Transfer of Property Act MCQs for Judiciary, Page 6

Correct answer: A. An option for renewal does not create a new interest in property within Section 14

In R. Kempraj v. Burton Son & Co. (1970 SC), the Supreme Court held that a clause giving a lessee an option to renew a lease from time to time in perpetuity does not violate the rule against perpetuity under Section 14 of the TPA. The Court reasoned that Section 14 is applicable only when there is a "transfer of property" creating an interest to take effect in the future beyond the permitted period. An option for renewal is not itself a transfer of property or a creation of an interest in property that would fall within Section 14. The transfer (the lease) is for a specific period only; the stipulation for renewal is merely a contractual right in the lessee, not a transfer of a property interest subject to perpetuity rules.

Source note: R. Kempraj v. Burton Son & Co., 1970 SC; Section 14, TPA 1882

Correct answer: A. The interest fails only as to the affected member; other class members whose interests do not violate the perpetuity rules take their proportionate shares

Section 15 TPA (severability for class gifts): 'Where, on a transfer of property, an interest therein is created for the benefit of a class of persons with regard to some of whom such interest fails by reason of any of the rules contained in sections 13 and 14, such interest fails in regard to those persons only and not in regard to the whole class.' The SEVERABILITY principle: (1) Transfer to 'all children of A' - some existing children qualify; some unborn children might vest beyond perpetuity period; (2) The transfer takes effect for qualifying children; (3) Only the share of members who would vest BEYOND the perpetuity period fails; (4) Other qualifying members still take their proportionate interests. This prevents the perpetuity rule from defeating an entire class gift merely because some potential members might vest late.

Source note: Section 15, TPA 1882

Correct answer: B. Also fails; an interest intended to take effect after or upon failure of a void prior interest also fails (gift-over rule)

Section 16 TPA: 'where, by reason of any of the rules contained in sections 10 to 15, an interest created for the benefit of a person or of a class of persons fails in whole or in part, any interest created in the same transaction and intended to take effect AFTER OR UPON FAILURE OF SUCH PRIOR INTEREST shall also fail.' The rule: a GIFT-OVER dependent on a void interest also fails. Example: A transfers to B for life, then to B unborn child for life (VOID under Section 13), then absolutely to C. The gift to C was intended to come AFTER the void life estate in the unborn child. Section 16: C interest also FAILS because it was intended to take effect after the void interest. This prevents circumvention by inserting void interests to delay vesting.

Source note: Section 16, TPA 1882

Correct answer: C. The life of the grantor, or 18 years from the date of transfer, or the minority of any person living at the date of transfer who would benefit from the accumulated fund

Section 17 TPA: directions for accumulating income (rather than distributing to beneficiaries) are VOID beyond permitted periods. PERMITTED periods: (1) Life of the GRANTOR; (2) 18 YEARS from the date of transfer; (3) MINORITY of any person living at the date of transfer who would be entitled to the fund on attaining majority; (4) Minority of any person who would be entitled if living at the date of transfer. Beyond these periods, income must be paid to persons who would have been entitled had the accumulation direction not been made. EXCEPTIONS: accumulation for paying the grantor or spouse or children debts contracted before the transfer, or for raising portions for children, are saved. The rule prevents property from being made economically sterile through perpetual accumulation.

Source note: Section 17, TPA 1882

Correct answer: A. Voidable at the option of the person entitled to enforce the condition; it remains valid until that person exercises the option

Section 19 TPA: 'Where a transfer is made subject to a condition or limitation which, not being a condition precedent, is a condition subsequent and which has been broken, the transfer is voidable at the option of the person entitled to enforce such condition.' Key aspects: (1) VOIDABLE not void: the transfer has legal effect until the entitled person elects to void it; (2) Who can void: 'the person entitled to enforce such condition' - may be the transferor, heirs, or a third-party beneficiary depending on whose benefit the condition served; (3) Election must be exercised within limitation; (4) COMPARE: where a condition subsequent is void under Sections 10-11 (absolute restraint on alienation), the condition is simply ignored and the transferee holds free of it - the transfer stands. Section 19 applies to valid conditions subsequent that have been breached, not to void conditions.

