C ON D ITIO NA L
TR A N SFE R
CONDITIONAL TRANSFER
• Section 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.
SECTION 25
Section 25 - Conditional transfer: A condition is a provision which
makes the existence of a a right dependent on the happening or non
happening of a thing.
Types Of Conditional Transfer:
1. Condition Precedent
2. Condition Subsequent
3. Condition Collateral
CONDITIONAL TRANSFERS
Transfers
Condition Condition Condition
Precedent Subsequent Collateral
A CONDITION PRECEDENT
• A condition precedent is one which delays the vesting of a right until the
happening of an event, as when B, promises to give a house to his
daughter provided she marries a man of his approval
1. A condition precedent is one which must happen before the estate, can
vest.
2. Where the condition is precedent the estate does not vest in the transferee
until the condition is performed.
3. In the case of a condition precedent being or becoming impossible to be
performed, or being immoral or opposed to public policy, the transfer will
be void.
4. A condition precedent is fulfilled if it is substantially complied with
According to section 25, an interest created on a transfer of property and
dependent upon a condition fails under the following conditions:-
1. Impossible condition
2. Forbidden by law
• Defeat the provisions of any law
• Fraudulent Acts
• Involves the injury to the person or property of another
• Violates of Public Policy
• Immoral or opposed to person or property of another.
IMPOSSIBLE CONDITION
A condition which cannot be practically performed is called impossible
condition. Since such condition can never be performed, the transfer of
property too can never take place.
Illustrations:
• A lets a farm B on condition that he shall walk a hundred miles In an
hour . The Lease is void.
• A will transfer the property to C if he marries B, but at the time of
marriage B was already dead. The transfer is void.
FORBIDDEN BY LAW
1. FORBIDDEN BY LAW;
• In these cases, if the conditions are illegal, the transfer is void. If a property is transferred with
such conditions, the transfer does not take effect.
Illustration- A transfers a portion of his property to B on a condition that B shall transfer his excise
license to C. This transfer shall be void as the transfer of license is forbidden by law.
2. DEFEATS THE PROVISIONS OF LAW- Where the condition is such that if performed it
would defeat the provision of any existing law, it is void. Transfer with such conditions fails.
Illustration- A landlord gave money to a tenant with the condition that the tenant would evict other
tenants illegally. When the tenant didn’t comply, the landlord tried to recover the money. The court
declared the transfer void because it involved an illegal condition.
FORBIDDEN BY LAW
3. FRADULENT- A condition the fulfilment of which amount to ‘fraud’ is unlawful.
Illustration- : E wanted to purchase a piece of land but knew he couldn’t do so legally due to zoning laws. He
transferred money to F with the condition that F would buy the land and then transfer it to E. This scheme was
considered void because it aimed to circumvent zoning regulations through deceitful means.
[Link] ANY INJURY TO PERSON OR PROPERTY- A condition the performance of which is an
offence causing injury to a person or property of another person is unlawful and a transfer with such condition
fails.
In Ramalinga Padayachi v. Natesa Padayachi: A bought property from C knowing that C didn't
actually own it. A's goal was to create problems for the real owner. Later, A tried to sue C for losses
from this property dispute. The court ruled that the Petition couldn’t proceed because A’s intention
was to harm the real owner, making the entire transaction invalid.
FORBIDDEN BY LAW
5. OPPOSE TO PUBLIC POLICY- Where the condition precedent is immoral or
opposed to public policy, the transfer with such condition cannot take place because
the condition is void.
Illustration : A makes a gift of rupees1000 to B when B deserts her husband, B can
never be entitled to get rupees 1000.
Wilkinson v. Wilkinson the condition where one party was required to desert her
husband for the transfer to go through, this was held by the court as invalid as it was
against public policy.
• SECTION 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.
– 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.
In other words, this condition does not require strict compliance and can be
considered fulfilled if there is substantial compliance.
Illustration: A agrees to transfer his property to B on the condition that B obtains
the consent of X, Y and Z before getting married and Z dies before giving consent,
substantial compliance may be considered if B obtains the consent of X and Y.
PERFORMANCE OF
CONDITION PRECEDENT
• The condition precedent : Where the transfer of property is dependent on the fulfilment
of precedent, the vesting of interest cannot take place unless the condition is performed.
