10 Solved Problems (IRAC Method) — Transfer of Property

These ten problems are worked in the IRAC method — Issue, Rule, Analysis, Conclusion — the way a KSLU answer sheet expects; the full Question Bank has 40+ more.

Problem 1 — Is a Mango Tree Movable or Immovable? (Unit I)

Problem: A asks whether a mango tree is movable or immovable property. Decide.

I — Issue. Is a mango tree movable property or immovable property?

R — Rule. 1. A tree rooted in the earth is a “thing attached to the earth” and therefore immovable property (s.3 TPA read with s.3(26), General Clauses Act, 1897). The real test is permanence of attachment and the intention behind it. 2. Section 3 TPA excludes “standing timber” from immovable property: a tree grown or dealt with to be cut and used as timber is movable, because the intention is to sever it (Marshall v Green, 1875).

A — Analysis. 1. The decoy — “standing timber”. The examiner invites you to call every tree “standing timber” (movable). Resist it: standing timber is a tree meant to be felled. A mango tree is a fruit tree, kept for its fruit and shade and meant to keep standing and growing on the land. 2. Applying the attachment-and-intention test, the mango tree is enjoyed where it stands; it is a thing rooted in the earth for its permanent beneficial enjoyment. It becomes movable only if it is sold specifically on the footing that the buyer will fell it at once as timber.

C — Conclusion. A mango tree is immovable property, unless it is sold specifically to be cut down as timber, in which case it is treated as standing timber and is movable.

Problem 2 — A Restraint on Selling the House (Unit I)

Problem: A sells a house to B on condition that B shall not sell it during A’s lifetime. Is the condition valid?

I — Issue. Is a condition restraining the buyer from selling the property during the seller’s lifetime an absolute or a partial restraint, and is it valid?

R — Rule. 1. Under s.10, a condition absolutely restraining the transferee from parting with his interest is void, but a partial and reasonable restraint may be valid. The test is whether the restraint is substantial and absolute, or partial and reasonable. 2. A restraint limited in time or to a class of persons is characteristically partial.

A — Analysis. 1. The decoy — “all restraints on sale are void”. Not so: only absolute restraints are void. The condition here does not forbid sale forever or in every direction — it bars sale only for a limited period, namely A’s lifetime. 2. A bar confined to the transferor’s lifetime leaves B free to sell thereafter and does not sterilise ownership permanently. It is a partial restraint, of the kind s.10 tolerates as reasonable (Mata Prasad v Nageshar Sahai, 1925).

C — Conclusion. The condition is a partial restraint and is valid; B is bound not to sell during A’s lifetime but takes a good title and may sell freely after A’s death.

Problem 3 — A Life Interest to an Unborn Son (Unit I)

Problem: A transfers property to A for life, then to A’s first (unborn) son for life, and then to B absolutely. Is the transfer valid?

I — Issue. Is a transfer valid that gives an unborn person (A’s first son) only a life interest, with the remainder over to B?

R — Rule. 1. Under s.13, an interest created for a person not in existence at the date of transfer, after a prior interest, takes effect only if it extends to the whole of the remaining interest of the transferor. A mere life estate to an unborn person is void. 2. A later gift dependent on that void prior interest also fails (Girjesh Dutt v Data Din, 1934).

A — Analysis. 1. A’s first son is unborn at the date of transfer. He is given only a life interest, not the whole remaining interest — the balance being carried over to B. That directly breaches s.13’s “whole remaining interest” requirement. 2. Because the gift to B is dependent on the void life interest of the unborn son, it fails along with it. Only the prior life interest to A, a living person, is unobjectionable.

C — Conclusion. The gift to the unborn son, and the subsequent gift to B, are void under s.13. Only A’s life interest is valid; on A’s death the property reverts to A’s estate.

Problem 4 — Property Bought in Another’s Name (Unit II)

Problem: A buys property with his own money in the name of B (his wife/nominee); B, as apparent owner, later sells it to C, a bona fide buyer for value who examined the records; A (or his heir) sues C to recover. Can he succeed?

I — Issue. Does C, a bona fide buyer for value from the ostensible owner B, get a good title against the real owner A (or his heir)?

