THE TRANSFER OF PROPERTY ACT, 1882

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THE TRANSFER OF PROPERTY ACT, 1882
(4 OF 1882)
[17TH FEBRUARY 1882]

An Act to amend the law relating to the Transfer of Property by act of Parties Preamble – WHEREAS it is expedient to define and amend certain parts of the law relating to the transfer of property by act of parties; it is hereby enacted as follows: –

Preliminary

1. Short title - This Act may be called the Transfer of Property Act, 1882.
Commencement - It shall come into force on the first day of July, 1882.
Extent -   1 [It extends2  in the first instance to the whole of India except 3
[the territories which, immediately before the 1st November, 1956, were comprised in Part B States
or in the States of] Bombay, Punjab and Delhi.]

       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, 1935, to all
Municipalities in the Punjab and to all notified areas declared and notified under sec. 241 of
the Punjab Municipal Act, 1911 (Pun. 3 of 1911), see Punjab Gazette, Extra., 1925, p. 27.
Those 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 (Mad. 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

 

 

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 Khasia and Jaintia Hills and the Mikir Hills
Tract, by notification under sec. 2 of the Assam Frontier Tracts Regulation, 1880 (2 of 1880).
3 Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “Part B States”.
2

4
[But this Act or any part thereof may be notification in the Official Gazette be
extended to whole or any part of the 5
[said territories] by the 6
[State] Government concerned.]

7
[And any State Government may 8
[***] from time to time, by notification in the Official
Gazette, exempt, either retrospectively or prospectively, any part of the territories
administered by such State Government from all or any of the following provisions, namely: –
Sections 54, paragraphs 2 and 3, 59, 107 and 123.]
9
[Notwithstanding anything in the foregoing part of this section, sections 54,
paragraphs 2 and 3, 59, 107 and 123 shall not extend or be extended to any district or tract
of country for the time being excluded from the operation of the Indian Registration Act,
10[1908], (16 of 1908) under the power conferred by the first section of that Act or otherwise.]

2. Repeal of Acts – Saving of certain enactments, incidents, rights, liabilities, etc.
    In the territories to which this Act extends for the time being the enactments specified in the schedule hereto annexed shall be repealed to the extent therein mentioned. But nothing herein contained shall be deemed to affect –
   (a) the provisions of any enactment not hereby expressly repealed;
   (b) any terms or incidents of any contract or constitution of property which are
consistent with the provisions of this Act, and are allowed by the law for the time being in force;
  (c) any right or liability arising out of a legal relation constituted before this Act comes into force, or any relief in respect of any such right or liability; or 
  (d) save as provided by section 57 and Chapter IV of this Act, any transfer by operation of law or by, or in execution of, a decree or order of a Court of competent jurisdiction;
     and nothing in the second Chapter of this Act shall be deemed to affect any rule of
11[***] Muhammadan 12[***] law.

3. Interpretation clause – In this Act, unless there is something repugnant in the subject or context, –

  “immoveable property” does not include standing timber, growing crops or grass:
  “instrument” means a non-testamentary instrument:

 

 

4 Subs. by the A.O. 1937, for the original para.
5 Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “said States”.
6 Subs. by the A.O. 1950, for “Provincial”.
7 Subs. by Act 3 of 1885, sec. 1, for the original para.
8
The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1928, 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 sec. 287 of the Cantonments Act, 1924 (2 of 1924).
10 Subs. by Act 20 of 1920, sec. 2, for “1877”.
11 The word “Hindu” omitted by Act 20 of 1929, sec. 3.
12 The words “or Buddhist” omitted by Act 20 of 1929, sec. 3. 3
13[“attested”, in relation to an instrument, means and shall be deemed always to have meant attested by two or more witnesses each of whom has seen the executant sign or affix his mark to the instrument, or has seen some other person sign the instrument in the
presence and by the direction of the executant, or has received from the executant a
personal acknowledgment of his signature or mark, or of the signature of such other person,
and each of whom has signed the instrument in the presence of the executant; but it shall
not be necessary that more than one of such witnesses shall have been present at the same
time, and no particular form of attestation shall be necessary:]
“registered” means registered in 14[
15[any part of the territories] to which this Act
extends] under the law16 for the time being in force regulating the registration of documents:
“attached to the earth” means –
(a) rooted in the earth, as in the case of trees and shrubs;
(b) imbedded in the earth, as in the case of walls or buildings;or
(c) attached to what is so imbedded for the permanent beneficial enjoyment of
that to which it is attached;
17 [“actionable claim” means a claim to any debt, other than a debt secured by
mortgage of immoveable property or by hypothecation or pledge of moveable property, or to
any beneficial interest in moveable property not in the possession, either actual or
constructive, of the claimant, which the Civil Courts recognize as affording grounds for relief,
whether such debt or beneficial interest be existent, accruing, conditional or contingent;]
18[“a person is said to have notice” of a fact when he actually knows that fact, or
when, but for wilful abstention from an inquiry or search which he ought to have made, or
gross negligence, he would have known it.
Explanation I – Where any transaction relating to immoveable property is required by
law to be and has been effected by a registered instrument, any person acquiring such
property or any part of, or share or interest in, such property shall be deemed to have notice
of such instrument as from the date of registration or, where the property is not all situated in
one sub-district, or where the registered instrument has been registered under sub-section
(2) of section 30 of the Indian Registration Act, 1908 (16 of 1908), from the earliest date on
which any memorandum of such registered instrument has been filed by any Sub-Registrar
within whose sub-district any part of the property which is being acquired, or of the property
wherein a share or interest is being acquired, is situated:]
Provided that –
(1) the instrument has been registered and its registration completed in the manner
prescribed by the Indian Registration Act, 1908 (16 of 1908), and the rules made
thereunder,
(2) the instrument or memorandum has been duly entered or filed, as the case may be,
in books kept under section 51 of that Act, and

13 Ins. by Act 27 of 1926, sec. 2, as amended by Act 10 of 1927, sec. 2 and Sch. I.
14 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).
15 Subs. by the Adaptation of Laws (No. 2) Order, 1956, for “any State”.
16 See the Indian Registration Act, 1908 (16 of 1908).
17 Ins. By Act 2 of 1900, sec. 2.
18 Subs. by Act 20 of 1929, sec. 4 as amended by Act 5 of 1930, sec. 2 for the original paragraph.
4
(3) the particulars regarding the transaction to which the instrument relates have been
correctly entered in the indexes kept under section 55 of that Act.
Explanation II – Any person acquiring any immoveable property or any share or
interest in any such property shall be deemed to have notice of the title, if any, of any person
who is for the time being in actual possession thereof.
Explanation III – A person shall be deemed to have had notice of any fact if his agent
acquires notice thereof whilst acting on his behalf in the course of business to which that fact
is material:
Provided that, if the agent fraudulently conceals the fact, the principal shall not be
charged with notice thereof as against any person who was a party to or otherwise cognizant
of the fraud.

4. Enactments relating to contracts to be taken as part of Contract Act and supplemental to the Registration Act :

       The Chapters and sections of this Act which relate to contracts shall be taken as part of the Indian Contract Act, 1872 (9 of 1872).
   19[And sections 54, paragraphs 2 and 3, sections 59, 107 and 123 shall be read as supplemental to the Indian Registration Act,
20[1908 (16 of 1908)].]

 

 

 

 

 

19 Added by Act 3 of 1885, sec. 3.
20 Subs. by Act 20 of 1929, sec. 5, for “1877”.

 

 

 

Transfers of Property by Act of Parties

(A) Transfer of Property, whether moveable or immoveable

5. “Transfer of property” defined
     In the following sections “transfer of property” means an act by which a living person conveys property, in present or in future, to one or more other living persons, or to himself,

2[or to himself] and one or more other living persons; and “to transfer property” is to perform
such act.
 2 [In this section “living person” includes a company or association or body of individuals, whether incorporated or not, but nothing herein contained shall affect any law for the time being in force relating to transfer of property to or by companies, associations or bodies of individuals.]

6. What may be transferred
Property of any kind may be transferred, except as otherwise provided by this Act or by any other law for the time being in force, –
(a) The chance of an heir-apparent succeeding to an estate, the chance of relation obtaining a legacy on the death of a kinsman, or any other mere possibility of a like nature, cannot be transferred.
(b) A mere right of re-entry for breach of a condition subsequent cannot be transferred to any one except the owner of the property affected thereby.
(c) An easement cannot be transferred apart from the dominant heritage.
(d) An interest in property restricted in its enjoyment to the owner personally cannot be
transferred by him.

3
[(dd) A right to future maintenance, in whatsoever manner arising, secured or determined,
cannot be transferred.]
(e) A mere right to sue 4
[***] cannot be transferred.
(f) A public office cannot be transferred, nor can the salary of a public officer, whether
before or after it has become payable.
(g) Stipends allowed to military 5
[naval],

[air-force] and civil pensioners of 7
[Government]
and political pensions cannot be transferred.
(h) No transfer can be made (1) in so far as it is opposed to the nature of the interest affected thereby, or (2) 8
[for an unlawful object or consideration within the meaning of

1 Nothing in Chapter II is to be deemed to affect any rule of Muhammadan Law, see section 2, Act 20 of 1929.
2 Ins. by Act 20 of 1929, sec. 6.
3 Ins. By Act 20 of 1929, sec. 6.
4 The words “for compensation for a fraud or for harm illegally caused” omitted by Act 2 of 1900, sec. 3.
5
Ins. by Act 35 of 1934, sec. 2 and Sch.
6
Ins. by Act 10 of 1927, sec. 2 and Sch. I.
7
The word “Government” successively subs. by the A.O. 1937 and the A.O. 1950 to read as above.
8 Subs. by Act 2 of 1900, sec. 3, for “for an illegal purpose”.
6 section 23 of the Indian Contract Act, 1872 (9 of 1872)], or (3) to a person legally disqualified to be transferee.
9 [(i) Nothing in this section shall be deemed to authorize a tenant having an nontransferable right of occupancy, the farmer of an estate in respect of which default has been made in paying revenue, or the lessee of an estate, under the management
of a Court of Wards, to assign his interest as such tenant, farmer or lessee.]

7. Persons competent to transfer
      Every person competent to contract and entitled to transferable property, or authorized to dispose of transferable property not his own, is competent to transfer such property either wholly or in part, and either absolutely or conditionally, in the circumstances, to the extend and in the manner, allowed and prescribed by any law for the time being in
force.

8. Operation of transfer
    Unless a different intention is expressed or necessarily implied, a transfer of property passes forthwith to the transferee all the interest which the transferor is then capable of passing in the property, and in the legal incidents thereof.
Such incidents include, where the property is land, the easements annexed thereto, the rents and profits thereof accruing after the transfer, and all things attached to the earth; and, where the property is machinery attached to the earth, the moveable parts
thereof;
and, where the property is a house, the easements annexed thereto, the rent thereof accruing after the transfer, and the locks, keys, bars, doors, windows, and all other things
provided for permanent use therewith; and, where the property is a debt or other actionable claim, the securities therefor
(except where they are also for other debts or claims not transferred to the transferee), but
not arrears of interest accrued before the transfer;
and, where the property is money or other property yielding income, the interest or
income thereof accruing after the transfer takes effect.

9. Oral transfer
   A transfer of property may be made without writing in every case in which a writing is not expressly required by law.

10. Condition restraining alienation
    Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: provided that
property may be transferred to or for the benefit of a woman (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein.

 

9 Added by Act 3 of 1885, sec. 4.

11. Restriction repugnant to interest created
   Where, on a transfer of property, an interest therein is created absolutely in favour of any person, but the terms of the transfer direct that such interest shall be applied or enjoyed by him in a particular manner, he shall be entitled to receive and dispose of such interest as if there were no such direction.
        10[Where any such direction has been made in respect of one piece of immoveable property for the purpose of securing the beneficial enjoyment of another piece of such property, nothing in this section shall be deemed to affect any right which the transferor may have to enforce such direction or any remedy which he may have in respect of a breach thereof.]

 

12. Condition making interest determinable on insolvency or attempted alienation
     Where property is transferred subject to a condition or limitation making any interest therein, reserved or given to or for the benefit of any person, to cease on his becoming insolvent or endeavouring to transfer or dispose of the same, such condition or limitation is void.
       Nothing in this section applies to a condition in a lease for the benefit of the lessor or
those claiming under him.

13. Transfer for benefit of unborn person
         Where, on a transfer of property, an interest therein is created for the benefit of a person not in existence at the date of the transfer, subject to a prior interest created by the same transfer, the interest created for the benefit of such person shall not take effect, unless it extends to the whole of the remaining interest of the transferor in the property.

Illustration
   A transfers property of which he is the owner to B in trust for A and his intended wife
successively for their lives, and, after the death of the survivor, for the eldest son of the
intended marriage for life, and after his death for A’s second son. The interest so created for
the benefit of the eldest son does not take effect, because it does not extend to the whole of
A’s remaining interest in the property.

14. Rule against perpetuity
       No transfer of property can operate to create an interest which is to take effect after the life-time of one or more persons living at the date of such transfer, and the minority of some person who shall be in existence at the expiration of that period, and to whom, if he attains full age, the interest created is to belong.

15. Transfer to class some of whom come under sections 13 and 14
     If, on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails 11[in regard to those persons only and not in regard to the whole class].

 

10 subs. by Act 20 of 1929, sec. 8, for the original paragraph.
11 Subs. by Act 20 of 1929, sec. 9, for “as regards the whole class”.

 

12[16. Transfer to take effect on failure of prior interest
Where, by reason of any of the rules contained in sections 13 and 14, an interest created for the benefit of a person or of a class of persons fails in regard to such person or the whole of such class, any interest created in the same transaction and intended to take effect after or upon failure of such prior interest also fails.

17. Direction for accumulation
     (1) Where the terms of a transfer of property direct that the income arising from the property shall be accumulated either wholly or in part during a period longer than –

   (a) the life of the transferor, or

  (b) a period of eighteen years from the date of the transfer,

such direction shall, save as hereinafter provided, be void to the extent to which the period during which the accumulation is directed exceeds the longer of the aforesaid periods, and at the end of such last-mentioned period the property and the income
thereof shall be disposed of as if the period during which the accumulation has been directed to be made had elapsed.

(2) This section shall not affect any direction for accumulation for the purpose of-
    (i) the payment of the debts of the transferor or any other person taking any interest under the transfer, or
   (ii) the provision of portions for children or remoter issue of the transferor or of any other person taking any interest under the transfer, or
   (iii) the preservation or maintenance of the property transferred; and such direction may be made accordingly.

18. Transfer in perpetuity for benefit of public
The restrictions in sections 14, 16 and 17 shall not apply in the case of a transfer of property for the benefit of the public in the advancement of religion, knowledge, commerce, health, safety, or any other object beneficial to mankind.]

