply to a contingent class (section 22)
bHe takes a vested interest because of the maintenance direction, by virtue of the exception to section 21
cHe takes a vested interest because enjoyment alone is postponed
dHe takes a contingent interest that fails entirely on the maintenance direction
Answer: A
Under section 22 (gift to a contingent class), no member acquires a vested interest before attaining the specified age, and the exception to section 21 does NOT extend to a contingent class, so the maintenance direction does not vest the share (Kanai Lal v Kumar Purnendu Nath).
A transfers Rs 5,000 to B on condition that he shall marry with the consent of C, D and E. E dies; B then marries with the consent of C and D. Separately, a like legacy is given to A by will with a proviso that if he marries WITHOUT the consent of B, C and D the legacy goes over to E, and D dies. Which statement correctly reflects the law?
aIn both cases the consent of the survivors suffices to keep the gift
bWhere it is a condition precedent (s.26), substantial compliance (consent of surviving C and D) is enough; where it is a condition subsequent (s.29/ISA s.132), strict construction means the gift over fails on D's death and the legatee may marry without B and C's consent
cIn both cases the gift fails because one consenting person has died
dA condition precedent must be strictly fulfilled while a condition subsequent need only be substantially complied with
Answer: B
Section 26 deems a condition precedent fulfilled by substantial compliance (consent of survivors), favouring vesting; whereas section 29 requires a condition subsequent to be strictly fulfilled, and being strictly construed it becomes inoperative on D's death, so the gift over does not take effect.
A transfers a farm to B for her life, with a proviso that, if she does not desert her husband, the farm shall go to C. What is the position?
aThe ulterior gift to C is valid and B loses the farm if she does not desert her husband
bBoth B's interest and C's interest are void as the whole transaction is against public policy
cThe ulterior disposition to C is invalid (condition against public policy), but under section 30 the prior disposition is not affected and B is entitled to the farm for life as if no condition had been inserted
dB takes an absolute interest in the farm despite only a life interest being granted
Answer: C
Per section 30 and its illustration, where the ulterior disposition is invalid, the prior disposition is unaffected; the condition (inducing desertion of a husband) is void, but B retains her life interest as though no condition existed.
The farm of Sultanpur belongs to C and is worth Rs 800. A, by an instrument of gift, professes to transfer the farm to B and by the same instrument gives Rs 1,000 to C. A dies before C makes any election, and C elects to retain his own farm. What is the consequence?
aC keeps both the farm and the full Rs 1,000, as A had no right to transfer the farm
bC must give up the farm to B because he accepted the instrument
cThe whole gift is void and C gets nothing
dC keeps the farm and forfeits the Rs 1,000, but out of it Rs 800 (the value of the farm) must be paid to the disappointed donee B by A's representative
Answer: D
Under section 35 (doctrine of election) and its illustration, C cannot both retain his property and take the benefit; electing against the transfer he forfeits the Rs 1,000, and since A (a gratuitous transferor) died before election, B is compensated out of it to the extent of Rs 800, the value of the property attempted to be transferred.
A bequeaths a fund to A for life, after his death to B for life, and after B's death to such of B's sons as shall first attain the age of 25. A and B survive the testator. What is the position of the bequest after B's death?
aIt is void as offending the rule against perpetuity, since vesting may be delayed beyond B's life and the minority of his sons
bIt is valid because the son's interest vests at his birth
cIt is valid because successive life estates may be created in any number
dIt is void only if no son of B is in fact born within the perpetuity period
Answer: A
Under section 14 (rule against perpetuity), as illustrated in section 114, Indian Succession Act, a son of B born after the testator's death may not attain 25 until more than 18 years after the death of the last life-tenant, so vesting may be delayed beyond the permissible period and the bequest is void; remoteness is judged on possible, not actual, events.