Source note: Section 19, TPA 1882

Correct answer: B. Transfers by operation of law such as intestate succession, court-ordered sales in insolvency or execution proceedings, and vesting by statute

Section 2 TPA saves certain transfers from its requirements. TRANSFERS BY OPERATION OF LAW are exempt: (1) INTESTATE SUCCESSION: property passing under inheritance laws (Hindu Succession Act, Muslim Personal Law, Indian Succession Act) does not require TPA formalities; (2) COURT-ORDERED SALES: in execution of decrees, insolvency, court auctions are involuntary; (3) VESTING BY STATUTE: government acquisitions under Land Acquisition Act, vesting of waqf etc.; (4) TESTAMENTARY SUCCESSION through a Will: passes under succession law, not TPA. These are involuntary transfers where parties do not negotiate; requiring TPA formalities would be impractical. Section 2 does NOT provide blanket exemption for government transactions or agricultural land generally.

Source note: Section 2, TPA 1882

Correct answer: A. At the moment of birth of the unborn person; title vests at birth; possession is deferred until death of the life holder

Section 20 TPA: 'such interest shall vest in such person FORTHWITH ON HIS COMING INTO EXISTENCE.' Mechanism: (1) Life estate created for living person L; (2) Absolute estate for unborn person UB; (3) Moment UB IS BORN: absolute estate VESTS in UB immediately (title passes); (4) POSSESSION is deferred until L dies. Creates VESTED INTEREST WITH DEFERRED POSSESSION: UB owns from birth, gets possession when L dies. CRITICAL CONSEQUENCE: if UB dies after birth but BEFORE L dies, UB vested interest passes to UB HEIRS (vested interest not defeated by death before possession - Section 19 TPA). The heirs would take possession when L eventually dies.

Source note: Sections 13, 19, 20, TPA 1882

Correct answer: C. Takes effect as to members for whom it is valid and fails only as to those members whose interests would vest beyond the perpetuity period

Section 22 TPA: 'the transfer shall take effect as if it had been made in favour of such of the persons only in regard to whom it does not fail.' SEVERABILITY principle for class gifts: (1) Transfer to 'all children of A' - some existing children qualify; some unborn children might vest beyond perpetuity period; (2) Transfer takes effect for qualifying children; (3) Only the share of members who would vest BEYOND the perpetuity period fails; (4) Their exclusion does NOT defeat the interests of qualifying members. Section 22 works with Section 15 to save as much of the class gift as can be saved without violating perpetuity rules.

Source note: Section 22, TPA 1882

Correct answer: C. The uncertain event must be capable of occurring within the perpetuity period; if it could possibly occur beyond the perpetuity period, the transfer is void

Section 23 TPA: 'Where, on a transfer of property, an interest therein is to accrue to a specified person if a specified uncertain event shall happen, and no time is mentioned for the occurrence of that event, the interest must vest, if at all, within the period allowed by Section 14.' The principle: (1) When a transfer is made contingent on an uncertain event (no time specified), it must be POSSIBLE for the event to occur and interest to vest within the perpetuity period; (2) If the event COULD occur beyond the perpetuity period, the transfer is void; (3) The POSSIBILITY TEST applies: actual events are irrelevant; (4) If the event can ONLY occur within the perpetuity period, the transfer is valid.

Source note: Sections 14, 23, TPA 1882

Correct answer: C. The surviving person takes the whole property by right of survivorship unless a contrary intention appears creating a tenancy in common

Section 24 TPA: 'Where property is transferred to two or more persons jointly, and one of them dies before taking possession, unless a different intention is expressed or necessarily implied, the property devolves on the survivor.' This embodies JOINT TENANCY with RIGHT OF SURVIVORSHIP: (1) Property to A and B jointly; A dies; B takes the WHOLE property; (2) CONTRARY INTENTION creating TENANCY IN COMMON: if the transfer specifies shares or implies severability, each co-owner's share passes to heirs on death; (3) Joint tenancy requires four unities: time, title, interest, possession; (4) Words indicating different shares indicate tenancy in common. The right of survivorship operates automatically; no court application required.