19. Vested interest
Where, on a transfer of property, an interest therein is created in favour of a person without specifying the time when it is to take effect, or in terms specifying that it is to take effect forthwith or on the happening of an event which must happen, such interest is vested, unless a contrary intention appears from the terms of the transfer.

A vested interest is not defeated by the death of the transferee before he obtains
possession.

    Explanation – An intention that an interest shall not be vested is not to be inferred merely from a provision whereby the enjoyment thereof is postponed, or whereby a prior interest in the same property is given or reserved to some other person, or whereby income

 

12 Subs. by Act 20 of 1929, sec. 10, for the original sections 16 to 18.

 

 

arising from the property is directed to be accumulated until the time of enjoyment arrives, or from a provision that if a particular event shall happen the interest shall pass to another person.

20. When unborn person acquires vested interest on transfer for his benefit
    Where, on a transfer of property, an interest therein is created for the benefit of a person not then living, he acquires upon his birth, unless a contrary intention appear from the terms of the transfer, a vested interest, although he may not be entitled to the enjoyment thereof immediately on his birth.

21. Contingent interest
Where, on a transfer of property, an interest therein is created in favour of a person to take effect only on the happening of a specified uncertain event, or if a specified uncertain event shall not happen, such person thereby acquires a contingent interest in the property.

Such interest becomes a vested interest, in the former case, on the happening of the event, in the latter, when the happening of the event becomes impossible.

Exception – Where, under a transfer of property, a person becomes entitled to an interest therein upon attaining a particular age, and the transferor also gives to him absolutely the income to arise from such interest before he reaches that age, or directs the income or so much thereof as may be necessary to be applied for his benefit, such interest
is not contingent.

22. Transfer to members of a class who attain a particular age
   Where, on a transfer of property, an interest therein is created in favour of such members only of a class as shall attain a particular age, such interest does not vest in any member of the class who has not attained that age.

23. Transfer contingent on happening of specified uncertain event
Where, on a transfer of property, an interest therein is to accrue to a specified person if a specified uncertain event shall happen, and no time is mentioned for the occurrence of that event, the interest fails unless such event happens before, or at the same time as, the intermediate or precedent interest ceases of exist.

24. Transfer to such of certain persons as survive at some period not specified
Where, on a transfer of property, an interest therein is to accrue to such of certain persons as shall go to such of them as shall be alive when the intermediate or precedent interest ceases to exist, unless a contrary intention appears from the terms of the transfer.
   Illustration
    A transfers property to B for life, and after his death to C and D, equally to be divided between them, or to the survivor of them. C dies during the life of B. D survives B. At B’s death the property passes to D.

25. Conditional transfer
     An interest created on a transfer of property and dependent upon a condition fails if the fulfilment of the condition is impossible, or is forbidden by law, or is of such a nature that, if permitted, it would defeat the provisions of any law, or is fraudulent, or involves or implies  injury to the person or property of another, or the Court regards it as immoral or opposed to
public policy.

  Illustrations
    (a) A lets a farm to B on condition that he shall walk a hundred miles in an hour.
      The lease is void.
   (b) A gives Rs. 500 to B on condition that he shall marry A’s daughter C. At the date of the transfer C was dead. The transfer is void.
   (c) A transfers Rs. 500 to B on condition that she shall murder C. The transfer is void.
   (d) A transfers Rs. 500 to his niece C if she will desert her husband. The transfer is void.

26. Fulfilment of condition precedent
     Where the terms of a transfer of property impose a condition to be fulfilled before a person can take an interest in the property, the condition shall be deemed to have been fulfilled if it has been substantially complied with.

Illustrations
   (a) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. E dies. B marries with the consent of C and D. B is deemed to have fulfilled the condition.
   (b) A transfers Rs. 5,000 to B on condition that he shall marry with the consent of C, D and E. B marries without the consent of C, D and E, but obtains their consent after the marriage. B has not fulfilled the condition.

27. Conditional transfer to one person coupled with transfer to another on failure of prior disposition
     Where, on a transfer of property, an interest therein is created in favour of one person, and by the same transaction an ulterior disposition of the same interest is made in favour of another, if the prior disposition under the transfer shall fail, the ulterior disposition shall take effect upon the failure of the prior disposition, although the failure may not have
occurred in the manner contemplated by the transferor.
    But, where the intention of the parties to the transaction is that the ulterior disposition
shall take effect only in the event of the prior disposition failing in a particular manner, the
ulterior disposition shall not take effect unless the prior disposition fails in that manner.
Illustrations
    (a) A transfers Rs. 500 to B on condition that he shall execute a certain lease within three months after A’s death, and, if he should neglect to do so, to C. B  dies in A’s life-time. The disposition in favour of C takes effect.
   (b) A transfers property to his wife; but, in case she should die in his life-time, transfers to B that which he had transferred to her. A and his wife perish together, under circumstances which make it impossible to prove that she
died before him. The disposition in favour of B does not take effect.

28. Ulterior transfer conditional on happening or not happening of specified event
   On a transfer of property an interest therein may be created to accrue to any person with the condition superadded that in case a specified uncertain event shall happen such interest shall pass to another person, or that in case a specified uncertain event shall not happen such interest shall pass to another person. In each case the dispositions are subject to the rules contained in sections 10, 12, 21, 22, 23, 24, 25 and 27.

29. Fulfilment of condition subsequent
An ulterior disposition of the kind contemplated by the last preceding section cannot take effect unless the condition is strictly fulfilled.
Illustration
   A transfers Rs. 500 to B, to be paid to him on his attaining his majority or marrying, with a proviso that, if B dies a minor or marries without C’s consent, the Rs. 500 shall go to D.

    B marries when only 17 years of age, without C’s consent. The transfer to D takes effect.

30. Prior disposition not affected by invalidity of ulterior disposition
     If the ulterior disposition is not valid, the prior disposition is not affected by it.
Illustration
    A transfers a farm to B for her life, and, if she do not desert her husband, to C. B is entitled to the farm during her life as if no condition had been inserted.

31. Condition that transfer shall cease to have effect in case specified uncertain
event happens or does not happen
Subject to the provisions of section 12, on a transfer of property an interest therein
may be created with the condition superadded that it shall cease to exist in case a specified
uncertain event shall happen, or in case a specified uncertain event shall not happen.
Illustrations
(a) A transfers a farm to B for his life, with a proviso that, in case B cuts down a
certain wood, the transfer shall cease to have any effect. B cuts down the
wood. He loses his life-interest in the farm.
(b) A transfers a farm to B, provided that, if B shall not go to England within three
years after the date of the transfer, his interest in the farm shall cease. B does
not go to England within the term prescribed. His interest in the farm ceases.
32. Such condition must not be invalid
In order that a condition that an interest shall cease to exist may be valid, it is
necessary that the event to which it relates be one which could legally constitute the
condition of the creation of an interest.
12
33. Transfer conditional on performance of act, no time being specified for
performance
Where, on a transfer of property, an interest therein is created subject to a condition
that the person taking it shall perform a certain act, but no time is specified for the
performance of the act, the condition is broken when he renders impossible, permanently or
for an indefinite period, the performance of the act.
34. Transfer conditional on performance of act, time being specified
Where an act is to be performed by a person either as a condition to be fulfilled
before an interest created on a transfer of property is enjoyed by him, or as a condition on
the non-fulfilment of which the interest is to pass from him to another person, and a time is
specified for the performance of the act, if such performance within the specified time is
prevented by the fraud of a person who would be directly benefited by non-fulfilment of the
condition, such further time shall as against him be allowed for performing the act as shall be
requisite to make up for the delay caused by such fraud. But if no time is specified for the
performance of the act, then, if its performance is by the fraud of a person interested in the
non- fulfilment of the condition rendered impossible or indefinitely postponed, the condition
shall as against him be deemed to have been fulfilled.
Election
35. Election when necessary
Where a person professes to transfer property which he has no right to transfer, and
as part of the same transaction confers any benefit on the owner of the property, such owner
must elect either to confirm such transfer or to dissent from it; and in the latter case he shall
relinquish the benefit so conferred, and the benefit so relinquished shall revert to the
transferor or his representative as if it had not been disposed of,
subject nevertheless,
where the transfer is gratuitous, and the transferor has, before the election, died or
otherwise become incapable of making a fresh transfer,
and in all cases where the transfer is for consideration,
to the charge of making good to the disappointed transferee the amount or value of
the property attempted to be transferred to him.
Illustrations
The farm of Sultanpur is the property of C and worth Rs. 800. A by an instrument of
gift professes to transfer it to B, giving by the same instrument Rs. 1,000 to C. C elects to
retain the farm. He forfeits the gift of Rs. 1,000.
In the same case, A dies before the election. His representative must out of the Rs.
1,000 pay Rs. 800 to B.
The rule in the first paragraph of this section applies whether the transferor does or
does not believe that which he professes to transfer to be his own.
13
A person taking no benefit directly under a transaction, but deriving a benefit under it
indirectly, need not elect.
A person who in his one capacity takes a benefit under the transaction may in
another dissent therefrom.
Exception to the last preceding four rules – Where a particular benefit is expressed to
be conferred on the owner of the property which the transferor professes to transfer, and
such benefit is expressed to be in lieu of that property, if such owner claim the property, he
must relinquish the particular benefit, but he is not bound to relinquish any other benefit
conferred upon him by the same transaction.
Acceptance of the benefit by the person on whom it is conferred constitutes an
election by him to confirm the transfer, if he is aware of his duty to elect and of those
circumstances which would influence the judgment of a reasonable man in making an
election, or if he waives enquiry into the circumstances.
Such knowledge or waiver shall, in the absence of evidence to the contrary, be
presumed, if the person on whom the benefit has been conferred has enjoyed it for two
years without doing any act to express dissent.
Such knowledge of waiver may be inferred from any act of his which renders it
impossible to place the persons interested in the property professed to be transferred in the
same condition as if such act had not been done.
Illustration
A transfers to B an estate to which C is entitled, and as part of the same transaction
gives C a coal-mine. C takes possession of the mine and exhausts it. He has thereby
confirmed the transfer of the estate to B.
If he does not within one year after the date of the transfer signify to the transferor or
his representatives his intention to confirm or to dissent from the transfer, the transferor or
his representative may, upon the expiration of that period, require him to make his election;
and, if he does not comply with such requisition within a reasonable time after he has
received it, he shall be deemed to have elected to confirm the transfer.
In case of disability, the election shall be postponed until the disability ceases, or until
the election is made by some competent authority.
Apportionment
36. Apportionment of periodical payments on determination of interest of person
entitled
In the absence of a contract or local usage to the contrary, all rents, annuities,
pensions, dividends and other periodical payments in the nature of income shall, upon the
transfer of the interest of the person entitled to receive such payments, be deemed, as
between the transferor and the transferee, to accrue due from day to day, and to be
apportionable accordingly, but to be payable on the days appointed for the payment thereof.
14
37. Apportionment of benefit of obligation on severance
When, in consequence of a transfer, property is divided and held in several shares,
and thereupon the benefit of any obligation relating to the property as a whole passes from
one to several owners of the property, the corresponding duty shall, in the absence of a
contract to the contrary amongst the owners, be performed in favour of each of such owners
in proportion to the value of his share in the property, provided that the duty can be severed
and that the severance does not substantially increase the burden of the obligation; but if the
duty cannot be severed, or if the severance would substantially increase the burden of the
obligation, the duty shall be performed for the benefit of such one of the several owners as
they shall jointly designate for that purpose:
Provided that no person on whom the burden of the obligation lies shall be
answerable for failure to discharge it in manner provided by this section, unless and until he
has had reasonable notice of the severance.
Nothing in this section applies to leases for agricultural purposes unless and until the
State Government by notification in the Official Gazette so directs.
Illustrations
(a) A sells to B, C and D a house situate 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 1/2 to C, and Rs. 7 1/2 to D, and must deliver the
sheep according to the joint direction of B, C and D.
(b) In the same case, each house in the village being bound to provide ten days’
labour each year on a dyke to prevent inundation, E had agreed as a term of
his lease to perform this work for A. B, C and D severally require E to perform
the ten days’ work due on account of the house of each. E is not bound to do
more than ten days’ work in all, according to such directions as B, C and D
may join in giving.
(B) Transfer of Immoveable Property
38. Transfer by person authorised only under certain circumstances to transfer
Where any person, authorized only under circumstances in their nature variable to
dispose of immoveable property, transfers such property for consideration, alleging the
existence of such circumstances, they shall, as between the transferee on the one part and
the transferor and other persons (if any) affected by the transfer on the other part, be
deemed to have existed, if the transferee, after using reasonable care to ascertain the
existence of such circumstances, has acted in good faith.
Illustration
A, a Hindu widow, whose husband has left collateral heirs, alleging that the property
held by her as such is insufficient for her maintenance, agrees, for purposes neither religious
nor charitable, to sell a field, part of such property, to B. B satisfies himself by reasonable
enquiry that the income of the property is insufficient for A’s maintenance, and that the sale
of the field is necessary, and acting in good faith, buys the field from A. As between B on the
one part and A and the collateral heirs on the other part, a necessity for the sale shall be
deemed to have existed.
15
39. Transfer where third person is entitled to maintenance
Where a third person has a right to receive maintenance, or a provision for
advancement or marriage, from the profits of immoveable property, and such property is
transferred,
13 [***] the right may be enforced against the transferee, if he has notice
14[thereof] or if the transfer is gratuitous; but not against a transferee for consideration and
without notice of the right, nor against such property in his hands.
15[***]
40. Burden of obligation imposing restriction on use of land
Where, for the more beneficial enjoyment of his own immoveable property, a third
person has, independently of any interest in the immoveable property of another or of any
easement thereon, a right to restrain the enjoyment 16[in a particular manner of the latter
property], or
Or of obligation annexed to ownership but not amounting to interest or easement
Where a third person is entitled to the benefit of an obligation arising out of contract
and annexed to the ownership of immoveable property, but not amounting to an interest
therein or easement thereon,
such right or obligation may be enforced against a transferee with notice thereof or a
gratuitous transferee of the property affected thereby, but not against a transferee for
consideration and without notice of the right or obligation, nor against such property in his
hands.
Illustration
A contracts to sell Sultanpur to B. While the contract is still in force he sells Sultanpur
to C, who has notice of the contract. B may enforce the contract against C to the same
extent as against A.
41. Transfer by ostensible owner
Where, with the consent, express or implied, of the persons interested in immoveable
property, a person is the ostensible owner of such property and transfers the same for
consideration, the transfer shall not be voidable on the ground that the transferor was not
authorized to make it: provided that the transferee, after taking reasonable care to ascertain
that the transferor had power to make the transfer, has acted in good faith.
42. Transfer by person having authority to revoke former transfer
Where a person transfers any immoveable property, reserving power to revoke the
transfer, and subsequently transfers the property for consideration to another transferee,
such transfer operates in favour of such transferee (subject to any condition attached to the
exercise of the power) as a revocation of the former transfer to the extent of the power.

