Mortgage and types A mortgage is a transfer of an interest in specific immovable property for

the purpose of securing the debt. Section 58 of the Transfer of Property Act, talks about it. The
term Mortgage is defined under section 58 of the Transfer of Property Act, 1882 which states
that a Mortgage is the transfer of interest of a immovable property for the object of obtaining the
money which is already paid or to be paid in future or to perform any obligation which results in
monetary liability. Mortgage does not refer to actual transfer of property but refers to the transfer
of ownership and interest of the property to obtain the money which is advanced as loan.
Elements of Mortgage
Three elements of a mortgage are:-
1. There must be a transfer of an interest.
2. The interest so transferred should be of an immovable property
3. The Mortgage must include consideration.
4. The transfer should be by way of security for an existing or future debt or monetary liability

Parties in a Mortgage
According to section 58(a) of the Transfer of Property Act, 1882 Mortgage involves two parties
namely “Mortgagor” the person who transfers the property that is the borrower and “Mortgagee”
the person who receives the property that is the lender.
Types of Mortgage

1. Simple Mortgage- Section 58(b) defines simple mortgage as a mortgage wherein there is no
transfer of possession of the property. Instead, in case the mortgagor fails to repay the loan
amount, the mortgagee has the right to have the specific immovable property sold through a
court order (Mathai Mathai v Joseph Mary) the court held that such deed was to be considered
as a simple mortgage.

2. Mortgage by conditional sale Section 58(c)- talks about mortgage by conditional sale. This
type of mortgage works on the condition that the mortgagor and mortgagee agree to a
prescribed date post which failure of payment will result in the absolute ostensible sale of the
mortgaged property. Or in case, such payment is made successfully on the prescribed date
such sale will be void and the property will have to be transferred back to the mortgagor.
Rama v Samiyappa

3. Usufructuary mortgages As per Section 58 (d) Usufructuary mortgage is a type of

mortgage wherein the mortgagor transfers/delivers or agrees to transfer/deliver the possession
of such mortgaged property to the mortgagee and gives him the following authority or powers –
• To retain such possession of mortgaged property up until the mortgage money is fully paid
• To be entitled to receive the whole or any part of the rents and profits accruing from the
property that is mortgaged
• To appropriate such rents or profits; (i) in lieu of interest, or (ii) in payment of the mortgage
money, or (iii) partly in lieu of interest and partly in lieu of the mortgage money.
Hikmatulla v Imam Ali,
4. English Mortgage As per Section 58 (e) of the Transfer Of Property Act, 1881 in an English
mortgage the mortgagor binds himself to repay the mortgage money on a certain prescribed
date, and transfers the said mortgaged property to the mortgagee, but is subject to a condition
that the mortgagee will re-transfer it to the mortgagor when the mortgage money is fully paid.

5. Mortgage by deposit of title deeds As per section 58 (f) of the Transfer Of Property Act,
1882 Mortgage by deposit of title deeds is a kind of mortgage wherein a person delivers
documents of title with regard to the immovable property to the mortgagee or creditor as a form
of security. Such a transaction is called a mortgage by deposit of title deeds. This mortgage
does not require registration(United Bank Of India v Messra Lekharam Sonam )

6. Anomalous Mortgage As per Section 58 (g) mortgage which is not a simple mortgage, a
mortgage by conditional sale, a usufructuary mortgage, an English mortgage, or a mortgage by
deposit of title-deeds within the meaning of this section is called an anomalous mortgage.
(Hathika v Puthiya Purayil Padmanathan)