• If the condition precedented is void under section 25 it cannot be performed and the
transfer never take effect. But where the condition is valid and lawful, its performance is
necessary for passing of the interest in favour of transferee.
• Section 26 provided that where transfer is dependent on any lawful condition precedent
its subsequent compliance is sufficient for the transfer.
• It is not necessary that the condition is fulfilled strictly in accordance with its terms this
section incorporates the rule that a condition precedent is to be interpreted liberally
where as a condition subsequent is to be strictly construed.
Gonendra Mohan Tagore V. Rajah Jotindra
Mohan Tagore
By substantial compliance is meant that condition has been carried out for the
most part of its term. For example, A transfers rupees 5000 to B on conditions
that B shall marry with the consent of C, D, E. E dies and his consent is not
possible. B marries with the consent of C and D. the condition has been carried
out in substance through not strictly according to its terms. B get rupees 5000 if
he marries with the consent of only C and D.
CONDITION
SUBSEQUENT
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.
CONDITION SUBSEQUENT
• It is given in Section 29 of the Transfer of Property Act, 1882. Any
condition that is required to be fulfilled after the transfer of any property
Is called condition subsequent.
• This condition is to be strictly complied with and the transfer will happen
only after the completion of such condition.
• Although it is an essential requirement that the condition needs to be
lawful and if it is not then the condition will be held as void and the
transfer will not break down and will be finalised.
• General rule of law that conditions subsequent which are intended to
defeat vested interests are to be constructed strictly. On the other hand, a
condition precedent is, as noted above under Section 26, deemed to have
been fulfilled if it is substantially complied with.
CONDITION SUBSEQUENT
Illustrations:
• A field is transferred to A with a proviso that if he married without the
consent of B, C and D, the field will go to E. D dies. Even if A married
without the consent of B and C, the gift to E does not take effect.
• A field is transferred to A with a proviso that if he married without the
consent of B, the field shall go to C. A marries with the consent of B. He
afterwards becomes a widower and marries again without the consent of B.
The gift to C does not take effect because the condition once fulfilled is
discharged.
• 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. Here, there has been a
clear breach of the condition and therefore B is divested of his interest.
CONDITION
COLLATERAL
• Any condition that is required to be fulfilled simultaneously after the
transfer of any property is called condition collateral. It needs to be
strictly followed otherwise the transfer will break down.
• Illustration, A transfers property 'X' to B on the condition that he shall
maintain A's wife C for a period of 10 years. If B complies with it and
maintains C, the transfer will be valid and the property will be in the
possession of B.
Condition Subsequent Condition Collateral
Example 1 Employment Contract: An Sale of Goods: A seller agrees to
employee's contract states that deliver a product and provide a
employment will be terminated if user manual. The delivery of the
the employee fails a mandatory user manual is a collateral
drug test. The drug test is a condition to the sale.
condition subsequent.
Example 2 Insurance Policy: A policy states Real Estate Transaction: A seller
that coverage will end if the agrees to paint the house before the
insured person engages in certain sale is finalized. The painting of
risky activities, like skydiving. the house is a collateral condition,
Engaging in skydiving is a not affecting the transfer of
condition subsequent. ownership if breached.
Example 3 Loan Agreement: A loan Lease Agreement: A landlord
agreement includes a clause that if agrees to provide a parking space
the borrower fails to maintain along with the apartment. The
insurance on the collateral, the loan provision of the parking space is a
may be called due immediately. collateral condition to the lease of
Failing to maintain insurance is a the apartment.
condition subsequent.
Condition Precedent, Subsequent and Collateral
Condition Condition Condition
Aspect
Precedent Subsequent Collateral
Timing of Before the transfer After the transfer Simultaneously
Condition takes place. has taken place. after the transfer.
Does not require Requires strict Requires strict
Compliance
strict compliance. compliance. compliance.
Transfer can occur Transfer occurs Transfer occurs
Effect on Transfer with substantial only if condition is only if condition is
compliance. fulfilled. fulfilled.
A agrees to A transfers
A transfers
transfer property if property to B if B
property to B if B
Example B obtains consent scores above 75%
maintains A’s wife
from X, Y and Z in university
C for 10 years.
before marrying. exams.