A makes a gift to B (his nephew's daughter) for life, then to B's male descendants absolutely, but if she has no male descendants then to B's daughters without power of alienation, and if there are no descendants of B then to her nephew. B dies without issue. As decided in Girish Dutt v Data Din, what is the fate of the gift to the nephew?
aIt takes effect because the nephew was a living person
bIt fails under section 16, because the prior limited interest to the unborn daughters was void under section 13
cIt is valid as an alternative independent limitation
dIt is valid but the nephew takes only a life interest
Answer: B
In Girish Dutt v Data Din the gift to the unborn daughters, being of a limited interest (not the whole remainder) subject to a prior interest, was void under section 13; the ulterior gift to the nephew, intended to take effect upon failure of that prior interest, therefore failed under section 16.
A fund is bequeathed to A for life, and after his death to such of A's children as shall attain the age of 25. A survives the testator with some children living. After the 1929 amendment to section 15, what is the effect?
aThe whole gift to A's children fails as a gift to a class
bThe gift fails entirely under section 16
cThe gift is inoperative only as to children born after the testator's death and those not attaining 25 within 18 years of A's death, but operative for the others
dAll children, whenever born, take vested interests at A's death
Answer: C
Section 15 (as amended in 1929, following section 115, Indian Succession Act) provides that where an interest is created for a class and fails under sections 13 and 14 as to some, it fails as to those persons only and not the whole class.
Q28Sale of immovable property (S54–57)
The implied covenant for title under Section 55(2) makes the seller liable in damages to the buyer where the buyer is evicted by title paramount, EVEN IF:
aThe seller had professed to transfer only an occupancy right
bThe seller was selling in a fiduciary character
cThe eviction was by a pre-emptor on the ground of the buyer's disqualification
dThe buyer was already aware of the defect in title at the time of the contract
Answer: D
The implied covenant for title in Section 55(2) operates irrespective of the buyer's notice; even if the buyer knew of the defect, he may hold the seller liable in damages (Ram Chunder Dutt v Dwarkanath).
Q29Sale of immovable property (S54–57)
Where a sale is made by a person in a fiduciary character (e.g., a trustee), the proviso to Section 55(2) deems him to contract only that:
aHe has done no act whereby the property is encumbered or whereby he is hindered from transferring it
bThe interest he professes to transfer subsists and he has power to transfer it
cHe warrants an absolute and marketable title in all respects
dHe indemnifies the buyer against eviction by any title paramount
Answer: A
The proviso to Section 55(2) limits a fiduciary seller's implied covenant to a contract that he has done no act whereby the property is encumbered or his power of transfer restricted.
Q30Sale of immovable property (S54–57)
Where the ownership of property has passed to the buyer before the whole purchase-money is paid, Section 55(4)(b) gives the unpaid seller:
aA right to rescind the conveyance for non-payment of the balance
bA charge upon the property in the hands of the buyer (and certain transferees) for the unpaid purchase-money with interest
cA possessory lien entitling him to refuse possession until paid
dA right to re-enter and take back possession of the property
Answer: B
Section 55(4)(b) gives the seller a charge on the property in the buyer's hands for the unpaid purchase-money and interest; this is a non-possessory charge and does not justify refusing possession.
Q31Sale of immovable property (S54–57)
Under Section 55(3), where the whole purchase-money has been paid but the seller retains a part of the property comprised in the title documents, the seller:
aMust deliver all the documents of title to the buyer
bMust hand over the documents to the buyer of the lot of greatest value
cIs entitled to retain all such documents, but is bound to produce them and furnish true copies on reasonable request at the requester's cost
dMay destroy the documents once the price is paid
Answer: C
Proviso (a) to Section 55(3) allows the seller who retains part of the property to keep all documents, while obliging him to produce them and furnish copies on reasonable request at the requester's cost and to keep them safe.