RIGHTS AND LIABILITIES OF MORTGAGOR AND MORTGAGEE OF PROPERTY

Mortgagor and Mortgagee of Property The person who has transferred the interest in a specific
immovable property is known as Mortgagor and the transferee or person in whose favor the
interest is being transferred is known as Mortgagee.
Section 60 to 77 of the Transfer of the Property Act deals with the rights and duties of the
Mortgagor and Mortgagee.
Rights of Mortgagor:
1.Right to Redemption Sec(60) 2.Transfer to a third party Sec(60A) 3.Right to inspection and
production of documents Sec(60B) 4.Accession of Mortgaged Property: Section 63
5.Improvement to Mortgaged Property: This section 63A 6.Mortgagor’s power to lease: This
Section 65A
Liabilities of Mortgagor:
1.Payment of Public Charges: Section 65(c) 2.Lease/Rent: Section 65(d) 3.Pay the interest
time to time: Section 65(e) 4.Not to waste(deteriorate) the property: Section 66

Rights of Mortgagee
The Mortgagee is the person to whom the property is transferred.
1. Right to foreclosure: Sec(67) Illustration: If a Bank loans X against the security of his
immovable property. The mortgage has been created, and the time for repayment of mortgaged
money has also been fixed. Regardless, X failed to repay the loan, thereby, debt becomes due.
Consequently, the right of foreclosure is readily obtainable by the Mortgagee (here, bank) as X
hasn’t paid the principal amount with interest on the due date.
2. Right to sue: Default in repayment, Destruction of the mortgaged property, Insufficient
security, Deprivation of security,
3. Right to sell 4. Right to appoint a receiver: Sec(69A) 5. Right to accession: Sec(70)
6. Right to a renewed lease: As per Sec(71) 7. Right of the Mortgagee to spend money
on mortgage-Property sec(72) 8. Right to proceeds of revenue sale or compensation
on acquisition.

Liabilities of Mortgagee: (Section 76)

1.Bound to sue: Sec(67A) 2.Bound to manage property 3.Bound to collect rents
4.Bound to pay government revenue and other charges 5.Bound to make necessary
repairs 6.Not to cause destruction or permanent injury 7.If any loss or damage due to
fire etc. 8.Mortgagee

● Right Of Redemption Under Transfer Of Property Act

Right of redemption Right of redemption is the legal right of a mortgagor who owns real estate
to reclaim his or her immovable property once certain terms have been met.
Right of Redemption (Section 60) Noakes & Co. Vs Rice, (1902) - In this case, the House of
Lords observed that anything which obstructs or comes in the way of right to redemption of
mortgagor is bad and came with the phrase “once a mortgage always a mortgage” and clarified
that mortgage is not reducible.
Stanley Vs Wilde, (1899) - It was decided that even under condition where the mortgagor fails
to pay his debts or the loaned amount, wouldn’t take away the right to redemption of the
mortgagor, and if there is any such provision clogging the right to redeem, then it will be
considered void.
Essential Elements of Right of Redemption of Mortgage
1. Legal validity of mortgage- it was decided in Vishnu Kaya vs Vishnu Maya that where
registration of mortgage is necessary there a mortgage without registration will be considered
illegal and the mortgage does not become entitled to getting compensation on the basis of the
mortgage.
2. The appropriate time to take the mortgage back 3. Time and place for payment
4. Filing of the suit
In Pranil Kumar vs Kishori Lal, it was held that the purchaser of the property by auction can
also file a suit of redemption because he has his interest in such property.

Clog on Redemption of Mortgage

Clog on redemption means barrier on redeeming the mortgaged property. There are various
judgments in which it was held that right of redemption of mortgagor cannot be finished even if
the loan amount is not paid on time.
In Murarilal vs. Devkaranit, it was held that the parties cannot restrict the right of redemption of
mortgages even after the fixed period, if done so such agreement will be void. But there are
certain exceptions to it they are:
• By submission of the right of redemption or by sale or by any method by the free transaction.
The right can be finished by the degree of the court.
• If the right of redemption is vested in one person.
• If the mortgaged property is vested in state.

