Section 10 TPA PDF

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Transfer of property act-Section 10...

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Examine the law relating to Condition Restraining Alienation of Property Whitley Stokes drafted the Transfer of Property Act, 1882. The Act came into force with effect from 17th February, 1882. According to Stokes, the chief objects of the Transfer of Property Act were first to bring the rules which regulate the transmission of property between living persons into harmony with the rules affecting its devolution on death and thus, to furnish and complement the work commenced in framing the law of testamentary and intestate succession; and secondly, to complete the code of contract law so far as it relates to immovable property.1 The Act has been broadly categorized into Part I and Part II. Part I deals with the general principles (Ss.5-37, Ss122-137). Part II deals with specific transfers viz., Sales, Mortgages, Leases, Exchanges, Gifts and transfer of actionable claims. (Ss. 3853A; and Ss.54 to 137). The law relating to Condition Restraining Alienation of Property is of the general principles of the law dealt with under section 10 of the Act. Section 10 reads: 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 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: Ingredients     

The property should be transferred It transfer shall be subject to a condition or limitation The condition or limitation should be absolute restraining the transferee The condition or limitation must be from parting with or disposing of the interest in the property Such condition or limitation from parting with or disposing of the interest in the property is void.

Thus, the condition or limitation absolutely restraining from parting with or disposing of the interest in the property is void. E.g., In a joint family of three brothers. The trio partitioned the property among themselves. A condition in the agreement was if any one of them should have no issues, he should not sell the property but leave to the other two brothers. The condition restraining the brother issueless, not to sell the property is absolute and hence void as per section 10. In Rosher v. Rosher,2 J.B. Rosher, by his will, devised his property called Trewyn Manor, and all other real estate, unto his son Jeremiah Lilburn Rosher. Rosher in the will declared that if his son, (or his heirs or devisees, or any person claiming through or under him or them) shall desire to sell Trewyn manor and estate in the life time of his wife, she should have the option to purchase the same at the price of £ 3600 for the whole, and at a proportionate price for any part or parts thereof. It should be first offered to her at such price or proportionate price for 1 Whitley Stokes, Anglo-Indian Codes, vol I, p 726. 2 (1884) 26 CH. D.801

the proportionate property. The testator died. The son initiated to sell the property to outsiders. The action was brought by the widow against the son. Pearson, J., considered the condition to compel the son if he chose to sell, to sell at one-fifth of the value of the estate, was really a prohibition of alienation during the widow‘s lifetime. It was held an absolute restraint against sale during the life of the widow. Hence, the justice declared the condition void. Another example: A sells to B a land measuring 1 acre by a registered sale deed. In the sale deed A imposed a condition that B should not sell the land to x but may alienate the property to any one else. The condition here only is partial and therefore, valid.

Ashok Bhushan J.. in Sridhar v. N. Revanna,3 Muniswamappa, great grandfather of the plaintiffs and grandfather of defendant No.1, was the absolute owner of the suit schedule property. Muniswamappa executed two gift deeds dated 05.06.1957 in favour of defendant No.1, N. Revanna. The gift deed was executed by Muniswamappa in favour of his grandson, N. Revanna. The gift deed also contained a condition that donee and his younger brothers hereafter had no right to alienate the scheduled property. Defendant No.1, N. Revanna executed sale deeds dated 07.10.1985, 08.10.1985 and 10.10.1985 in favour of defendant Nos.2 to 5. The question came upto the Supreme Court was whether the sale deeds executed by the defendant despite the condition not to alienate was valid. The Court observed that Section 10 expressly provides 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. According to Section 10 any condition restraining the transferee the right of alienation is void. The Court observed that a plain reading of Section 10 of Transfer of Property Act makes it clear that the condition in the gift deed dated 05.06.1957 that defendant No. 1 shall not alienate the property is a void condition. Thus, the sale was held valid.

Dr. Justice D.Y. Chandrachud J., in Idol of Sri Renganathaswamy Rep By ... vs P K Thoppulan Chettiar ,4 has inter alia dealt with Section 10 of the TPA. The question was whether the Deed of Settlement dated 8 July 1901 creates a specific endowment, regulated by the Act of 1959.

3 Ashok Bhushan J.Sridhar vs N. Revanna decided on 11 February, 2020, available at https://indiankanoon.org/doc/99240039/ 4 Dr. Justice D.Y. Chandrachud J., Idol of Sri Renganathaswamy Rep By ... vs. P K Thoppulan Chettiar on 19 February, 2020, available at https://indiankanoon.org/doc/98822089/

Thoppulan Chettiar purchased the suit property in 1877 for the purpose of performing charitable work in reference to Sri Renganathaswamy sanctum. Thoppulan Chettiar executed a Deed of Settlement, prohibiting the future sale or mortgage of the suit property and directing his descendants to continue carrying out the charitable activities upon his death from the income of their business. It has been contested that the restraint created in the Deed of Settlement is void under Section 10 of the Transfer of Property Act 1882. The trustees of the first respondent are not able to perform the charities on account of encroachments in the suit property. The Supreme Court opined that in the present case, the Deed of Settlement stated that the charity was to be carried on for the benefit of the ―devotees of Sri Renganathaswamy who visit during the Chithirai Gajendra Moksham and Padi Eighteen festivals. The charity is one which benefits the public and the beneficial interest is created in an uncertain and fluctuating body of persons. The devotees as a class of beneficiaries are not definitive and therefore, the respondent trust was held a public trust. The Court held that the specific endowment created by the Deed of Settlement was not in favour of the appellant idol but an endowment to a religious charity. The Court found that the Deed of Settlement did not create a ‘specific endowment’ as regulated by the Act of 1959. The specific endowment created was an absolute endowment in favour of the ―religious charity as understood under the Act of 1959. The Court allowed the appeal and set aside the order of the Single Judge of the Madurai Bench of the High Court. Exceptions There has been a proviso added to section 10. It reads: 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 of the Transfer of Property Act 1882. Thus, the absolute restraint not to alienate the property may be put against a woman not being a Hindu, Muhammadan or Buddhist. In India, other than Hindu, Muhammadan or Buddhist, there are Christians. Therefore, the restraints can be put upon the transfer of property to Christian women. It looks prima facie discriminatory. However, the restriction can be imposed upon a woman not belonging to Hindu, Mohammadan or Budhist. The other exception is upon transfer by lease. Thus, the lessee can be put to restriction not to sub lease the property. If the lessee sub leases the property the sub lease will be void and the lessor can re-enter. Conclusion Section 10 as a whole is a salutary provision which permits the free flow of the property to alienate. It prohibits absolute conditions against further alienations. As it facilitates the enjoyment of all the rights including the right to sell, the absolute prohibition not to alienate the property is desirable in the interest of the transferees and the economy....