13 The words “with the intention of defeating such right” omitted by Act 20 of 1929, sec. 11.
14 Subs. by Act 20 of 1929, sec. 11, for “of such intention”.
15 The illustration omitted by Act 20 of 1929, sec. 11.
16 Subs. by Act 20 of 1929, sec. 12, for “of the latter property or to compel its enjoyment in a particular manner”.
16
Illustration
A lets a house to B, and reserves power to revoke the lease if, in the opinion of a
specified surveyor, B should make a use of it detrimental to its value, Afterwards A, thinking
that such a use has been made, lets the house to C. This operates as a revocation of B’s
lease subject to the opinion of the surveyor as to B’s use of the house having been
detrimental to its value.
43. Transfer by unauthorized person who subsequently acquires interest in
property transferred
Where a person 17[fraudulently or] erroneously represents that he is authorized to
transfer certain immovable property, and professes to transfer such property for
consideration, such transfer shall, at the option of the transferee, operate on any interest
which the transferor may acquire in such property at any time during which the contract of
transfer subsists.
Nothing in this section shall impair the right of transferees in good faith for
consideration without notice of the existence of the said option.
Illustration
A, a Hindu who has separated from his father B, sells to C three fields, X, Y and Z,
representing that A is authorized to transfer the same. Of these fields Z does not belong to A,
it having been retained by B on the partition; but on B’s dying A as heir obtains Z. C, not
having rescinded the contract of sale, may require A to deliver Z to him.
44. Transfer by one co-owner
Where one of two or more co-owners of immoveable property legally competent in
that behalf transfer his share of such property or any interest therein, the transferee acquires,
as to such share or interest, and so far as is necessary to give effect to the transfer, the
transferor’s right to joint possession or other common or part enjoyment of the property, and
to enforce a partition of the same, but subject to the conditions and liabilities affecting, at the
date of the transfer, the share or interest so transferred.
Where the transferee of a share of a dwelling-house belonging to an undivided family
is not a member of the family, nothing in this section shall be deemed to entitle him to joint
possession or other common or part enjoyment of the house.
45. Joint transfer for consideration
Where 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.

17 Ins. By Act 20 of 1929, sec. 13.
17
In the absence of evidence as to the interests in the fund to which they were
respectively entitled, or as to the shares which they respectively advanced, such persons
shall be presumed to be equally interested in the property.
46. Transfer for consideration by persons having distinct interests
Where immoveable property is transferred for consideration by persons having
distinct interests therein, the transferors are, in the absence of a contract to the contrary,
entitled to share in the consideration equally, where their interest in the property were of
equal value, and, where such interests were of unequal value, proportionately to the value of
their respective interests.
Illustration
(a) A, owing a moiety, and B and C, each a quarter share, of mauza Sultanpur,
exchange an eighth share of that mauza for a quarter share of mauza Lalpura.
There being no agreement to the contrary, A is entitled to an eighth share in
Lalpura, and B and C each to a sixteenth share in that mauza.
(b) A, being entitled to a life-interest in mauza Atrali and B and C to the reversion,
sell the mauza for Rs. 1,000. A’s life- interest is ascertained to be worth Rs.
600, the reversion Rs. 400. A is entitled to receive Rs. 600 out of the
purchase-money. B and C to receive Rs. 400.
47. Transfer by co-owners of share in common property
Where several co-owners of immoveable property transfer a share therein without
specifying that the transfer is to take effect on any particular share or shares of the
transferors, the transfer, as among such transferors, takes effect on such shares equally
where the shares were equal, and, where they were unequal, proportionately to the extent of
such shares.
Illustration
A, the owner of an eight-anna share, and B and C, each the owner of a four-anna
share, in mauza Sultanpur, transfer a two-anna share in the mauza to D, without specifying
from which of their several shares the transfer is made. To give effect to the transfer oneanna
share is taken from the share of A, and half-an-anna share from each of the shares of
B and C.
48. Priority of rights created by transfer
Where a person purports to create by transfer at different times rights in or over the
same immoveable property, and such rights cannot all exist or be exercised to their full
extent together, each later created right shall, in the absence of a special contract or
reservation binding the earlier transferees, be subject to the rights previously created.
49. Transferee’s right under policy
Where immoveable property is transferred for consideration, and such property or
any part thereof is at the date of the transfer insured against loss or damage by fire, the
transferee, in case of such loss or damage, may, in the absence of a contract to the contrary,
require any money which the transferor actually receives under the policy, or so much
thereof as may be necessary, to be applied in reinstating the property.
18
50. Rent bona fide paid to holder under defective title
No person shall be chargeable with any rents or profits of any immoveable property,
which he has in good faith paid or delivered to any person of whom he in good faith held
such property, notwithstanding it may afterwards appear that the person to whom such
payment or delivery was made had no right to receive such rents or profits.
Illustration
A lets a field to B at a rent of Rs. 50, and then transfers the field to C. B, having no
notice of the transfer, in good faith pays the rent to A. B is not chargeable with the rent so
paid.
51. Improvements made by bona fide holders under defective titles
When the transferee of immoveable property makes any improvement on the
property, believing in good faith that he is absolutely entitled thereto, and he is subsequently
evicted 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 his interest in the property to the transferee at the then
market-value thereof, irrespective of the value of such improvement.
The amount to be paid or secured in respect of such improvement shall be the
estimated value thereof at the time of the eviction.
When, under the circumstances aforesaid, the transferee has planted or sown on the
property crops which are growing when he is evicted therefrom, he is entitled to such crops
and to free ingress and egress to gather and carry them.
52. Transfer of property pending suit relating thereto
During the 18[pendency] in any Court having authority 19[
20[within the limits of India
excluding the State of Jammu and Kashmir] or established beyond such limits] by 21[the
Central Government] 22[***], of 23[any] suit or proceeding which is not collusive and in which
any right to immoveable property is directly and specifically in question, the property cannot
be transferred or otherwise dealt with by any party to the suit or proceeding so as to affect
the rights of any other party thereto under any decree or order which may be made therein,
except under the authority of the Court and on such terms as it may impose.
24 [Explanation – For the purposes of this section, the pendency of a suit or
proceeding shall be deemed to commence from the date of the presentation of the plaint or
the institution of the proceeding in a Court of competent jurisdiction, and to continue until the
suit or proceeding has been disposed of by a final decree or order, and complete satisfaction
or discharge of such decree or order has been obtained, or has become unobtainable by
reason of the expiration of any period of limitation prescribed for the execution thereof by
any law for the time being in force.]

18 Subs. by Act 20 of 1929, sec. 14, for “active prosecution”.
19 Subs. by the A.O. 1950, for “in the Provinces or established beyond the limits of the Provinces”.
20 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).
21 Subs. by the A.O. 1937, for “the Governor General in Council”.
22 The words “or the Crown Representative” rep. by the A.O. 1948.
23 Subs. by Act 20 of 1929, sec. 14, for “a contentious”.
24 Ins. By Act 20 of 1929, sec. 14.
19
25[53. Fraudulent transfer
(1) Every transfer of immoveable property made with intent to defeat or delay the
creditors of the transferor shall be voidable at the option of any creditor so defeated
or delayed.
Nothing in this sub-section shall impair the rights of a transferee in good faith and for
consideration.
Nothing in this sub-section shall affect any law for the time being in force relating to
insolvency.
A suit instituted by a creditor (which term includes a decree-holder whether he has or
has not applied for execution of his decree) to avoid a transfer on the ground that it
has been made with intent to defeat or delay the creditors of the transferor, shall be
instituted on behalf of, or for the benefit of, all the creditors.
(2) Every transfer of immoveable property made without consideration with intent to
defraud a subsequent transferee shall be voidable at the option of such transferee.
For the purposes of this sub-section, no transfer made without consideration shall be
deemed to have been made with intent to defraud by reason only that a subsequent
transfer for consideration was made.]
26[53A. Part performance
Where any person contracts to transfer for consideration any immoveable property
by writing signed by him or on his behalf from which the terms necessary to constitute the
transfer can be ascertained with reasonable certainty, and the transferee has, in part
performance of the contract, taken possession of the property or any part thereof, or the
transferee, being already in possession, continues in possession in part performance of the
contract and has done some act in furtherance of the contract,
and the transferee has performed or is willing to perform his part of the contract,
then, notwithstanding that the contract, though required to be registered, has not
been registered, or, where there is an instrument of transfer, that the transfer has not been
completed in the manner prescribed therefor by the law for the time being in force, the
transferor or any person claiming under him shall be debarred from enforcing against the
tranferee and persons claiming under him any right in respect of the property of which the
transferee has taken or continued in possession, other than a right expressly provided by the
terms of the contract:
Provided that nothing in this section shall affect the rights of a transferee for
consideration who has no notice of the contract or of the part performance thereof.]

25 Subs. by Act 20 of 1929, sec. 15, for the original section.
26 Ins. By Act 20 of 1929, sec. 16.

Sales of Immoveable Property

54. “Sale” defined
“Sale” is a transfer of ownership in exchange for a price paid or promised or part-paid and part-promised.

 Sale how made
1Such 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.
47In the case of tangible immoveable property of a value less than one hundred
rupees, such transfer may be made either by a registered instrument or by delivery of the
property.
Delivery of tangible immoveable property takes place when the seller places the buyer, or such person as he directs, in possession of the property.

Contract for sale
A contract for the sale of immovable property is a contract that a sale of such
property shall take place on terms settled between the parties.
It does not, of itself, create any interest in or charge on such property.
55. Rights and liabilities of buyer and seller
In the absence of a contract to the contrary, the buyer and the seller of immoveable
property respectively are subject to the liabilities, and have the rights, mentioned in the rules
next following, or such of them as are applicable to the property sold:
(1) The seller is bound –
(a) to disclose to the buyer any material defect in the property 2
[or in the
seller’s title thereto] of which the seller is, and the buyer is not, aware,
and which the buyer could not with ordinary care discover;
(b) to produce to the buyer on his request for examination all documents
of title relating to the property which are in the seller’s possession or
power;
(c) to answer to the best of his information all relevant questions put to
him by the buyer in respect to the property or the title thereto;
(d) on payment or tender of the amount due in respect of the price, to
execute a proper conveyance of the property when the buyer tenders
it to him for execution at a proper time and place;

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 Cantonments Act, 1924 (2 of 1924).
2
Ins. by Act 20 of 1929, sec. 17.
21
(e) between the date of the contract of sale and the delivery of the
property, to take as much care of the property and all documents of
title relating thereto which are in his possession as an owner of
ordinary prudence would take of such property and documents;
(f) to give, on being so required, the buyer, or such person as he directs,
such possession of the property as its nature admits;
(g) to pay all public charges and rent accrued due in respect of the
property up to the date of the sale, the interest on all encumbrances
on such property due on such date, and, except where the property is
sold subject to encumbrances, to discharge all encumbrances on the
property then existing.
(2) The seller shall be deemed to contract with the buyer that the interest which the
seller professes to transfer to the buyer subsists and that he has power to transfer
the same:
Provided that, where the sale is made by a person in a fiduciary character, he shall
be deemed to contract with the buyer that the seller has done no act whereby the
property is encumbered or whereby he is hindered from transferring it.
The benefit of the contract mentioned in this rule shall be annexed to, and shall go
with, the interest of the transferee as such, and may be enforced by every person in
whom that interest is for the whole or any part thereof from time to time vested.
(3) Where the whole of the purchase-money has been paid to the seller, he is also
bound to deliver to the buyer all documents of title relating to the property which are
in the seller’s possession or power:
Provided that, (a) where the seller retains any part of the property comprised in such
documents, he is entitled to retain them all, and, (b) where the whole of such property
is sold to different buyers, the buyer of the lot of greatest value is entitled to such
documents. But in case (a) the seller, and in case (b) the buyer, of the lot of greatest
value, is bound, upon every reasonable request by the buyer, or by any of the other
buyers, as the case may be, and at the cost of the person making the request, to
produce the said documents and furnish such true copies thereof or extracts
therefrom as he may require; and in the meantime, the seller, or the buyer of the lot
of greatest value, as the case may be, shall keep the said documents safe,
uncancelled and undefaced, unless prevented from so doing by fire or other
inevitable accident.
(4) The seller is entitled –
(a) to the rents and profits of the property till the ownership thereof passes to the
buyer;
(b) where the ownership of the property has passed to the buyer before payment
of the whole of the purchase-money, to a charge upon the property in the
hands of the buyer, 1[any transferee without consideration or any transferee
with notice of the non-payment], for the amount of the purchase-money, or
any part thereof remaining unpaid, and for interest on such amount or part
3
[from the date on which possession has been delivered].

3
Ins. by Act 20 of 1929, sec. 17.
22
(5) The buyer is bound
(a) to disclose to the seller any fact as to the nature or extent of the seller’s
interest in the property of which the buyer is aware, but of which he has
reason to believe that the seller is not aware, and which materially increases
the value of such interest;
(b) to pay or tender, at the time and place of completing the sale, the purchasemoney
to the seller or such person as he directs: provided that, where the
property is sold free from encumbrances, the buyer may retain out of the
purchase-money the amount of any encumbrances on the property existing at
the date of the sale, and shall pay the amount so retained to the persons
entitled thereto;
(c) where the ownership of the property has passed to the buyer, to bear any
loss arising from the destruction, injury or decrease in value of the property
not caused by the seller;
(d) where the ownership of the property has passed to the buyer, as between
himself and the seller, to pay all public charges and rent which may become
payable in respect of the property, the principal moneys due on any
encumbrances subject to which the property is sold, and the interest thereon
afterwards accruing due.
(6) The buyer is entitled –
(a) where the ownership of the property has passed to him, to the benefit of any
improvement in, or increase in value of, the property, and to the rents and
profits thereof;
(b) unless he has improperly declined to accept delivery of the property, to a
charge on the property, as against the seller and all persons claiming under
him,
4
[***] to the extent of the seller’s interest in the property, for the amount
of any purchase-money properly paid by the buyer in anticipation of the
delivery and for interest on such amount; and, when he properly declines to
accept the delivery, also for the earnest (if any) and for the costs (if any)
awarded to him of a suit to compel specific performance of the contract or to
obtain a decree for its rescission.
An omission to make such disclosures as are mentioned in this section, paragraph
(1), clause (a), and paragraph (5), clause (a), is fraudulent.
5
[56. Marshalling by subsequent purchaser
If the owner of two or more properties mortgages them to one person and then sells
one or more of the properties to another person, the buyer is, in the absence of a contract to
the contrary, entitled to have the mortgage-debt satisfied out of the property or properties not
sold to him, so far as the same will extend, but not so as to prejudice the rights of the
mortgagee or persons claiming under him or of any other person who has for consideration
acquired an interest in any of the properties.]