Source note: Section 24, TPA 1882

Correct answer: D. When the prior equity was not created by a registered document and the purchaser takes for consideration without actual or constructive notice of the prior equity

Section 27 TPA (BFP rule): 'No terms of the trust, charge, or other encumbrance to which property is subject, can be enforced against a purchaser for value without notice.' The BFP requirements: (1) PURCHASE FOR VALUE: adequate consideration (not a gratuitous transfer); (2) WITHOUT NOTICE: no actual notice, constructive notice (wilful abstention, gross negligence, registration giving notice, possession by third party), or imputed notice. Interplay with registration: a REGISTERED instrument gives constructive notice to all under Explanation I to Section 3; therefore a subsequent purchaser CANNOT claim BFP status against a PRIOR REGISTERED interest. But against prior UNREGISTERED equities (unregistered agreement to sell, Section 53A equity before 2001), the BFP takes free if without actual or constructive notice.

Source note: Section 27, TPA 1882

Correct answer: D. General Contract Law principles (capacity, free consent, consideration) apply to TPA transactions unless TPA has a specific provision or the principle is inconsistent with TPA

Section 4 TPA supplemental relationship: (1) GENERAL CONTRACT PRINCIPLES APPLY to TPA transactions: capacity (ICA Sections 11-12); free consent (ICA Sections 13-22 - coercion, undue influence, fraud, misrepresentation); (2) SPECIFIC TPA PROVISIONS PREVAIL where they conflict with general contract principles; (3) WHERE TPA IS SILENT: general contract law fills the gap. Practical applications: (a) Mortgage obtained by coercion may be voidable under ICA Section 15; (b) Undue influence (ICA Section 16) can invalidate a gift under TPA Section 122-126 (Kartari v. Kewal Krishan); (c) ICA Section 25(3) overlaps with TPA Section 53; (d) Minor capacity rules from ICA apply to TPA transfers.

Source note: Section 4, TPA 1882; Indian Contract Act 1872

Correct answer: D. A transferee of X with notice and a gratuitous transferee of X even without notice; but not against a bona fide purchaser of X for value without notice

Section 40 TPA: 'Such right may be enforced against a transferee with notice thereof or a gratuitous transferee of the property affected thereby; but NOT against a transferee for consideration and without notice of such right or obligation, nor against such property in his hands.' Three categories: (1) TRANSFEREE WITH NOTICE: bound by the restrictive covenant; (2) GRATUITOUS TRANSFEREE (donee): bound even without notice; (3) BFP FOR VALUE WITHOUT NOTICE: NOT bound; takes property X free. The practical implication: to protect restrictive covenants against all future purchasers, the covenant holder should ensure the covenant is registered (giving constructive notice). Section 40 creates an equitable interest in land that runs with the burden against successors with notice, codifying the Tulk v. Moxhay (1848) principle.

Source note: Section 40, TPA 1882; Tulk v. Moxhay, 1848

Correct answer: B. A third party (C) who after the original transfer but before the transferor acquires the property, purchases that property from the transferor for consideration and without notice of the prior transfer to B

The proviso to Section 43 TPA: 'nothing in this section shall impair the right of transferees for consideration in good faith and without notice.' Application: A transfers to B (misrepresenting having full title, only having spes). BEFORE A acquires the property, A transfers to C (who pays consideration in good faith, without notice of B prior claim). When A acquires the property: normally Section 43 would feed B prior claim. BUT the proviso PROTECTS C: since C paid consideration, acted in good faith, and had no notice of B claim, C rights prevail over B Section 43 claim. This is consistent with the BFP principle throughout TPA. Applied in Jumma Masjid v. Kodimaniandra Devaiah: subsequent dealings by Jumma Masjid did not prevail over the original transferee Section 43 claim because Jumma Masjid had knowledge.

Source note: Section 43 proviso, TPA 1882

Correct answer: C. Section 6(a) prohibits direct transfer of spes; Section 43 operates as a rule of estoppel on subsequently acquired title

In Jumma Masjid Mercara v. Kodimaniandra Devaiah (AIR 1962 SC 847), the Supreme Court drew a clear distinction between Section 6(a) and Section 43. Section 6(a) is a rule of substantive law that prohibits direct transfer of spes successionis. Section 43 is a rule of estoppel/evidence that operates on subsequently acquired title: when a person fraudulently or erroneously represents having a present transferable interest and transfers for consideration, any title they subsequently acquire feeds the estoppel and vests in the transferee. The two provisions operate in different fields with no conflict. The Court held that Section 43 applied because the reversioners made a representation of present title, the transferee acted on it for consideration, and the title subsequently vested in the reversioners upon W3's death.