R — Rule. 1. Under s.41, where, with the express or implied consent of the real owner, a person is the ostensible owner and transfers the property for consideration, the transfer is not voidable merely because he was unauthorised — provided the transferee took reasonable care to ascertain the transferor’s power and acted in good faith. 2. The section is an exception to nemo dat quod non habet; the benami tests (source of money, possession, conduct, custody of deeds) identify the ostensible holding (Jayadayal Poddar v Bibi Hazra, 1974).

A — Analysis. 1. The decoy — “A paid, so A must win”. That A supplied the purchase money shows a benami, but under s.41 the real owner who consented to the property standing in B’s name cannot recover from an honest buyer. A created the appearance and must bear the loss (Ramcoomar Koondoo v McQueen, 1872). 2. All four conditions are met: B was the ostensible owner with A’s consent; C paid value; C examined the records (reasonable care); and C acted in good faith. The death of A and a suit by his heir change nothing — the heir is in no better position than A.

C — Conclusion. C gets a good title against A and his heir. The suit to recover the property fails. (Had C not enquired, or had B held without A’s consent, the real owner would have won.)

Problem 5 — A Transfer During a Pending Suit (Unit II)

Problem: A sues B over a house; before the summons is served, B transfers it to C; the suit is decreed against B. Is C bound by the decree?

I — Issue. Is C, who bought the house from B during the pendency of A’s suit, bound by the decree even though he had no notice of the suit?

R — Rule. 1. Under s.52, during the pendency of a non-collusive suit in which a right to specific immovable property is directly and specifically in question, a party cannot transfer the property so as to affect the other party’s rights under the decree; a transferee takes subject to the decree. 2. A suit is pending from the presentation of the plaint — not from service of summons — and the transferee’s notice is irrelevant (Bellamy v Sabine, 1857; Hardev Singh v Gurmail Singh, 2007).

A — Analysis. 1. The decoy — “the summons had not been served, and C knew nothing”. Neither fact helps C. Pendency runs from the filing of the plaint, which preceded the transfer, and s.52 binds a transferee regardless of notice. 2. B, a party, transferred the suit property while the suit was pending; the decree then went against B. C therefore takes the house subject to that decree.

C — Conclusion. C is bound by the decree and must give up the house. His purchase is not void, but it is subordinate to the rights A established in the suit.

Problem 6 — Building in Good Faith on Another’s Plot (Unit II)

Problem: A buys an open plot from B, builds a house believing in good faith that he has absolute title; C, with a better title, evicts A. What reliefs are available to A?

I — Issue. What relief does a bona fide purchaser, who built a house believing he had absolute title, get on being evicted by a person with a better title?

R — Rule. 1. Under s.51, a transferee who makes an improvement believing in good faith that he is absolutely entitled to the property, and is later evicted by a person having a better title, may require the evictor either to pay the value of the improvement, or to sell his own interest in the property to the improver — at the option of the person evicting. 2. The good-faith belief in absolute title is the decisive requirement.

A — Analysis. 1. A bought the plot from B and believed in good faith he was absolutely entitled when he built the house. He is exactly the person s.51 protects. 2. On eviction by C (better title), the section gives C the choice: pay A the value of the house (the enhanced value) and keep the land, or sell A the land at its value without the improvement.

C — Conclusion. A is entitled under s.51 either to be paid the value of the house or to buy the land, at C’s option. A does not lose the value of his honest construction.

Problem 7 — 800 Bags for 500 — Clog on Redemption? (Unit III)

Problem: A borrows 500 bags of paddy from B, agrees to return 800 bags with 50 bags a year as interest, and secures it by transferring an interest in specific immovable property. Is the transaction a mortgage?

I — Issue. Is a transaction a mortgage where the loan is in kind (paddy) but is secured by transferring an interest in specific immovable property?

R — Rule. 1. Under s.58(a), a mortgage is the transfer of an interest in specific immovable property to secure the payment of money advanced, an existing or future debt, or the performance of an engagement giving rise to a pecuniary liability. 2. The essentials are a transfer of an interest (not ownership) in specific immovable property, to secure such a debt or engagement.