4
The words “with notice of the payment” omitted by Act 20 of 1929, sec. 17.
5 Subs. by Act 20 of 1929, sec. 18, for the original section.
23
Discharge of Encumbrances on Sale
57. Provision by Court for encumbrances and sale freed therefrom
(a) Where immoveable property subject to any encumbrance, whether immediately
payable or not, is sold by the Court or in execution of a decree, or out of Court, the
Court may, if it thinks fit, on the application of any party to the sale, direct or allow
payment into Court, –
(1) in case of an annual or monthly sum charged on the property, or of a capital
sum charged on a determinable interest in the property — of such amount as,
when invested in securities of the central Government, the Court considers
will be sufficient, by means of the interest thereof, to keep down or otherwise
provide for that charge, and
(2) in any other case of a capital sum charged on the property — of the amount
sufficient to meet the encumbrance and any interest due thereon.
But in either case there shall also be paid into Court such additional amount
as the Court considers will be sufficient to meet the contingency of further
costs, expenses and interest, and any other contingency, except depreciation
of investments, not exceeding one-tenth part of the original amount to be paid
in, unless the Court for special reasons (which it shall record) thinks fit to
require a large additional amount.
(b) Thereupon the Court may, if it thinks fit, and after notice to the encumbrance, unless
the Court, for reasons to be recorded in writing, thinks fit to dispense with such notice,
declare the property to be freed from the encumbrance, and make any order for
conveyance, or vesting order, proper for giving effect to the sale, and give directions
for the retention and investment of the money in Court.
(c) After notice served on the persons interested in or entitled to the money or fund in
Court, the Court may direct payment or transfer thereof to the persons entitled to
receive or give a discharge for the same, and generally may give directions
respecting the application or distribution of the capital or income thereof.
(d) An appeal shall lie from any declaration, order or direction under this section as if the
same were a decree.
(e) In this section “Court” means (1) a High Court in the exercise of its ordinary or
extraordinary original civil jurisdiction, (2) the Court of a District Judge within the local
limits of whose jurisdiction the property or any part thereof is situate, (3) any other
Court which the State Government may, from time to time, by notification in the
Official Gazette, declare to be competent to exercise the jurisdiction conferred by this
section.

Mortgages of Immoveable Property and Charges

58. “Mortgage”, “mortgagor”, “mortgagee”, “mortgage-money” and “mortgagedeed”
defined

(a) A mortgage is the transfer of an interest in specific immoveable property for the
purpose of securing the payment of money advanced or to be advanced by way of
loan, an existing or future debt, or the performance of an engagement which may
give rise to a pecuniary liability.
The transferor is called a mortgagor, the transferee a mortgagee; the principal money
and interest of which payment is secured for the time being are called the mortgagemoney,
and the instrument (if any) by which the transfer is effected is called a
mortgage-deed.
(b) Simple mortgage
Where, without delivering possession of the mortgaged property, the mortgagor binds
himself personally to pay the mortgage-money, and agrees, expressly or impliedly,
that, in the event of his failing to pay according to his contract, the mortgagee shall
have a right to cause the mortgaged property to be sold and the proceeds of sale to
be applied, so far as may be necessary, in payment of the mortgage-money, the
transaction is called a simple mortgage and the mortgagee a simple mortgagee.
(c) Mortgage by conditional sale
Where the mortgagor ostensibly sells the mortgaged property -
on condition that on default of payment of the mortgage-money on a certain date the
sale shall become absolute, or
on condition that on such payment being made the sale shall become void, or
on condition that on such payment being made the buyer shall transfer the property
to the seller,
the transaction is called a mortgage by conditional sale and the mortgagee a
mortgagee by conditional sale:
1[Provided that no such transaction shall be deemed to be a mortgage, unless the
condition is embodied in the document which effects or purports to effect the sale.]
(d) Usufructuary mortgage
Where the mortgagor delivers possession 1
[or expressly or by implication binds
himself to deliver possession] of the mortgaged property to the mortgagee, and
authorizes 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-

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”.
25
money, the transaction is called an usufructuary mortgage and the mortgagee an
usufructuary mortgagee.
(e) English mortgage
Where the mortgagor binds himself to re-pay the mortgage-money on a certain date,
and transfers the mortgaged property absolutely to the mortgagee, but subject to a proviso
that he will retransfer it to the mortgagor upon payment of the mortgage-money as agreed,
the transaction is called an English mortgage.
4
[(f) Mortgage by deposit of title-deeds
Where a person in any of the following towns, namely, the towns of Calcutta, Madras,
5
[and Bombay],
6
[***] and in any other town7 which the 8
[State Government concerned] may,
by notification in the Official Gazette, specify in this behalf, delivers to a creditor or his agent
documents of title to immoveable property, with intent to create a security thereon, the
transaction is called a mortgage by deposit of title-deeds.
(g) Anomalous mortgage
A mortgage which is not a simple mortgage, a mortgage by conditional sale, an
usufructuary mortgage, an English mortgage or a mortgage by deposit of title-deeds within
the meaning of this section is called an anomalous mortgage.]
9
[59. Mortgage when to be by assurance
Where the principal money secured is one hundred rupees or upwards, a mortgage
10[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 11[a registered instrument] signed and attested as aforesaid, or
(except in the case of a simple mortgage) by delivery of the property.
12[***].

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 ¡V 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.
9 As to limitation to the territorial operation of section 59, see, section 1, supra. Section 59, extends to every
cantonment ¡V see section 287 of the Cantonments Act, 1924 (2 of 1924).
10 Ins. by Act 20 of 1929, sec. 20.
11 Subs. by Act 6 of 1904, sec. 3, for “an instrument”.
12 The third paragraph was omitted by Act 20 of 1929, sec. 20.
26
13[59A.References to mortgagors and mortgagees to include persons deriving title
from them
Unless otherwise expressly provided, references in this Chapter to mortgagors and
mortgagees shall be deemed to include references to persons deriving title from them
respectively.]
Rights and Liabilities of Mortgagor
60. Right of mortgagor to redeem
At any time after the principal money has become 14[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 15[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 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 acknowledgment 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 16[decree] of a Court.
The right conferred by this section is called a right to redeem and a suit to enforce it
is called a suit for redemption.
Nothing in this section shall be deemed to render invalid any provision to the effect
that, if the time fixed for payment of the principal money has been allowed to pass or no
such time has been fixed, the mortgagee shall be entitled to reasonable notice before
payment or tender of such money.
Redemption of portion of mortgaged property
Nothing in this section shall entitle a person interested in a share only of the
mortgaged property to redeem his own share only, on payment of a proportionate part of the
amount remaining due on the mortgage, except 17[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.
18[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.

13 Ins. by Act 20 of 1929, sec. 21.
14 Sub. by Act 20 of 1929, sec. 22, for “payable”.
15 Subs. by Act 20 of 1929, sec. 22, for “the mortgage-deed, if any to the mortgagor”.
16 Subs. by Act 20 of 1929, sec. 22, for “order”.
17 Ins. by Act 20 of 1929, sec. 22.
18 Sections 60A and 60B ins. By Act 20 of 1929, sec. 23.
27
(2) The rights conferred by this section belong to and may be enforced by the mortgagor
or by any encumbrancer notwithstanding an intermediate encumbrance; but the
requisition of any encumbrance shall prevail over a requisition of the mortgagor and,
as between encumbrancers, the requisition of a prior encumbrancer shall prevail over
that of a subsequent encumbrancer.
(3) The provisions of this section do not apply in the case of a mortgagee who is or has
been in possession.
60B. Right to inspection and production of documents
A mortgagor, as long as his right of redemption subsists, shall be entitled at all
reasonable times, at his request and at his own cost, and on payment of the mortgagee’s
costs and expenses in this behalf, to inspect and make copies or abstracts of, or extracts
from, documents of title relating to the mortgaged property which are in the custody or power
of the mortgagee.]
19[61. Right to redeem separately or simultaneously
A mortgagor who has executed two or more mortgages in favour of the same
mortgagee shall, in the absence of a contract to the contrary, when the principal money of
any two or more of the mortgages has become due, be entitled to redeem any one such
mortgage separately, or any two or more of such mortgages together.]
62. Right of usufructuary mortgagor to recover possession
In the case of a usufructuary mortgage, the mortgagor has a right to recover
possession of the property 20[together with the mortgage-deed and all documents relating to
the mortgaged property which are in the possession or power of the mortgagee], –
(a) where the mortgagee is authorized to pay himself the mortgage-money from
the rents and profits of the property, — when such money is paid;
(b) where the mortgagee is authorized to pay himself from such rents and profits
21[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 22[the mortgage-money or the
balance thereof] or deposits it in Court as hereinafter provided.
63. Accession to mortgaged property
Where mortgaged property in possession of the mortgagee has, during the
continuance of the mortgage, received any accession, the mortgagor, upon redemption,
shall, in the absence of a contract to the contrary, be entitled as against the mortgagee to
such accession.
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

19 Subs. by Act 20 of 1929, sec. 24 for the original section.
20 Ins. by Act 20 of 1929, sec. 25.
21 Subs. by Act 20 of 1929, sec. 25, for “the interest of the principal money”.
22 Subs. by Act 20 of 1929, sec. 25, for “the principal money”.
28
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,
23[with interest
at the same rate as is payable on the principal, or, where no such rate is fixed, at the rate of
nine per cent per annum].
In the case last mentioned the profits, if any, arising from the accession shall be
credited to the mortgagor.
Where the mortgage is usufructuary and the accession has been acquired at the
expense of the mortgagee, the profits, if any, arising from the accession shall, in the
absence of a contract to the contrary, be set off against interest, if any, payable on the
money so expended.
24[63A.Improvements to mortgaged property
(1) Where mortgaged property in possession of the mortgagee has, during the
continuance of the mortgage, been improved, the mortgagor, upon redemption, shall,
in the absence of a contract to the contrary, be entitled to the improvement; and the
mortgagor shall not, save only in cases provided for in sub-section (2), be liable to
pay the cost thereof.
(2) Where any such improvement was effected at the cost of the mortgagee and was
necessary to preserve the property from destruction or deterioration or was
necessary to prevent the security from becoming insufficient, or was made in
compliance with the lawful order of any public servant or public authority, the
mortgagor shall, in the absence of a contract to the contrary, be liable to pay the
proper cost thereof as an addition to the principal money with interest at the same
rate as is payable on the principal, or, where no such rate is fixed, at the rate of nine
per cent per annum, and the profits, if any, accruing by reason of the improvement
shall be credited to the mortgagor.]
64. Renewal of mortgaged lease
Where the mortgaged property is a lease 25[***] and the mortgagee obtains a renewal
of the lease, the mortgagor, upon redemption, shall, in the absence of a contract by him to
the contrary, have the benefit of the new lease.
65. Implied contracts by mortgagor
In the absence of a contract to the contrary, the mortgagor shall be deemed to
contract with the mortgagee, –
(a) that the interest which the mortgagor professes to transfer to the mortgagee
subsists, and that the mortgagor has power to transfer the same;
(b) that the mortgagor will defend, or, if the mortgagee be in possession of the
mortgaged property, enable him to defend, the mortgagor’s title thereto;

23 Subs. by Act 20 of 1929, sec. 26, for “at the same rate of interest”.
24 Ins. by Act 20 of 1929, sec. 27.
25 The words “for a term of years” omitted by Act 20 of 1929, sec. 28.

(c) that the mortgagor will, so long as the mortgagee is not in possession of the
mortgaged property, pay all public charges accruing due in respect of the
property;
(d) and, where the mortgaged property is a lease 26[***], that the rent payable
under the lease, the conditions contained therein, and the contracts binding
on the lessee have been paid, performed and observed down to the
commencement of the mortgage; and that the mortgagor will, so long as the
security exists and the mortgagee is not in possession of the mortgaged
property, pay the rent reserved by the lease, or, if the lease be renewed, the
renewed lease, perform the conditions contained therein and observe the
contracts binding on the lessee, and indemnify the mortgagee against all
claims sustained by reason of the non-payment of the said rent or the nonperformance
or non-observance of the said conditions and contracts;
(e) and, where the mortgage is a second or subsequent encumbrance on the
property, that the mortgagor will pay the interest from time to time accruing
due on each prior encumbrance as and when it becomes due, and will at the
proper time discharge the principal money due on such prior encumbrance.

27[***]
The benefit of the contracts mentioned in this section shall be annexed to and shall
go with the interest of the mortgagee as such, and may be enforced by every person in
whom that interest is for the whole or any part thereof from time to time vested.
28[65A.Mortgagor’s power to lease
(1) Subject to the provisions of sub-section (2), a mortgagor, while lawfully in possession
of the mortgaged property, shall have power to make leases thereof which shall be
binding on the mortgagee.
(2) (a) Every such lease shall be such as would be made in the ordinary course of
management of the property concerned, and in accordance with any local law,
custom or usage.
(b) Every such lease shall reserve the best rent that can reasonably be obtained,
and no premium shall be paid or promised and no rent shall be payable in
advance.
(c) No such lease shall contain a covenant for renewal.
(d) Every such lease shall take effect from a date not later than six months from
the date on which it is made.
(e) In the case of a lease of buildings, whether leased with or without the land on
which they stand, the duration of the lease shall in no case exceed three
years, and the lease shall contain a covenant for payment of the rent and a
condition of re-entry on the rent not being paid within a time therein specified.

