Property Law [5] markers

Module 1-
[Link] transfer-
Conditional transfer is the transfer of properties where a condition makes the existence of a
right dependent on the happening or not happening of a thing. The legal effect of the transfer
may vary based on the nature of the condition attached to it. There are three types of
conditions: Condition Precedent, Condition Subsequent and Collateral Condition. All these
conditions must satisfy the requirements of Section 25 of the Transfer of Property Act, 1882.
Section 25 of the Transfer of Property Act, 1882, states that any transfer that occurs upon the
fulfilment of a condition imposed on the other party is a conditional transfer. For instance, A
agrees to transfer his property to B if B gets selected for a job. The condition imposed by A
for B to get a job is an example of a condition.
For a conditional transfer to be valid, the imposed condition should not be:
1. Prohibited by law,
2. Should not be an act that involves fraudulent acts,
3. Should not be any act that is impossible,
4. Should not be an act that is termed as violative of public policy,
5. Should not be immoral,
6. Any act that incurs any harm to any person or his property.
For example, if X transfers property ‘B’ to Y under the condition that Y murders Z, such a
transfer is void as the condition is prohibited by law.
Types of Conditional Transfer in Property Law
Condition Precedent, Condition Subsequent and Condition Collateral are two types of
conditions under the Transfer of Property Act, 1882, that govern the timing of fulfilling
certain conditions in a property transfer.
Condition Precedent
Section 26 of the Transfer of Property Act, 1882, defines a Condition Precedent as a
condition that must be fulfilled before the transfer of property can take place. Unlike
Condition Subsequent, this condition does not require strict compliance and can be
considered fulfilled if there is substantial compliance. If 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.
Condition Subsequent
Section 29 of the Transfer of Property Act, 1882, defines a Condition Subsequent as a
condition that must be fulfilled after the transfer of property has taken place. This condition
requires strict compliance and the transfer will only happen if the condition is fulfilled. If A
transfers property ‘X’ to B on the condition that B must score above 75 percent in his
university exams, the transfer will only be finalised if B achieves the required marks. If B
fails to meet this condition, the transfer will break down and the property will revert back to
A.
It’s important to note that for a condition to be valid, it must be lawful. If the condition is
unlawful, such as in the case where A transfer’s property to B on the condition that B murders
C, the condition will be considered void and the transfer will go through, with the property
being retained by B.
Condition Collateral
Condition Collateral refers to a condition that must be fulfilled simultaneously after the
transfer of property. This condition must be strictly followed for the transfer to be valid. For
example, if A transfers property ‘X’ to B on the condition that B must maintain A’s wife C for
a period of 10 years, B must comply with this condition to validate the transfer. Failure to
comply will result in the breakdown of the transfer and the property will not be transferred to
B.
In a recent case in 2018, the Supreme Court clarified the concept of a conditional gift. If a gift
is conditional and there is no acceptance or proof of acceptance and the possession of the gift
remains with the donor for their lifetime without completion of the condition, the donor has
the right to cancel the gift deed. This cancellation does not violate the principles of a valid
property transfer.
[Link] and Contingent transfer-
Transfer of Property Act deals with vested and contingent interest. Vested Interest is created
where there is a condition of the happening of a specified certain event. While Contingent
Interest is created on fulfilling a condition of happening of a specified uncertain event.
Vested Interest
Section 19 of the Transfer of Property Act, 1882 talks about Vested Interest. It is an interest
which is created in favour of a person where there is a condition of the happening of a
specified certain event and time is not specified. The person having the vested interest does
not obtain the possession of that property but expects to receive it upon happening of a
specified certain event.
A promises to transfer his property to B on him attaining the age of 21. B will have vested
interest in A’s property till the time he does not become 21 years old and gets the possession
of it.
-After death, the person (promise) who is having this interest will not have any right over that
property and the interest will vest in his legal heirs. If B dies at the age of 20, then the interest
vested in B will pass on to the legal successors of B and they will get the charge over the
property in the mentioned time period.
- As per Section 20 of the TPA, 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 appears from the terms of the transfer, a vested interest, although he may not be
entitled to the enjoyment thereof immediately on his birth.

Essentials:
1. Immediate Transfer of Ownership: The transferee acquires ownership immediately
upon transfer.
2. No Condition Precedent: Interest is not subject to any condition; it arises directly.
3. Certainty of Vesting: The interest is definite and cannot fail.
4. Transferable and Heritable- Can be transferred during the transferee's lifetime or
passes to legal heirs upon the transferee's death.
In the case of Lachman v. Baldeo, a person transferred a deed of gift in favour of another
person but directed him that he will get the possession of that property only when the
transferor himself dies. The transferee will have a vested interest even though his right of
enjoyment is postponed till the death event.
Characteristics
1) Vested interest creates a current right that comes in effect immediately, although the
enjoyment is postponed to the time prescribed in the transfer. It does not entirely dependent
on the condition as the condition involves a certain event.
2) Vested interest is a Transferable and heritable right.
3) Death of transferee will not make the transfer invalid as the interest will pass on to his
legal heirs.
Contingent Interest
Section 21 of the Transfer of Property Act, 1882 states about Contingent Interest. It is an
interest which is created in favour of a person on fulfilling a condition of happening of a
specified uncertain event. The person having the contingent interest does not get
the possession of the property but receives it upon happening of that event but will not
receive the property if the event does not happen. Contingent interest is entirely dependent on
the condition imposed on the transfer.
-A agrees to transfer the car ‘X’ to B on the condition that he shall secure 80 % in his exams.
This condition is uncertain on the happening of the event or not happening and therefore B
here acquires a contingent interest in the car ‘X’. He shall get the property only if he gets 80
% and when the condition is fulfilled.
-In the case of Leake v. Robinson, the court upheld that when a condition involves an event
that is to be given ‘at’ a particular age or ‘upon attaining’ a particular age or ‘after’ attaining
this particular age, then it can be derived that the transfer involves a contingent interest.
Essentials:
 1. Condition Precedent: Interest arises only after the fulfillment of a specified
condition.
2. No Immediate Ownership: Ownership is delayed until the condition is met.
3. Uncertainty: The interest is uncertain as it depends on a future event.
4. Non-Transferable and Non-Heritable: Cannot be transferred or inherited until the
condition is fulfilled.