A — Analysis. 1. The decoy — “the loan is paddy, not money, so it cannot be a mortgage”. Section 58(a) is not confined to cash: an engagement to return 800 bags with interest is a pecuniary liability — it can be valued in money — and that suffices. 2. Every essential is present: there is a debt (paddy to be returned with interest), specific immovable property, and a transfer of an interest in it to secure the debt. The mortgagor retains ownership and the right to redeem.

C — Conclusion. The transaction is a mortgage. The loan being in kind does not matter, so long as it creates a pecuniary liability secured on specific immovable property.

Problem 8 — The Usufructuary Mortgage Term (Unit III)

Problem: A executes a usufructuary mortgage to B with a term that if A does not redeem within 10 years the mortgage shall become a sale. Is the term valid?

I — Issue. Is a term valid which provides that a usufructuary mortgage shall become a sale if the mortgagor does not redeem within 10 years?

R — Rule. 1. Under s.60, the right to redeem cannot be clogged; any term that prevents, hampers or postpones redemption on payment is void as a clog on the equity of redemption — “once a mortgage, always a mortgage” (Santley v Wilde, 1899). 2. A term converting the mortgage into a sale on failure to redeem within a period is the classic void clog (Seth Ganga Dhar v Shankar Lal, 1958).

A — Analysis. 1. The decoy — “the parties freely agreed to it, so it binds them”. The right to redeem is statutory and cannot be contracted away; free agreement does not save a clog. 2. The clause tries to extinguish A’s right to redeem after 10 years and turn the security into an outright sale — precisely the “mortgage-becomes-sale” clog the courts strike down. The mere length (10 years) is not itself the vice; the conversion into a sale is.

C — Conclusion. The term is void. The mortgage remains redeemable, and A may still redeem after 10 years on paying the mortgage-money.

Problem 9 — An Exchange of Unequal Properties (Unit IV)

Problem: A transfers his house worth Rs. 1,50,000 to B; B transfers land worth Rs. 1,00,000 plus Rs. 50,000 cash to equalise the values. Is it a valid exchange?

I — Issue. Does the addition of Rs. 50,000 cash to equalise values convert a property-for-property transaction into a sale, or is it a valid exchange?

R — Rule. 1. Under s.118, a mutual transfer of the ownership of one thing for the ownership of another, neither thing being money only, is an exchange. 2. Money added merely to equalise value (owelty) does not make it a sale, so long as the main consideration is property for property.

A — Analysis. 1. The decoy — “money is involved, so it must be a sale”. The presence of some cash does not decide it. What matters is whether the substance is property-for-property. Here the core of the deal is a house for land (Rs. 1,50,000 for Rs. 1,00,000). 2. The Rs. 50,000 is paid only to balance the difference in value between the house and the land — classic owelty. It is not the price of the house, so the transaction remains an exchange, effected like a sale by a registered instrument.

C — Conclusion. It is a valid exchange, not a sale. The cash paid to equalise values is owelty and does not alter the character of the transaction.

Problem 10 — The Executed, Accepted Gift Deed (Unit IV)

Problem: A gift deed is executed, attested and delivered; the donee accepts; before registration the donor seeks to revoke it. Can he?

I — Issue. Can a donor revoke a gift after it has been executed, attested, delivered and accepted, but before registration?

R — Rule. 1. Under ss.122–123, a gift of immovable property is complete when executed, attested, accepted and registered; where the donee has accepted and the deed is delivered, registration is a ministerial act that may be completed later (K. Balakrishnan v K. Kamalam, 2004). 2. Under s.126, a gift may be revoked only on an agreed contingency not depending on the donor’s will, or on grounds that would rescind a contract — never at the donor’s mere will.

A — Analysis. 1. The decoy — “the deed is not yet registered, so the gift is incomplete and revocable”. Registration is ministerial where the gift is otherwise complete; the essential is a completed acceptance, which has occurred here (the donee accepted and took delivery). 2. The donor’s wish to revoke is a mere change of mind — neither an agreed event nor a vitiating factor under s.126. It therefore provides no ground for revocation.

C — Conclusion. The donor cannot revoke the gift. It is complete on acceptance and delivery; registration may be compelled or completed, and the gift stands.

📄 Full Transfer of Property notes + Question Bank (₹199) — the complete study notes plus 40+ more solved problems and 16-mark essay blueprints. Get the bundle · All Transfer of Property topics · Past Questions