26 The words “for a term of years” omitted by Act 20 of 1929, sec. 29.
27 Certain words omitted by Act 20 of 1929, sec. 29.
28 Ins. by Act 20 of 1929, sec. 30.
30
(3) The provisions of sub-section (1) apply only if and as far as a contrary intention is not
expressed in the mortgage-deed; and the provisions of sub-section (2) may be varied
or extended by the mortgage-deed and, as so varied and extended, shall, as far as
may be, operate in like manner and with all like incidents, effects and consequences,
as if such variations or extensions were contained in that sub-section.]
66. Waste by mortgagor in possession
A mortgagor in possession of the mortgaged property is not liable to the mortgagee
for allowing the property to deteriorate; but he must not commit any act which is destructive
or permanently injurious thereto, if the security is insufficient or will be rendered insufficient
by such act.
Explanation – A security is insufficient within the meaning of this section unless the
value of the mortgaged property exceeds by one third, or, if consisting of buildings, exceeds
by one-half, the amount for the time being due on the mortgage.
Rights and Liabilities of Mortgagee
67. Right to foreclosure or sale
In the absence of a contract to the contrary, the mortgagee has, at any time after the
mortgage-money has become 29[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 30[a decree] that a mortgagor shall be absolutely debarred of his right
to redeem the mortgaged property is called a suit for foreclosure.
Nothing in this section shall be deemed –
31[(a) to authorize any mortgagee other than a mortgagee by conditional sale or a
mortgagee under an anomalous mortgage by the terms of which he is entitled to
foreclose, to institute a suit for foreclosure, or an usufructuary mortgagee as such or
a mortgagee by conditional sale as such to institute a suit for sale; or]
(b) to authorize a mortgagor who holds the mortgagee’s rights as his trustee or legal
representative, and who may sue for a sale of the property, to institute a suit for
foreclosure; or
(c) to authorize the mortgagee of a railway, canal or other work in the maintenance of
which the public are interested, to institute a suit for foreclosure or sale; or
(d) to authorize a person interested in part only of the mortgage-money to institute a suit
relating only to a corresponding part of the mortgaged property, unless the
mortgagees have, with the consent of the mortgagor, severed their interests under
the mortgage.

29 Sub. by Act 20 of 1929, sec. 31, for “payable”.
30 Subs. by Act 20 of 1929, sec. 31, for “an order”.
31 Subs. by Act 20 of 1929, sec. 31 for the original clause.
31
32[67A.Mortgagee when bound to bring one suit on several mortgages
A mortgagee who holds two or more mortgages executed by the same mortgagor in
respect of each of which he has a right to obtain the same kind of decree under section 67,
and who sues to obtain such decree on any one of the mortgages, shall, in the absence of a
contract to the contrary, be bound to sue on all the mortgages in respect of which the
mortgage-money has become due.]
33[68. Right to sue for mortgage money
(1) The mortgagee has a right to sue for the mortgage-money in the following cases and
no others, namely: –
(a) where the mortgagor binds himself to repay the same;
(b) where, by any cause other than the wrongful act or default of the mortgagor
or mortgagee, the mortgaged property is wholly or partially destroyed or the
security is rendered insufficient within the meaning of section 66, and the
mortgagee has given the mortgagor a reasonable opportunity of providing
further security enough to render the whole security sufficient, and the
mortgagor has failed to do so;
(c) where the mortgagee is deprived of the whole or part of his security by or in
consequence of the wrongful act or default of the mortgagor;
(d) where, the mortgagee being entitled to possession of the mortgaged property,
the mortgagor fails to deliver the same to him, or to secure the possession
thereof to him without disturbance by the mortgagor or any person claiming
under a title superior to that of the mortgagor:
Provided that, in the case referred to in clause (a), a transferee from the mortgagor or
from his legal representative shall not be liable to be sued for the mortgage-money.
(2) Where a suit is brought under clause (a) or clause (b) of sub-section (1), the Court
may, at its discretion, stay the suit and all proceedings therein, notwithstanding any
contract to the contrary, until the mortgagee has exhausted all his available remedies
against the mortgaged property or what remains of it, unless the mortgagee
abandons his security and, if necessary, re-transfers the mortgaged property.]
69. 34[(1)] Power of sale when valid
35 [
36 [***] A mortgagee, or any person acting on his behalf, shall, subject to the
provisions of this section, have power to sell or concur in selling the mortgaged property, or
any part thereof, in default of payment of the mortgage-money, without the intervention of
the Court, in the following cases and in no others, namely: – ]
(a) where the mortgage is an English mortgage, and neither the mortgagor nor
the mortgagee is a Hindu, Muhammadan or Buddhist 37[or a member of any

32 Ins. by Act 20 of 1929, sec. 32.
33 Subs. by Act 20 of 1929, sec. 33, for the original section.
34 Section 69 was numbered as sub-section (1) of that section, by Act 20 of 1929, sec. 34.
35 Subs. by Act 20 of 1929, sec. 34, for certain original words.
36 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.
37 Ins. by Act 3 of 1885, sec. 5.
32
other race, sect, tribe or class from time to time specified in this behalf by
38[the State Government], in the Official Gazette];
(b) where 39[a power of sale without the intervention of the Court is expressly
conferred on the mortgagee by the mortgage-deed and] the mortgagee is
40[the Government];
(c) where 41[a power of sale without the intervention of the Court is expressly
conferred on the mortgagee by the mortgage-deed and] the mortgaged
property or any cart thereof 42 [was, on the date of the execution of the
mortgage-deed], situate within the towns of Calcutta Madras, Bombay,
43[***]
44 [or in any other town 45 or area which the State Government may, by
notification in the Official Gazette, specify in this behalf].
46[(2)] 47[***] No such power shall be exercised unless and until –
48[(a)] notice in writing requiring payment of the principal money has been served on the
mortgagor, or on one of several mortgagors, and default has been made in payment
of the principal money, or of part thereof, for three months after such service; or
49[(b)] some interest under the mortgage amounting at least to five hundred rupees is in
arrear and unpaid for three months after becoming due.
50[(3)] When a sale has been made in professed exercise of such a power, the title of the
purchaser shall not be impeachable on the ground that no case had arisen to
authorize the sale, or that due notice was not given, or that the power was otherwise
improperly or irregularly exercised; but any person damnified by an unauthorized or
improper or irregular exercise of the power shall have his remedy in damages against
the person exercising the power.
51[(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

38 The words “the L.G., with previous sanction of the G.G. in C” successively amended by the A.O. 1937 and the
A.O. 1950 to read as above.
39 Ins. by Act 20 of 1929, sec. 34.
40 The words “the Secretary of State for India in Council” successively amended by the A.O. 1937 and the A.O.
1950 to reade as above.
41 Ins. by Act 20 of 1929, sec. 34.
42 Subs. by Act 20 of 1929, sec. 34, for “is”.
43 The word “Karachi” omitted by the A.O. 1948.
44 The words “or Rangoon” have been successively amended by Act 6 of 1904, 11 of 1915, 20 of 1929, the A.O.
1937 and the A.O. 1950 to read as above.
45 For notifications relating to the towns of:
Ahmedabad, see Gazette of India 1935, Pt I, p. 936.
Bandra, Kurla and Chatkoper-Kirol, see Gazette of India, 1924, Pt. I, p. 1064.
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 (Construction), see Gazette of India, 1963, Pt. II, Section 3, Sub-section (1), p. 1020.
46 Second paragraph numbered as sub-section (2) by Act 20 of 1929, sec. 34.
47 The word “but” omitted by Act 20 of 1929, sec. 34.
48 Clause (1) was lettered (a) by Act 20 of 1929, sec. 34.
49 Clause (2) was lettered (b) by Act 20 of 1929, sec. 34.
50 Third paragraph numbered as sub-section (3) by Act 20 of 1929, sec. 34.
51 Fourth paragraph numbered as sub-section (4) by Act 20 of 1929, sec. 34.
33
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.
52[(5) Nothing in this section or in section 69A applies to powers conferred before
the first day of July, 1882.]
53[***]
54[69A.Appointment of receiver
(1) A mortgagee having the right to exercise a power of sale under section 69 shall,
subject to the provisions of sub-section (2), be entitled to appoint, by writing signed
by him or on his behalf, a receiver of the income of the mortgaged property or any
part thereof.
(2) Any person who has been named in the mortgage-deed and is willing and able to act
as receiver may be appointed by the mortgagee.
If no person has been so named, or if all persons named are unable or unwilling to
act, or are dead, the mortgagee may appoint any person to whose appointment the
mortgagor agrees; failing such agreement, the mortgagee shall be entitled to apply to
the Court for the appointment of a receiver, and any person appointed by the Court
shall be deemed to have been duly appointed by the mortgagee.
A receiver may at any time be removed by writing signed by or on behalf of the
mortgagee and the mortgagor, or by the Court on application made by either party
and on due cause shown.
A vacancy in the office of receiver may be filled in accordance with the provisions of
this sub-section.
(3) A receiver appointed under the powers conferred by this section shall be deemed to
be the agent of the mortgagor; and the mortgagor shall be solely responsible for the
receiver’s acts or defaults, unless the mortgage-deed otherwise provides or unless
such acts or defaults are due to the improper intervention of the mortgagee.
(4) The receiver shall have power to demand and recover all the income of which he is
appointed receiver, by suit, execution or otherwise, in the name either of the
mortgagor or of the mortgagee to the full extent of the interest which the mortgagor
could dispose of, and to give valid receipts accordingly for the same, and to exercise
any powers which may have been delegated to him by the mortgagee in accordance
with the provisions of this section.
(5) A person paying money to the receiver shall not be concerned to inquire if the
appointment of the receiver was valid or not.
(6) The receiver shall be entitled to retain out of any money received by him, for his
remuneration, and in satisfaction of all costs, charges and expenses incurred by him
as receiver, a commission at such rate not exceeding five per cent on the gross

52 Subs. by Act 20 of 1929, sec. 34, for the original fifth paragraph.
53 Original last paragraph omitted by Act 20 of 1929, sec. 34.
54 Ins. by Act 20 of 1929, sec. 35.
34
amount of all money received as is specified in his appointment, and, if no rate is so
specified, then at the rate of five per cent on that gross amount, or at such other rate
as the Court thinks fit to allow, on application made by him for that purpose.
(7) The receiver shall, if so directed in writing by the mortgagee, insure to the extent, if
any, to which the mortgagee might have insured, and keep insured against loss or
damage by fire, out of the money received by him, the mortgaged property or any
part thereof being of an insurable nature.
(8) Subject to the provisions of this Act as to the application of insurance money, the
receiver shall apply all money received by him as follows, namely, –
(i) in discharge of all rents, taxes, land revenue, rates and outgoings whatever
affecting the mortgaged property;
(ii) in keeping down all annual sums or other payments, and the interest on all
principal sums, having priority to the mortgage in right whereof he is receiver;
(iii) in payment of his commission, and of the premiums on fire, life or other
insurances, if any, properly payable under the mortgage-deed or under this
Act, and the cost of executing necessary or proper repairs directed in writing
by the mortgagee;
(iv) in payment of the interest falling due under the mortgage;
(v) in or towards discharge of the principal money, if so directed in writing by the
mortgagee;
and shall pay the residue, if any, of the money received by him to the person who,
but for the possession of the receiver, would have been entitled to receive the
income of which he is appointed receiver, or who is otherwise entitled to the
mortgaged property.
(9) The provisions of sub-section (1) apply only if and as far as a contrary intention is not
expressed in the mortgage-deed; and the provisions of sub-sections (3) to (8)
inclusive may be varied or extended by the mortgage-deed, and, as so varied or
extended, shall, as far as may be, operate in like manner and with all the like
incidents, effects and consequences, as if such variations or extensions were
contained in the said sub-sections.
(10) Application may be made, without the institution of a suit, to the Court for its opinion,
advice or direction on any present question respecting the management or
administration of the mortgaged property, other than questions of difficulty or
importance not proper in the opinion of the Court for summary disposal. A copy of
such application shall be served upon, and the hearing thereof may be attended by,
such of the persons interested in the application as the Court may think fit.
The costs of every application under this sub-section shall be in the discretion of the
Court.
(11) In this section, “the Court” means the Court which would have jurisdiction in a suit to
enforce the mortgage.]
70. Accession to mortgaged property
35
If, after the date of a mortgage, any accession is made to the mortgaged property,
the mortgagee, in the absence of a contract to the contrary, shall, for the purposes of the
security, be entitled to such accession.
Illustrations
(a) A mortgages to B a certain field bordering on a river. The field is increased by
alluvion. For the purposes of his security, B is entitled to the increase.
(b) A mortgages a certain plot of building land to B and afterwards erects a house on the
plot. For the purposes of his security, B is entitled to the house as well as the plot.
71. Renewal of mortgaged lease
When the mortgaged property is a lease 55[***] and the mortgagor obtains a renewal
of the lease, the mortgagee, in the absence of a contract to the contrary, shall, for the
purposes of the security, be entitled to the new lease.
72. Rights of mortgagee in possession
56[A mortgagee] may spend such money as is necessary –
57[***]
(b) for 58[the preservation of the mortgaged property] from destruction, forfeiture
or sale;
(c) for supporting the mortgagor’s title to the property;
(d) for making his own title thereto good against the mortgagor; and
(e) when the mortgaged property is a renewable lease-hold, for the renewal of
the lease;
and may, in the absence of a contract to the contrary, add such money to the
principal money, at the rate of interest payable on the principal, and, where no such rate is
fixed, at the rate of nine per cent per annum:
59[Provided that the expenditure of money by the mortgagee under clause (b) or
clause (c) shall not be deemed to be necessary unless the mortgagor has been called upon
and has failed to take proper and timely steps to preserve the property or to support the title.]
Where the property is by its nature insurable, the mortgagee may also, in the
absence of a contract to the contrary, insure and keep insured against loss or damage by
fire the whole or any part of such property; and the premiums paid for any such insurance
shall be 60[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

55 The words “for a term of years” omitted by Act 20 of 1929, sec. 36.
56 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”.
57 Clause (a) omitted by Act 20 of 1929, sec. 37.
58 Subs. by Act 20 of 1929, sec. 37, for “its preservation”.
59 Ins. by Act 20 of 1929, sec. 37.
60 Subs. by Act 20 of 1929, sec. 37, for certain original words.
36
mortgage-deed or (if no such amount is therein specified) two-thirds of the amount that
would be required in case of total destruction to reinstate the property insured.
Nothing in this section shall be deemed to authorize the mortgagee to insure when
an insurance of the property is kept up by or on behalf of the mortgagor to the amount in
which the mortgagee is hereby authorized to insure.
61[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.
(3) Such claims shall prevail against all other claims except those of prior
encumbrancers, and may be enforced notwithstanding that the principal money on
the mortgage has not become due.]
74. Right of subsequent mortgagee to pay off prior mortgagee
[Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), sec. 39].
75. Rights of mesne mortgagee against prior and subsequent mortgagees
[Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), sec. 39].
76. Liabilities of mortgagee in possession
When, during the continuance of the mortgage, the mortgagee takes possession of
the mortgaged property, –
(a) he must manage the property as a person of ordinary prudence would
manage it if it were his own;
(b) he must use his best endeavours to collect the rents and profits thereof;
(c) he must, in the absence of a contract to the contrary, out of the income of the
property, pay the Government revenue, all other charges of a public nature
62[and all rent] accruing due in respect thereof during such possession, and
any arrears of rent in default of payment of which the property may be
summarily sold;
(d) he must, in the absence of a contract to the contrary, make such necessary
repairs of the property as he can pay for out of the rents and profits thereof

61 Subs. by Act 20 of 1929, sec. 38, for the original section
62 Ins. by Act 20 of 1929, sec. 40.
37
after deducting from such rents and profits the payments mentioned in clause
(c) and the interest on the principal money;
(e) he must not commit any act which is destructive or permanently injurious to
the property;
(f) where he has insured the whole or any part of the property against loss or
damage by fire, he must, in case of such loss or damage, apply any money
which he actually receives under the policy or so much thereof as may be
necessary, in reinstating the property, or, if the mortgagor so directs, in
reduction or discharge of the mortgage-money;
(g) he must keep clear, full and accurate accounts of all sums received and spent
by him as mortgagee, and, at any time during the continuance of the
mortgage, give the mortgagor, at his request and cost, true copies of such
accounts and of the vouchers by which they are supported;
(h) his receipts from the mortgaged property, or, where such property is
personally occupied by him, a fair occupation-rent in respect thereof, shall,
after deducting the expenses 63[properly incurred for the management of the
property and the collection of rents and profits and the other expenses]
mentioned in clauses (c) and (d), and interest thereon, be debited against him
in reduction of the amount (if any) from time to time due to him on account of
interest 64 [***] and, so far as such receipts exceed any interest due, in
reduction or discharge of the mortgage-money; the surplus, if any, shall be
paid to the mortgagor;
(i) when the mortgagor tenders, or deposits in manner hereinafter provided, the
amount for the time being due on the mortgage, the mortgage must,
notwithstanding the provisions in the other clauses of this section, account for
his 65[***] 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 66[and shall not be entitled to deduct any amount therefrom on
account of any expenses incurred after such date or time in connection with
the mortgaged property].
Loss occasioned by his default
If the mortgagee fail to perform any of the duties imposed upon him by this section,
he may, when accounts are taken in pursuance of a decree made under this chapter, be
debited with the loss, if any, occasioned by such failure.
77. Receipts in lieu of interest
Nothing in section 76, clauses (b), (d), (g) and (h), applies to cases where there is a
contract between the mortgagee and the mortgagor that the receipts from the mortgaged
property shall, so long as the mortgagee is in possession of the property, be taken in lieu of
interest on the principal money, or in lieu of such interest and defined portions of the
principal.