instances of Clog On redemption

There are many instances that creates a clog on redemption by the mortgagor
1.Postponement by mortgagee as an advantage of his position:
In the case of Seth Ganga Dhar v. Shankar lal[1], it was held that the postponement of 85 was
not a clog because of the conditions that existed at that time. In the case of Bhullan v.Bachcha,
it was held that in a usufructuary mortgage, the condition of redemption after 60 years on a
particular was a clog.
2.Conditional Sale of property:When the contract between the mortgagor and mortgagee
shows that if mortgagor will not pay the amount on time, the mortgagee will be eligible for selling
the property, such condition is considered as void.
3.Restraint on other mortgage: he mortgagor only transfers the interest and not the ownership
in the property. The mortgagor holds a right of mortgaging the property for advancing another
loan too
4.Collateral benefits in case of usufructuary mortgage to mortgagee: the mortgagee has
the right of taking the rents of that property, these are not illegal. If above all such benefits, the
mortgagee takes advantage of the needy condition of mortgagor and enjoys collateral benefits,
it is a clog.
case Laws on Exceptions to Clog on Redemption
Narandas Karsondas vs S.A. Kamtam L.K. Trust Vs EDC Ltd

Once a mortgage, always a mortgage

It is well known principle that once a mortgage is always a mortgage, some changes or revision
can be done to it. In a nutshell, the mortgage and right of redemption are coextensive of each
other whether it is described or not. The right to redemption of mortgage cannot be restricted or
ended as once a mortgage always remains a mortgage. In all mortgages, this right of
redemption is inherently applied.
In Noakes & Co Vs. Rice, the Court held that the mortgagee cannot make any such
reservations which would restrict the mortgagor from exercising his right of redemption after
paying the debt along with interest, if any.
In Knocks vs Roulds, the Court held that once a mortgage will always remain a mortgage. In
this case, there the premises and goodwill were mortgages and a contract limiting the right of
redemption was entered into, the Court held such a contract will not imply that the mortgagor
has waived his right of redemption.

RIGHT TO FORECLOSURE
The right of the mortgagee to obtain a decree of the Court barring the mortgagor from exercising
his right of redemption is known as foreclosure. The right of foreclosure is provided to the
mortgagee to enable him to recover the debt money. This right is envisaged under Section 67 of
the Transfer of Property Act, 1882. The right to foreclosure can be exercised by the mortgagee
when the amount of debt has become due and has not been paid by the mortgagor and the
agreement provides no fixed date for repayment. Further, the mortgagor must have not
exercised his right of redemption. Section 67 deals with the "Right to fore-closure or sale" and
provides that the mortgagee has a right to obtain a decree, after the debt amount owed by
mortgagor has become due and the mortgagor has not obtained a decree for exercising his right
of redemption, for preventing the mortgagor from exercising the redemption right or to obtain a
decree for the sale of the mortgaged property. The limitation for instituting a suit for exercising
the right of foreclose is 12 years.

Doctrine of Subrogation
The term "subrogation" means to substitute. Any individual other than the mortgagee or co-
mortgagor who has an interest in the mortgaged property and redeems the mortgage is entitled
to be substituted in place of the mortgagee.
The doctrine of subrogation under Section 92 had been included in the TP act
The Calcutta High Court explained the nature and scope of the doctrine of subrogation in
Bisseswar Prasad v. Lala Sarnam Singh (1910), 6 Cal. LJ 134 −“The doctrine of
subrogation is a doctrine of equity jurisprudence. It does not depend upon the
privity of contract, express or implied, except in so far as equity may be supposed
to be imported into transaction and thus raise a contract by implication.
Essential Requisites for a Valid Claim for Subrogation
1.A person claiming the right must have an interest in or charge over the mortgaged property
that entitles him to redeem the mortgage. 2.He must redeem the mortgage. 3.A person must
have given money to a mortgagor to redeem a mortgage with an agreement in writing that he
will be subrogated to the rights of the mortgagee whose mortgage is discharged.
Kinds of Subrogation- Section 92 of the Tp act provides for two kinds of subrogation
− 1.Legal subrogation 2.Conventional Subrogation