Q32Sale of immovable property (S54–57)
A buyer who properly declines to accept delivery because of the seller's default is, under Section 55(6)(b), entitled to a charge on the property for:
aOnly the purchase-money properly paid in anticipation of delivery, but not the earnest
bDamages for loss of bargain measured by the rise in market value
cNothing, since declining delivery extinguishes all rights
dThe purchase-money paid and interest, plus the earnest (if any) and the costs of a suit for specific performance or for rescission
Answer: D
Section 55(6)(b) gives the buyer a charge for purchase-money paid in anticipation of delivery with interest, and where he properly declines delivery, also for the earnest and the costs of a suit for specific performance or rescission.
Q33Sale of immovable property (S54–57)
An amount paid by the buyer at the date of the agreement is in dispute as to whether it is forfeitable. Which statement reflects the law on 'earnest' (Satish Batra v Sudhir Rawal; Maula Bux)?
aEarnest is security for performance and is forfeitable on the buyer's default, but mere part-payment of price not paid as earnest cannot be forfeited
bAll advance money paid towards price is automatically forfeitable on the buyer's default
cEven earnest cannot be forfeited in any circumstances
dEarnest is forfeitable even where the seller is the defaulting party
Answer: A
Earnest serves as security for performance and is forfeited on the buyer's default, but money paid merely as part-payment of price (not as earnest) is not forfeitable; the right to forfeit must be clear and explicit (Satish Batra v Sudhir Rawal).
Q34Sale of immovable property (S54–57)
Properties X, Y and Z owned by M are mortgaged to one mortgagee. M then sells X to A free from encumbrances. Under Section 56, A is entitled to:
aCompel the mortgagee to release X unconditionally regardless of the mortgagee's interest
bHave the mortgage-debt satisfied out of Y and Z so far as they will extend, without prejudicing the mortgagee or others who acquired an interest for consideration
cMarshalling only if A is a bona fide purchaser without notice of the mortgage
dNothing, as a purchaser has no right of marshalling
Answer: B
Section 56 entitles a subsequent purchaser to have the mortgage-debt satisfied out of the property not sold to him, so far as it will extend, without prejudicing the mortgagee or others who acquired an interest for consideration; this right is independent of notice.
Q35Leases (S105–117)
Under Section 108(e), if by fire, tempest, flood or violence of an army or a mob a material part of the leased property is wholly destroyed or rendered substantially and permanently unfit for the purpose for which it was let, the lease becomes void—
aautomatically, by operation of the doctrine of frustration
bat the option of the lessor
cat the option of the lessee
donly if both lessor and lessee agree
Answer: C
Section 108(e) gives only the lessee the option to treat the lease as void on such destruction; it is not automatic frustration (Hind Rubber Industries v Tayebhai). If the lessee does not exercise the option, the lease subsists.
Q36Leases (S105–117)
Where a lessor transfers the leased property to a third person, under Section 109 the transferee becomes subject to the liabilities of the lessor—
aautomatically, in all cases
bnever, since liabilities cannot be transferred
conly if the original lessor consents in writing
donly if the lessee so elects to treat the transferee as the person liable
Answer: D
Section 109 provides the transferee possesses all the rights and, if the lessee so elects, is subject to all the liabilities of the lessor as to the property transferred; the original lessor does not cease to be liable unless the lessee elects to treat the transferee as the person liable.
Q37Leases (S105–117)
A lease is expressed to commence 'from the 1st of January'. In computing the term of the lease under Section 110, the 1st of January is to be—
aexcluded in computing the time
bincluded in the term
ctreated as the last day of the term
dignored only if the lease is oral
Answer: A
Para 1 of Section 110 ('Exclusion of the day on which term commences') provides that where the time is expressed as commencing from a particular day, that day shall be excluded in computing the time. This mirrors Section 9(1) of the General Clauses Act, 1897.
Q38Leases (S105–117)
A lease is for a term of years and is expressed to be terminable before its expiration, but the deed omits to mention at whose option it is so terminable. Under Section 110, who has the option to determine the lease?
aThe lessor, as the grantor of the lease
bThe lessee, and not the lessor
cEither party, at its own choice
dNeither party; the lease runs for the full term
Answer: B
Para 3 of Section 110 provides that where the lease is silent as to whose option it is terminable, the lessee (not the lessor) shall have such option—resting on the rule that ambiguous words of grant are construed most strictly against the grantor (Dann v Spurrier).