63 Ins. by Act 20 of 1929, sec. 40.
64 The words “on the mortgage-money” omitted by Act 20 of 1929, sec. 40.
65 The word “gross” omitted by Act 20 of 1929, sec. 40.
66 Ins. by Act 20 of 1929, sec. 40.
38
Priority
78. Postponement of prior mortgagee
Where, through the fraud, misrepresentation or gross neglect of a prior mortgagee,
another person has been induced to advance money on the security of the mortgaged
property, the prior mortgagee shall be postponed to the subsequent mortgagee.
79. Mortgage to secure uncertain amount when maximum is expressed
If a mortgage made to secure future advances, the performance of an engagement
or the balance of a running account, expresses the maximum to be secured thereby, a
subsequent mortgage of the same property shall, if made with notice of the prior mortgage,
be postponed to the prior mortgage in respect of all advances or debits not exceeding the
maximum, though made or allowed with notice of the subsequent mortgage.
Illustration
A mortgages Sultanpur to his bankers, B & Co., to secure the balance of his account
with them to the extent of Rs. 10,000. A then mortgages Sultanpur to C, to secure Rs.
10,000, C having notice of the mortgage to B & Co., and C gives notice to B & Co. of the
second mortgage. At the date of the second mortgage, the balance due to B & Co. does not
exceed Rs. 5,000. B & Co. subsequently advance to A sums making the balance of the
account against him exceed the sum of Rs. 10,000. B & Co. are entitled, to the extent of Rs.
10,000, to priority over C.
80. Tacking abolished
[Rep. by the Transfer of Property (Amendment) Act, 1929 (20 of 1929), sec. 41].
Marshalling and Contribution
67[81. Marshalling securities
If the owner of two or more properties mortgages them to one person and them
mortgages one or more of the properties to another person, the subsequent mortgagee is, in
the absence of a contract to the contrary, entitled to have the prior mortgage-debt satisfied
out of the property or properties not mortgaged to him, so far as the same will extend, but
not so as to prejudice the rights of the prior mortgagee or of any other person who has for
consideration acquired an interest in any of the properties.]
82. Contribution to mortgage-debt
68[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.]

67 Subs. by Act 20 of 1929, sec. 42, for the original section.
68 Subs. by Act 20 of 1929, sec. 43, for the original paragraph.
39
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
69[subsequent] mortgagee.
Deposit in Court
83. Power to deposit in Court money due on mortgage
At any time after the principal money 70[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 law71 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 72[and all documents in his possession or
power relating to the mortgaged property], apply for and receive the money, and the
mortgage-deed 73[and all such other documents] so deposited shall be delivered to the
mortgagor or such other person as aforesaid.
74[Where the mortgagee is in possession of the mortgaged property, the Court shall,
before paying to him the amount so deposited, direct him to deliver possession thereof to the
mortgagor and at the cost of the mortgagor either to re-transfer the mortgaged property to
the mortgagor or to such third person as the mortgagor may direct or to execute and (where
the mortgage has been effected by a registered instrument) have registered an
acknowledgment in writing that any right in derogation of the mortgagor’s interest transferred
to the mortgagee has been extinguished.]
84. Cessation of interest
When the mortgagor or such other person as aforesaid has tendered or deposited in
Court under section 83 the amount remaining due on the mortgage, interest on the principal
money shall cease from the date of the tender or 75[in the case of a deposit, where no
previous tender of such amount has been made] as soon as the mortgagor or such other
person as aforesaid has done all that has to be done by him to enable the mortgagee to take
such amount out of Court,
76[and the notice required by section 83 has been served on the
mortgagee:

69 Subs. by Act 20 of 1929, sec. 43, for “second”.
70 Subs. by Act 20 of 1929, sec. 44, for “has become payable”.
71 See the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order VI, rule 15.
72 Subs. by Act 20 of 1929, sec. 44, for “if then in his possession or power”.
73 Ins. by Act 20 of 1929, sec. 44.
74 Ins. by Act 20 of 1929, sec. 44.
75 Ins. by Act 20 of 1929, sec. 45.
76 Subs. by Act 20 of 1929, sec. 45, for “as the case may be”.
40
Provided that, where the mortgagor has deposited such amount without having
made a previous tender thereof and has subsequently withdrawn the same or any part
thereof, interest on the principal money shall be payable from the date of such withdrawal.]
Nothing in this section or in section 83 shall be deemed to deprive the mortgagee of
his right to interest when there exists a contract that he shall be entitled to reasonable notice
before payment or tender of the mortgage-money 77[and such notice has not been given
before the making of the tender or deposit, as the case may be].
78Suits for Foreclosure, Sale or Redemption
85. Parties to suits for foreclosure, sale and redemption
[Rep. by the Code of Civil Procedure, 1908 (Act 5 of 1908), sec. 156 and Sch. V].
Foreclosure and Sale
86 to 90.
[Rep. by the Code of Civil Procedure, 1908 (Act 5 of 1908), sec. 156 and Sch. V].
Redemption
79[91. Persons who may sue for redemption
Besides the mortgagor, any of the following persons may redeem, or institute a suit
for redemption of, the mortgaged property, namely: –
(a) any person (other than the mortgagee of the interest sought to be redeemed)
who has any interest in, or charge upon, the property mortgaged or in or upon
the right to redeem the same;
(b) any surety for the payment of the mortgage-debt or any part thereof; or
(c) any creditor of the mortgagor who has in a suit for the administration of his
estate obtained a decree for sale of the mortgaged property.]
80[92. Subrogation
Any of the persons referred to in section 91 (other than the mortgagor) and any comortgagor
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.

77 Added by Act 20 of 1929, sec. 45.
78 For the repealed provisions, as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order
XXXIV.
79 Subs. by Act 20 of 1929, sec. 46, for the original section.
80 Ins. by Act 20 of 1929, sec. 47. Original sections 92 to 94 were rep. by Act 5 of 1908, sec. 156 and Sch. V.
41
A person who has advanced to a mortgagor money with which the mortgage has
been redeemed shall be subrogated to the rights of the mortgagee whose mortgage has
been redeemed, if the mortgagor has by a registered instrument agreed that such persons
shall be so subrogated.
Nothing in this section shall be deemed to confer a right of subrogation on any
person unless the mortgage in respect of which the right is claimed has been redeemed in
full.
93. Prohibition of tacking
No mortgagee paying off a prior mortgage, whether with or without notice of an
intermediate mortgage, shall thereby acquire any priority in respect of his original security;
and, except in the case provided for by section 79, no mortgagee making a subsequent
advance to the mortgagor, whether with or without notice of an intermediate mortgage, shall
thereby acquire any priority in respect of his security for such subsequent advance.
94. Rights of mesne mortgagee
Where a property is mortgaged for successive debts to successive mortgagees, a
mesne mortgagee has the same rights against mortgagees posterior to himself as he has
against the mortgagor.]
81[95. Right of redeeming co-mortgagor to expenses
Where one of several mortgagors redeems the mortgaged property, he shall, in
enforcing his right of subrogation under section 92 against his co-mortgagors, be entitled to
add to the mortgage-money recoverable from them such proportion of the expenses properly
incurred in such redemption as is attributable to their share in the property.
96. Mortgage by deposit of title-deeds
The provisions hereinbefore contained which apply to a simple mortgage shall, so far
as may be, apply to a mortgage by deposit of title-deeds.]
82[97. Application of proceeds
[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V].
Anomalous Mortgages
98. Rights and liabilities of parties to anomalous mortgages
In the case of 83[an anomalous mortgage] the rights and liabilities of the parties shall
be determined by their contract as evidenced in the mortgage-deed, and, so, far as such
contract does not extend, by local usage.

81 Subs. by Act 20 of 1929, sec. 48, for the original section 95. Original section 96 was rep. by Act 5 of 1908, sec.
156 and Sch. V.
82 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.
83 Subs. by Act 20 of 1929, sec. 49, for “a mortgage, not being a simple mortgage, a mortgage by conditional sale,
and usufructuary mortgage or an English mortgage or a combination of the first and third, or the second and
third, of such forms”.
42
84[99. Attachment of mortgaged property
[Rep. by the Code of Civil Procedure, 1908 (5 of 1908), sec. 156 and Sch. V].
Charges
100. Charges
Where immoveable property of one person is by act of parties or operation of law
made security for the payment of money to another, and the transaction does not amount to
a mortgage, the latter person is said to have a charge on the property; and all the provisions
hereinbefore contained 85[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,
86[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].
87[101. No merger in case of subsequent encumbrance
Any mortgagee of, or person having a charge upon, immoveable property, or any
transferee from such mortgagee or charge holder, may purchase or otherwise acquire the
rights in the property of the mortgagor or owner, as the case may be, without thereby
causing the mortgage or charge to be merged as between himself and any subsequent
mortgagee of, or person having a subsequent charge upon, the same property; and no such
subsequent mortgagee or charge-holder shall be entitled to foreclose or sell such property
without redeeming the prior mortgage or charge, or otherwise than subject thereto.]
Notice and Tender
102. Service or tender on or to agent
Where the person on or to whom any notice or tender is to be served or made under
this Chapter does not reside in the district in which the mortgaged property or some part
thereof is situate, service or tender on or to an agent holding a general power-of-attorney
from such person or otherwise duly authorized to accept such service or tender shall be
deemed sufficient.
88[Where no person or agent on whom such notice should be served can be found or
is known] to the person required to serve the notice, the latter person may apply to any Court
in which a suit might be brought for redemption of the mortgaged property, and such Court
shall direct in what manner such notice shall be served, and any notice served in compliance
with such direction shall be deemed sufficient:

84 For the repealed provisions as re-enacted, see the Code of Civil Procedure, 1908 (5 of 1908), Sch. I, Order
XXXIV, rule 14.
85 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”.
86 Added by Act 20 of 1929, sec. 50.
87 Subs. by Act 20 of 1929, sec. 51, for the original section.
88 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”.
43
89[Provided that, in the case of a notice required by section 83, in the case of a
deposit, the application shall be made to the Court in which the deposit has been made.]
90[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 91[in any
Court in which a suit might be brought for redemption of the mortgaged property] the amount
sought to be tendered, and such deposit shall have the effect of a tender of such amount.
103. Notice, etc., to or by person incompetent to contract
Where, under the provisions of this Chapter, a notice is to be served on or by, or a
tender or deposit made or accepted or taken out of Court by, any person incompetent to
contact, such notice may be served 92[on or by], or tender or deposit made, accepted or
taken by, the legal curator of the property of such person; but where there is no such curator,
and it is requisite or desirable in the interests of such person that a notice should be served
or a tender or deposit made under the provisions of this Chapter, application may be made
to any Court in which a suit might be brought for the redemption of the mortgage to appoint a
guardian ad litem for the purpose of serving or receiving service of such notice, or making or
accepting such tender, or making or taking out of Court such deposit, and for the
performance of all consequential acts which could or ought to be done by such person if he
were competent to contract93; and the provisions of 94[Order XXXII in the First Schedule to
the Code of Civil Procedure, 1908 (5 of 1908)] shall, so far as may be, apply to such
application and to the parties thereto and to the guardian appointed thereunder.
104. Power to make rules
The High Court may, from time to time, make rules consistent with this Act for
carrying out, in itself and in the Courts of Civil Judicature subject to its superintendence, the
provisions contained in this Chapter.

89 Ins. by Act 20 of 1929, sec. 52.
90 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”
91 Subs. by Act 20 of 1929, sec. 52, for “in such Court as last aforesaid”.
92 Ins. by Act 20 of 1929, sec. 53.
93 As to persons competent to contract, see sections 11 and 12 of the Indian contract Act, 1872 (9 of 1872).
94 Subs. by Act 20 of 1929, sec. 52, for “Chapter XXXI of the Code of Civil Procedure”.