Charge

According to section 100 of Tp act, when the immovable property of one party is (by an act of
parties or operation of law) pledged as security for the payment of money to another, and the
transaction does not constitute a mortgage, the later would acquire a charge over the property.
In simple terms, a charge is a claim against an immovable property acquired by one person (by
the act of parties or by operation of law) as security for payment to another, and the property is
not mortgaged.
A charge on immovable property is created to secure payment of money. The payment is made
out of the property charged if it is not made by the person responsible for such payment. The
charge does not amount to a transfer of any interest in the property in favour of the charge
holder.
Let us take an example.
X has two daughters, P and Q. X gives his entire property to P and puts a condition that P would
be under an obligation to pay Rs 10,000 out of the property every month to Q. This amount of
money would constitute a charge in favour of Q. If P sells the property to a third person (say Z),
then Q can enforce her right against the third person provided he (the third person, Z) has
notice of this charge.
Essentials of Charge
(i) Immovable property of one person is made security for the payment of money to another.
(ii) By the act of parties or by operation of law.
(iii) This transaction does not amount to a mortgage.

Marshalling
means arranging something. Section 81 of the transfer of property act says that if the owner of
two or more properties mortgages them to one person and other property mortgages to other
people, the new mortgagee is in the absence of a contract to the contrary, entitled to have the
mortgaged debt satisfied out of the properties not mortgaged to him, so far as the same will
extend, but not to prejudice the rights of the prior mortgagee or persons claiming under him or of
any other person who has for consideration acquired an interest in any of the properties. The
right given to the subsequent mortgagee under this section contemplates a situation where a
mortgagor, mortgages more than two or more than two properties firstly to a mortgagee and
after that mortgages some of these properties to the other person.
For example-
· X mortgages properties A, B and C to Y for securing a loan of 30,000 rupees.
· After that X mortgages property B to Z for securing another loan of 10,000 rupees.
In this Y is the first mortgagee on properties A, B and C which are securities for a loan of 30,000
rupees. And property B mortgages to X for loan 10,000 rupees. Here Y is the prior mortgaged
and Z is the subsequent mortgagee. The right is given to Z (subsequent mortgagee) entitles him
to say that the loan of rupees 30,000, it should be satisfied out of sale proceeds of properties A
and B only and it is not from C which has been mortgaged to him. In the case, A and B could be
sold for less than 30,000 rupees, property C mat be sold to complete the amount. Although Z is
a subsequent mortgagee and his claim is not before the Y but Z has right of marshalling or in
other word he has right to arranging the securities in his favour.

Landmark Cases
In the case of Devatha Pullaya v. Jaldu Manikyala Rao where a puisne mortgagee has taken
the mortgage expressly on condition of discharging certain amount due on the prior mortgage
but fails to fulfil that term, he cannot exercise the right of marshalling.
Narandas Karsondas vs S.A. Kamtam
L.K. Trust Vs EDC Ltd