Q39Leases (S105–117)
Under Section 111(d), a lease of immovable property determines by merger when—
athe lessee assigns his interest to a third person
bthe lessor sells the reversion to a stranger
cthe interests of the lessee and the lessor in the whole property become vested at the same time in one person in the same right
dthe lessee renounces his character by setting up title in himself
Answer: C
Section 111(d) embodies the rule of merger: the lease determines when the interests of lessee and lessor in the whole property vest at the same time in one person in the same right. (Setting up title in oneself falls under forfeiture, clause (g).)
Q40Leases (S105–117)
After the 1929 amendment, for a lease (executed after 1930) to be determined by forfeiture under Section 111(g) following the lessee's breach of an express condition with a re-entry clause, what is an essential requirement?
aThe lessor must take physical possession with his servants
bThe lessor must obtain a court decree before the lease is forfeited
cNo formality is required; the lease stands forfeited automatically on breach
dThe lessor must give notice in writing to the lessee of his intention to determine the lease
Answer: D
Since the 1929 amendment, the giving of notice in writing of the intention to determine the lease is an essential condition of forfeiture under Section 111(g), even if the lease contains a clause to the contrary; the lease subsists until such notice.
Q41Leases (S105–117)
A forfeiture incurred under Section 111(g) is waived under Section 112 by which of the following acts of the lessor?
aAcceptance of rent which has become due since the forfeiture
bMere knowledge of the breach without any action
cFiling a suit for ejectment of the lessee
dServing a fresh notice to quit on the lessee
Answer: A
Section 112 provides that a forfeiture under Section 111(g) is waived by acceptance of rent that became due since the forfeiture, by distress for such rent, or by any other act of the lessor showing an intention to treat the lease as subsisting.
Q42Exchange & gift (S118–129)
A transfers a house worth Rs 1,50,000 to B, and B transfers to A a field worth Rs 1,00,000 plus Rs 50,000 in cash. Which of the following correctly describes this transaction under the Transfer of Property Act, 1882?
aIt is a sale, because money has passed as part of the consideration
bIt is an exchange, because neither thing transferred is money only
cIt is partly a sale and partly an exchange
dIt is void, since the values of the two properties are unequal
Answer: B
Under Section 118, a transaction is an exchange where two persons mutually transfer ownership of one thing for another, neither thing (or both) being money only; payment of money merely to equalise the exchange does not convert it into a sale (Ismail Shab v Saleh Muhammad).
Q43Exchange & gift (S118–129)
CIT v Motor & General Stores (P) Ltd held that where the consideration for the transfer of certain immovable properties was shares in a limited company, the transaction was:
aA sale, because shares represent monetary value
bA gift, because no price was fixed
cAn exchange, because the consideration was not money but another thing
dA mortgage by conditional sale
Answer: C
Since the consideration was shares (a thing) and not money, the transaction is an exchange under Section 118; a sale must always be for a price, whereas in an exchange ownership of one thing is transferred for another thing in return (CIT v Motor & General Stores).
Q44Exchange & gift (S118–129)
A and his neighbour mutually transfer their respective plots of land by an unregistered writing, each plot being worth more than Rs 100. With respect to immovable property, the mode of completing an exchange under Section 118 is governed by:
aThe rules applicable to a gift, requiring two attesting witnesses
bMere delivery of possession, registration being optional
cAn oral agreement followed by mutation in revenue records
dThe same manner as provided for the transfer of such property by sale
Answer: D
Section 118 provides that a transfer in completion of an exchange can be made only in the manner provided for the transfer of such property by sale; hence for tangible immovable property of Rs 100 or upward, a registered instrument is required and an unregistered exchange is invalid.
