PROPERTY LAW- UNIT 2

Doctrine of Election
.
Election entails selecting between two competing rights. A person is required to elect or select only one right if two
rights are granted to him under any instrument in a way that makes one right preferred to the other. The Doctrine of
Election is covered in Section 35 of the Transfer of Property Act of 1882 alongside Section 180-190 of the Indian
Succession Act 1925.
Election is the obligation imposed upon a party by Courts of Equity to choose between two inconsistent or
alternative rights of claims in case where there is clear intention of the person from whom one derives that he
should not enjoy both. That he who accepts a benefit under a deed or will must adopt the whole contents of the
instrument
In simple words, election is a process that puts a person in a situation where he has to choose between two
alternative rights or two inconsistent rights.
Principle: The Latin maxim “quod approbo non reprobo” means that ‘no one can approbate and reprobate.’ In
other words, a person cannot accept a thing and reject another in the same instrument. In Cooper v. Cooper, Lord
Hather explained the principle underlying the doctrine of election.
In other words, a person cannot take under and against one and the same instrument. Suppose, by a deed A gives to
B a house belonging to C, and by the same instrument gives other property belonging to himself to C. C is entitled
to A's property only upon the condition of C's conforming to all the provisions of the instrument by renouncing the
right to his own property given in favour of B; he must consequently make his choice, or as it is technically termed
"he is put to his election", to take either under or against the instrument. If C elects to take under the 'instrument', he
must relinquish in favour of B his property given to B by A; and takes the property which is given to him by A
A person cannot accept a benefit under a deed or will and simultaneously reject other parts of the same instrument.
The doctrine mandates that the person taking a benefit must also accept the burdens of the instrument.
This doctrine is based on the equitable premise that whoever accepts the advantage under an instrument or
transaction of their choice must adopt the entirety of it or renounce everything. It is the idea that someone makes a
decision out of their own free will to accomplish something. (Held in the case of Cordington v. Cordington).

The doctrine of election may be stated in the classic words of Maitland as “He who accepts a benefit under a deed or
will or other instrument, must-
 adopt the whole contents of that instrument;
 conform to all its provisions; and
 (c)renounce all rights that are inconsistent with it.”
 ANALYSIS OF THE PROVISION-SECTION 35
 The transferor must profess to transfer a property which he has no right to transfer. It is immaterial
whether in doing so he knows or does not know it to be his own property;
 He must confer a benefit on the owner whose property he purports to transfer to another person; The two
things (viz., the transfer and conferring of the benefit) must form parts of the same transaction;
 The benefit must be directly conferred upon the owner of the property. (For instance, suppose A by a
deed makes a gift of B's property to c, and gives Rs. 10,000 to B's son, B will not be put to election for
nothing is being given to B which may be supposed to be in compensation for his loss.)
 The benefit must be conferred on him in the same capacity in which he is the owner of the property

Effect of election against the transfer.- Where the owner dissents from the transfer of his property-
 He must relinquish the benefit;
 The benefit intended for him would then revert to the transferor.
Exceptions
 General Rule is that if the owner decides to retain the property- he must relinquish the benefits conferred
to him through the same instrument. But the exception to this is that- 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.
 If the benefit has been enjoyed by the owner for 2 years without doing any act to express dissent-
presumed to be elected
 Any act of the owner 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. (Status quo cannot be
restored)