instances of Clog On redemption

There are many instances that creates a clog on redemption by the mortgagor
1.Postponement by mortgagee as an advantage of his position:
In the case of Seth Ganga Dhar v. Shankar lal[1], it was held that the postponement of 85 was
not a clog because of the conditions that existed at that time. In the case of Bhullan v.Bachcha,
it was held that in a usufructuary mortgage, the condition of redemption after 60 years on a
particular was a clog.
2.Conditional Sale of property:When the contract between the mortgagor and mortgagee
shows that if mortgagor will not pay the amount on time, the mortgagee will be eligible for selling
the property, such condition is considered as void.
3.Restraint on other mortgage: he mortgagor only transfers the interest and not the ownership
in the property. The mortgagor holds a right of mortgaging the property for advancing another
loan too
4.Collateral benefits in case of usufructuary mortgage to mortgagee: the mortgagee has
the right of taking the rents of that property, these are not illegal. If above all such benefits, the
mortgagee takes advantage of the needy condition of mortgagor and enjoys collateral benefits,
it is a clog.
SALE
Section 54 of the Transfer of Property Act, 1882, defines “sale” as the transfer of ownership in
exchange for a price. The term “price” is to be interpreted as a price in terms of money and not
otherwise. If the transfer involves any other kind of consideration, it is not a sale.
Contract for sale Section 54 further incorporates the concept of “contract for sale.” It is an
agreement between the parties that a sale will be effectuated in the future by executing a sale
deed on mutually settled terms.
Ramshankar Jivatram v. Bai Kailasgauri( A sold the property to C. In this case, B cannot
approach the court to enforce his right to specific performance)
Elements of Sale
1.Transfer of ownership 2.Money consideration
Essentials of Sale of Immovable Property
1.Parties 2. Competency a.Competency of a seller - Sec7(Smt M Bhagyamma v. Bangalore
Development Authority) b.Competency of a buyer
3.Essentials of Valid contract- (a.Offer and Acceptance • b.Lawful object • c.Agreement not
expressly declared void • d.Intension to create legal relationship • e.Free consent)
4.Absolute Transfer of Ownership 5.Consideration 6.Mode of Transfer

Section 55 of the Transfer of Property Act, 1882 describes right and liabilities of buyer
and seller.
Rights, Duties and Liabilities of Seller in case of Sale of Immovable Property:
Before sale
Duties of Seller:
1. To disclose any material defect(s.55(1)(a) 2. To produce documents of title(s.55(1)(b)
3. To answer questions about the property or title(s.55(1)(c) 4. To execute conveyance(s.55(1)
(d) 5. Take reasonable care of the property and title deed (Section 55(1)(e)
6. To pay outgoings(s.55(1)(g).

Rights of Seller: 1.Right to get Rent and Profit (section 55(4)(a)

Liability of buyer
1. Liability to disclose facts(s. 55(5)(a) 2. Liability of payment of purchase money (s. 55(5)(b)

After sale:
Liabilities of Seller:
1. To deliver possession of the property(s. 55(1)(f) 2. Lis pendens(s. 55(2) 3. Liability to
Submit Document(s. 55(3) 4. Liability to Submit Document as to Entitlement (Laxmidas &
Company V/s D.J. Tata) 5. Liability to Execute Conveyance 6. Liability to Protect Document
7. Liability to Deliver up Occupation

Rights of seller: Right to get Interest on Unpaid buying money(Section 55(4)(b)

(In Subba Rao V/s Vasudev Shastri, the Court decided that the seller is entitled to get interest
on selling-money only when the possession of sold property is given to buyer)

Rights of Buyer:-
1.Right to get Benefits, Rents(Section 55(6)(a) 2. Right to get Interest

Liabilities of buyer:- 1.Liability to bear damages(s. 55(5)(c) 2. Liability to pay due amount(s.
55(5)(d) (Gangi V/s Govinda - the buyer is liable to pay all the charges after sale. Due amount
includes revenue, principal, interest etc)

Lease
Lease is a transfer of possession. Section 105 of TPA defines lease. Lease is a transfer of the
right of enjoyment of an immovable property made for a certain period, in consideration of a
price paid or promised to be made or money, share of crops, service or any other thing of value
to be given periodically or on specified occasions by the transferee to the transferor. A lease is
not a transfer of ownership of property, but only possession is given for a certain time. The
transferor is called lessor (landlord), and the transferee is called lessee (tenant).
Duration of lease Section 106 describes the duration of lease of two conditions including
Agriculture or Manufacturing purpose or other purposes.
Agriculture Or Manufacturing purpose - a year and notice for termination of the lease is given in
6 months.
Other Purpose - 1 month and renewed every month if it is not mentioned in the contract. The
notice for such a lease can be given within 15