Source note: Jumma Masjid Mercara v. Kodimaniandra Devaiah, AIR 1962 SC 847; Section 43, TPA 1882

Correct answer: B. The transferee had constructive notice of the mother's incompetency as guardian

In Kartar Singh v. Harbans Kaur (AIR 1994 SC 1001), the Supreme Court held that the transferee could not claim protection under Section 43 because they had constructive notice of the mother's incompetency to alienate the minor's property. The marginal note on the sale deed clearly mentioned that the land was acquired by the mother and her minor son and that she was executing the deed as guardian of the minor's share. A reasonable prudent person would have inquired whether a guardian could alienate a minor's property without court authorization - the answer being no. Under Section 43, the protection is unavailable if the transferee had actual or constructive notice of the lack of title. The Court held that even constructive notice on the transferee's part brings the case under Section 6(a) rather than Section 43.

Source note: Kartar Singh v. Harbans Kaur, AIR 1994 SC 1001; Section 43, TPA 1882

Correct answer: D. When the transferor subsequently acquires the property they had previously represented as belonging to them

Under Section 43 of the TPA, the "feeding of the estoppel" occurs automatically when the transferor subsequently acquires the property they had previously (fraudulently or erroneously) represented as belonging to them. At that very moment, the previously ineffective transfer springs to life and the subsequently acquired title automatically vests in the transferee. No further act is needed: the estoppel is "fed" by the later acquisition of title. This operation is automatic provided: (i) the transfer was for consideration; (ii) the transferee did not have notice of the misrepresentation at the time of the contract; (iii) the contract is subsisting and not cancelled; and (iv) there is no intervening bona fide purchaser for value without notice.

Source note: Section 43, TPA 1882; Jumma Masjid v. Kodimaniandra Devaiah, AIR 1962 SC 847

Correct answer: B. They must have taken the transfer for consideration, in good faith, and without notice of the prior Section 43 transfer

Section 43 TPA contains a proviso: "Nothing in this section shall impair the rights of transferees for consideration in good faith and without notice." A subsequent purchaser from the same transferor (after the transferor acquires title) is protected if they: (i) paid CONSIDERATION - a gratuitous transferee cannot claim this protection; (ii) acted in GOOD FAITH - honestly, without suspicious circumstances; (iii) had NO NOTICE (actual or constructive) of the prior Section 43 transfer. If such a BFP takes from the transferor after the transferor acquires title, they defeat the earlier Section 43 claim. This is consistent with TPA's BFP protection scheme. In Jumma Masjid (AIR 1962 SC 847), Jumma Masjid's claim through subsequent dealings from the reversioners failed because the Section 43 transferee had already acquired title when the reversioners got title, and Jumma Masjid could not show it was a BFP without notice of the prior Section 43 transfer.

Source note: Section 43 proviso, TPA 1882; Jumma Masjid v. Kodimaniandra Devaiah, AIR 1962 SC 847

Correct answer: D. A gratuitous gift by A to B based on A's representation that A owned the property

Section 43 TPA specifically requires the transfer to be "for consideration." A gratuitous gift does not attract Section 43 protection. If A falsely represents ownership and gifts property to B (who takes in good faith), B cannot invoke Section 43 when A later acquires the property. The rationale: equity and estoppel protect those who CHANGE THEIR POSITION by paying value in reliance on a representation. A donee who receives a gift suffers no detriment in terms of consideration paid - they can be restored to their original position if the gift fails. Sales (option A), mortgages (option B), and leases (option D) all involve consideration and can potentially attract Section 43 protection if other conditions are met. This consideration requirement aligns with the BFP protection principles throughout TPA.

