X gives to Y property worth only ₹5,000 and adds a condition that Y should sell property for ₹75,000 and not below that amount, this condition will at once become invalid for no one will buy the property which is only wo
CS Executive · Economic, Business and Commercial Laws · PYQS · December 2020
X gives to Y property worth only ₹5,000 and adds a condition that Y should sell property for ₹75,000 and not below that amount, this condition will at once become invalid for no one will buy the property which is only worth ₹5,000 for ₹75,000. Similarly X gives property to Y worth ₹75,000 and stipulates that if Y wants to sell the property he should sell it to Z for ₹2,000. Decide with help of case law whether it is an absolute restraint under law relating to Transfer of Property Act, 1882.
Answer & Explanation:
Section 10 of the Transfer of Property Act, 1882 says that when property is transferred, the transferee should not be restrained absolutely from alienating the property. One may give property to another subject to a condition, but the condition should not be one which absolutely prevents the transferee from alienating the property. Such a condition, if provided is invalid. In Trichinpoly Varthaga Sangum v. Shunmoga Sunderam, (1939) Madras 954 , there was a partition between a Hindu father and his five sons. The deed of partition provided that if any one of the sons wanted to sell his share, he should not sell it to a stranger but to one of his brothers who should have the option to buy for a sum not exceeding ₹1,000. It was held by the Court that the condition absolutely prevented the son from selling the property to any one for good value. In this case the market value of the property of the son was far greater than ₹1,000. Hence, the condition was declared invalid and absolute restraint. Coming to the factual matrix provided in the present case, the conditions stipulated therein are in the nature of absolute restraint under the provisions of the Transfer of Property Act, 1882.
Topics: Transfer of Property Act, 1882
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