Essential features of a valid lease

1. Immovable Property 2. Parties should be Competent 3. Subject matter of lease 4. Duration
5. Consideration 6. Valid contract essentials 7. Express and implied transfer 8.Possession of
Property
LEASE EXECUTED
• When there is a lease of Immovable property for a term of 1 year or more • All other leases of
Immovable property – Can be either made by a registered deed or an oral agreement
When the lease is of multiple properties that require multiple deeds, it will be made by both the
parties of the lease.
In the case of Punjab National Bank v. Ganga Narain Kapur, Court held that if the lease is
done through an oral agreement, then the provisions of Section 106 will apply.
Determination/termination of Lease of Property - Section 111
1) By lapse of time (S. 111 (a) (Renuka Seal .V. Sabitri Dey) 2) By happening of specified
event(S. 111 (b) 3) Termination of lessor’s interest(S. 111 (c)) 4) By Merger(S. 111 (d) 5) By
express surrender(S. 111 (e) 6) By Implied Interest(S. 111 (f) 7) By Forfeiture(S. 111 (g)
(Denial of landlord’s title, Insolvency of the lessee) 8. Expiry of Notice to Quit (S. 111 (h)
(Vijay Kumar v. Harbhajan Kaur 11h was proper ) (Chadrawati v Surendra AIR-no right to
sell it with vacant possession) (Chandi Charan v Ashulosh)
Notice to quit
Section 113 provides two ways in which the notice can be waived
1.Express Waiver of notice to quit 2.Implied Waiver of notice to quit

RIGHTS AND LIABILITIES OF LESSOR AND LESSEE IN LEASE OF PROPERTY - Section

108 LESSOR

Rights of a lessor
1.Right to accretions 2. Right to collect rent
Liabilities of a lessor 1. Duty of disclosure s. 108(a) 2. Latent defect 3. Apparent defect 4. To
give possession s. 108(b) 5. Covenant for quiet enjoyment s. 108(c)

LESSEE
Rights of a lessee 1. To charge for repair 2. Right to remove fixtures 3. Right to assign his
interest 4. Right to have benefits of crops
Liabilities of a lessee 1. Duty to disclose material facts 2. Duty to pay rent 3. Duty to
maintain the property 4. Duty to give notice 5. Duty to use the property in a reasonable manner
6. Duty not to erect any permanent structure 7. Duty to restore possession
Paritosh Ghosh vs. Ashim Kumar Gupta In this case, the tenant made holes in walls for fixing
air cooler, replace brass water caps by plastic caps, in violation of lease agreement, the eviction
of the tenant was held proper.
Munne Dutt vs. William cumpbell In this case court held that, in every case there is an implied
contract that Lessor will give peaceful possession of the land leased to the Lessee.

GIFT
A Gift is generally regarded as a transfer of ownership of a property where the sender willingly
brings into effect such transfer without any compensation or consideration in monetary value. It
may be in the form of moveable or immoveable property and the parties may be two living
persons or the transfer may take place only after the death of the transferor. When the transfer
takes place between two living people it is called inter vivos, and when it takes place after the
death of the transferor it is known as testamentary.
Section 122 of Transfer of Property Act defines a gift as the transfer of an existing moveable or
immovable property. Such transfers must be made voluntarily and without consideration. The
transferor is known as the donor and the transferee is called the donee. The gift must be
accepted by the donee.

Mt. Brij Devi v. Shiva Nanda Prasad & Ors (1939) : The court in this case rightfully upheld the
defendants claim and ruled that the gift deed cannot be revoked by the successors of the
ancestor who had made the gift deed in favour of Jain Bulaqi as the transfer was uncosniable in
the first place as it restricted the donee completely to alienate such property.

Parties to a gift transfer- 1.Donor 2. Donee

Essential elements There are the following five essentials of a valid gift:
1. Transfer of ownership
2. Existing property
3. Transfer without consideration
4. Voluntary transfer with free consent
5. Acceptance of the gift

Certain restrictions to mode of transfer of property is mentioned under

section 123
1. Section 123 of TPA states that if such gift is made out of a movable property it will be
registered instrument signed and attested by the Donor with 2 witnesses.
2. Gift of a movable property can be given either by registration or by delivering the property.

