Unit IV — Sale, Lease, Exchange, Actionable Claims, Gifts

“A lease is a transfer of a right to enjoy property; a licence merely makes lawful what would otherwise be a trespass.” — the lease–licence distinction

Sale & Lease

A sale (s.54) is a transfer of ownership in exchange for a price paid or promised. For tangible immovable property of ₹100 or more (and for a reversion or intangible thing), sale can be made only by a registered instrument; for tangible property below ₹100, by registered instrument or delivery of possession. A contract for sale does not, of itself, create any interest in the property.

A lease (s.105) is a transfer of a right to enjoy immovable property for a time (or in perpetuity) in consideration of a premium or rent — the lessor parts with possession but not ownership. A lease of immovable property from year to year, or for a term exceeding one year, or reserving a yearly rent, requires a registered instrument (s.107). The respective rights and liabilities of lessor and lessee are set out in s.108.

flowchart TD
    A["Lease determines (s.111) — then lessee stays on"]:::root
    A --> B["Lessor ASSENTS / accepts rent<br/>-> HOLDING OVER (s.116)"]:::yes
    A --> C["Lessor does NOT consent<br/>-> tenant at SUFFERANCE (trespasser)"]:::no
    B --> B1["New tenancy renewed (year-to-year<br/>or month-to-month per rent basis)"]:::yes

    classDef root fill:#FFF8DC,stroke:#333,color:#000;
    classDef yes fill:#E6FFE6,stroke:#1E7A1E,color:#000;
    classDef no fill:#FFE6E6,stroke:#8A1E1E,color:#000;
    linkStyle default stroke:#888,stroke-width:1px;

A lease determines (s.111) by efflux of time, notice, forfeiture, merger, surrender, etc. Where a lessee continues in possession after determination and the lessor assents or accepts rent, the tenancy is renewed (holding over, s.116); without consent, the occupant is a mere tenant at sufferance.

Exchange, Actionable Claims & Gifts

An exchange (s.118) is the mutual transfer of ownership of one thing for another (neither being money only). An actionable claim (s.3) is a claim to an unsecured debt or to beneficial interest in movable property not in possession, which can be transferred by a written instrument under s.130, the transferee taking subject to the equities. A gift (s.122) is the voluntary, gratuitous transfer of existing property, made by a donor and accepted by the donee during the donor’s lifetime; a gift of immovable property must be by a registered instrument attested by two witnesses (s.123). An onerous gift (s.127) invokes the all-or-nothing rule: where a single transfer gives several things, one burdened and others not, the donee must take the whole or none.

✏️ Sample Solved Problem (IRAC Method)

Problem: A holds shares in a prosperous company X and a loss-making company Y; by one gift deed A gifts all the shares to B. B wishes to accept X but refuse Y. Can he?

I — Issue

Whether the donee of a single gift comprising both a beneficial and an onerous item may accept the beneficial part and reject the burdened part.

R — Rule

Section 127 — where a gift is in the form of a single transfer of several things, one of which is burdened by an obligation and the others not, the donee can take nothing by the gift unless he accepts it fully (the onerous-gift “all-or-nothing” rule). If the things had been gifted by separate deeds, the donee could accept one and reject the other.

A — Analysis

The decoy is commercial common sense — naturally B wants the profitable shares (X) and not the loss-making ones (Y), and he may argue each parcel of shares is a distinct “thing.” But s.127 looks at the form of the transfer, not the donee’s preference: because A made a single gift of all the shares by one deed, the burdened item (Y) and the beneficial item (X) are tied together. B cannot cherry-pick — he must accept the whole onerous gift or decline it entirely. The result would differ only if A had used two separate deeds, in which case the all-or-nothing rule would not apply and B could accept X and reject Y.

C — Conclusion

B cannot keep X and refuse Y. Under s.127, the gift being a single transfer, B must take the whole onerous gift or none of it.

📄 The full bundle (₹199) has the complete Unit IV — sale, lease and s.108 rights, determination and holding over, exchange, actionable claims and gifts including onerous and conditional gifts — plus the Question Bank’s model answers to 10 solved problems (holding over vs sufferance, waiver of notice, sub-letting, onerous gift, transfer of debt). Get Notes + Question Bank — ₹199