Leases of Immoveable Property

105. Lease defined
   A lease of immoveable property is a transfer of a right to enjoy such property, made for a certain time, express or implied, or in perpetuity, in consideration of a price paid or promised, or of money, a share of crops, service or any other thing of value, to be rendered
periodically or on specified occasions to the transferor by the transferee, who accepts the
transfer on such terms.
Lessor, lessee, premium and rent defined
The transferor is called the lessor, the transferee is called the lessee, the price is
called the premium, and the money, share, service or other thing to be so rendered is called
the rent.
106. Duration of certain leases in absence of written contract or local usage
In the absence of a contract or local law or usage to the contrary, a lease of
immoveable property for agricultural or manufacturing purposes shall be deemed to be a
lease from year to year, terminable, on the part of either lessor or lessee, by six months’
notice expiring with the end of a year of the tenancy; and a lease of immoveable property for
any other purpose shall be deemed to be a lease from month to month, terminable, on the
part of either lessor or lessee, by fifteen days’ notice expiring with the end of a month of the
tenancy.
Every notice under this section must be in writing, signed by or on behalf of the
person giving it, and 1
[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.
2
107. Leasees 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.
3
[All other leases of immoveable property may be made either by a registered
instrument or by oral agreement accompanied by delivery of possession.
4
[Where a lease of immoveable property is made by a registered instrument, such
instrument or, where there are more instruments than one, each such instrument shall be
executed by both the lessor and the lessee:]
Provided that the State Government may 5
[***] from time to time, by notification in the
Official Gazette, direct that leases of immoveable property, other than leases from year to
year, or for any term exceeding one year, or reserving a yearly rent, or any class of such

1 Subs. by Act 20 of 1929, sec. 54, for “tendered or delivered either personally to the party who is intended to be
bound by it”.
2 As to limitation to the territorial operation of section 107, see sec. 1, supra, section 107 extends to every
cantonment; see section 287 of the Cantonments Act, 1924 (2 of 1924).
3 Subs. by Act 6 of 1904, sec. 5, for the original paragraph.
4 Subs. by Act 6 of 1904, sec. 5, for the original paragraph.
5
The words “with the previous sanction of the Governor General in Council” omitted by the A.O. 1937.
45
leases, may be made by unregistered instrument or by oral agreement without delivery of
possession.]
108. Rights and liabilities of lessor and lessee
In the absence of a contract or local usage to the contrary, the lessor and the lessee
of immoveable property, as against one another, respectively, possess the rights and are
subject to the liabilities mentioned in the rules next following, or such of them as are
applicable to the property leased: –
(A) Rights and Liabilities of the Lessor
(a) The lessor is bound to disclose to the lessee any material defect in the
property, with reference to its intended use, of which the former is and
the latter is not aware, and which the latter could not with ordinary
care discover:
(b) the lessor is bound on the lessee’s request to put him in possession of
the property:
(c) the lessor shall be deemed to contract with the lessee that, if the latter
pays the rent reserved by the lease and performs the contracts
binding on the lessee, he may hold the property during the time limited
by the lease without interruption.
The benefit of such contract shall be annexed to and go with the
lessee’s interest as such, and may be enforced by every person in
whom that interest is for the whole or any part thereof from time to
time vested.
(B) Rights and Liabilities of the Lessee
(d) If during the continuance of the lease any accession is made to the
property, such accession (subject to the law relating to alluvion for the
time being in force) shall be deemed to be comprised in the lease:
(e) if by fire, tempest or flood, or violence of an army or of a mob, or other
irresistible force, any material part of the property be wholly destroyed
or rendered substantially and permanently unfit for the purposes for
which it was let, the lease shall, at the option of the lessee, be void:
Provided that, if the injury be occasioned by the wrongful act or default
of the lessee, he shall not be entitled to avail himself of the benefit of
this provision:
(f) if the lessor neglects to make, within a reasonable time after notice,
any repairs which he is bound to make to the property, the lessee may
make the same himself, and deduct the expense of such repairs with
interest from the rent, or otherwise recover it from the lessor:
(g) if the lessor neglects to make any payment which he is bound to make,
and which, if not made by him, is recoverable from the lessee or
against the property, the lessee may make such payment himself, and
deduct it with interest from the rent, or otherwise recover it from the
lessor:
46
(h) the lessee may 6
[even after the determination of the lease] remove, at
any time 7
[whilst he is in possession of the property leased but not
afterwards] all things which he has attached to the earth; provided he
leaves the property in the state in which he received it:
(i) when a lease of uncertain duration determines by any means except
the fault of the lessee, he or his legal representative is entitled to all
the crops planted or sown by the lessee and growing upon the
property when the lease determines, and to free ingress and egress to
gather and carry them:
(j) the lessee may transfer absolutely or by way of mortgage or sub-lease
the whole or any part of his interest in the property, and any transferee
of such interest or part may again transfer it. The lessee shall not, by
reason only of such transfer, cease to be subject to any of the
liabilities attaching to the lease:
Nothing in this clause shall be deemed to authorize a tenant having an
untransferable right of occupancy, the farmer of an estate in respect of
which default has been made in paying revenue, or the lessee of an
estate under the management of a Court of Wards, to assign his
interest as such tenant, farmer or lessee:
(k) the lessee is bound to disclose to the lessor any fact as to the nature
or extent of the interest which the lessee is about to take, of which the
lessee is, and the lessor is not, aware, and which materially increases
the value of such interest:
(l) the lessee is bound to pay or tender, at the proper time and place, the
premium or rent to the lessor or his agent in this behalf:
(m) the lessee is bound to keep, and on the termination of the lease to
restore, the property in as good condition as it was in at the time when
he was put in possession, subject only to the changes caused by
reasonable wear and tear or irresistible force, and to allow the lessor
and his agents, at all reasonable times during the term, to enter upon
the property and inspect the condition thereof and give or leave notice
of any defect in such condition; and, when such defect has been
caused by any act or default on the part of the lessee, his servants or
agents, he is bound to make it good within three months after such
notice has been given or left:
(n) if the lessee becomes aware of any proceeding to recover the
property or any part thereof, or of any encroachment made upon, or
any interference with, the lessor’s rights concerning such property, he
is bound to give, with reasonable diligence, notice thereof to the lessor:
(o) the lessee may use the property and its products (if any) as a person
of ordinary prudence would use them if they were his own; but he
must not use, or permit another to use, the property for a purpose
other than that for which it was leased, or fell 1[or sell] timber, pull

6
Ins. by Act 20 of 1929, sec. 56.
7 Subs. by Act 20 of 1929, sec. 56, for “during the continuance of the lease”.
47
down or damage buildings 8
[belonging to the lessor, or] work mines or
quarries not open when the lease was granted, or commit any other
act which is destructive or permanently injurious thereto:
(p) he must not, without the lessor’s consent, erect on the property any
permanent structure, except for agricultural purposes:
(q) on the determination of the lease, the lessee is bound to put the lessor
into possession of the property.
109. Rights of lessor’s transferee
If the lessor transfers the property leased, or any part thereof, or any part of his
interest therein, the transferee, in the absence of a contract to the contrary, shall possess all
the rights, and, if the lessee so elects, be subject to all the liabilities of the lessor as to the
property or part transferred so long as he is the owner of it; but the lessor shall not, by
reason only of such transfer, cease to be subject to any of the liabilities imposed upon him
by the lease, unless the lessee elects to treat the transferee as the person liable to him:
Provided that the transferee is not entitled to arrears of rent due before the transfer,
and that, if the lessee, not having reason to believe that such transfer has been made, pays
rent to the lessor, the lessee shall not be liable to pay such rent over again to the transferee.
The lessor, the transferee and the lessee may determine what proportion of the
premium or rent reserved by the lease is payable in respect of the part so transferred, and,
in case they disagree, such determination may be made by any Court having jurisdiction to
entertain a suit for the possession of the property leased.
110. Exclusion of day on which term commences
Where the time limited by a lease of immoveable property is expressed as
commencing from a particular day, in computing that time such day shall be excluded.
Where no day of commencement is named, the time so limited begins from the making of
the lease.
Duration of lease for a year
Where the time so limited is a year or a number of years, in the absence of an
express agreement to the contrary, the lease shall last during the whole anniversary of the
day from which such time commences.
Option to determine lease
Where the time so limited is expressed to be terminable before its expiration, and the
lease omits to mention at whose option it is so terminable, the lessee, and not the lessor,
shall have such option.
111. Determination of lease
A lease of immoveable property determines –
(a) by efflux of the time limited thereby:

8
Ins. by Act 20 of 1929, sec. 56.
48
(b) where such time is limited conditionally on the happening of some event – by
the happening of such event:
(c) where the interest of the lessor in the property terminates on, or his power to
dispose of the same extends only to, the happening of any event – by the
happening of such event:
(d) in case the interests of the lessee and the lessor in the whole of the property
become vested at the same time in one person in the same right:
(e) by express surrender; that is to say, in case the lessee yields up his interest
under the lease to the lessor, by mutual agreement between them:
(f) by implied surrender:
(g) by forfeiture; that is to say, (1) in case the lessee breaks an express condition
which provides that, on breach thereof, the lessor may re-enter 9
[***]; or (2) in
case the lessee renounces his character as such by setting up a title in a third
person or by claiming title in himself; 10[or (3) the lessee is adjudicated an
insolvent and the lease provides that the lessor may re-enter on the
happening of such event]; and in 11[any of these cases] the lessor or his
transferee 12[gives notice in writing to the lessee of] his intention to determine
the lease:
(h) on the expiration of a notice to determine the lease, or to quit, or of intention
to quit, the property leased, duly given by one party to the other.
Illustration to clause (f)
A lessee accepts from his lessor a new lease of the property leased, to take effect
during the continuance of the existing lease. This is an implied surrender of the former lease,
and such lease determines thereupon.
112. Waiver of forfeiture
A forfeiture under section 111, clause (g), is waived by acceptance of rent which has
become due since the forfeiture, or by distress for such rent, or by any other act on the part
of the lessor showing an intention to treat the lease as subsisting:
Provided that the lessor is aware that the forfeiture has been incurred:
Provided also that, where rent is accepted after the institution of a suit to eject the
lessee on the ground of forfeiture, such acceptance is not a waiver.
113. Waiver of notice to quit
A notice given under section 111, clause (h), is waived, with the express or implied
consent of the person to whom it is given, by any act on the part of the person giving it
showing an intention to treat the lease as subsisting.

9
The words “or the lease shall become void” omitted by Act 20 of 1929, sec. 57.
10 Ins. by Act 20 of 1929, sec. 57.
11 Subs. by Act 20 of 1929, sec. 57, for “either case”.
12 Subs. by Act 20 of 1929, sec. 57, for “does some act showing”.
49
Illustrations
(a) A, the lessor, gives B, the lessee, notice to quit the property leased. The
notice expires. B tenders, and A accepts, rent which has become due in
respect of the property since the expiration of the notice. The notice is waived.
(b) A, the lessor, gives B, the lessee, notice to quit the property leased. The
notice expires, and B remains in possession. A gives to B as lessee a second
notice to quit. The first notice is waived.
114. Relief against forfeiture for non-payment of rent
Where a lease of immoveable property has determined by forfeiture for non-payment
of rent, and the lessor sues to eject the lessee, if, at the hearing of the suit, the lessee pays
or tenders to the lessor the rent in arrear, together with interest thereon and his full costs of
the suit, or gives such security as the Court thinks sufficient for making such payment within
fifteen days, the Court may, in lieu of making a decree for ejectment, pass an order relieving
the lessee against the forfeiture; and thereupon the lessee shall hold the property leased as
if the forfeiture had not occurred.
13[114A. Relief against forfeiture in certain other cases
Where a lease of immoveable property has determined by forfeiture for a breach of
an express condition which provides that on breach thereof the lessor may re-enter, no suit
for ejectment shall lie unless and until the lessor has served on the lessee a notice in writing

(a) specifying the particular breach complained of; and
(b) if the breach is capable of remedy, requiring the lessee to remedy the breach;
and the lessee fails, within a reasonable time from the date of the service of
the notice, to remedy the breach, if it is capable of remedy.
Nothing in this section shall apply to an express condition against the assigning,
under-letting, parting with the possession, or disposing, of the property leased, or to an
express condition relating to forfeiture in case of non-payment of rent.]
115. Effect of surrender and forfeiture on under-leases
The surrender, express or implied, of a lease of immoveable property does not
prejudice an under-lease of the property or any part thereof previously granted by the lessee,
on terms and conditions substantially the same (except as regards the amount of rent) as
those of the original lease; but, unless the surrender is made for the purpose of obtaining a
new lease, the rent payable by, and the contracts binding on, the under-lessee shall be
respectively payable to and enforceable by the lessor.
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.

13 Ins. by Act 20 of 1929, sec. 58.
50
116. Effect of holding over
If a lessee or under-lessee of property remains in possession thereof after the
determination of the lease granted to the lessee, and the lessor or his legal representative
accepts rent from the lessee or under-lessee, or otherwise assents to his continuing in
possession, the lease is, in the absence of an agreement to the contrary, renewed from year
to year, or from month to month, according to the purpose for which the property is leased,
as specified in section 106.
Illustrations
(a) A lets a house to B for five years. B underlets the house to C at a monthly rent of Rs.
100. The five years expire, but C continues in possession of the house and pays the
rent to A.C’s lease is renewed from month to month.
(b) A lets a farm to B for the life of C.C dies, but B continues in possession with A’s
assent. B’s lease is renewed from year to year.
117. Exemption of leases for agricultural purposes
None of the provisions of this Chapter apply to leases for agricultural purposes,
except in so far as the State Government 14[***] may by notification published in the Official
Gazette declare all or any of such provisions to be so applicable 15[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.

14 The words “with the previous sanction of the Governor General in Council” omitted by Act 38 of 1920, sec. 2
and Sch. I.
15 Ins. by Act 6 of 1904, sec. 6

Exchanges

118. “Exchange” defined
When two persons mutually transfer the ownership of one thing for the ownership of another, neither thing or both things being money only, the transaction is called an “exchange”.
   A transfer of property in completion of an exchange can be made only in manner provided for the transfer of such property by sale.
1
[119. Right of party deprived of thing received in exchange
If any party to an exchange or any person claiming through or under such party is by
reason of any defect in the title of the other party deprived of the thing or any part of the
thing received by him in exchange, then, unless contrary intention appears from the terms of
the exchange, such other party is liable to him or any person claiming through or under him
for loss caused thereby, or at the option of the person so deprived, for the return of the thing
transferred, if still in the possession of such other party or his legal representative or a
transferee from him without consideration.]

120. Rights and liabilities of parties
Save as otherwise provided in this Chapter, each party has the rights and is subject to the liabilities of a seller as to that which he gives, and has the rights and is subject to the liabilities of a buyer as to that which he takes.