Q45Exchange & gift (S118–129)
A and B exchange lands. Later, owing to a defect in B's title, A is evicted from the land he received from B. In the absence of any contrary intention in the exchange, what is A's remedy under Section 119?
aHe may, at his option, claim compensation for the loss, or the return of the land he transferred if it is still in B's possession (or with B's legal representative or a transferee without consideration)
bHe can only sue B for damages and can never recover the land he gave
cHe must accept any substitute property B chooses to offer
dHe has no remedy, as each party bears the risk of the other's title
Answer: A
Section 119 gives the deprived party, unless a contrary intention appears, the option of claiming compensation for the loss or the return of the thing transferred, provided it is still in the possession of the other party, his legal representative, or a transferee from him without consideration.
Q46Exchange & gift (S118–129)
X exchanges currency notes with Y. One of the notes given by X turns out to be a forged currency note. Under the Transfer of Property Act, what is the legal position?
aCaveat emptor applies, and Y bears the entire loss
bThere is an implied warranty of genuineness, and the forged note involves a total failure of consideration
cX warrants only the value, not the genuineness, of the money
dThe transaction is a sale, attracting the Sale of Goods Act warranties
Answer: B
Section 121 provides that on an exchange of money each party warrants the genuineness of the money given by him; a forged currency note (like a forged banknote in Jones v Ryde) amounts to a total failure of consideration.
Which of the following is an 'actionable claim' as defined for the purposes of Sections 130-137 of the Transfer of Property Act?
aA claim to mesne profits, being unliquidated damages
bA judgment debt secured by a decree
cAn unsecured debt, whether existent, accruing, conditional or contingent
dA debt secured by a mortgage of immovable property
Answer: C
An actionable claim is a claim to an unsecured debt (or a beneficial interest in movable property not in possession), whether existent, accruing, conditional or contingent; a mortgage-secured debt, a judgment debt, and a mere right to sue for mesne profits are excluded.
A owes money to B, who assigns the debt to C by a written instrument. Before A receives any notice of the assignment, A pays the debt to B. Under Section 130 and its proviso, the position is:
aA's payment is void and A must pay C again
bThe assignment to C is itself invalid for want of notice to A
cC can recover from A because title passed to C only on notice
dA's payment to B is a valid discharge and C cannot recover the debt from A
Answer: D
Under the proviso to S130(1), a debtor who pays his creditor without express notice of the assignment gets a valid discharge; the assignee's remedy lies against the assignor, not the debtor (Illustration (i) to S130).
Under Section 130, the transfer of an actionable claim:
aMust be effected by an instrument in writing signed by the transferor, and is complete and effectual upon execution of that instrument
bCan be made orally, and takes effect only from the date express notice is given to the debtor
cRequires the consent of the debtor before the transferee can sue
dVests the rights in the transferee only after notice is given under Section 131
Answer: A
S130 requires a written, signed instrument; the transfer is complete and effectual on execution (whether or not notice is given), and the transferee may sue in his own name without the transferor's consent.
A enters into an unregistered written agreement to sell his land to B, who pays part of the price, is put into possession and erects a house on the plot. A later sues to evict B. B sets up Section 53A of the Transfer of Property Act, 1882. Which statement BEST describes the nature of the right B can assert under Section 53A (as judicially explained)?
aIt confers ownership on B, who may sue A for a declaration of title based on his possession
bIt is a statutory right available only as a shield in defence to protect B's possession against A and persons claiming under him, not as a sword to found an independent action
cIt is a purely equitable right identical in scope to the English doctrine, available both as a claim and as a defence
dIt bars A from selling the property to anyone else during the subsistence of the agreement
Answer: B
Section 53A imports a modified form of the English equity of part performance as a statutory right which is more restricted: it requires a written contract and is available only as a defence (a shield, not a sword) to protect possession against the transferor and those claiming under him; it confers no title and cannot found an independent suit.
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