Characteristics
1. This interest only happens when the condition is fulfilled.
2. Contingent interest is a transferable right, but the condition of heritability depends upon the
nature of such any transfer and the condition.
3. Death of the transferee before getting the possession of the property will result in the
failure of continent interest and the property will remain with the transferor.
The following sections of Transfer of Property Act lay down the conditions for contingent
interest.
[Link] of security-
This doctrine states that no one can convey a better title than what they already have. For
example, if a property is mortgaged to one person and then transferred to another, the first
person will have priority over the second.
Section 48: Priority of Rights Created by Transfer
 Provides that when a person creates successive rights over the same property, the
rights will take effect in the order in which they are created.
 The principle of "first in time, first in right" applies unless there is a statutory or
contractual provision to the contrary.
 There are both actual and constructive notice.
-If X mortgages a property to A first and then to B, A’s mortgage has priority over B’s.
Essentials-
1. There ought to be one owner or transferor of the property and more than one transferee.
2. It is only applicable only to immovable property.
3. The transfer should be created at different times and at these different times there ought to
be created rights to the transferee.
4. This right cannot be exercised to the fullest at the same time.

[Link] and contribution-

The doctrines of marshalling and contribution are addressed under Sections 81 and 82 of
the Transfer of Property Act, 1882. These doctrines ensure fairness in the enforcement of
rights among multiple claimants over the same property.

- Marshalling (Section 56) the doctrine of marshalling enables a creditor to satisfy their
claim from multiple securities held by a common debtor in a way that does not prejudice
other creditors.
Essentials-
[Link] or More Securities: The debtor must provide multiple securities for a debt.
[Link] Mortgagee or Purchaser: Marshalling can be invoked by a subsequent
mortgagee or purchaser who holds an interest in one of the securities.
[Link]-Prejudice to the Prior Mortgagee: The prior mortgagee must not be prejudiced by
the enforcement of marshalling.
-X mortgages properties A and B to Y for ₹10,00,000, X mortgages property A to Z for
₹5,00,000. If Y enforces their claim over property A, Z can compel Y to first satisfy their
debt from property B.
- Contribution (Section 82)
The doctrine of contribution ensures that when two or more properties are subject to a
common liability, they contribute proportionately to discharge the encumbrance.
Essentials-
[Link] Encumbrance: There must be a single charge or encumbrance over two or more
properties.
2,Proportional Liability: Each property owner is liable to contribute proportionately to the
discharge of the debt based on the property’s value.
-X mortgages properties A and B to Y for ₹10,00,000. Property A is sold to P, and property B
to Q. If Y enforces the mortgage, P and Q must contribute proportionately based on the value
of properties A and B.
Exceptions -
-If one of the properties was purchased with a clause exempting it from liability.
-When one of the properties was not originally part of the mortgaged security.

[Link]-
A charge is defined under Section 100 as a right created on immovable property to secure
the payment of a debt or the performance of an obligation. It states that "Where immovable
property of one person is by act of parties or operation of law charged with payment of
money, it is said to be charged with the payment of that money."
Unlike a mortgage, a charge does not transfer ownership of the property to the creditor. It
only gives the creditor a right to receive the payment from the proceeds of the sale of the
charged property, should the debtor default.
Types of Charge- there are 2 types-
[Link] Charge: A simple charge does not create a personal liability on the owner of the
charged property. It only gives the charge-holder the right to realize the debt by selling the
property.
[Link] Charge: A conditional charge may involve an additional condition, such as the
performance of a particular action. This may create a higher level of obligation or lien on the
property.

-A charge can be created in the following 2 methods-

[Link] Act of Parties: The debtor and the creditor may enter into a contract creating a charge
over the property. This can be done through an agreement, deed, or other instruments.
[Link] Operation of Law: A charge can arise without an agreement, due to the operation of
law. For example, in cases involving a court decree or statutory provision, a charge may
automatically arise to secure payment of the decree.

Charge vs. Mortgage, A charge is similar to a mortgage but with some key differences:
-Mortgages transfer ownership of the property to the mortgagee, while a charge does not.
-Mortgages confer certain additional rights on the mortgagee, including possession of the
property (in some cases), while a charge does not grant such rights.