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.
• 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.
SECTION 31- CONDITION
SUBSEQUENT
• This section states that an interest may be created on a transfer of
property with a superadded condition that interest shall cease to exist –
(if not complied with)
a. In case a specified uncertain event shall happen
b. In case a specified uncertain event shall not happen.
• States that any transfer where the condition of happening of an event or
not happening of an event takes place is applied, the transfer shall cease
to have an effect.
• The condition mentioned in this section is a condition subsequent and not
a conditional limitation which is in favour of any third party
• Illustration: A can put a condition on B to plant a tree and then the
transfer will have an effect. If B plants, then he will get the property.
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.
32. SUCH CONDITION MUST
NOT BE INVALID.—
• Section 32 of the Transfer of Property Act, 1882 states that the condition
mentioned in Section 31 should not be invalid or prohibited by law.
• Although Section 30 is also kept in mind that any condition in ulterior
disposition which is invalid will not invalidate any transfer that happened prior
to it.
• As for condition precedent or subsequent, for the transfer to be valid the
conditions need not be invalid and all the requirements mentioned in Section
25 should be met.
Illustration-
• A transfers his land to B ,with a condition that if B does not set fire to C’s hay
stack within a year ,his interest shall cease. The condition subsequent is invalid
and B’s interest is not affected.
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.
SECTION 33 – NO TIME FOR
PERFORMANCE MENTIONED
• States about any transfer where on a condition, time is not
specified for the happening or non-happening of an act. This
transfer ceases to have effect only when the act is made to be
impossible permanently or for a great period of time.
• Section 33 deals with a condition where no fixed time is
mentioned for the performance of a condition subsequent.
• The person who has to perform the condition and who is to take
interest created, does some act by which the condition becomes
impossible to perform or its performance is permanently
postponed, the condition subsequent is broken.
ULTERIOR
DISPOSITION
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.
CONDITIONAL TRANSFER TO ONE
PERSON COUPLED WITH TRANSFER
TO ANOTHER ON FAILURE OF PRIOR
DISPOSITION
• Under section 27 when a prior transfer is dependent on a condition and
if the prior transfer fails of non-fulfilment of the condition, the
property is to vest in another person. In such a case ulterior transfer
instead of failing, is accelerated due to the failure of the prior transfer.
• In other words where an interest is created on the transfer of property
in favour of one person and in the same transaction an ulterior
disposition is created of the same interest in favour of another person,
when the prior transfer fails the ulterior disposition takes place upon
its failure.
• Only when the Valid conditions is (accordance to Section 25) not
fulfilled or shall fail then only the subsequent transfer takes effect.
DOCTRINE OF
ACCELERATION
Acceleration refers to the shortening of time until a certain event occurs. In the
context of property transfers, it involves triggering a subsequent interest earlier
than initially planned.
Application under Section 27 of the Transfer of Property Act: When
property is transferred with a condition that if one disposition fails, a
subsequent disposition to another person will take effect, the subsequent
disposition becomes effective upon the failure of the prior one.
Condition-Based Acceleration: If the parties specify that the ulterior
disposition is conditional upon the prior disposition failing in a specific
manner, the ulterior disposition will only take effect if the prior disposition
fails in that specified manner.
• Future Possession: A person with a right to possess property in the
future may have that right advanced if the original condition (such as a
life estate) fails.
• Life Estate Failures: If a life estate ends prematurely, the remainder
interest may be accelerated so that the remainder beneficiaries can take
possession earlier than originally intended.
If a prior interest fails for reasons not anticipated by the transferor, the
subsequent interest will take effect. The effect of the doctrine is to ensure
that if the initial interest fails, the subsequent interest becomes effective
even if the failure occurs in an unforeseen manner.
SECTION 27 – DOCTRINE OF
ACCELERATION
Illustrations:
• A agreed to transfer his property to B. If B meet certain conditions if he did not do so
then the property are going to be transferred to C.
• A disposition favoured to C will be effective where a transfer of Rs 12000 is done by A
to B on condition that the lease will be executed by B after A's death after 3 months
• X transfers his house to Y on the condition that he shall transfer his field to Z. If he
does not transfer his field, the house will be transferred to B. Hence if Y does not
transfer his field to Z, the house of X will go to B.