Compensation to disappointed transferee: If a transferor, who doesn't own the property, attempts to transfer it and
then dies or becomes incapable of making a new transfer before the rightful owner decides whether to accept or
reject the transfer, the disappointed transferee (the person who was supposed to receive the property) can claim
compensation. This is especially relevant if the transferee gave something of value in return (consideration), as the
matter then becomes one of contract. If the rightful owner rejects the transfer, any benefits they received revert back
to the transferor or their representative.
English Law.-In this respect the English Law is different because there the done electing against the instrument
does not incur a forfeiture of the benefit conferred on him by it, but is merely bound to make compensation out of it
to the person disappointed by his election.
Where election limited to part of benefit.-The fifth paragraph provides an exception to the general rule that if a
person elects against the instrument, he will forfeit the whole of the benefit received under it.
For instance, suppose A transfers a property X belonging to B and by the same instrument confers benefits, a, b and
c and it is expressly stated that the benefit c is given to B in lieu of property X, then, if B elects to retain X, he will
not be bound to relinquish all the benefits conferred on him by the instrument but only c which is expressed to be in
lieu of X
Mode of election.-
According to the term of these paragraphs, election may be expressed or implied by conduct.
Where, the election is made in express words, it is final and conclusive.
Where, however, it is not so made, but the transferee
(i) being aware of his duty to elect, and
(ii) having a full knowledge of such matters as the value of properties, accepts the benefit giver to him by the
transaction, such action on his part constitutes an election in favour of the transaction.
Hence, it follows that If a person acts through ignorance or mistake, the doctrine gives way.
Presumption as election.-The question as to whether the benefit was accepted with the knowledge of the
circumstances would be a question of fact subject to the following rules :
(a) If the benefit has been enjoyed for two years without doing any act to express dissent, it shall be presulned
that he had the knowledge or he waived enquiry.
(b) If he has done any act which renders it impossible to place the person interested in the property professed to
be transferred in the same condition as if such act had not been done. For instance, if 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 coal-mine and exhausts it. C must be presumed to have confirmed the transfer of his estate by A to B.
Requisition to elect.-The last but one paragraph provides a special procedure by which the person put to his
election may be compelled by the transfer to elect. Upon the expiration of one year from the transfer, if an election
has not taken place, the transferor may compel him to make his election. If he fails to comply with this requisition
within a reasonable time, he shall be deemed to have elected to confirm the transaction.
Suspension of election.-The ninth and the last paragraph lays down that where the donee suffers from some
disability by reason of infancy, lunacy and so forth, the election shall be postponed until the disability ceases or until
the election is made by some competent authority, e.g., a guardian of a minor.
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APPORTIONMENT- 6M
Apportionment of Periodical Payments refers to the division of income that is received periodically, like rent or
interest, between the transferor (seller) and transferee (buyer) when a property is transferred. There are two types of
apportionment:
 1. Apportionment by Time: This occurs when income is divided based on the time the property was owned
by each party. For instance, if a property generating monthly rent is sold in the middle of the month, the
seller is entitled to the rent for the days before the sale, and the buyer gets the rent for the days after.
The general rule in property transfer, as stated in Section 8 of the Transfer of Property Act, is that all interests in the
property pass to the transferee immediately. However, this rule does not apply to periodical income, which is instead
apportioned based on daily accrual. For example, if a house is sold on the 15th of the month, the seller gets rent for
the first 14 days, and the buyer gets the rent for the remaining days.
In summary, Apportionment by Time ensures that periodical payments are fairly divided between the transferor and
transferee based on the duration of ownership during the payment period.
2. Apportionment of Benefit refers to the division of benefits arising from obligations related to a property
when that property is transferred to multiple owners. When a single property is split and transferred to
different people, the obligation (like paying rent) connected to the property must also be split. Each new
owner is entitled to their share of the benefit according to their share of the property.
However, this rule comes with conditions:
 Notice of Severance: The person who bears the obligation (like a tenant) must be informed that the
property has been divided and that the obligation now applies to multiple owners.
 Severability: The obligation must be something that can be divided. For example, paying rent can be
split between different owners, but delivering a single item (like a sheep) cannot be easily split.
 No Increased Burden: The division of the property and the obligation must not increase the burden
on the person responsible for fulfilling the obligation. For example, if land is sold to two people, the
tenant can be asked to pay half the rent to each, but they can't be required to pay more than the total
rent they were originally paying.
In essence, when property is split among multiple owners, the benefits and obligations attached to the property
are also divided. Each owner is entitled to their share of the benefits, like rent, but this division must be
practical, and the person fulfilling the obligation (like a tenant) must be informed and not overburdened.
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FRAUDULENT TRANSFER
Section 53 of the Transfer of Property Act, 1882 (TPA), pertains to fraudulent transfers and principally concerns
the intentional transfer of property with the aim of defrauding creditors. As outlined in Section 53, a property
transfer is considered voidable, allowing any defrauded creditor the option to void the transfer, unless the transferee
acquired the property in good faith and for valuable consideration.
Additionally, the section outlines a procedure for nullifying such transfers. The section also provides a mechanism
for setting aside the transfer.
Section 53 of the Transfer of Property Act
 Every transfer of immovable property made with intent to defeat or delay the creditors of the transferor shall
be voidable at the option of any creditor so defeated or delayed. Nothing in this sub-section shall impair the
rights of a transferee in good faith and for consideration.
 o For example:– When ‘A’ transfers his property to ‘B’ without giving him his ownership of the
property with the intention to keep his assets out of reach of his creditor, such a transfer is called a
fraudulent transfer.
A fraudulent transfer of property gives rise to a civil cause of action. The court may set aside a fraudulent transfer at
the request of the defrauded creditor.
Essentials
 The transferor carries out the conveyance of immovable property without receiving any consideration.
 The purpose behind the transfer is to deceive a future transferee and hinder or postpone the rights of
creditors.
 This type of transfer can be void which means it is voidable at the discretion of the subsequent
transferee.
Exceptions
 Good Faith under Section 53(a):
o If the person receiving the property (transferee) acted in good faith and had no notice of the
fraudulent intent of the transferor, the transfer is not voidable.
o Good faith here implies an honest belief and lack of knowledge about any fraudulent intention on the
part of the transferor.
o If the transferee can prove that they acquired the property without any knowledge of the fraudulent
intent, the transfer may be considered valid.
 Insolvency of the Creditor under Section 53(b):
o Another exception is when the transferor was not rendered insolvent by the transfer, and the transfer
was made for adequate consideration.
o If the transferor remains solvent even after the transfer, and the transfer was made for a legitimate
purpose with adequate consideration, it may not be considered fraudulent even if it prejudiced the
creditor.
Framing of suit under fraudulent transfer
Privity of contract is followed, which means that only the parties to the contract can sue. Hence, no third party can
sue on the creditor’s behalf who is not a party to the suit.
o The suit is instituted by the creditor on the ground that the transfer is made to defeat or delay the
creditors of the transferor.
The suit is instituted in the representative category or for the benefit of all creditors.
o This is to avoid a multiplicity of suits against the same opposite party/parties on the same subject.
Dismissing a creditor’s lawsuit would be binding on all creditors.
 The Burden of Proof
 Initial Burden on Creditors:
o Burden lies on creditors under Section 53 of TPA, 1882.
o They initiated legal action, attacking the debtor based on fraudulent transfer.