Source note: Section 43, TPA 1882

Correct answer: A. Section 43 does not apply if the transfer was "thrown up or cancelled" before the transferor acquired title; the doctrine only operates on a subsisting and uncancelled transfer

Section 43 TPA expressly states that the transfer operates to vest subsequently acquired title in the transferee "if the transfer has not meantime been thrown up or cancelled and is subsisting." This is an essential condition: if between the original transfer and the transferor's acquisition of title, the agreement was validly terminated, rescinded, or mutually cancelled, there is no subsisting transfer for Section 43 to operate upon. Jumma Masjid v. Kodimaniandra Devaiah (AIR 1962 SC 847) acknowledged this condition explicitly. Thus a transferee who sought to cancel the contract (perhaps on discovering the transferor had no title and seeking return of consideration) loses Section 43 protection. The doctrine rewards those who insist on the contract - not those who give it up.

Source note: Section 43, TPA 1882; Jumma Masjid v. Kodimaniandra Devaiah, AIR 1962 SC 847

Correct answer: A. Require the true owner to pay the estimated value of the improvements or allow the bona fide improver to retain possession until compensated

Section 51 TPA: where a bona fide holder under defective title has made improvements, the true owner who recovers possession must pay the estimated VALUE OF THE IMPROVEMENTS. Rights of the bona fide improver: (1) RETAIN POSSESSION until improvement value is paid; (2) Claim a PROPORTIONATE SHARE of rents and profits until paid; (3) Compel the true owner to take property at its improved value. REQUIREMENTS: (1) The improver must have been a BONA FIDE holder with honest belief in their title (not a trespasser knowing they have no title); (2) The holder must have had a DEFECTIVE TITLE (some title, however flawed). A person who KNEW they had no title cannot invoke Section 51. This prevents unjust enrichment of the true owner who recovers improved property without compensating the honest improver.

Source note: Section 51, TPA 1882

Correct answer: B. The lease was executed pendente lite and the tenant had no surviving antecedent right because the earlier unregistered lease had already expired

The Court treated the 1956 lease as hit by lis pendens for two linked reasons: the earlier unregistered lease had already expired, so the tenant had no antecedent legal right to preserve, and the fresh registered lease was created pendente lite during the mortgage suit. Since a new right was created while litigation over the property was pending, it remained subject to the eventual decree.

Source note: Supreme General Films Exchange v. Maharaja Brijnath, 1975 SC; Section 52, TPA 1882

Correct answer: C. Voidable at the option of any person thereby defrauded; but a subsequent bona fide transferee for value without notice of the fraud is protected

Section 53 TPA: 'Every transfer of immovable property made with intent to defraud transferors, creditors, or other persons is voidable at the option of any person thereby defrauded.' Key aspects: (1) VOIDABLE not void: the transfer has legal effect until challenged; (2) The PERSON DEFRAUDED can apply to have the transfer set aside; (3) PROTECTED SUBSEQUENT TRANSFEREE: 'nothing in this section shall impair the right of any subsequent transferee in good faith and for consideration, without notice of the intent to defraud.' A bona fide purchaser from the fraudulent transferee (who paid value without notice of the fraud) takes free; (4) Not per se criminal: IPC/BNS has separate provisions for cheating and fraudulent transfers; (5) Interacts with insolvency law: fraudulent preferences by insolvent transferors can be challenged by official receivers.

Source note: Section 53, TPA 1882

Correct answer: D. No; Section 53A expressly requires a written contract signed by the transferor; an oral agreement cannot attract Section 53A protection regardless of possession taken

Section 53A TPA expressly states: 'any person CONTRACTS TO TRANSFER FOR CONSIDERATION any immovable property BY WRITING SIGNED BY HIM OR ON HIS BEHALF.' The WRITING requirement is absolutely mandatory: (1) Plain language of Section 53A requires a written contract; (2) After the 2001 Amendment, the written contract must ALSO be registered; (3) Public policy: oral agreements about significant property are uncertain and prone to fabrication; (4) Section 53A was designed to protect those who relied on a WRITTEN and since 2001 REGISTERED contract. A remaining rights: (1) Suit for unjust enrichment or quantum meruit for improvements; (2) A visible possession may give C constructive notice under Section 3 Explanation II for purposes of a specific performance suit - but this is a different basis from Section 53A.

Source note: Section 53A, TPA 1882