121. Exchange of money
On an exchange of money, each party thereby warrants the genuineness of the money given by him.

Transfers of Actionable Claims

130. Transfer of actionable claim
  (1) The transfer of an actionable claim 2  [whether with or without consideration] shall be
effected only by the execution of an instrument in writing signed by the transferor or his duly authorized agent,
3 [***] shall be complete and effectual upon the execution of
such instrument, and thereupon all the rights and remedies of the transferor, whether
by way of damages or otherwise, shall vest in the transferee, whether such notice of
the transfer as is hereinafter provided be given or not:
Provided that every dealing with the debt or other actionable claim by the debtor or
other person from or against whom the transferor would, but for such instrument of
transfer as aforesaid, have been entitled to recover or enforce such debt or other
actionable claim, shall (save where the debtor or other person is a party to the
transfer or has received express notice thereof as hereinafter provided) be valid as
against such transfer.
(2) The transferee of an actionable claim may, upon the execution of such instrument of
transfer as aforesaid, sue or institute proceedings for the same in his own name
without obtaining the transferor’s consent to such suit or proceedings and without
making him a party thereto.
Exception – Nothing in this section applies to the transfer of a marine or fire policy of
insurance 4
[or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)].
Illustrations
(i) A owes money to B, who transfers the debt to C. B then demands the debt
from A, who, not having received notice of the transfer, as prescribed in
section 131, pays B. The payment is valid, and C cannot sue A for the debt.
(ii) A effects a policy on his own life with an Insurance Company and assigns it to
a Bank for securing the payment of an existing or future debt. If A dies, the
Bank is entitled to receive the amount of the policy and to sue on it without
the concurrence of A’s executor, subject to the proviso in sub-section (1) of
section 130 and to the provisions of section 132.
5
[130A. Transfer of policy of marine insurance
[Rep. by the Marine Insurance Act, 1963 (11 of 1963), sec. 92 (w.e.f. 1-8-1963)].]
131. Notice to be in writing, signed
Every notice of transfer of an actionable claim shall be in writing, signed by the
transferor or his agent duly authorized in this behalf, or, in case the transferor refuses to sign,
by the transferee or his agent, and shall state the name and address of the transferee.

1
Subs. by Act 2 of 1900, sec. 4, for the original Chapter.
2
Ins. by Act 20 of 1929, sec. 62.
3
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.
4 Added by Act 4 of 1938, sec. 121 (w.e.f. 1-7-1939).
5
Ins. by Act 6 of 1944, sec. 2.
55
132. Liability of transferee of actionable claim
The transferee of an actionable claim shall take it subject to all the liabilities and
equities to which the transferor was subject in respect thereof at the date of the transfer.
Illustrations
(i) A transfers to C a debt due to him by B, a being then indebted to B. C sues B
for the debt due by B to A. In such suit B is entitled to set off the debt due by
A to him; although C was unaware of it at the date of such transfer.
(ii) A executed a bond in favour of B under circumstances entitling the former to
have it delivered up and cancelled. B assigns the bond to C for value and
without notice of such circumstances. C cannot enforce the bond against A.
133. Warranty of solvency of debtor
Where the transferor of a debt warrants the solvency of the debtor, the warranty, in
the absence of a contract to the contrary, applies only to his solvency at the time of the
transfer, and is limited, where the transfer is made for consideration, to the amount or value
of such consideration.
134. Mortgaged debt
Where a debt is transferred for the purpose of securing an existing or future debt, the
debt so transferred, if received by the transferor or recovered by the transferee, is applicable,
first, in payment of the costs of such recovery; secondly, in or towards satisfaction of the
amount for the time being secured by the transfer, and the residue, if any, belongs to the
transferor or other person entitled to receive the same.
6
[135. Assignment of rights under policy of insurance against fire
Every assignee, by endorsement or other writing, of a policy of insurance against fire,
in whom the property in the subject insured shall be absolutely vested at the date of the
assignment, shall have transferred and vested in him all rights of suit as if the contract
contained in the policy had been made with himself.]
7
[135A. Assignment of rights under policy of marine insurance
[Rep. by the Marine Insurance Act, 1963 (11 of 1963), sec. 92, (w.e.f. 1-8-1963)].]
136. Incapacity of officers connected with Courts of Justice
No Judge, legal practitioner or officer connected with any Court of Justice shall buy
or traffic in, or stipulate for, or agree to receive any share of, or interest in, any actionable
claim, and no Court of Justice shall enforce, at his instance, or at the instance of any person
claiming by or through him, any actionable claim so dealt with by him as aforesaid.

6 Subs. by Act 6 of 1944, sec. 3, for the original section.
7 Section 135A was ins. by Act 6 of 1944, sec. 4, which now stands repealed.
56
137. Saving of negotiable instruments, etc.
Nothing in the foregoing sections of this Chapter applies to stocks, shares or
debentures, or to instruments which are for the time being, by law or custom, negotiable, or
to any mercantile document of title to goods.
Explanation – The expression “mercantile document of title to goods” includes a bill of
lading, dock-warrant, warehouse-keeper’s certificate, railway receipt, warrant or order for the
delivery of goods, and any other document used in the ordinary course of business as proof
of the possession or control of goods, or authorizing or purporting to authorize, either by
endorsement or by delivery, the possessor of the document to transfer or receive goods
thereby represented.
The S

Gifts

122. “Gift” defined
“Gift” is the transfer of certain existing moveable or immoveable property made
voluntarily and without consideration, by one person, called the donor, to another, called the
done, and accepted by or on behalf of the done.
Acceptance when to be made
Such acceptance must be made during the lifetime of the donor and while he is still
capable of giving.
If the done dies before acceptance, the gift is void.

1 Sub. by Act 20 of 1929, sec. 59, for the original section.
52
2
123. Transfer how effected
For the purpose of making a gift of immoveable property, the transfer must be
effected by a registered instrument signed by or on behalf of the donor, and attested by at
least two witnesses.
For the purpose of making a gift of moveable property, the transfer may be effected
either by a registered instrument signed as aforesaid or by delivery.
Such delivery may be made in the same way as goods sold may be delivered.
124. Gift of existing and future property
A gift comprising both existing and future property is void as to the latter.
125. Gift to several of whom one does not accept
A gift of a thing to two or more donees, of whom one does not accept it, is void as to
the interest which he would have taken had he accepted.
126. When gift may be suspended or revoked
The donor and done may agree that on the happening of any specified event which
does not depend on the will of the donor a gift shall be suspended or revoked; but a gift
which the parties agree shall be revocable wholly or in part, at the mere will of the donor, is
void wholly or in part, as the case may be.
A gift may also be revoked in any of the cases (save want or failure of consideration)
in which, if it were a contract, it might be rescinded.
Save as aforesaid, a gift cannot be revoked.
Nothing contained in this section shall be deemed to affect the rights of transferees
for consideration without notice.
Illustrations
(a) A gives a field to B, reserving to himself, with B’s assent, the right to take
back the field in case B and his descendants die before A. B dies without
descendants in A’s lifetime. A may take back the field.
(b) A gives a lakh of rupees to B, reserving to himself, with B’s assent, the right to
take back at pleasure Rs. 10,000 out of the lakh. The gift holds good as to Rs.
90,000, but is void as to Rs. 10,000 which continue to belong to A.
127. Onerous gifts
Where a gift 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 done can take nothing
by the gift unless he accepts it fully.

2 As to limitation to the territorial operation of section 123, see sec. 1, supra, section 123 extends to every
cantonment see section 287 of the Cantonments Act, 1924 (2 of 1924).
53
Where a gift is in the form of two or more separate and independent transfers to the
same person of several things, the done 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 done not competent to contract and accepting property burdened by any obligation
is not bound by his acceptance. But if, after becoming competent to contract and being
aware of the obligation, he retains the property given, he becomes so bound.
Illustrations
(a) A has shares in X, a prosperous joint stock company, and also shares in Y, a
joint stock company in difficulties. Heavy calls are expected in respect of the
shares in Y. A gives B all his shares in joint stock companies. B refuses to
accept the shares in Y. He cannot take the shares in X.
(b) A, having a lease for a term of years of a house at a rent which he and his
representatives are bound to pay during the term, and which is more than the
house can be let for, gives to B the lease, and also, as a separate and
independent transaction, a sum of money. B refuses to accept the lease. He
does not by this refusal forfeit the money.
128. Universal done
Subject to the provisions of section 127, where a gift consists of the donor’s whole
property, the done is personally liable for all the debts due by 3
[and liabilities of] the donor at
the time of the gift to the extent of the property comprised therein.
129. Saving of donations mortis causa and Muhammadan law
Nothing in this Chapter relates to gifts of movable property made in contemplation of
death, or shall be deemed to affect any rule of Muhammadan law 4
[***].

3
Ins. by Act 20 of 1929, sec. 60.
4
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.

Transfers of Actionable Claims

130. Transfer of actionable claim
   (1) The transfer of an actionable claim 2 [whether with or without consideration] shall be effected only by the execution of an instrument in writing signed by the transferor or his duly authorized agent,
3 [***] shall be complete and effectual upon the execution of
such instrument, and thereupon all the rights and remedies of the transferor, whether
by way of damages or otherwise, shall vest in the transferee, whether such notice of
the transfer as is hereinafter provided be given or not:
Provided that every dealing with the debt or other actionable claim by the debtor or
other person from or against whom the transferor would, but for such instrument of
transfer as aforesaid, have been entitled to recover or enforce such debt or other
actionable claim, shall (save where the debtor or other person is a party to the
transfer or has received express notice thereof as hereinafter provided) be valid as
against such transfer.
(2) The transferee of an actionable claim may, upon the execution of such instrument of
transfer as aforesaid, sue or institute proceedings for the same in his own name
without obtaining the transferor’s consent to such suit or proceedings and without
making him a party thereto.
Exception – Nothing in this section applies to the transfer of a marine or fire policy of
insurance 4
[or affects the provisions of section 38 of the Insurance Act, 1938 (4 of 1938)].
Illustrations
(i) A owes money to B, who transfers the debt to C. B then demands the debt
from A, who, not having received notice of the transfer, as prescribed in
section 131, pays B. The payment is valid, and C cannot sue A for the debt.
(ii) A effects a policy on his own life with an Insurance Company and assigns it to
a Bank for securing the payment of an existing or future debt. If A dies, the
Bank is entitled to receive the amount of the policy and to sue on it without
the concurrence of A’s executor, subject to the proviso in sub-section (1) of
section 130 and to the provisions of section 132.
5
[130A. Transfer of policy of marine insurance
[Rep. by the Marine Insurance Act, 1963 (11 of 1963), sec. 92 (w.e.f. 1-8-1963)].]
131. Notice to be in writing, signed
Every notice of transfer of an actionable claim shall be in writing, signed by the
transferor or his agent duly authorized in this behalf, or, in case the transferor refuses to sign,
by the transferee or his agent, and shall state the name and address of the transferee.

1
Subs. by Act 2 of 1900, sec. 4, for the original Chapter.
2
Ins. by Act 20 of 1929, sec. 62.
3
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.
4 Added by Act 4 of 1938, sec. 121 (w.e.f. 1-7-1939).
5
Ins. by Act 6 of 1944, sec. 2.
55
132. Liability of transferee of actionable claim
The transferee of an actionable claim shall take it subject to all the liabilities and
equities to which the transferor was subject in respect thereof at the date of the transfer.
Illustrations
(i) A transfers to C a debt due to him by B, a being then indebted to B. C sues B
for the debt due by B to A. In such suit B is entitled to set off the debt due by
A to him; although C was unaware of it at the date of such transfer.
(ii) A executed a bond in favour of B under circumstances entitling the former to
have it delivered up and cancelled. B assigns the bond to C for value and
without notice of such circumstances. C cannot enforce the bond against A.
133. Warranty of solvency of debtor
Where the transferor of a debt warrants the solvency of the debtor, the warranty, in
the absence of a contract to the contrary, applies only to his solvency at the time of the
transfer, and is limited, where the transfer is made for consideration, to the amount or value
of such consideration.
134. Mortgaged debt
Where a debt is transferred for the purpose of securing an existing or future debt, the
debt so transferred, if received by the transferor or recovered by the transferee, is applicable,
first, in payment of the costs of such recovery; secondly, in or towards satisfaction of the
amount for the time being secured by the transfer, and the residue, if any, belongs to the
transferor or other person entitled to receive the same.
6
[135. Assignment of rights under policy of insurance against fire
Every assignee, by endorsement or other writing, of a policy of insurance against fire,
in whom the property in the subject insured shall be absolutely vested at the date of the
assignment, shall have transferred and vested in him all rights of suit as if the contract
contained in the policy had been made with himself.]
7
[135A. Assignment of rights under policy of marine insurance
[Rep. by the Marine Insurance Act, 1963 (11 of 1963), sec. 92, (w.e.f. 1-8-1963)].]
136. Incapacity of officers connected with Courts of Justice
No Judge, legal practitioner or officer connected with any Court of Justice shall buy
or traffic in, or stipulate for, or agree to receive any share of, or interest in, any actionable
claim, and no Court of Justice shall enforce, at his instance, or at the instance of any person
claiming by or through him, any actionable claim so dealt with by him as aforesaid.

6 Subs. by Act 6 of 1944, sec. 3, for the original section.
7 Section 135A was ins. by Act 6 of 1944, sec. 4, which now stands repealed.
56
137. Saving of negotiable instruments, etc.
Nothing in the foregoing sections of this Chapter applies to stocks, shares or
debentures, or to instruments which are for the time being, by law or custom, negotiable, or
to any mercantile document of title to goods.
Explanation – The expression “mercantile document of title to goods” includes a bill of
lading, dock-warrant, warehouse-keeper’s certificate, railway receipt, warrant or order for the
delivery of goods, and any other document used in the ordinary course of business as proof
of the possession or control of goods, or authorizing or purporting to authorize, either by
endorsement or by delivery, the possessor of the document to transfer or receive goods
thereby represented.
The S

(a) Statutes
Year and Chapter Subject Extent of repeal
27 Hen. VIII, c. 10 Uses The whole
13 Eliz., c. 5 Fraudulent conveyances The whole
27 Eliz., c. 4 Fraudulent conveyances The whole
4 Wm. And Mary, c. 16 Clandestine mortgages The whole
(b) Acts of the Governor General in Council
Number and uear Subject Extent of repeal
IX of 1842 Lease and re-lease The whole
XXXI of 1854 Modes of conveying land Section 17
XI of 1855 Mesne profits and
improvements
Section 1; in the title, the
words ¡§to mesne profits
and¡¨, and in the preamble
¡§to limit the liability for
mesne profits and¡¨.
XXVII of 1866 Indian Trustee Act Section 31.
IV of 1872 Punjab Laws Act
So far as it re-lates to
Bengal Regulations I of
1798 and XVII of 1806.
XX of 1875 Central Provinces Laws Act
So far as it relates to
Bengal Regulations I of
1798 and XVII of 1806.
XVIII of 1876 Oudh Laws Act
So far as it relates to
Bengal Regulations XVII of
1806.
I of 1877 Specific Relief In sections 35 and 36, the
words ¡§in writing¡¨.
(c) Regulations
Number and year Subject Extent of repeal
Bengal Regulation I of 1798 Conditional Sale The whole Regulation
Bengal Regulation XVII of
1806
Redemption The whole Regulation
Bombay Regulation V of
1827
Acknowledgement of debts;
interest; Mortgages in
possession
Section 15.