Modes of making a gift

Section 123 of the Transfer of Property Act deals with the formalities necessary for the
completion of a gift. The gift is enforceable by law only when these formalities are observed
1.Immovable properties.
In the case of immovable property, registration of the transfer is necessary irrespective of the
value of the property (In the case of Renikuntla Rajamma v. K. Sarwanamma)
2.Movable properties
3.Actionable claims.
A gift of future property
A gift made to more than one donee(Section 125)

Suspension or revocation of gifts

Section 126 of the Act provides the legal provisions which must be followed in case of a
conditional gift. The donor may make a gift subject to certain conditions of it being suspended or
revoked and these conditions must adhere to the provisions of Section 126. This Section lays
down two modes of revocation of gifts and a gift may only be revoked on these grounds.
Revocation by mutual agreement
● The condition must be expressly laid down
● The condition must be a part of the same transaction, it may be laid down either in the
gift-deed itself or in a separate document being a part of the same transaction.
● The condition upon which a gift is to be revoked must not depend solely on the will of the
donor.
● Such condition must be valid under the provisions of law given for conditional transfers.
For eg. a condition totally prohibiting the alienation of a property is void under Section 10
of the Transfer of Property Act.
● The condition must be mutually agreed upon by the donor and the donee.
● Gift revocable at the will of the donor is void even if such condition is mutually agreed
upon.
2.Revocation by the rescission of the contract 3. Bonafide purchaser
Exception - Donations mortis causa(These are gifts made in contemplation of death.) Muslim-
gifts (Hiba)- ( The only essential requirements are declaration, acceptance and delivery of
possession)

Onerous Gift -
It is derivative of the maxim qui sentit commodum, debet et sentire onus which means he who
derives a benefit ought also to bear a burden. This section focused on the idea that a property
gifted may have a burden on it such as actionable claims under section 130 of TPA. In a
situation where A is a Donor having property X,Y,Z with him in which Z has a certain burden on
it. He made the offer of a gift to B of all X,Y,Z property , in such a situation the concept of an
onerous Gift comes in hand. Since on acceptance B will get benefits of X and Y he ought to
bear the lossof Z .
In this situations donee have 2 options
1. Donee can accept the gift with the burden on the gift
2. Or donee can decline the whole offer of gift.

Exchange in Transfer of Property Act

Exchange is defined in section 118 of the Transfer of Property Act, 1882. The exchange of
property in this act relates to immovable property** only. The exchange of moveable property is
governed by the Sale of Goods Act. The literal meaning of exchange is giving and taking of
something.
In the early decades, the concept of exchange was known as barter system. The people used to
exchange their things and commodities with others who are in need of them. And in return, they
used to get something which is useful for themselves.

Essentials of Exchange
1. There must be two persons for the purpose of exchange.
2. Their intention to transfer the things must be with mutual consent. If either of them has not
given consent, then it is not exchange.
3. There must be a transfer of ownership of a thing from one person to another and vice-versa.
4. Any of the thing which is getting exchanged can be any immoveable property but not money.
Money can’t be a property in exchange. (If money is involved, it becomes sale and not
exchange.) (But money can be exchanged if both parties exchange money. Like A gives 71
rupees to B, and receives 1 dollar from A. See next to next heading.)
5. The exchange takes place between the parties like the process of sale. One person transfers
his ownership to the other person, and likewise, other person does.

Rights and Liabilities of Parties in Exchange

Both the parties in exchange have equal rights over one another.
Can There Be Exchange of Money
It is a written rule that money can’t be a thing in exchange. But section 121 of the Transfer of
Property Act says that if money is exchanged between the parties, then the parties must assure
the other party regarding the genuineness of money he has given to the other. The proving of
the genuineness of money is essential, if exchanged.