• Underwood v. wing : A transfers his property to his wife B, in case she dies in his
lifetime the property should be transferred to C. A and his wife B die in an accident
together and it cannot be proved as to who died first. The disposition in favour of C
cannot take place.
• Ismail Haji v. Umar Abdulla: Demonstrates that if a transfer creates an interest for
one person and includes a condition for an ulterior disposition to another if the first
fails, the ulterior interest takes effect upon the failure of the prior disposition, even if
the failure does not occur in the exact manner anticipated by the transferor.
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.
CONDITIONAL LIMITATION-
• Conditional Limitation is something that is applied here and it affects any ulterior
disposition and if a vested property involves any condition that does not happen, it takes
place and property is transferred to the ulterior disposition which is the ultimate
beneficiary.
• Ulterior disposition which take place upon the failure upon a prior transfer, are effected
by conditional limitation.
• Section 28 provides that in a transfer of property, interest may be created in a favour of a
person with a condition that if an uncertain event does not happen the interest shall pass
on to another person. Thus, a conditional limitation is a condition of defeasance, which
terminates the interest of a person and invests another person with it.
• Conditional limitations as contemplated under this section are, however, subject to the
rules contained in sections 10, 12, 22, 23, 24, 25, and 27 of this Act. This is to say, the
validity of conditional limitation depends on mentioned sections
• Restraint of alienation [s.10] , Restraint on insolvency [s12] , Contingencies [s.21-24],
Condition precedent [s.25] and Doctrine of acceleration[s.27]
CONDITIONAL LIMITATION
• In the case of Sarojini v. Radha Kurup 2017, a donor gifted property to her daughter,
with a stipulation in the gift deed that the property would eventually be passed on to the
female children of the donee. It was held that this stipulation did not fall within the
scope of Section 28.
• Illustration: A transfer rupees 10,000 to B with a condition that B goes to England
within three years and in case B does not do so the money is to go to C. here, the
transfer of money [Rupees 10,000] to C is an ulterior transfer and it takes effect in case
the prior transfer viz. from A to B fails. Therefore, if A goes to England within three
years the money cannot go to C but if B does not go to England within three years it
shall pass on to C. it may be noted that for prior transfer the condition is a condition
subsequent whereas for the ulterior transfer it is a condition precedent.
28. ULTERIOR TRANSFER
CONDITIONAL ON HAPPENING OR NOT
HAPPENING OF SPECIFIED EVENT.—
Illustrations:
• A transfers his land to B, and if B becomes insolvent, to C. The condition is void under
Section 12.
• A transfers his field to B and in case of B's death without issue to C. C's interest is
contingent. (Sec. 21).
• A transfers his field to B and on B's death to such children of C who attain the age of 18.
All the children of C who are alive at B's death have an interest as laid down in Section 22.
• A transfers his field to B for life and on B's death to C at the age of
• C does not attain the age of 18 until 6 months after B's death. C's interest fails under Sec.
23.
• A transfers his field to B and on B's death without issue, to the sons of C or the survivor of
them. The sons of C who survive B become entitled to it under Section 24.
• A transfers his field to B for life on the condition that B murders C and then after B's death
to D. The transfer fails in both cases under Section 25.
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.
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-fulfillment 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.
34. TRANSFER CONDITIONAL ON
PERFORMANCE OF ACT, TIME BEING
SPECIFIED.—
• This section lays down where if the performance of the condition, whether
subsequent or precedent, is prevented by a person interested in its non
fulfillment, the delay is executed and the condition is discharged.
• States about any transfer where on a condition, time is specified for the
happening or non-happening of an act and on the failure of such condition,
the interest of the property is to go to another person.
• If the condition is fulfilled within the prescribed time, then the transfer will
continue to have effect, and if not then the transfer shall cease to have an
effect.
• Illustration, M agrees to transfer land "X to Non the condition that he shall go
to England in a span of 2 months. If N goes to England within the prescribed
time period then the transfer shall go through and N shall get the property,
but if he fails to do so inside the 2 months specified by M, the transfer shall
cease to have effect.