property law project report (1).docx

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  FACTS OF THE CASE    Dutta and Manohar (plaintiff) were first cousins.    By way of will dated 13 th  June, 1962 Dutta bequeathed the property to Manohar.    On Dutta’s dea th in 1966, Manohar acquired the title of the property and sold it to Dhondubai (defendant), who was also the brother of Dutta.    The sale deed contained a condition : “If it is necessary to transfer the aforesaid property by any instrument, then property shall be transferred into the jangam family and not to others. The property sold on such condit ion.”      Which mean that if Dhondubai want to sell the property, he would sell the property to the person  belongs to jangam (caste) family and not to anybody else.    Dhondubai sold the property to member of Non jangam family. ISSUE RAISED WHETHER THE SALE DEED IS IN CONTRAVENTION OF SECTION 10 OF TRANSFER OF PROPERTY ACT, 1882 ?    The issue in this case was whether the condition put in by the plaintiff came under Section 10 of the Transfer of Property act and thus void or not? This is because Section 10 says that “Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting with or disposing of his interest in the property, the condition or limitation is void”. So the que stion is to find out whether the restrain was absolute or not.    Introduction Ownership of the property carries with it certain basic rights, such as a right to have the title to the property, a right to possess and enjoy it to the exclusion of everyone else, and a right to alienate it without being dictated to. Section 10 to 18 of the Transfer of Property Act, 1882 contain the first set of rules that have to be observed while alienating property. Since it is a  principle of economics that wealth should be in free circulation to get the greatest benefit from it, these Sections provide that ordinarily there should be no restraints on alienation.   This paper seeks to analyse the rules regarding transfer of property which talk about conditions restraining alienation of property once it is transferred. The researcher will first look into the general provision that all such conditions would be void and then will talk about partial restraints and other conditions which are valid. Finally conditions restraining enjoyment of property which can be enforced will be discussed. The researcher will analyse the law in light of decided Supreme Court and major High Court cases.   Analysis of present case with the help of relevant section and case laws. Section 10 1   Condition restraining alienation-Where property is transferred subject to a condition or limitation absolutely restraining the transferee or any person claiming under him from parting him from  parting with or disposing of his interest in the property, the condition or limitation is void, except in the case of a lease where the condition is for the benefit of the lessor or those claiming under him: provided that property may be transferred to or for the benefit of a women (not being a Hindu, Muhammadan or Buddhist), so that she shall not have power during her marriage to transfer or charge the same or her beneficial interest therein. 1   The Transfer of Property Act, 1882  The rule in all systems of jurisprudence is alienation rei praefertur juri accrescendi, that is, alienation is favoured by the law rather than accumulation It was this attitude that made sub-infeudation make place for substitution. Restraints on alienation can appear in the following ways:    Restraints on transfer for a particular time    Restraints directing control over consideration/money    Restraints with respect to persons/transferee    Restraints with respect to sale for particular purposes or use of property The section is based on the principle that the power of alienation is one of the most important incidents of property. If total restraints were not prohibited, this important principle would be abrogated by private agreement. On the same principle, a provision in an agreement among the members of a joint Hindu family that they would not enjoy the income of the joint family  properties and that they would no claim partition, would be void, though partition is not alienation. The section has to be read with Section 12 as they both deal with restraints on powers of alienation. While a total restraint on the power of alienation is void, partial restraints may be good. For example, a condition that the transferee shall not transfer his interest for a period of 3 years, or a condition that the transferee shall not transfer the property to any member of a  particular person’s family. But, the determ ination where a condition amounts to a total or partial restraint depends upon the substance and not the form. For example, an agreement preventing the transferee from transferring his property to anyone except to the transferor or his heirs, and that too if they are willing to buy it at a fixed price, is in substance an absolute restraint.  Exceptions to the General Rule The section makes two exceptions; one in favour of lessors and the other in case of married women. In the case of lessors, the conditi on will be good only “if it is for the benefit of the lessors”, as for example a specific statement in the conveyance that the lessor may re-enter. The effect of contravening a mere condition against assignment in a lease will not make an assignment in contravention of such a condition automatically void. Without an express provision for re-entry, the lessor will only be entitled to damages for breach of covenant. A valid condition against alienation of the leasehold interest can be imposed in respect of voluntary and involuntary alienations, such as, sale in execution. But in the case of voluntary alienations, there should also be a condition for re-entry to make the condition against alienation valid. A condition in the lease deed that the lessee would compulsorily have to surrender the lease in the event the lessor needs to sell the property is valid. Restraints on the power of alienation in dispositions in favour of married woman, who are not Hindu, Mohammedans or Buddhists, will be valid. This proviso was introduced to serve a similar  purpose as English law in this regard. The English Courts recognized the rule that it was open to the settler or transferor to insert a clause in the deed of settlement or transfer, by way of a restraint on anticipation, that is, to restrain her from anticipating the future income of the  property and from encumbering it or alienating it while she is under husband’s protection and shelter. The section is enacted to check that the transferor shall not impose an absolute restraint on the  power to alienate that interest or right which was transferred to the transferee. Therefore, a limited interest in property can be created in favour of a transferee, but a restraint on the power to alienate that limited interest will be invalid.
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