 Creditor's Assertion:
o The creditor must establish that the transfer was fraudulent.
o The aim is to show the transfer was intended to defeat or delay creditor's claims.

 Shift in Burden:
o Upon creditor's successful proof, burden shifts to the transferee.

 Transferee's Defense:
o A transferee must prove good faith in acquiring the property.
o Burden includes demonstrating bona fide purchase for value.
o Transferee must show non-involvement in the fraudulent transfer.

 Section as a Shield for Transferee:

o Transferees can use Section 53 as a defense mechanism.
o Protection against allegations of fraudulent involvement.

 Creditor's Use as a Sword:

o Section 53 serves as a legal weapon for creditors.
o Allows them to challenge and attack the debtor in case of fraudulent transfers.

Case Laws
 Karim Dad v. Assistant Commissioner (1999): If the whole transaction is based on fraud and
misrepresentation, then no valid title can be passed to the transferee by using a forged and fabricated deed.
 Musahar Sahu v. Lala Hakim Lal (1951): It will not be fraud if the debtor chooses to pay one creditor and
leave others unpaid provided that he must not retain any benefit.
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PART PERFORMANCE
Doctrine of Part Performance is an equitable doctrine and it is incorporated to prevent fraud and from taking
illegal advantage on account of non-registration of the document.
The doctrine of part performance in India is recognized under Section 53A of the Transfer of Property Act,
1882. The doctrine simply means that where two people enter into an agreement and one of the parties acts in
consonance with the agreement, it creates equity, presuming that the other party will also perform its
obligations. So, if the other party later denies or acts fraudulently by refusing to fulfil his duties as mentioned in
the agreement, the doctrine of part performance is applied to safeguard the interest of the party who performed
 acts in furtherance of the agreement. Thus, the doctrine is embodied to protect the interests of transferees who
take possession of the property but are not able to obtain the title after paying the consideration in part or whole
and where the transferor later denies such an agreement or sues him for the possession. This doctrine prevents
such instances and provides justice to genuine and innocent transferees.
Illustration: X enters into a contract with Y regarding the transfer of a flat on payment of consideration. The
contract also provided that on partial payment of consideration, Y could take possession, and so he did. Later, X
denies transferring the title to the property, stating that he does not want to sell the flat. The doctrine of part
performance will be applied here to protect the interest of Y, either by asking X to repay the consideration paid
or by performing the contract and transferring the title of the property to Y.
Objectives of the Section:

 Mutual Responsibility: It ensures that both the transferor (seller) and transferee (buyer) follow through
on their promises and obligations as outlined in the contract.
 Protection for the Buyer: It protects the buyer’s rights to the property, especially if they have already
started fulfilling their part of the contract.
 Prevention of Fraud: It prevents the seller from unfairly backing out or taking advantage of the buyer
who has acted in good faith.
 Limiting the Seller’s Rights: Once the buyer has taken possession under the contract, the seller (or
anyone claiming under them) cannot enforce any rights over the property except those specifically
mentioned in the contract.

