Transfer of Property Act_Vested Interest and Contingent Interest

Vested Interest and Contingent Interest

1. The Transfer of Property Act, 1882 deals with the following two categories of interests - [a] Vested Interest, and [b] Contingent Interest
2. Section 19 of the Transfer of Property Act, 1882 deals with a Vested Interest.
3. Vested Interest is not depend upon the fulfilment of a condition.
4. It creates present and immediate right through enjoyment.
5. It may be postponed to a future date.
6. A vested interest is not come to an end by the death of the transferee before obtaining possession. It will pass on to his/her heirs.
7. In short, vested interest is transferable and heritable.
8. For Example - ‘M’ gift to ‘P’ on the death of D creates a vested interest in M even during D's lifetime for the condition is bound to happen. But a gift to M on the marriage of D creates only a contingent interest because D may never marry, but that contingent interest becomes vested if and when D gets married.
9. Section 21 of the Transfer of Property Act, 1882 deals with a Contingent Interest.
10. Contingent Interest refers to a future interest which is an uncertain and it largely depends upon the happening of an event.
11. In this type of interest, an interest can only arise on the occurrence of a specified event.
12. In a contingent interest, the person who will enjoy the property or the occurrence of the event may be unknown and uncertain
13. When the interest is contingent, the transfer depends upon a condition precedent.
14. When the condition is fulfilled the transfer takes effect and that the interest becomes vested.

Transfer of Property Act_Doctrine of Election

Doctrine of Election 

1. Section 35 of the Transfer of Property Act, 1882 lays down the Doctrine of Election.
2. The meaning of term Election is to select  between two alternative rights or inconsistent rights. 
3. The Section 35 provides that, when a person who is a stranger to the property or having no authority over the property transfers the property to third person and by virtue of the same transaction confers some benefit to the owner in lieu of his property then it is the duty on the owner of the property to elect i.e. whether to retain the property or to accept the benefit. If he retains the property then he has to forfeit the benefit or in case, if he accepts the benefit then he has to forfeit the claim over the said property. 
4. The principle behind  the doctrine of election is that a person cannot approbate and reprobate at the same time. It means that, under this doctrine if a person accepts one thing then he/she has to accept it wholly and relinquish the other.  It means either the property or the benefit. If a person retains the property in that case he/she has to relinquish the benefit. In case, if he/she has accepts the benefit then he/she has to relinquish the claim over the property. 
5. The Privy Council in the case of Rungama V/s. Atchama, held that a party shall not at the same time affirm and disaffirm in the same transaction.
6. Example - P’ is a stranger/transferor who transfers the house worth Rs. 1 Lakh of ‘R’ the owner of the house to ‘S’, the transferee and in the same transaction confers benefit of Rs. 2 lakh on the owner ‘R’. Here ‘R’ as per the Section - 35 has the duty of election wherein he is having two options i.e. (i) to retain the property or, (ii) to accept the benefit.

Transfer of Property Act_Lis Pendens

Lis-Pendens

1. The provisions relating to Lis-Pendens has been enumerated under Section 52 of the Transfer of Property Act, 1882
2. Lis-Pendens means pending litigation. It means ‘during pendency of any suit regarding title of a property, any new interest in respect of that property should not be created. 
3. The doctrine of Lis Pendens is expressed in the well-known maxim; pendente lite nihil innovetur.
4. The doctrine of Lis-Pendenes effectively provides that during the pendency of a suit in which any right to immovable property in is question, the property cannot be transferred by any party to the suit. The aim of this doctrine is to protect the rights of other parties.
5. Lis Pendens is considered as a constructive notice of the pending lawsuit. 
6. Essentials of Lis-Pendenes – 
• A suit or proceeding relating to the immovable property must be pending in a Competent Court having the authority within such territorial jurisdiction as provided by the law 
• The immovable property cannot be transferred or dealt with by any party to the suit or proceeding to affect the rights of other party. 
• The suit or proceeding must not be of collusive nature. The term collusive means as a result of secret agreement for illegal purpose. In other words, the litigation must be bona fide litigation. 
• The suit or proceeding must be pending in the Indian Court. 
• The dispute must be in connection with the right or right arising from an immovable property. 
7. Effect of Lis-Pendenes -  When the suit or proceeding is pending in the competent court relating to immovable property and if such property is transferred, then such transfer will be treated as “void”. 
8. Exception - It is open to court to permit any party to the suit to transfer the property to on terms which it may think fit to impose

Transfer of Property Act_Rule Against Perpetuity

Rule against Perpetuity

1. Section 14 of Transfer of Property Act, 1882 provides for the Rule against perpetuity.
2. The meaning of perpetuity is indefinite Period. Thus, this rule is against the transfer that makes a property inalienable for an indefinite time. 
3. The rule has come into existence because the law is not in favour of lying up of the property for a long period. It is therefore necessary that the interest should not be created in property beyond the lifetime of person. 
4. Section 114 of the Indian Succession Act 1925 also deals with rule against perpetuity. 
5. There are certain exceptions to the Rule against perpetuity and are are follows: 
• This rule is not apply to the transfers which are made for the benefit of the public. 
• The renewal of lease with a covenant does not affect the rule against perpetuity. 
• It does not apply to personal agreements.
• It does not apply to the mortgagor’s right of redemption
• It does not apply to the vested interests.