Scope of Doctrine of Part Performance

The Doctrine of Part Performance applies solely to written and valid contracts. It does not extend to oral or void
agreements. The contract must be in writing and signed by the transferor. The transferee must have taken possession
of the property as part performance of the contract and they must be prepared and willing to fulfill their obligations.
This section is applicable not only to contracts of sale but also to any contracts involving the transfer of property for
consideration. It has been established in the case of Jacobs Private Limited vs. Thomas Jacob that the doctrine is
intended to be used as a defensive measure rather than an offensive one.

In the case of Kamalabai Laxman Pathak v. Onkar Parsharam Patil, the Bombay High Court has emphasised
the requirements outlined in Section 53-A for the application of the Doctrine of Part Performance. These
requirements are as follows:

 Contract for Transfer of Property: There must be a written contract to transfer immovable property
(like land or a building) for value.
 Written Contract: The contract must be in writing and signed by the transferor or their representative.
Oral agreements don't qualify.
 Valid Contract: The contract must be legally valid and enforceable under the Indian Contract Act,
1872.
 Immovable Property: This rule only applies to immovable property. It doesn’t apply to movable property
(like cars or furniture).
 Transfer for Consideration: The written contract must clearly show an intention to transfer the
property in exchange for consideration (payment). Vague contracts don’t qualify.
 Possession in Furtherance of the Contract: The person receiving the property must take possession or
continue to possess it as part of the contract. They can also perform actions that help carry out the
contract.
  Some Act in Furtherance: If the transferee is already in possession, they need to do something
additional to support the contract.
 Willingness to Perform: The transferee must show they are willing to fulfill their part of the contract
for the doctrine to apply. They must act fairly and fulfill their obligations.

Exception to the Doctrine of Part Performance:

Under Section 53A of the Transfer of Property Act, there’s an exception protecting a transferee who buys property
for consideration without knowing about the previous contract or its part performance. This means:

 If a new transferee buys the property without knowing about the earlier contract or its performance, they are
not bound by the doctrine of part performance.
 Any rights based on the earlier contract and part performance cannot be enforced against this new, innocent
transferee.

In Hemraj v. Rustomji, the Supreme Court confirmed that the new transferee's rights are protected if they were
unaware of the previous transaction. The burden of proof is on the person claiming part performance to show that
the new transferee knew about the earlier deal.

Additionally, the right under Section 53A remains valid even if:

 The time for filing a lawsuit for specific performance has expired, or
 The claim of title through adverse possession has been rejected.

The doctrine of part performance is based on three equitable principles:

1. Equity demands fair conduct.

2. Equity values intention over formalities.
3. Equity treats as complete what should have been completed.

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 OTENSIBLE OWNER
Ostensible owner is not the real owner but one who can represent himself as the real owner to the third
parties for such dealings. It states that when a person acts with the permission, whether expressed or implied,
of someone who appears to be the owner of a particular immovable property, that person is considered the
‘ostensible owner’ of that property.

The law relating to transfer by an ostensible owner as given in section 41 of the Act is now is subject to the
provisions of Benami Transaction Act 1988. This Act extends to the whole India except Jammu and
Kashmir. Ostensible owner is the person who has all the inditcta of ownership without being the real owner.
An ostensible owner has all the indications of the ownership and looks like owner. Thus, a person may have
possession and enjoyment of the property and may also have entered his name in the official records but
even then he may not be the real owner of the property.

An ostensible owner has all the indications of the ownership and looks like owner. He can be called as an
Apparent Owner. S.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 violable on the ground that the transferor was not authorised to make
it: Provided that the transferee, after taking reasonable care to ascertain that the transferor had power to
make the transfer, has acted in good faith.

The phenomenon of appointing an ostensible owner is a principle of natural equity, which must be
universally applicable, that where one man allows another to hold himself out as the owner of an estate, and
a third person purchases it for value from the apparent owner in the belief that he is the real owner. This
principle was laid down in the case Ram Coomar v. Mac Queen.

The transferee will be protected only if he has acted in good faith after taking reasonable care to ascertain
that the transferor has power to make the transfer. The transferee who wilfully shuts his eyes and takes the
transfer without any inquiry is not protected. What is reasonable care depends upon the facts and
circumstances of each case, and no hard and fast rules can be laid down.

Essentials of Section 41

(Discuss the circumstances in which transfer from an ostensible owner is protected)

To apply Section 41, certain conditions must be met. Here are the necessary prerequisites:

 The person transferring the property must be the ostensible owner: Once it is established that the transfer
was made with the permission of the real owner, the real owner will be prevented from making a claim on
the property. This applies even if the transferee did not conduct any investigations to verify the transferor’s
authority, which is otherwise necessary for this provision to apply. The key factor is that the transferor is the
ostensible owner with the approval of the real owner at the time of the transfer.
 The actual owner’s consent, either expressed or implied, is required:

a) Express Consent: This occurs when the real owner clearly states, either verbally or in
writing, that they have no interest in the property, or acknowledges another person’s interest. It can
be demonstrated through actions such as attesting a deed that disclaims ownership or registering the
 property in another person’s name. Mere inaction or silence typically does not constitute consent
unless there is a specific duty to speak or the silence effectively conveys consent.
b) Implied Consent: This can be inferred from the real owner’s actions or behavior. If the real
owner is aware that someone else is dealing with their property and does not object, this silence or
inaction may imply consent. However, the real owner’s awareness of their right or interest is
crucial; if they were unaware of their right at the time, they are not barred from asserting their claim
against the transferee.

 The ostensible owner must receive some form of compensation in exchange for the property: To benefit
from Section 41 of the Act, the transferee must show that they received the property in exchange for
something. There must be a quid pro quo, or something of value, involved in the transaction.
 The transferee must exercise reasonable caution regarding the transferor’s authority over the property
and act in good faith: Reasonable precautions, degree of care, ordinary prudence, reasonability, diligence
 It’s important to note that this section applies only to the transfer of immovable property and not movable
property.

Examples of Non-Ostensible Owners

There are certain individuals who are not considered ostensible owners. They include:

 Self-proclaimed managers or agents who claim to have authority over the property.
 Mortgagors who have a minor interest in the property and act as servants.
 Co-sharers who occupy jointly shared family property.
 Trustees or managers of idols, as idols themselves cannot provide consent.

An Exception to the ‘Nemo Dat Quod Non Habet’ Rule

Section 41 introduces an exception to the general principle of ‘Nemo Dat Quod Non Habet,’ which means that a
person cannot transfer a better title to property than what they possess. Section 41 is a widely accepted
exception to this principle.

For instance, if the real owner entrusts the title documents of the property to a specific person in a reasonable
manner and makes that person an ostensible owner, then a third party who deals with the ostensible owner in
good faith and after conducting proper investigation may acquire a valid title to the property, even against the
real owner.

Exemptions to Section 41 of the Act

However, there are exemptions where the provisions of Section 41 do not apply:

 When the person in whose name the property is held is a coparcener in a Hindu Undivided Family, and
the property is held for the benefit of all coparceners.
 When the person in whose name the property is held is a trustee or holds a fiduciary position, and the
property is held for the benefit of another person for whom they act as a trustee or in a similar capacity.
 In these cases, the ostensible owner or benamidar does not become the real owner. Therefore, except for
instances where the benamidar is a coparcener or a trustee in a fiduciary position, the provision
established by Section 41 of the Act can be modified.
In the case of Ram Coomar v. Mac Queen- Alexander Mac Donald had a mistress named Bunoo Bibi- had 2
children together (1 is Mac Queen)- McD bought a property in the name of BB- the sale deed was in her name- she
received rent from that property, etc; BB then sold the prop to Ram Coomar's father- McD did not object this; later
McD executed a will that Mac Queen will inherit this property; RC v. MQ The court held that, from S.41- BB
would be the ostensible owner of that property because to the rest of the world it appeared as though BB is the true
owner; Ram Coomar's father, even if he would have taken reasonable care and good faith, he would still find out
that BB is only the owner. The transfer was held valid and RC received the property from his father.